Paradoxes of progress

Thursday, April 18, 2019

Book Review


Deepak Lal

Anita Inder Singh

China poses the greatest threat to America’s world power and to the current world order. How did China become such a strong economic power? And why is India lagging? That being the case, can India really counter China?  These three outstanding questions make this book a thought-provoking read.

China’s economic and military strengths are disturbing not just because it is an authoritarian state but because its view of international relations rests on its subjective axiom of the inequality of states, with China (the Middle Kingdom) at the centre, receiving deferential tributes by lesser states. China is unlikely to change its traditional world view. Dr. Lal’s point is correct: China continually invokes its own version of history to claim the territories of neighbouring states.  A coalition of economically and militarily strong states must be crafted to counter China’s growing power.  Even a slowdown in China’s growth will not stem its rise, although it may take nearly three decades to develop truly global clout. The author is right again: China is building world class armed forces for global deployment by 2050.

Russia, also steeped in authoritarian intellectual and political traditions, also challenges the lone superpower but is economically incapable of countering either China or the US. Its economic strategy relies on the export of natural resources for growth.  Most of these resources are located in the poorly inhabited Siberian wastelands and are being exploited by China.  Dr. Lal might have added:  at Moscow’s request, of course – because the Russians lack the thinking and skills to develop their Far East themselves.

Following the disastrous collectivization and other economic policies of Mao Tse Tung, Deng Xiao Ping sought ‘facts from truth’.  privatized farming and used China’s labour to promote labour-intensive development . China built up a huge production capacity in the 1990s – and exposed itself to global markets. Through state-led capitalism, Deng led Chinese industry into consumer goods and foreign trade. The decentralization of foreign trade gave provinces more fiscal autonomy.  Market reform included the abolition of price controls and trade liberalisation.


How do the Chinese view their progress? They don’t care about the  inequalities it has spawned  China, like India and the US, is an aspirational society, not an egalitarian one. China’s  spectacular growth has trickled down to the poor. The Chinese see the wealth of others as an achievement to aim for – rather than to be resented. Socialists, admirers of China  and Indian poverty-fighters , please note!

A strong rule of law and judicial independence are essential to sustain China’s economic advance, but the Communist Party is not at home with such liberal western ideas.  The Communists are  worried about economic slowdown if popular expectations of “achievement”  remain  unmet.  It is then that the communist monopoly of power will be challenged.

Although India’s democracy is premised on the rule of law and separation of powers, its $ 3 trillion economy is far behind China’s $ 14 trillion one. (Lal should have used more updated figures: his are  from 2014.)

Here one can take issue with him.  Given the ease with which corrupt Indian leaders  have  flouted the law, the ease with the Modi government has bypassed administrative and legal procedures to advance its own political interests,  how effectively can India’s weakened rule of law oil the wheels of progress?

He is rightly critical of India’s dirigisme and unproductive economic management. From this the following questions arise: are India’s economic prospects really all that bright? Enough to empower it to challenge China’s possible dominance of Asia?

Thankfully (!) he is a critic of the Gandhis and their erroneous belief in their self-styled dynasty.  India’s economy actually took off under two non-dynastic prime ministers – Narasimha Rao and Atal Behari Vajpayee. Sonia Gandhi held the reins of Manmohan Singh’s government  through her National Advisory Council – and created a dysfunctional dyarchy. Since the link between politics and economic policy can never be broken the author  could have made more of the fact that the inefficiency of “dual power”  hampered progress and  largely contributed to Narendra Modi’s electoral victory in 2014.

Dr. Lal is on very thin ground when he labels  Modi’s communally destructive gang as “Gandhian”. The violence and hatred that has spread under Modi could never be Gandhian – even if his government  had brought about the wonderful development without dole that he promised in 2014.  Instead, it has destroyed livelihoods through its most important measure – the 2016 demonetisation –  and  through its ban on cow slaughter.  His BJP-RSS combine  doesn’t  realise that communal violence, unchecked by the state,  is never a recipe for progress.

China, despite being a dictatorship , has created incentives for progress. ? Why is incentive scarce in the economy of the world’s largest  democracy?  Has incentive been drowned out by noisy, heavy-handed state intervention that has  left India in the bottom one-third of the Human Development Index?

That disturbing and urgent question emerges from this interesting  book. But Lal’s optimism about India could be tempered by the  facts that India’s democracy is currently  functioning poorly. And  joining the US in an anti-China coalition  will never make India a great power. Only India’s economic progress will.


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