Tag Archives: Development

Who Killed My Golden Goose?

There are some truths. And then there are some indoctrinated truths.

Whether it be the communist dictators or free market die-hards – the indoctrination of the mass populace has been a method adopted by all the rulers alike. The biggest control is not the kne over body, but the one over the mind. And any ruler by the very compulsions of his profession and the weakness associated by being a human would love to control the ruled so as to prolong their rule. And for us, so ingrained it becomes in our minds when we grow up – for we are but a product of our indoctrination – that we struggle to accept the possibility of the existence of another truth.

Catch hold of any group of Indian university students and ask them – Why is India underdeveloped? Because the British looted us, because the west wants to exploit us, because we are poor in resources, because of foreign capital!

Why has China been growing so rapidly over these years? Because they have cheap labor, because they keep a weak currency, because they protected their industry, they imitated the west… Blah blah.

Why did US develop so rapidly? Because they had all the resources, they had all the technology, they had all the goods which in some way they must have taken away from us.

Theories after theories, models after models have been proposed and an exhaustive literature exists on developmental economics. I would not want to and neither am I capable of examining the merits and demerits of each.

So while it may be true that cheap labor in China played an important role in their growth, British and internationl exploitation limited India’s capabilities and US got it all by robbing us, we must ask whether these are really the reasons for the international economy to be what it is today.

Lets take China. It has got cheap labor, no denyig the fact. But is it the only country where labor is cheap? Even in India more than 90% people live on less than $2 a day. Vietnam, Philippines, Africa, Latin America all have got cheap labor – cheaper than China in some cases. Then they have got a long coastline and benefitted from that… Pooh…. We have a long coastline too, Vietnam is situated along the sea, Argentina too has got long coastline. Then Indians say China is developing because it has a dictatorship or because Chinese are hard working people. Chinese are hard working, no doubt, but I would certainly not agree that others are not hard working. ( As a matter if fact, I am against all this stereotyping, but forget about it.) Even Indians are considered to be one of the most hardworking. There is a dictatorship in Venezuela as well (which has got additional benefit of oil), there is one in Vietnam, in N Korea… All of them have cheap labor, long coastlines etc. but none could prosper like China.

The British exploited China as well, it too faced the same international hostile order as we faced. Similarly, in 1950s, Korea, Taiwan, Malaysia, Singapore, Hong Kong etc. were all as agarian as us, many were even poorer in nature’s blessings, still today they all are way ahead of India in any developmental index. Then what creates the difference – clearly cheap labor, form of government, geographical endowments etc. are not the determining factors of a nation’s destiny.

Here I would like to draw upon the concept of locus of control from psychology. There are two types of people in the world. The externalizing types who believe external forces shape their destiny and the internalizing types who believe they themselves shape their destinies.

When it comes to nations, while externalities may impact them to varying extents and that too for certain periods of time, its only the internal factors which ultimately determine the final shape of the nation. Its the choices a nation makes… Its own actions which decide the nation’s destiny. These choices take the shape of the policy framework which then would ultimately decide your fate – not the coal you have, not the oil and not the currency. Given a conducive policy framework, resources will come to the right places. Now of course what is “right” will depend on the priorities of each society and it must then be ready to face the consequences of its choices. (Of course, I am exempting extreme cases like global warming sinking an entire nation or if say the earth splits and everyone falls into it.)

If we think India is underdeveloped today, its only because of the choices we made and not anything else. Britishers could have been a factor 10-15-20 years after the independence, but if we suffered after that, it was because of the inward looking policies of Nehru, Mahalanobis and Indira Gandhi. It was our conscious choice of adopting populist and high sounding policies without thinking whether they would work outside the Utopian world they were created in which kept us in the mesh of stagnation.

Of course, anybody hates to accept their mistakes and my hunch is that if we are underdeveloped even after 200 years we would continue to blame British, or US or China or who knows Ajeberjan!