Is India living through a new “gilded age"? This question was being posed by scholars and observers in the early years of this decade, coinciding with the latter days of the previous government: a period characterized by rapid growth, rising inequality and rampant corruption scandals.

Positing the premise most sharply, as early as 2011, were Jayant Sinha, at that time managing director of an investment fund and, today, a Union minister, and Ashutosh Varshney, political science professor at Brown University. Writing in the Financial Times (FT), Sinha and Varshney drew a striking analogy between contemporary India and the US in the latter part of the 19th century—the era of the “robber barons"—a time similarly characterized by a heady cocktail of growth, inequality and corruption.

It should be noted that important ideas are often independently discovered. Writing about the same time, economist Michael Walton of Harvard Kennedy School similarly drew the analogy in a 2011 research paper put out by the Institute for Social and Economic Change in Bengaluru, which had circulated in manuscript as early as 2010. Sinha-Varshney, meanwhile, inspired further analysis, including by this author, writing in the International Herald Tribune a few months later in 2011.

The contribution there had been to articulate clearly the causal mechanism: “Unregulated capitalism generates both rapid growth and burgeoning inequality." Further, I wrote: “In the absence of legal channels for influencing policy, such as the lobbying and campaign contributions in the United States, such attempts manifest themselves as corruption."

That piece drew out, too, a crucial corollary of these propositions: “Excessive corruption and inequality, by corroding the political process, threaten to delegitimize capitalism and the market system, and so create pressures for reform and the redistribution of wealth that then temper the incentive-driven impetus to capitalist growth, which caused the inequality in the first place." In other words, it seemed plausible that “corruption and inequality are natural by-products of the early stages of market-based capitalism". I had concluded: “The necessity for redistribution and social policy thus becomes a mechanism for the system to correct itself."

After being left on the back burner during the early days of the current government, the analogy, then much derided by some prominent commentators, is now back with a vengeance, as late-term Narendra Modi and his government deal with a growing backlash against big-ticket corruption associated with a bevy of bank frauds and absconding billionaires, and while inequality (both interpersonal and, as documented by political economist Praveen Chakravarty and myself, spatial) continues to grow apace. Economic growth is not quite as white hot as it was during the heyday of the previous government, but India remains the world’s fastest-growing major economy.

Tapping into the zeitgeist is a fascinating and well-timed new book by former FT Mumbai correspondent James Crabtree, just out in India and abroad, titled The Billionaire Raj: A Journey Through India’s New Gilded Age (HarperCollins India, 2018). Drawing on the premise articulated and elaborated by Sinha-Varshney, Walton, myself, and others, the chief contribution of Crabtree’s book is fleshing out what may have seemed to some an arcane academic idea into a lively portrait of characters, at once picaresque or picayune, who inhabit and shape this rough-hewn world: a world in which rules may conveniently be bent or broken in the interest of personal gain and, in which, individuals rule and twist institutions. This is a world characterized by an insidious nexus between big businesses and high politics, the part visible to us being presumably, but the tip of a much larger and submerged iceberg (having said this, one cannot overplay the notion that government is in the pocket of business. Democratic politics brings its own counterbalancing forces, as argued in this column a fortnight ago).

Crabtree’s proposed remedy is for India to graduate to something analogous to the American “progressive era"— the period that followed the gilded age and that built institutional safeguards against the capture of politics by business and created the first makings of a welfare state, aimed ultimately at curbing escalating inequalities, which eventually and inevitably corrode the legitimacy of capitalism and the market system.

Indeed, in 2011, I had struck this warning note: “The crux is that economic growth must help raise up the disadvantaged, and not merely further enrich the rich. Otherwise continuing poverty and inequality will become socially disruptive and politically dangerous." My prognosis had been: “Without the natural redistributive tendency of a well-functioning and regulated democratic polity, the combination of crony capitalism and either repressive authoritarianism or quasi-feudal paternalism is a deadly cocktail."

The chief difficulty is that the transition from a gilded age to a progressive era requires a fundamental shift in the underlying political economy that allows for, and perhaps even engenders, the transition from a bad equilibrium to a good one. In the US, the catalysts of this change were progressive and populist (not always an oxymoron!) politicians such as Theodore Roosevelt.

Who might such an agent of change be in India? Crabtree’s thoughtful, timely book will nudge you too into asking this vital question.

Vivek Dehejia is a Mint columnist and resident senior fellow at the IDFC Institute, Mumbai. Read Vivek’s Mint columns at

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