India’s March into the light and the great lie of the golden bird
A 5 trillion economy, that was the original promise. They started with 2022 and then went to 2025. To be fair, I buy it. A 5 trillion economy is viable. In the absence of an ex machina as we are now seeing, a 5 trillion economy is a certainty. A 10 trillion economy is a certainty. So is a 20 trillion economy. I daresay a 30 trillion economy too. It’s a matter of inertia. In the presence of stability, prosperity will flourish. Growth is certainty from a low base as long as no one’s rioting and nobody is burning buildings and nobody is firebombing towns. And as long as those things don’t happen and the government doesn’t actively mess with things, the country will grow. Emphasis on that final part. More often than not some moron in power with good intentions will interfere. It’s in the nature of humanity to interfere. To want to do better. Whether it is with Mugabe in Zimbabwe and his relentless printing of notes to cause million dollar bread levels of inflation or Maduro in Venezuela and his thieving from the rich to give to the even more rich (himself). And more often than not as with our dear PM and his demonetization scheme it is with good intentions. It was a wise move, unfortunately, directed at the wrong people. The problem with it is that ignores the fundamental issue with wealth. Most wealth is today stored in human skill, not heaps of cash or steel. Human capital as it is called. And what human capital needs most is opportunity and education. There are other things important among which is the lack of being hectored and bothered while doing good work. That is the type of corruption that truly hurts this nation. Functional corruption that acts as a constant spanner in the works of India’s burgeoning business ecosystem. It is not a shortage of tax revenue caused by the presence of black money that is a threat. It’s not like all the tax money is going towards roads. Nor is the country suffering from a shortage of revenue. Fundamentally Black money isn’t even that much of a problem. I mean it hurts that taxes are not paid on it, but as long as it is spent and moved around, it is still contributing to the economy. It might even better serve us away from a government that is likely to fritter it away on some scheme or the other. I’d rather go hacking at the bureaucracy that’s busy holding goods hostage in ports and causing delays in projects by denying one or the other clearance. That is where the real damage is done. I remember reading an article by a prominent startup founder on Quora who lamented this very issue. He claimed all the work they do building robots (That’s a clue) is significantly hurt by the fact that a lot of the stuff they need is stuck in customs for months. What could customs possibly want with Robot parts from China. And the answer is in the statement. You would never talk about customs if it didn’t hold you up for months. They draw all their importance from holding you up for months. Make of it what you will, but the incentives don’t really align.
Why Human Capital and where it comes from
But back to the original point of human capital. In a fundamental sense, there is more money in what we can do with things than there is in those things themselves. This has not always been true. For much of history, we could do little from what providence provided us. We took from the earth, consumed, and discarded. Sometimes reused but that was the limit. Metal raised from the earth was at best refined and forged into a sword or a farm implement or armor. Fairly valuable an addition in value, but unlikely to be too much more valuable than the steel in the sword itself. In the right hands, a hunk of steel could do a solid fraction of the damage that the sword could cause on its own. Maybe doubling in the forging the value of materials therein. Maybe more, depending on the nature of supply and demand. But the actual use-value has not risen much. But the Industrial Revolution changed everything. If ever there was an event that we owe the most to, for all the wealth of the world we live in, it is the Industrial revolution. The Industrial Revolution changed the rules. No more was the money in the extraction of metals but in their utility. A car is worth tens of times the value of the materials put into it. The entire modern world order of stability is borne from this fundamental truth. No more must the deprived hordes of Mongolia, join together to launch a grand conquest of the world to fuel their great ambitions of great wealth. There is no wealth in pillaging great towns. What money could you gain from pillaging an oil field. You don’t know how to run it. Moreover there is more wealth in processing the oil in Iran than actually pulling it out of the earth or owning it outright. The value chain, as it is called, is now longer. And there are more places you can tap into. You can make pens from the plastic made from that oil, you can make cars that run off of that oil, you can also make pipelines for the oil. Why waste precious young blood on a conquest, when it could be working in the factories making you money. As long as this fundamental truth remains true, the larger world will remain at peace. The second world war was the last war of the old kind we will have fought for a long time. The Germans don’t need more land to feed their starving populace as they did at the outbreak of WW2. The Haber process and modern agriculture fixed that. The amount you can squeeze from the soil is now far more dependent on how you squeeze it than how much soil you have in the first place. The great plains of the Ganga in India, that hold some of the finest soil on the planet can’t compare in productivity to European farms that once struggled to maintain yield. And the how of things is far better thought of in peaceful conditions. The value of a car is vastly greater than the thunk of metal it was cleaved from. Wealth is no longer hard-capped as it once was.
The Founding of the Indian Myth
Much is made of the great glorious land of India, that India was pre-British arrival. And that is true to an extent. We were sort of rich. As a portion of GDP, India commanded a quarter of the world’s wealth under the much-hated Aurangzeb. Alexander would have cowered before the great might of the Nanda’s that faced him a few miles deeper into India. But make no mistake we held a comparable number of people. We always have. India has always been populous, because of the Ganga delta being so conducive to farming, a large population could be supported. And that meant more total wealth. But a man can only be as rich as the wealth he can yield. He can only make as much money as he provides to the world in value. And that remains constant across the world. So a farmer in India was about as rich as a farmer in Italia under the auspices of the Roman Republic. So was every place equally rich? Not precisely. A farmer in Londonium at the edges of the Roman Empire was likely to struggle. The soil was simply not as productive there. And so the wealth was in what the world gave us. It was in the soil, the rivers, the livestock, and the metals. And we revered them and we prayed to them and treated them as gods. That was what they were to us. The source of all sustenance. The source and essence of wealth. We fought over them, and that was what conquest was fundamentally about. When the British arrived we had a lot of the raw materials they needed. India was wealthy, so to say. But nowhere as rich as we are today. But to the British that sailed from their wretched frozen lands, it was paradise. And so we thought. That we were the stronger one in that bond. The British bent and jostled before the Mughal Emperor, and begged for trades rights. They had no idea. Unbeknownst to all involved, the rules were about to change.
The Crack of the whip, and where it came from
The Industrial Revolution had arrived and Britannia was the factory of the world. All the Cotton we could raise we could do little with. Weave it with effort into quality clothing as in Bengal. It was called the proto-industrialization. It was impressive and it made Bengal one of the Richest provinces in the world for a while. The Mughals were rich off it. But the British factories could do so much more with the cotton. And more importantly so much faster. Their clothing was cheaper if a little worse in quality. The coffee had cooked and no one was awake to smell it.
Not exactly nobody. If you’ve ever wondered why Japan is so rich, you have your answer in this very revolution. The answer to what would happen to India, if the British had not played their tricks and let the Marathas consolidate India is Japan. A country united can look outwards. And if it has the humility to acknowledge it’s own shortcomings all the better for it. If the Marathas were victorious and had this humility, we would be Japan. If they didn’t we’d be China circa 1940s. A country leaving their famed century of humiliation. This is the consequence of vanity. To be used as China was for a century. At it’s peak, China was never ruled, but remote controlled and exploited. Rail rights were distributed among the Western powers willy billy via negotiation. The Chinese Emperor be damned. The worst thing the British ever did to India was to tie it up and blindfold it just when the world finally hit it’s stride. All of human history had led up to this glorious period. And one frontrunner was tied up and blindfolded while the other one (China) refused to look and learn out of stubbornness. It was a period where anyone could rise, a true era of opportunity where any free nation could rise into its own, and the wealth of a nation had little to nothing to do with what mother nature endowed its soil and hills, but rather what the creator placed between the ears and under the heads of its men and women.
The Japanese were watching. Quietly. And their humility was to yield results. And when they were united under one ruler they had the stability to look outwards and see the world as it was, and as it could be. They saw an opportunity. And they were desperate for it. And they were willing to learn. The Meiji Restoration stands out as a prodigious move in the grander scale of history. A nation humble enough to know it was blind. And to be willing to see, even if it meant learning from another nation, however oppressive. It takes a certain kind of resilient humility for a good man to learn from the devil as he sees him. Personal dislike put aside. To acknowledge that the states that they hoped to defeat were indeed more capable, and to have the humility and wisdom to learn and study from them. To bring the technology back home. It remains the only way for a nation to rise into the light. And all the way back in the 1880s too. The Japanese were sending their nationals to European universities to learn and study and bring back technology. By 1940, Japan was going toe to toe in battle with the greatest economy in the world, the US.
In the 1980s Deng Xiaoping showed similar brilliance and humility in accepting western capitalism in his country while he led the communist party of China. This humility tempered with the utilitarianism to know what would help and what would hurt built the great edifice that is China today. A nation that can bully and mock India with impunity and we must push with great care not to offend the great dragon too much. In India, it took a complete disaster before we could be dragged, kicking and screaming into the light. We never had the humility to accept that we were not equals in the global order. We had not the humility to watch and learn. We still aren’t equals in the great world order. The narrative of India is that of a fallen nation fighting for redemption. No nation that has ever tried to rise using that narrative has ever made it out of the past. This is the narrative that has wracked Africa for decades and locked it in inter-community and inter tribal strife. After all, those are the institutions of the glorious past. When you think the past holds all the answers, it makes little sense to look anywhere else. In Turkey Kemal Pasha had the same humility and courage to push for modernisation. And he raised Turkey into a great modern developed nation from the declining Ottoman Empire that had been declining for centuries. A nation that looks to it’s past rather than to it’s future with pride is a nation likely to keep to that configuration going for very long. For the future holds nothing good for it. Tradition to such a nation is sacred. After all it is the one vestige of our greatness. It is the one thing we have from the good ol’ days. Ideas and social structures ossify and remain constant. It is challenging to abolish a system while you glorify the era of it’s inception. To the modern Indian consciousness, India is a temporarily humiliated nation. Stolen from and now trying to take back it’s old wealth. This is similarly shown in the declining United States call for Make America Great Again. From Obama’s optimistic idea of Change to looking backward to an older era, the Americans face a similar threat in the form of a regressive culture. The 2008 recession and it’s aftermath seem to have broken their spirit as a nation. As with the Americans, the future for India is not in its past. To those who say that the greatest thing stolen from us by the British is wealth in hard terms and other things like diamonds, the truth is far from it.
The greatest thing stolen from us was our choice. The greatest loss from the British rule is in opportunity cost. What is opportunity cost? It is the cost in terms of things that could have been ours if things had gone differently. And the opportunity has been back in our hands for 60 years now. Do we have the humility to accept that there is at least a solid failure on our part to make use of it? The Chinese had the century of humiliation to teach them through hard labor and insult their own shortcomings, but in India, the pride of the Indian state is it’s greatest downfall.
We must instead adopt the Ideals of Enlightenment Europe. Those of a nation rising from the darkness into the light. A constant eternal march into the light. Each day better than the last. I have often mocked it. Even on this blog ( This post on the nature of evil). That human nature remains constant. That the people of a century ago are no more wretched or corrupt than ourselves in all their troubling traits and acts. But the truth is that this is an ideal. It is humility. To accept that we are not a perfect society. That the answer lies in tomorrow and not yesterday. To a society built on such ideals, no idea or tradition is sacred. The world is suddenly open and rife with fresh ideas and innovations waiting to be adopted. And like the Romans that built a great empire from a disparate part of the world, let us adopt and steal ideas from all and sundry and build us a new culture. One based on progress and growth and prosperity for the nation and it’s people. A new India divorced from its old community conflicts, castes, patriarchal ideas, and other vestiges. Let some traditions remain ceremonially as a form of national pride as the British foist their Monarchy. But the British queen doesn’t veto and pass law. Because if the greatest capital a society can have is it’s human capital. The only things that can trap human capital are culture and ignorance. And so only on the ideas of a society rising into the new world, shedding the chains of the past can we reach for what we desire. We must be willing to introduce both western and eastern ideas into our society. Only then can we rise into the new world. Not as fallen heroes rising yet again, or sleeping dragons rising from their slumber, but a wounded capable nation of great potential, fighting it’s way into the light.
Originally published at http://balladsandbrokendreams.blogspot.com.