Subramanian Swamy’s economic views come full circle from Harvard
Chennai: “Oh! You don’t take me seriously as an economist,” railed then irrepressible Janata party chairman Dr Subramanian Swamy, the Harvard economist turned politician on the eve of the Lok Sabha polls. 1998, while searching for an interview, covering his campaign in Madurai, from where he won comfortably with the support of AIADMK led by Jayalalithaa.
I was working for an economic daily at the time, could put his anxiety away and content myself with a few quotes while covering his election campaign. But the suddenness of that memory, emerging almost 21 years later after reading Dr Subramanian Swamy’s remarkably lucid last book, “Reset – Regaining India’s Economic Legacy,” shows how his economic philosophy has come full circle, in a long trip. from a scholar-teacher at Harvard to a politician in New Delhi.
Methodological issues, ideological differences, aside from his contempt for the Soviet-inspired socialist model, which gained momentum under the leadership of Indian Prime Minister Jawaharlal Nehru and the famous statistician Dr PC Mahalanobis, Dr Swamy’s book is a important contribution in the current political environment.
What is particularly striking is that this is the first major criticism of the ruling establishment in New Delhi in the form of a cohesive text, as the BJP obtained its majority in Lok Sabha in the Lok Sabha polls of 2014, followed by an even better performance in 2019. As the author himself says, economic performance was hardly an issue with Narendra Modi making national security the key issue.
Dr Swamy leaves no one in doubt that India’s economy is now in a state of crisis, even if “that does not necessarily mean an imminent collapse”. The author makes it clear that while Dr Manmohan Singh was an “accomplished economist, remained a marginal figure,” Mr. Modi is “honest about money” and “a domineering figure who cannot stand political competition.” But on complex issues concerning macroeconomics, its dynamics being very different from micro-issues, Modi has to rely on political advisers and colleagues who know very little about the subject, he says.
Dr Swamy claims that “the madness of demonetization and the futility of the Goods and Services Tax (GST)” hastened the downfall of the economy “, in part because of what can be called the lack of intellectual sophistication and lack of familiarity with mathematical economics in the world. current exemption.
In addition to reviving the economy, he pleads for an “alternative ideological push” to India’s economic policy. “Now is the time for a structural overhaul to purge the vestiges of the managed economy and usher in a competitive economy driven by incentives, structured by innovation and determined by the market.” India’s future model of rapid growth must reconcile “our old values and our heritage; Thus, India today is an ancient nation in search of a rebirth. “
The basis of this work, as the author puts it, is a monograph called “Plan Swadeshi”, which Dr Swamy presented at the Patna session of the Jana Sangh in 1970. The text he has developed now does not give only a historical, synoptic overview of what led to the country’s current economic ills and its solutions for
but it has an interesting annex, which underlies a model of rapid and sustainable growth rate of 10% of GDP, with a theoretical framework based on the philosophy of “integral humanism”, as proposed by the ideologue RSS of the late Deendhayal Upadhyaya.
Dr Swamy recalls that shortly after returning to India in 1969, after spending seven years in the United States – two of those years working for a doctorate at Harvard University and five more years teaching there – he began to question the socialist planning model which he got into trouble with then Prime Minister Indira Gandhi, who in his response to Lok Sabha “denounced” his “Swadeshi plan” as dangerous .
“Dr. Swamy’s” instant success “monograph was then prompted by a few leaders of Jana Sangh, such as Nanaji Deshmukh and Jagannatharao Joshi, and he wanted to show that” material economic growth must be harmonized with spiritual progress, in others. In terms, to stand up – a single materialist advance, as in the West, was not suitable for India.
Two chapters in this book which dwell on the very unfair and murderous land revenue collection system under the former British Raj which crippled Indian agriculture and crafts, in addition to the comparative perspective on Indian economies and Chinese until 1952 (roughly coinciding with our first five years Initial Plan), are an analytical delight. While China was better positioned in 1952 to embark on industrialization than India, because the latter’s “agriculture” was “in shambles in 1947”, but India’s relatively better infrastructure in terms of industrialization. rail network and so on didn’t make much of a difference, says Swamy.
In fact, Dr. Swamy’s analysis is quite similar to what mainstream Marxist economic historians have said about the grueling nature of colonial exploitation, the appropriation of agricultural surpluses in India and elsewhere, with which he is. disagree ideologically. Even denouncing John Stuart Mill’s utilitarian take on indigenous ‘governance’, highlighting key markers that distinguished the elite in India and China even under foreign rule, drawing attention to how the The performance of the Indian princely states in agriculture was as good if not better than British-ruled India which reaped the benefits of irrigation systems, his comparison of the fallout from famines in India and China is instructive.
“The drop in famine deaths in India (unlike China) was largely due to the existence of a relatively larger rail network and of course the free press,” writes Dr Swamy. This is similar to the opinion of his pet peeve, Professor Amartya Sen, that the press as an “ early warning system ” and “ traditional legal mechanisms ” is the best social insurance against death. by famine, that famines are not so much due to lack of food, but due to lack of access to food. Yet Dr Swamy views the years of the Plan and Soviet-style socialism (1950-91) as a “monumental” loss of economic opportunity for India, despite the “Green Revolution”.
The author also revealed how the economic reforms of the early 1990s, under the tenure of former Prime Minister PV Narashimha Rao, were based on the
“ master plan ” as Minister of Commerce, Law and Justice of Cabinet Chandra Sekhar, he had drawn, with the help of experts, to free the labyrinth of regulations
controls that have created corruption and put more emphasis on export orientation. But thanks to Nehru-Gandhi’s nationalization policies, including the big banks and insurance companies and the years of the plan, about which Dr Swamy is so critical, a new large Indian middle class has emerged, which are now the most big supporters of the BJP.
As ironic as these historic trends are, Dr Swamy’s economic recovery plan wants the government to focus on the two engines of growth – consumption and investment. Both have fallen a lot in addition to exports. The abolition of income tax is part of its reform. He is concerned about the “deep demoralization” of the bureaucracy, particularly within the Ministry of Finance, where a large number of incumbent offices were “compulsorily retired” after the Modi-2 government took office. in 2019.
The heyday of Dr Swamy’s economic philosophy emerges by revisiting the implications of famed economist Kenneth Arrow’s famous “ General Impossibility Theorem ” – on the “ aggregation ” of individual preference functions into an order of preference. social by satisfying conditions such as majority decision rule, which Professor Amartya Sen has described as having “profoundly influenced modern welfare economics” (Sen’s “Choice, Welfare and Measurement”, OUP, 1983).
Without going into the technical details of the economists concerned in his “Appendix”, Dr Swamy seeks to reconfigure Arrow’s relevance on the basis of the “Hindu way of life” as articulated by RSS leaders Golwalkar and Deendayal Upadhyaya.
Criticizing both capitalism and communism, Dr Swamy implies the Hindu theory of “Purusharthas” as having already anticipated Kenneth Arrow! This philosophical debate will surely continue.