Modi and the guys in business suits



Anil Ambani, the industrialist and 7th richest Indian by Forbes estimates, confirmed his man-crush on Narendra Modi (Click here for my favourite Modi profile). Last Friday, at Modi’s ritzy investor carnival, Ambani publicly professed that Modi’s birth in 1950 was an event equal in importance to Mahatma Gandhi’s in 1869. Greatness was never this small and flattery never so daring.

In Gujarat, a relatively new idiom in Indian politics is potently playing itself out. It’s being called Moditva, or literally Modiness, for want of a better word. It’s an improvisation over Hindutva, the right-wing Hindu ideology, and one that seeks to legitimize Hindu conservatism with the able help of the free markets.

In Gujarat, it works by keeping fat-cat tycoons (to borrow a word from Obama’s dictionary) happy by granting them the power to “over-leverage” a market. In other words, big corporations get access to easy terms and conditions to conduct business, which are sometimes seen as being lopsidedly favorable to the investors.

The point to make, however, is this: how does an over-leveraged free market in Gujarat fundamentally alter our opinion of politics and society with Modi at the helm?

The lavish praise of Modi by almost all of our biggest industrialists was stunning. (For some help on how they paid tributes, click here. ) “King of kings,” said Anil Ambani. Ratan Tata, the former patriarch of the Tata group, said he would only be “stupid” not to invest in Gujarat. So, those who haven’t boarded the flight to Ahmedabad yet can be rest assured about his or her idiocy.

In a Freudian hint, Ambani summed up the essential Modi: a “king”. Only kings can be as totalitarian.

Gujarat has a robust two-digit growth rate, but it isn’t progressing anything like it is pretending to be. Its human development indicators are just as bad or even worse than in some other Indian states with comparatively lower growth. A comparison between Gujarat and Kerala is sufficient to bear this out.

GDP, or Gross Domestic Product, or quite simply, growth, is a key economic statistic. It’s an output measure (the value of the goods and services produced by all sectors in an economy); an expenditure measure (the value of the goods and services purchased by households and by government, investment in equipment and real estate); and an income measure (of income generated by all sectors, and mostly in profits and wages).

However, growth in many ways is just a number. It tells you how much a country’s income has gone up by, but does not tell you whose share fuelled this growth. For example, a high-growth rate could result from profits and wages earned by a small part of the economy.

Unless growth is made to result in development, which must be defined by greater access to health, schooling and alleviation from poverty, growth means nothing, as Amartya Sen has often argued. He therefore calls for “growth-mediated development”. I can’t help recalling an aptly titled essay on the subject by Sen and Jean Drèze: Putting growth in its place. They write: “We referred to this process as “growth-mediated” development in our 1989 book, Hunger and Public Action. This can indeed be an effective route to a very important part of development; but we must be clear about what can be achieved by fast economic growth on its own, and what it cannot do without appropriate social supplementation.”

Gujarat (44.7%) has more children with poor health than say Ethiopia (34.6%) precisely because of Modi’s single-minded worship of growth that lacks “appropriate social supplementation”.

Industrialists cannot be expected to worry about malnourishment. They will flock to whichever state that gives them freedom to do business the way they find it most useful. In fact, this becomes an acceptable norm, if we presume that industrialists should not be judged from a moral standpoint. So, no matter if Modi had been called a Nero, no matter if human rights remains highly questionable in the state, no matter if a key aide and minister is doing prison time for abetting an anti-Muslim pogrom – it is possible to argue that these cannot be reasonable deterrents to responding to Modi’s business allurements.

However, in economics, there is something called “pricing out of democracy”. Citizens are said to be “priced out of democracy” when the globalised finance capital gives and take incentives from and to political parties as well as governments.

The question to ask is, are citizens being “priced out of democracy” in Gujarat because tax sops, cheap power and land are evidently being exchanged for neo-liberal economic goodwill? (Click here for a discussion on NDTV)

Economy rides religion?

Modi is not at all a historical exception in combining religious nationalism with a push for economic growth.

Modern social theories have pointed to an agreeable relationship between nationalism and capitalism. The rise of most modern economies has been found to be concomitant with a rise in nationalism.

In 1929, hit by an economic depression, America rolled back its foreign aid and investments, ruining Weimar Germany. Its unemployment rose to 6 million, leaving the economy in doldrums and middle-class Germans disenchanted. This would go on to serve as perfect conditions for the Nazis to claim power.

With the rise of Hitler’s nationalism, jobs were back. By 1939, unemployment in Germany was nearly wiped out. Public works were run efficiently and industrialists backed Hitler with money and investment. Déjà vu?

Workers could buy a Volkswagen Beetle for small weekly installments. The Nazis set up the SdA (Beauty of Work) to help Germans see dignity in work. They abolished trade unions and gave more power to the industrialists. Then came the Autarky — an attempt, though unsuccessful — to make Germany self-reliant. The KdF (Strength through Joy) scheme rewarded good workers with entertainment facilities and free holidays. There were so many good things about life in Nazi Germany. In a nutshell, Germany was a strong and successful economy.

In The Spirit of Capitalism: Nationalism and Economic Growth (Harvard University Press, 2001), Liah Greenfield contends that nationalism served as a vehicle for economic might by committing “masses of people to an endless race for national prestige”.

She takes off from Max Weber’s Protestant Ethic and the Spirit of Capitalism, a canonical, if contested, work that looks at the role of religious affiliation, such as Protestant theology, in firing the spirits of capitalism.

Greenfield has argued that nationalism as “a unique form of social consciousness” is the key impetus to the rise of modern economies, having emerged in 16th-century England to spread across the world, including France, Germany, Japan, and the United States. R.H. Tawney in Religion and the Rise of Capitalism, shines the light on “why Christianity continues to exert a unique role in the marketplace”.

Is Modi’s Hindutva then an essential ingredient for Gujarat’s economic rise? India’s economic rise? If yes, then what is the price that we are ready to pay? India’s economic progress should ideally come from a careful avoidance of mistakes developed economies made. That’s why economic history is so important. India must rise to power by dint of economic determinism, not on the back of an ideology that is against the very idea of modern India.

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