Gods and the GDP3 min read . Updated: 29 Apr 2011, 08:31 PM IST
Gods and the GDP
Gods and the GDP
It’s not often that you get to read the minds of people who have a room in the power-filled corridors of North Block. Though most of the book was completed just before Kaushik Basu’s first few days as chief economic advisor to the Union finance ministry, you do get to read a bit about the first impressions of a person more used to lecture theatres and tutorials than the ceremonial routines of the Indian bureaucracy.
An Economist’s Miscellany (the title self-admittedly influenced by British mathematician John Edensor Littlewood’s A Mathematician’s Miscellany) will disappoint those expecting a serious discourse on economic theory. True to its name, it is actually just a collection of old columns, articles, translations, self-scripted plays and a game put in some order. But if the dour reader of economic theory can shed the serious mask for a while, there is plenty of deep stuff under the clock of a facetious storytelling style—written in the wonderfully self-deprecating style that Basu has perfected. I found myself turning chortles into coughs as I read the book everywhere—in office, in elevators, in the Metro.
While the non-serious reader has enough to laugh about, the serious reader will do well to read carefully. At two points in the past Basu has predicted correctly the future rates of GDP. The first was in a column in 2005, when India was still to taste the fruit of sustained 8% growth: “Unless India makes a major blunder or gets inadvertently drawn into some costly war or generates so much inequality as to cause political instability, the growth rate should continue. And to aim for a sustained growth rate of 8% and a rapid decline in poverty is entirely within the realm of the feasible."
In the next he stuck his head out at a time when the world was collapsing. It was 2008 and the world was fast grinding to a halt. That the US and Europe were not going to recover for a long time was clear, but it is a tribute to his skill as an economist that he wrote in October 2008: “...India’s growth forecast for this year has been lowered to 7%—my own expectation is that it will be even lower. But there is reason to expect that, within two years, India will be back on the 9% per annum growth path that it has been during the last four years." Basu is near enough— growth fell to 6.7% in 2008-09 and is a few percentage points short of 9% in 2010-11.
So what’s his prediction for the future? “It is reasonable to forecast that 30-40 years from now, India will be a developed country." I’d translate that to simply bumping up my SIP (systematic investment plan) contributions in the equity funds I have.
For those who freeze at the mention of the word economics, the book is a gentle entry into what is known as a dismal science. His binary thought process finds great application, using game theory to make prescriptions that are as varied as attempting to stop mis-selling of financial products and tracking down a thief in Italy. Miscellany is a great read not just because it allows the reader a glimpse into the person and not just the economist, but also because he does not hesitate to step into the intellectual quagmires of modern-day India—and talks about (oh my God) God!
My favourite story goes like this: Battling a midnight tummy upset in a secluded Japanese resort, Basu had two options. One, wake up his Japanese colleague in the middle of the night. Two, die. He tried a third, which began as a facetious idea, took root and in the absence of any other viable option, got implemented. Basu invokes the long-lost connection with “God". He prayed to God to please take pity and make him well. And if God wondered why he only called Him in a time of distress, Basu reasons: “Unlike other people who call on you day and night with little rhyme or reason, I never do." Fifteen minutes later he was absolutely fine. That led him to two (of course!) conclusions: Either there is no God and he got better anyway. Or there is a God who loves him for his lack of faith and not troubling Him with daily prayers!
When I asked Basu last week if he now believed in God, Basu gave a vintage binary answer: There is a short answer and a longer nuanced answer.
The short answer is No.