• Home
• /
• Opinion

The growth paradox

In India, especially, a blind man can see what is happening. The poor are to be found almost everywhere you go, even and especially in this mammoth nation's capital city. Fortunately, Manmohan Singh has anything but deficient eyesight. Educated at Punjab and Oxford Universities in economics, he senses some kind of gathering storm — a kind of global political warming in the sociological rather than the meteorological sense.

Singh, India's deeply intellectual prime minister, offered an extraordinary speech on Thursday before an enormously well-fed audience of Indian industrialists that in another era might have been dismissed as maudlin Marxism. But Singh is no more a Marxist than Alan Greenspan, the former US Federal Reserve system chairman, who at about the some time went public with an expression of fears about China's overheated economy that sent shivers down the spine of world markets.

In his speech, Singh, a deeply serious man with a cerebral IQ probably twice that of most national leaders, expressed concern not about the possible crash of financial and equity markets but about the possible crash of national political legitimacies. Speaking of his own India in particular, Singh offered the kind of penetrating and wide-ranging critique of capitalism that other national leaders should take to heart.

The turban-topped economist asked his audience (and by implication the world) whether self-satisfaction about unprecedented wealth, as is being enjoyed in India itself these days, is wholly justified in the oppressive presence of diminished equality. All but begging the business community to show more social responsibility by investing in and caring for workers as much as profits, he proposed that companies put a lid on excessive and odious compensation and benefits for top executives, especially when it was obvious that masses of people are near-starving in the streets.

The exhibition of a philosophical dimension at the top of Indian politics is not considered grandiose puffery or vulgar grandstanding, but rather as an inheritance and indeed responsibility derived from the grand tradition of Mahatma Gandhi, the George Washington of India, and Jawaharlal Nehru who is arguably the nation's Thomas Jefferson and its first prime minister.

We do have enough for our needs, Gandhi would often say, but not enough for our greed. His disciple Nehru would often echo the thought, once putting the issue to Indian youth this way: "What shall it profit you to get your empty degrees and your mess of pottage if the millions starve…?"

It was into this rich tradition of large question-asking that Singh last week stepped. But he did not jump off the cliff into the utter madness of rank socialist prescriptions. Nehru had tried almost all of them, from centralised planning to state capitalism, and almost every one of them failed. In his life he raised the right questions, but in his career he came up with the wrong answers.

But the social and humanitarian norms underlying Nehru's philosophy remain deeply embedded in India's soil. It may be glorious to get rich but not if that process breeds more poor. If excessive clumsy government intervention stymies economic growth without reducing inequality, then who does possess the tools to ameliorate the problem? It is none other than those who have the wealth; and so it is the rich who must help the poor — far more than ever.

Singh carefully sought to pull out one example to make his point accessible to more than professional economists and hard-driven businessmen. He chose one of the true Indian cultural untouchables: the lavishly extravagant wedding so prevalent among the wealthy. "Such vulgarity insults the poverty of the less privileged," he told the businessmen. "We cannot afford the wasteful lifestyles of the western world. Conspicuous consumption must be reduced."

The prime minister is suggesting that a philosophy of systematically caring for those who have less is probably the best way to make sure that all of us will continue to have more. India Inc, as the nation sometimes refers to itself these days, is currently having a banner year — bouncing around at the nine per cent or so growth level. This puts it on China's level and is remarkable all by itself.

But the prime minister, like any very good CEO, worries about trouble that might be just around the corner even as the present bountiful seems unending. Wealth can trigger social and political unrest at the same time as it produces numbers over which economists and business men will salivate. The paradox of economic wealth is that it can impoverish societies by depriving them of legitimacy — the necessary social capital required for stability, continuity and progress. Singh's speech may be the most important one given by a major national leader so far this year.

Tom Plate, a full-time adjunct professor at UCLA, is a veteran US journalist