Home / Opinion / The Exit of the Middle Class

It has now become the rule. Any conversation with friends, when it turns to the state of Indian polity and governance, quickly degenerates into either despair or derision.

Of course, middle-class disenchantment is hardly new. But in recent times, I do believe it has grown to fierce proportions. Government corruption, subversion of democratic institutions, a slew of supposedly populist but financially ruinous measures, shameless pandering to vote banks, mismanagement of the economy…in the last few years, if my friends are a representative sample, the Indian middle class seems to have just had enough. In fact, it is exhibiting classic signs of what economist Albert Hirschman observed in his seminal 1970 book Exit, Voice and Loyalty. Circa 2013, large sections of the Indian middle class are Exiting.

In the 1960s, free market champion Milton Friedman came up with a novel idea to rejuvenate the ailing American public school system. If the private sector is kept on its toes by the possibility of Exit—of shareholders, employees, customers—the same principle should work in the public sector too, he argued. Friedman suggested that parents be given vouchers that allowed them to take their tax money away from bad schools to good schools. But, Hirschman found that this Exit option (he extended it from schools to any sort of human grouping—firm, organization, nation-state) had several important drawbacks. In the words of political scientist Francis Fukuyama: “The freedom to Exit was often used by the most ambitious, educated, or well-to-do users of a particular service, and once they exited, those remaining were even poorer, less educated, and less demanding. Moreover…the possibility of Exit weakened the effectiveness of Voice, that is, the ability to directly change the management’s behaviour through feedback, discussion, and criticism."

In the 1970s and 1980s, India lost large numbers of its best and brightest young men and women, who went to the US for higher studies with the express intention of never coming back. This, with the active support of their parents, who saw only a bleak depressing future for the middle class in India. In the 1990s and the 2000s, this migration—the most unambiguous form of Exit—has been tempered to a large extent, but Exits need not only be physical. The collapse of Communism was brought about by the Mental and Emotional Exit of people (Physical Exit was almost impossible, unless you were willing to risk your life).

In India currently, we are seeing a Mental Exit of the middle class, and a Physical Exit of the cream of the next generation, like in the past, may be imminent. Look around: the number of middle class parents taking on huge financial burdens to send their children abroad right after they finish school is rising by the year. The brain drain of yesteryears comprised graduates. Today, the process starts at a younger age. Exit has to be made at the earliest.

The Mental Exit—a rejection of the state while residing within its geographical boundaries—is typified by Indian resourcefulness. So the middle class uses every means it can think of to avoid or evade taxes. It is also increasingly insulating itself. Consider Gurgaon, aka Millenium City, or the townships burgeoning around our metropolises. Gurgaon gets only a fraction of the services that are its due from the Haryana government: power, security, transport infrastructure. So the city is a collection of countless gated communities—self-sufficient units with their own security, power and water backups, and recreational areas. The condominium dwellers can do little about the pot-holed roads or the law and order situation, so they shrug and once they are back home, they switch off from India. They are now well-ensconced in the Republic of Gurgaon. This is being replicated all over the country.

Exit is also about taking advantage of every loophole in the system it can exploit. A prime example is diesel, which, till as recently as a decade ago, was a commodity whose price needed to be stubbornly kept low, because it was the fuel needed to carry foodgrains and other essential products to the poor. Today, a large chunk of diesel consumption is by the rich and the middle class, who have shifted to diesel-powered vehicles and use the fuel to run generators that give them power when there isn’t any coming from the state supplier. You get little anyway from the state, so take every bit you can. And screw the environment.

According to Hirschman, Exit extinguishes Voice, and this causes organizational stasis and finally decay. Evidence that a large part of the Indian middle class is exiting reluctantly and still cares enough to have its Voice heard lies in the popular participation in Anna Hazare-led anti-corruption movement, and in the spontaneous public outrage over the gangrape and death of a young women in Delhi in December (But the less-than-sensitive handling of that Voice by the administration perhaps strengthened the Exit impulse). We should also not find it surprising that Narendra Modi, with his talk about a New India, a new energy, is so popular on social media, which is packed with middle class people who have mentally exited India but yearn to return. They retain Loyalty—Hirschman’s third concept—to some idea of India. That idea—at best hazy and amorphous—is powered by a bitter sense of betrayal.

What should worry the people who govern India is that it is always the more intelligent, the more valuable people who exit. Alienation is not a mental condition fools are familiar with. Also, when you Exit a place, you enter another. Circa 2013, the Indian middle class may be believing that wherever it enters, it can’t be worse than the place it exited.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Recommended For You
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout