From Biography to Political Economy

BOOK REVIEW

past, was lost in the mists of time. Delhi was now the place of her second birth.

The author visited Andhra Pradesh in 2002 to meet the then Chief Minister Chandrababu Naidu, as also Maoists in Warangal and other destabilised parts of Andhra. He met Gummadi Vittal Rao, nicknamed Gaddar, a bank clerk turned balladeer who drew thousands of people to his concerts, as well as one Madhu, a “squat and stunted man with a look of terror on his face” (p 182), physically destroyed by poor nourishment, who had joined the Maoists after being beaten by his landlord. The author also met Suneetha Kukka, all of 19, after she had surrendered in exchange for the Rs 20,000 bounty that was on her own head, and agreed to abandon Maoism. In more recent times, in 2009, French met Kobad Ghandy in Tihar jail. His guide on the visit was S A R Geelani, earlier charged with involvement in the attack on the Indian Parliament and later acquitted.

Yet later, French met Sunil Bharti Mittal, the hugely successful telecom tycoon, whose manner he describes as “direct, unpretentious”. The author writes with candour and balance about such meetings, making a number of rather perceptive and penetrating observations.

Politics and Economics

One of the points that French hammers in with force is the extent to which family politics has seeped into the core of the Indian party system. This is not an original argument but one that needs to be periodically reconsidered to understand the extent of the malaise. Every once in a while lately, some major functionary of the Congress Party will suggest that Rahul Gandhi now be called upon to take over the reins of government. But the Jawaharlal, Indira, Sanjay, Rajiv, Sonia, Rahul trail is not the only one. There are others: Lalu, Rabari and their sundry nephews; Charan Singh, Ajit Singh; Govind Vallabh Pant and K C Pant; Karunanidhi and his extended family; Deve Gowda and his son; Biju Patnaik, Naveen Patnaik; Mulayam Singh Yadav, Akhilesh Yadav, and many, many more.

The hereditary system goes beyond politics, into music, sundry professional callings like carpentry and fishing, and even Bollywood. Possibly, the phenomenon has something to do with the Indian setting. (The author observes that the Bollywood movie, Luck by Chance, about young actors who make it on merit rather than family connections, itself starred Farhan Akhtar and Konkona Sen Sharma, children of famous parents.)

In politics, the dependence on the family system seems to have progressively increased over the past 50 years. Examining the present Lok Sabha, French notes that “of the thirty-eight youngest MPs, thirtythree had arrived with the help of mummydaddy” (p 120). Of the 208-strong contingent of Congress MPs, 23 are women. This works out to a low percentage, barely 11%, but the interesting fact is that 19 out of the 23 are either wives or daughters of earlier Congress worthies. Of the remaining four, Chandresh Kumari Katoch is the daughter of the erstwhile Maharaja of Jodhpur. There is merit in the author’s fear that India’s house of representatives might ultimately turn out to be not a Lok Sabha but a Vansh Sabha, a house of dynasty.

French devotes considerable space to the economic vision of two of the key figures of India’s planning, namely, Jawaharlal Nehru and Prasanta Chandra Mahalanobis. However, the second part of the book, entitled “Laxmi”, opens with the economic vision of John Maynard Keynes. Keynes did have an India connection, though he never set foot in India. After graduating in mathematics from Cambridge, he sat for the civil service exams in 1906 and took up his first job, at age 23, at the India Office, where he stayed for two years. He worked in the revenue, statistics and commerce department but seems to have had enough spare time to finish his Cambridge dissertation on probability theory. Much later, in 1913, Keynes wrote his first major work in economics, Indian Currency and Finance, a defining theoretical exposition on the gold exchange standard. He later accepted a seat on a royal commission to enquire into Indian currency and finance. He strongly suggested the setting up of an Indian reserve bank, an idea that was to be taken up more than 20 years later, in 1935.

Keynes’ fundamental economic project, of course, was directed at making capitalism work, but his focus was entirely on the working of mature capitalist economies, like those of England, Germany and the

United States (US). His other major contribution, to which he had devoted the last years of his life, was to comprehensively alter the system of international payments by setting up the Bretton Woods institutions, which began functioning just on the eve of India’s independence. No few ideological battles have been fought in India through the past half century and right up till the present time on the extent to which Indian economic policymaking should or should not abide by the prescriptions of these venerable institutions.

Why did the Indian economy go wrong in the decades after Independence? French holds the view that it was the kind of dirigiste dogma propagated by the likes of Nehru and Mahalanobis that caused the difficulty. Nehru was attracted to Fabian socialist ideas propagated by Sidney and Beatrice Webb, H G Wells and G B Shaw. French thinks that Nehru’s economic thinking was a “hardened version of the social democratic outlook of Clement Attlee’s postwar Labour government” (p 137). Nehru did not believe in Gandhi’s idea of village industry and a spinning wheel in every hut; he believed in new, fast, scientific progress. A visit he paid to Soviet Russia in 1927 left him much impressed, and he wanted to introduce the same approach of medium-term econo mic planning, with the state to play a central role. After January 1948, Gandhi was no longer in the political firmament and Nehru’s views therefore held untrammelled sway.

Nehru’s ideas were to later find resonance in the work of a Cambridge compatriot, Prasanta Mahalanobis, who took a first in physics from King’s College a few years after Nehru. Mahalonobis later gained stature as a front-rank statistician while fancying himself more as an economic planner. Nehru was impressed with his knowledge

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of mathematics and his self-confidence. Mahalanobis in the mid-1950s suggested a mathematical model of economic planning in which the growth rate of the economy at large is driven by the share of investment being channelised into the capital goods sector of the economy. This was to form the theoretical basis of the Second Five Year Plan (1956-61).

Mahalanobis was widely known to be a product of the Bengal renaissance, and close to Rabindranath Tagore. He had pursued subjects like the pseudo-science of eugenics and in particular, the racial origins of Bengalis. In matters economic he had great faith in large-scale input-output matrices, the bigger the better, to precisely map out the development path of large complex economies like that of India. Elaborating on his ideas in the mid-1950s, he was confident that full employment would be ensured within 10 years. He even proposed the creation of a Labour Reserve Service, with a giant pool of surplus workers on half-pay basis to be shifted around the country from project to project.

The Mahalanobis model was based on some heroic, and rather unrealistic, assumptions. For example, it was presumed that all factories would work at full capacity, that all entrepreneurship could be brought under government auspices, and that prices could be fixed. All of this was in sharp contrast to the Keynesian vision of accepting risk and potential failure to be an intrinsic part of economic reality. The Mahalanobis model was supposed to run on a command structure, by pure administrative fiat, where the central planners were supposed to be endowed with full information on the tastes and preferences of consumers. There was no scope for mismatch of demand and supply or possible waste. The chief contention of French seems to be that this kind of economic and planning regime suppressed the latent potential of the Indian entrepreneurial class. This can hardly be disputed.

Society

It is when French delves deep into the interiors of the country to explore the precise form of the economic and social exploitation that some of the horrors come starkly alive. There is the story of a certain Venkatesh, a dalit who worked in a quarry

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