The Wall Street Journal - Communism’s Long Shadow Over India
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17 ноября 2017 г. Sadanand Dhume.
The Bolshevik revolution helped disfigure the country’s economic imagination.
As the world marks the centenary of the Bolshevik Revolution in Russia, our attention has naturally turned to how communism ravaged the former Soviet Union and its Eastern European vassals. But the ideology also cast a shadow outside the communist world. In terms of the sheer number of people affected, India suffered more than any noncommunist country. Overcoming this poisonous legacy remains a work in progress.
Of course, democratic India witnessed no Soviet-style show trials or gulags. There is no modern Indian equivalent of China’s brutal Cultural Revolution or Great Leap Forward. Nothing in independent India’s experience approaches the horrors of the Khmer Rouge in Cambodia.
But though India may have been spared the worst of communist excesses, it nonetheless paid a price for the ideology’s rise to global prominence. Simply put, communism helped disfigure India’s economic imagination. If India still houses 268 million people who earn less than $1.90 a day—the World Bank’s official estimate for poverty—at least part of the blame belongs to politicians besotted by the Soviet experiment before it finally collapsed.
Lenin’s revolution had an impact on India even before its independence from Britain in 1947. Twenty years earlier, Jawaharlal Nehru, at the time an up-and-coming leader in the Congress Party, visited Moscow for the 10th anniversary of the revolution. He later wrote: “I had no doubt that the Soviet Revolution had advanced human society by a great leap and had lit a bright flame that could not be smothered.”
Though himself a Fabian socialist, a worldview he picked up as a student in Britain, Nehru freely acknowledged the impact of communism on his economic thinking. After independence, with Nehru at the helm, India enthusiastically embraced state planning. As the theory went, high-minded bureaucrats would make better economic decisions than grubby entrepreneurs.
Nehru decreed that lavishly funded state-owned companies would control “the commanding heights” of India’s economy. The phrase itself was borrowed from Lenin. In 1955 the ruling Congress Party declared its intent to establish “a socialistic pattern of society” in India.
Nehru’s fans point out that planning was all the rage in the 1950s. Communists were hardly the only ones enamored by it. This is true, but it glosses over prescient early critiques of India’s statist path by the University of Chicago’s Milton Friedman and the Indian free market economist B.R. Shenoy.
Over the first three decades of independence, Nehru, followed by his daughter Indira Gandhi, built one of the most dirigiste economies outside the communist world. Between them they nationalized aviation (1953), life insurance (1956), banks (1969) and coal mines (1973).
At the same time, communist parties established a beachhead in politics. In 1957, the state of Kerala elected a Communist government. In national elections that year, Communists came in (a distant) second after Congress. Ten years later, they came to power as part of a coalition in West Bengal. Outside Parliament, Communist influence was even stronger. Under the umbrella of the socialist Congress Party’s patronage, Communists came to wield disproportionate influence in the media and academia.
Today all this may seem like ancient history. Effectively bankrupted by socialism, India since 1991 has embarked upon economic reforms by ending licensing, welcoming foreign investment, and embracing trade. Communists are at their lowest ebb, embattled in their regional strongholds and reduced to just 10 of 543 seats in Parliament. Maoist insurgencies sputter on in central India, but nobody seriously gives them a chance against the might of the state.
But while communists may be on the ropes, the destructive legacy of Indian statism lingers. About 70% of India’s debt-ridden banking sector remains state-owned. Air India is a byword for shoddy service and a drag on government finances. Public sector dominated coal mining remains synonymous with sloth and corruption.
Moreover, when it comes to economic policies all major political parties in India largely speak the language of the left. Run by the Nehru-Gandhi dynasty, Congress can never bluntly acknowledge the follies of its greatest heroes. The ruling Bharatiya Janata Party, with its roots in Hindu chauvinism, remains wary of market-based solutions to policy problems. Its leading ideologue, Deen Dayal Upadhyaya (1916-68), viewed both communism and capitalism as “foreign ideologies.”
A clutch of Hindu nationalists championed Prime Minister Narendra Modi’s most dramatic decision so far—last year’s sudden voiding of nearly 90% of India’s currency by value. (A communist would recognize the blithe disregard for private property and overwhelming faith in the state.) And unlike most countries that have adopted a goods-and-services tax, India has not settled on a single tax rate. Some in the BJP cannot seem to stomach the idea that, in the words of one party official, a Mercedes-Benz and flour would be taxed equally.
Despite these problems, on the whole India has done a lot better after the fall of the Berlin Wall than at any other time in its modern history. In both the BJP and Congress, anti-market economics no longer enjoys the monopoly it once held. Liberalizers may not be ascendant, but nor are they irrelevant.
With a little luck, over the next century India will look less toward failed statist ideas and more toward what economist Deirdre McCloskey calls “market-tested betterment” to propel itself from poverty to wealth.
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