Tag: India

No Discernible Rise in Wellbeing? The Data Suggests Otherwise…

Economist Jeffrey Sachs of Columbia University recently made this claim (emphasis mine):

“We’re so rich in our total production and in our capacities to do things that we could solve absolutely fundamental challenges, such as ending extreme poverty or addressing climate change or preserving biodiversity without much effort … it cannot be the most important issue in the world whether the U.S. grows at another 3% or 3.5% or 2.9% a year, when over the last 65 years there’s been no discernible rise in wellbeing

That is the theme of his new book, The Origins of Happiness.

By “we” Sachs appears to mean the U.S. and other rich countries and calls for their governments to engage in wealth transfers to poor countries and a plethora of environmental projects. What he does not seem to realize is that humanity is already making swift progress—through the free actions of billions of individuals—toward ending poverty and better preserving the environment.

The Global Poor, the Great Enrichment, and the American Working Class

Americans have lately been debating the tradeoffs we face as the global poor rise. Their gains have been enormous and unprecedented. And yet the American working class has struggled to better itself even as conditions have improved for most others:

Image source.

Percentiles 80-95 contain many from the relatively rich countries’ lower-income classes; there are a lot of Americans in there. Other factors may be at work, but let’s say for the sake of argument that the gains by the global poor have on balance harmed at least some of them.

So why is this happening? Is it part of some other nation’s malicious plan? Is it China, perhaps? Or India? Or did we inadvertently do it to ourselves, through bad trade agreements or “soft” foreign policy?

It’s natural to want to make the story about us, or our actions, or a villain who threatens us. Those sorts of explanations are politically useful; they suggest that the right leader can get us out of the mess we’re in.

But maybe the correct explanation isn’t about us at all. One way to see this is to ask a slightly different question: Why is the Great Global Enrichment happening right now? Why didn’t it happen in the 1960s? It happened in the 1960s in Japan, after all. It presumably could have happened elsewhere too. So why not?

Modern Slavery, More Important than Who Built the White House

When Michelle Obama delivered her address at the Democratic National Convention (DNC) in Philadelphia, she created a stir when she cried out that America’s story was “the story that has brought me to this stage tonight, the story of generations of people who felt the lash of bondage, the shame of servitude, the sting of segregation, but who kept on striving and hoping and doing what needed to be done so that today I wake up every morning in a house that was built by slaves.”

That last line, “…I wake up every morning in a house that was built by slaves,” was the focus of much attention, with some conservative critics calling the claim false or misleading. The record was set straight in a New York Times article of July 26th, “Yes, Slaves Did Help Build the White House”.

While it important to address sins of the past, it is always wise to focus on today’s indiscretions too. Yes, a forward-looking perspective is always prudent. The slavery problem that is pressing today is modern slavery, and it’s a shockingly huge problem.

In 2013, the Walk Free Foundation, founded by Australian mining magnate Andrew Forrest, created the Global Slavery Index (GSI) to track and report modern slavery worldwide. The GSI defines modern slavery as “situations of exploitation that a person cannot refuse or leave because of threats, violence, coercion, abuse of power or deception, with treatment akin to a farm animal.” With data on 167 countries, the Global Slavery Index estimates that over 45.8 million people find themselves in some form of modern slavery today.

According to the Global Slavery Index, over 58 percent of slaves today live in just five countries. India’s embrace of slavery is astounding, with over 18 million Indians enslaved today – over 4.5 times more than the U.S. had during its peak decade of the 1860s.1  China, Pakistan, Bangladesh, and Uzbekistan round out the top five offenders. Seventeen countries have at least one percent of their populations living in modern slavery, with North Korea leading the pack, as the accompanying table shows.

 

While it might be politically correct to exclusively spend time gazing into the rearview mirror and speaking only about the history of slavery in the U.S., it would be wise to speak of the 45.8 million who are enslaved today. It’s time to shine a light on today’s slave trade and the countries where slaves reside.

Is Washington Courting India as an Anti-China Ally?

The just completed visit of Secretary of Defense Ashton Carter to India has generated considerable speculation.  That is especially true in China, where opinion leaders noted not only was this was Carter’s second trip to India during his relatively short tenure as Pentagon chief, but that he cancelled a previously scheduled trip to Beijing so that he could make this latest journey.  That move, they feared, suggested a rather unsubtle tilt against China in favor of one of its potential geostrategic competitors.

The agreement that came from Carter’s visit will do nothing to reassure the Chinese.  Carter and his Indian counterpart, Defense Minister Manohar Parrikar, pledged to increase logistical cooperation in the military arena, especially maritime cooperation.  Although that agreement is still a considerable distance away from constituting a full-fledged military alliance between the two nations, it continues a trend that has emerged over the past decade of ever deepening strategic ties.  And mutual concerns about China’s ambitions appear to be the driving force in the bilateral relationship.

At a minimum, the United States appears to be trying to put in place the building blocks of a containment policy directed against China, if U.S. leaders later decide that such a full-blown policy has become necessary.  On this same trip, Carter made a stop in the Philippines to reassure that country of strong U.S. backing in its South China Sea territorial dispute with China. Apparently previous statements by the Secretary of State and President Obama himself, combined with a buildup of U.S. troops in the island nation were not sufficient evidence of resolve.

And Carter’s sojourn in India must be seen in the larger context of Washington’s efforts to strengthen its long-standing alliances with South Korea and Japan and to forge cooperative military ties with such former adversaries as Vietnam.  Along with Japan, though, India would be the biggest prize as a strategic ally.

Despite the wishes of some Sinophobes in Washington, we are likely to see a more measured response from India.  Delhi has much to lose and little to gain by becoming a cat’s paw ally of the United States against China.  That is especially true if Washington is not willing to sever its close ties with India’s arch-enemy, Pakistan.  Yet as long as U.S. leaders insist on waging a “war on terror” with a major Central Asia/South Asia component, centered in Afghanistan, they will not cut Washington’s supposed Pakistani ally loose.  And as long as that is the case, Indian leaders and the Indian public will view professions of U.S. loyalty to their country’s vital interests with justifiable skepticism.

Moreover, shrewd Indian policymakers may conclude that the best position for their country is one of constructive neutrality in the growing tensions between the United States and China.  Whatever side India would take, it would anger one of those great powers, lose potential benefits, and increase its risk level.  Only if China truly adopted a policy of rogue expansionism is that sober calculation likely to change.  In the meantime, Ash Carter and other American suitors may press their courtship of India, but they are likely to come away disappointed.

Restarting India’s Faltering Economic Revolution

The sharp defeat of Narendra Modi’s Bharatiya Janata Party in the state of Bihar has put the prime minister’s reform plan and political legacy at risk. He still has time to act, but governments usually grow more timid the longer they hold office.

A trading people who had succeeded at commerce around the globe, Indians long were held back by an officious bureaucracy notable for its inefficiency and corruption. The first systematic economic reforms were implemented in the 1980s, but a succession of weak governments never allowed their people to fulfill India’s high promise. According to the Economic Freedom of the World report, in 2013, the latest year for which numbers are available, India ranked a dismal 114 out of 157 nations rated.

Eighteen months ago Modi won a dramatic victory and seemed poised to transform India’s economy and more. Some called him the Indian Reagan.

However, his government has not delivered much change. One reason was that the opposition continues to control the legislature’s upper chamber. Moreover, Modi always was more pro-business than free market.

Finally, the government has been timid despite its sizeable legislative majority. Deficits continue. Banking remains state-directed. Privatization has disappointed. The law still discourages creation of family firms.

India’s Faltering Economic Revolution: Lost Opportunity, Lost Future

Last year Narendra Modi won an unusually strong majority in India’s parliamentary election. Modi subsequently visited the U.S. and was warmly welcomed by both the Obama administration and Indian-Americans.

Although ethnic Indians circled the globe as entrepreneurs and traders, the Delhi government turned dirigiste economics into a state religion. Mind-numbing bureaucracies, rules, and inefficiencies were legion.

Eventually modest reform came, but even half-hearted half-steps generated overwhelming political opposition. Last May the Hindu nationalist Bharatiya Janata Party, led by Modi, handed the venerable Congress Party its greatest defeat ever. He seemed poised to transform his nation economically.

As the anniversary of that visit approaches, the Modi dream is fading. He simply may not believe in a liberal free market.

Moreover, few reforms of significance have been implemented. The failures overshadow the Modi government’s successes and highlight its lost opportunities. Critics cite continuing outsize budget deficits and state direction of bank lending.

Former privatization minister Arun Shourie observed last December: “when all is said and done, more is said than done.” Unfortunately, Modi has missed the “honeymoon” period during which his political capital was at its greatest. Time is slipping away.

How Capitalism Is Undermining the Indian Caste System

Karl Marx was wrong about many things but right about one thing: the revolutionary way capitalism attacks and destroys feudalism. As I explain in a new study,  in India, the rise of capitalism since the economic reforms of 1991 has also attacked and eroded casteism, a social hierarchy that placed four castes on top with a fifth caste—dalits—like dirt beneath the feet of others. Dalits, once called untouchables, were traditionally denied any livelihood save virtual serfdom to landowners and the filthiest, most disease-ridden tasks, such as cleaning toilets and handling dead humans and animals. Remarkably, the opening up of the Indian economy has enabled dalits to break out of their traditional low occupations and start businesses. The Dalit Indian Chamber of Commerce and Industry (DICCI) now boasts over 3,000 millionaire members. This revolution is still in its early stages, but is now unstoppable.

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