4 min read.Updated: 11 Jun 2021, 01:23 AM ISTArun Maira
Our economy has changed but some fundamental faults remain much the same. Inequality has widened so much that covid has left the poor exposed to far worse outcomes than the rich.
Georg Hegel said, “The only thing we learn from history is that we learn nothing from history." His warning comes to mind on reading Satish Saberwal’s statement on India’s failing institutions in Seminar magazine back in July 1987. He wrote: “As the year 1987 grows, there is a sense of crisis in and about Indian society. The difficulty is not specific, local and temporary, it is general, wide-spread, and persistent. It is evident in the difficulty we have over such elemental issues as unemployment, population, growth, sanitation, and control over violence; in all branches of government; political parties, legislatures, bureaucracy, judiciary; in key societal institutions like the universities and trade unions. The list can go on. It is a complex situation."
Year 2021 seems like déjà vu. The failures perceived of our institutions in 1987, and citizens’ lack of trust in them, are permeating the country 34 years later, as India approaches its 75th anniversary of Independence in 2022. The late 1980s, when intellectuals despaired, were also years of hope, with the emergence of a young and technocratic government around Rajiv Gandhi. The technocrats began to peel away the past, and strengthened India’s intellectual and economic bonds with the world. The 1991 Indian economic crisis, and Indian intelligentsia’s alignment with the neo-liberal Washington Consensus, spurred changes in Indian government policies.
India has achieved much since then. Economic growth accelerated, though it’s spluttering now, and millions were lifted above the poverty line—though, sadly, millions have fallen below it again in the covid pandemic. The economy has changed since the 1990s, but the fundamentals have not. L.C. Jain had written in that 1987 issue of Seminar what one could say in 2021: “Electoral equality is the only sphere in life where, after Independence, we have established equality. In all other spheres, especially in the economic and social spheres, be it education, health, income, employment, housing, the inequality is gross and has widened over time. It does not require much imagination to realise that the oasis of electoral equality will not be able to last long in the midst of the expanding desert of inequality in all other spheres of life."
One defence that India’s leaders could have is that since the 1990s, inequality has grown everywhere, as Piketty and others have documented. In fact, it has become tragic in 2021 with ‘vaccine apartheid’ among and within countries. The rich can afford to protect themselves while the masses remain exposed to the deadly virus. The fault lies in ideas that have dominated public policies. “It’s the economy, stupid," went Bill Clinton’s line. However, it has become clear in this pandemic that it is not just the size of the economy that matters, its shape matters as much. Who is benefiting most from economic growth and becoming even richer, and who has no security whenever the system is shaken? And, how did the process of trickle-down become a process of flowing up of wealth? And with wealth spelling power in politics, are democracies hollowing out while leaving a shell of elections in place?
Saberwal wrote: “We need to acknowledge that many of the institutions which we have given ourselves after 1947... have not emerged out of our own historical experience". Institutions which developed with “relatively gradual evolutionary process in Europe were grafted in India much more hurriedly, with social and cultural backgrounds very different to the ones in Europe."
Institutions are not machines designed by engineers. Nor are they merely organizations that can be designed with charters written, powers defined, personnel recruited, and budgets assigned. Institutions are the rules of the game with which societies function. Organizations created to implement the societal consensus, our institutions, cannot operate outside their social and cultural system. Reforms of institutions require the skills of gardeners, not engineers. Good gardeners are sensitive to the condition of the soil in which they plant seeds. They also know that the environment must support growth. Whereas engineers work best with a tabula rosa, a clean sheet to draw their blueprint on, or a clean piece of land, from which troublesome slum and forest dwellers are swept aside to enable their marvels. The technocratic approach to institutions has caused maladies in India and the West. The Institute of Public Policy Research in the UK says in its 2012 paper, ‘Complex New World: Translating new economic thinking into public policy’: “At heart, from [the dominant economic paradigm] perspective, the world is seen as a machine, admittedly a complicated one, but one that can be controlled with the right pressure on this button, just the right amount of pull on that lever. It is a world in which everything can be quantified, and targets can not only be set, they can be achieved thanks to the cleverness of experts. But the world is simply not like this. It is a much more complex, much less controllable place than ‘rational’ planners believe."
India will not meet its tryst with destiny until it changes its paradigm of progress. India’s aspiring reformers would do well to study India’s history more sincerely, and modern management less, to nurture more just and more effective institutions. Humans live their lives in stories, not as numbers in economists’ equations. The economy must serve society and its people, rather than humans seen as bits of data in economists’ equations serving the economy as mere producers and consumers.
Arun Maira is a former member of the Planning Commission
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