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Economic Super Power Status: Pros, Cons and Considerations – Personalising the Problem

-- By Dr Ramesh N. Rao

In his last essay on matters economics, Mr. Dasu Krishnamurthy wrote about how Indian individuals and businesses “park” their funds abroad and how much foreign exchange is siphoned off illegally and through some very creative accounting skulduggery. Closing and tightening legal loopholes, monitoring closely the activities of businesses and corporations and punishing severely and quickly those undermining the Indian economy through their illegal activities are measures that any policy maker would advocate in these matters. Others would encourage different approaches, including offering “carrots” rather than wielding the “stick” in seducing the underground economy to seek the sunlight.

I have, with just an undergraduate degree in economics, little to say about the technical aspects of managing the economy and about macro-economic issues. What I would like to do in this essay is to bring the perspective closer to our own, individual behaviours, aspirations and practices and argue how they can and do affect the pursuit of the dream of being an economic super power and the growth and the direction of the national economy.

There is not a particular focal point for this “thinking out loud”. So, I will begin with myself. As an American citizen and as a resident of the United States, I should acknowledge that the US, with about 5% of the world’s population, consumes about 40-45% of the world’s resources. If India were to aim at the level of consumption of the US, then Indians would have to consume 150% of the world’s resources, since Indians make up about 16-17% of the world’s population! Clearly, increasing the world’s consumption levels at this point in human history would simply hasten the process of destroying our environment and to bringing American-style problems of “pathological consumption” to the rest of the world. But before we can simply put away that “obvious” conclusion, let us stop and acknowledge that to this day the first choice of any individual, anywhere in the world, to migrate is to the United States! So, we have to acknowledge that the simple reason why the US is seductive is not necessarily because of “freedom” as much as it is to a combination of freedom and consumption. Individuals -- us, you and me -- despite what we say publicly of the need to limit our desires, to manage our resources and to cultivate balance in our lives, are easy prey to the seductive mistress that is consumption.

I earn about $50, 000 a year, pre-tax. Converted to Indian rupees it amounts to a yearly income of about Rs 20, 30, 000. My salary, as a professor in the social sciences, is rather on the low end of the scale compared to what even a beginning software or IT professional earns. It is very low compared to what doctors and lawyers earn. It is even lower compared to what businessmen and entrepreneurs earn. I therefore complain to my colleagues and to the university administrators that what my colleague earns in the Business School is almost 20-30% more than what we earn in the Social Sciences and Humanities and I write letters to the editors here about Americans’ and America’s lop-sided “market system” that allows such discrimination.

But to put this matter in a different perspective, imagine how many people could live comfortably in India with that Rs 20, 30, 000/-. I live in a very small university town of 17, 000 people. In a town of that size in India, I assume that a salary of Rs 5, 000 a month would enable a couple with two children to live a decent middle class life. Which means that Rs 20, 30, 000 can sustain forty families, or 160 people easily in a small town in India! What I and my wife earn/spend therefore is unconscionably high compared to Indian living/earning standards. Would I therefore have the “right” to comment about the world economy and how we should follow this or that “ism” to right the ills of the world?

To propose that we should follow the Gandhian precept can only ring true when a “real” Gandhian proposes it. Not when Dr. Rao so proposes. In that regard, I came across an article in an old issue of The Week (V. Pushkarana 27/12/1998. “Kiss of life for mother earth” in which the magazine chose Rajendra Singh as its “Man of the Year”. Singh, who left home and wife when he was 28 to start life anew in the Aravalli region of Rajasthan helping the villagers to rebuild and reinvigorate their lives, says his inspiration is Gandhiji, but he is more practical in his approach to resolving life’s problems than was Gandhi. He says about Gandhi, “I don't even feel competent to comment on Gandhi. He was a Mahatma, a yugpurush, I am an ordinary man. However, there are small differences. In 1909, he had the nation debate on mechanisation. But, it remained a debate all his life, he could not give it a practical direction. If you say there is threat to the nation from the trains, buses, diesel, you should offer an alternative to them. Scientists of that time should have addressed that. Same goes for energy. Because of his loftiness in thought, he missed some of the ground realities. We are more practical than philosophical. Gandhi spoke of gram swaraj and ganraj but the Constitution has no place for village autonomy. Everyone used to listen to Gandhi, so he could well have got it included. Had that been done, the state of the nation would have been different today. After Independence, much has been taken from the villages, but nothing has been given to the villages. We are ordinary workers who cannot carry the ideological burden of Gandhi. But we do follow the path shown by him and try to make people stand on their own feet”.

Rajendra Singh, who heads the Tarun Bharat Sangh and who has transformed the life of people in over 500 villages in Rajasthan is a “practical Gandhian” and we should be paying attention to the likes of him. He says that those who are destroying the environment and are the big consumers constitute a minority, according to him about 15% of the population. If the rest can get together to legislate the use of land and water resources we could change consumption habits, he feels. Or is it going to be, like that old, wise Native American leader who said that only when the last fish is killed, the last drop of water drunk and the last tree felled will we realise the importance of conservation and of respecting nature?

When Rajendra Singh mentions mechanisation, he is alluding to a very important part of this whole discussion about globalisation, production and consumption in the industrial era and about protecting the earth. When I said that I am somewhat of a determinist, what I meant was that there is a particular dynamic to modernisation and industrialisation that makes it extremely difficult, if not impossible, to stop or redirect the process. Mechanisation not only brings a certain speed and a certain efficiency to work, but also a certain mind-set in its wake. Therefore, once we complete a project in two weeks that if done by human labour would have taken six months to a year (for example laying a road five miles long) because of modern earth-moving equipment and road-laying machinery, we don’t stop there. We want more roads. More and more roads. In fact, we would like to be like the Americans who have enough paved roads in the country to cover the whole state of Kentucky and more! Not only that, we would be keen on improving the already efficient machinery. We will build bigger ones and faster ones and lighter ones all in the name of conservation! But can we say, as some are saying in India now, that what India has in abundance is human labour and that we should use it rather than relying on modern machinery? Is that the reason that we continue to see “handmade roads” in India – the most shoddy, dangerous roads that makes travel in India utterly unpredictable and frightening? Remember, more than 70, 000 people die in India each year in road accidents!

Worse yet, have you seen the backbreaking work of labourers who sit in the open breaking stones for paving these roads? Have you seen those labourers sweat in the sweltering heat as they use their brooms and ladles to tar the road surface? Is there “dignity” in such labour? Should we continue to harp on using people for such work when mechanisation makes not only the task easier but makes the final product better?

Finally, what drives you and me more than our love of nature and of our desire to protect the earth for future generations? It is our drive to consume. So, what we can expect is that the 85% of India’s population who are “low” consumers will be more prone to develop the tastes of the minority 15% than to legislate a cap on consumption. More importantly, what will be MY response to this problem of over-consumption, for I am very much part of the minority 15%?

I try to follow what my local “green” enthusiasts tell me: to reduce, recycle, reuse. I reuse certain goods. I recycle plastics, glass and paper that my little town’s recycling services allow. And I try to reduce consumption to some extent. The car I drive is about ten years old and has 100, 000 miles on it. However, I know that my next car is going to be bigger and more expensive than the Honda Civic that I drive now. I know that my next year’s paycheck is going to be larger. Therefore my enthusiasm for the Green Party is just out of guilt and is surely hypocritical you will say and you will be right in pointing that out. Donating 5% of my salary to good causes, you will point out, may look impressive on paper, but actually, those living simple and less “consumptive” lives are donating more in real terms. And you will be even more correct in pointing that out. So, for consistency’s sake, for the sake of honesty and because I am somewhat of a believer in “determinism” I have to reject Gandhian economics. Moreover, as I said in my last piece, in this age of globalisation and of competing nation states, Gandhian values are not just anachronistic but impractical. Unless of course a large enough natural disaster forces all the peoples of the world to scamper to save what they have left and to realise the folly of their ways.

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