Monday, April 14, 2014

India 2014: Democracy and Development

Indian election is quickly turning into a battle between democracy and development. Underlying this tension, there is a thesis that democracy is only a luxury and can wait. Despite India's pride in being a democracy, this idea is as old as the country itself. Many people thought it was madness to have democracy in India, a poor and illiterate country at the time of Independence, in the first place. The privileged, the upper caste Hindus, the landlords, the princes, the educated, almost always thought this was a disaster. Indira Gandhi's brief adventure in authoritarianism was cheered on by many of these people: This was perhaps the reason why she was so wrong-footed eventually - everyone around her told her that this was great idea until the voters threw her out. Wealthy Indians nowadays point to China's development and blame their own democracy for failing to catch up, and this has become well accepted among the rich, powerful and the non-residents. Middle Class Indians therefore desire a 'strong leader', who can ride roughshod over democracy. The talk now is of the 'Gujrat model of development', which means better roads and e-Governance, though the assembly only met a few days every year and all dissent is ruthlessly suppressed.

One could attempt to justify democracy morally. The strong state that the middle classes advocate may not look that appetising if they try the famous test proposed by John Rawls: How would it look if you are on the losing side? But if we set aside the moral question for a moment, because all morality in India now is treated as a left-liberal dogma (something that the left-liberals should be happy about), and deal solely in the realm of the practical, the arguments against democracy looks fatally flawed. 

This logic that development brings democracy, which is now lapped up by National Chauvinists who argue that democracy matters less in an underdeveloped country. Though they profess to hate everything European and stand for truly Indian identity, this 'development first' is indeed a very Western idea. Worse, this is a Western neo-imperialist idea, entertained by those who would privately rather believe that India should not be exist as an independent country at all. If anything, that a poor country can indeed boldly experiment with democracy while it attempts to bring about development is a very original Indian idea, which lies at the very heart of the modern Indian state. And, I shall argue, despite all the disappointments we may have had, this idea that democracy can precede development was remarkably prescient and is still very relevant.

The problem of development, as modern Political Scientists show, does not come from democracy; it rather comes from the lack of it. To understand its reason, we should look closely at the nature of Capitalist development itself. Why is it that this has proved to be a more durable model despite the great initial achievements of the command economies such as the USSR? Surely, those economies built the appropriate legal structure, and a very effective mechanism of power, to focus solely on 'development'. However, the development as we know it, the ability to develop technologies, to continuously strive for productivity, to take risks and start enterprises to solve existing and future challenges, goes hand in hand with one of Capitalism's least liked features, the 'creative destruction', the itinerant liquidation of the structures of powers and creation of new hierarchies in its place. So, it is not just the socialism that the rich and the powerful should be afraid of: Capitalist development should be at least as disconcerting.

A reading of history shows that countries developed as that country's elite had been defeated and was forced to give up their privileges. This is why revolutions and civil wars, tragic as they are, often brought about 'development'. One could argue that one reason for China's progress and USSR's demise may have the former's 'Cultural Revolution' which destroyed the elite: USSR indeed had the same through Stalin's purges a few generations earlier. Now, democracy can run this process without so much blood-letting, and indeed proved to be a good system in resolving disputes. So, one way to foster development is to situate it on the basis of an effective democracy, one that greases the wheels of creative destruction by denying the powerful a chance to block progress, without wrecking everything and setting the economies back through bloody revolutions.

Indeed, the Indian version is slightly different from USSR: The idea is not about creating a command state producing by everything itself, but rather a state which stands behind its business classes and let them do whatever they wish. This state makes sure all the legislations and institutions are business-friendly - Banks lend them money easily, they can acquire any land as they like, they can hire and fire people without bothering about unions - in short, a Capitalist paradise. However, building this, which sounds a lot like Dubai rather than England, or USA, or Japan, countries that could build sustained long term development models, does not guarantee development or widespread prosperity. It only means that some rich people will have more opportunities to get rich. This will, however, not mean better education, more innovative products, better aware consumers with more rights, more new businesses, better jobs, enhanced disposable income and growth of demand, because all those things depend on things that this model will effectively stop: competitiveness, productivity growth, innovation, efficiency, enterprise. 

My argument is only democracy can ensure, bloodlessly, that the economy remains dynamic. This does not mean that India does not need institutional reforms: It sure does, and those need to happen immediately. But there is less discussion about the failings of, say, the Courts system, than the need for a different political system: Indeed, the elite in India does not want the courts to function better, more efficiently and hold them accountable. A democratically elected government which throws its weight behind the reforms of the judiciary will do more to unlock 'development' than one which merely believes building roads by awarding contracts to friendly industrialists will do so. 

So, in the end, my contention is a positive one: That democracy and development do hand in hand in India. As for China, it is a different cultural and historical model, and besides, who could say whether China wouldn't have developed faster had it been democratic. Democracy is not a mistake, and we shouldn't treat it as one.

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