Election in India, World’s Biggest Democracy
by Jayant Bhandari | Posted April 14, 2014
Mahatma Gandhi, when asked what he thought of Western civilization:
“I think it would be a good idea.”
The biggest democracy in the world has started an electioneering process for the next federal government. This massive exercise runs from April 7 to May 12. Euphoria has swept the nation. Foreign Institutional Investors (FILs) are extremely optimistic about India’s future. The Indian stock market has reached its highest ever level.
Comparing India's low growth rate with China's high one, many experts believe that in democracies, growth must be slow — but steady — and eventually very strong. Is India’s moment of very strong growth arriving?
Narendra Modi of the seemingly right-leaning Hindu nationalistic party, BJP, is widely expected to be the next Prime Minister. Before dissecting Modi — to understand the current nature of Indian sociopolitical thought — let’s have a look at a recently emerged party that came out of nowhere aspiring to rule India, won a major election, but then slipped and broke its back, and ended up playing a major role in crystallizing Modi’s prospects.
That new party is the Aam Aadmi Party(AAP). Its key proclaimed interest has been reducing corruption in India. They would like to install a massive new government department with tens of thousands of new bureaucrats with “impeccable” integrity to oversee the conduct of the (rest of the) government.
The more complex a society becomes, the more it needs decentralization of power and the free market.
Those with any experience of India know that it is virtually impossible to find a single honest bureaucrat; moreover, you must constantly deal with extremely dishonest people in the society, which seriously lacks work ethic and integrity. One must struggle with dust and dirt everywhere, for cleaners don’t clean and sweepers don’t sweep. Nothing is done properly, but with expediency and a patch-up mentality. The environment is a disaster. Any concept of quality is conspicuous by its absence. Offering extra money to workers does not help; it merely results in more skipped days. Animals rot and people wallow in filth and disease. Only someone utterly lacking in empathy would not weep at the lack of dignity that even animals must suffer. I wept today, for I failed to get even my servants to treat our dying dog with some basic decency. The vet does not see any value in protecting his eye before spaying antiseptic on a wound right next to the eye.
Can Indians conceptualize what corruption really means?
AAP made a lot of noise and demonstrations against corruption and came to power in the state of Delhi in November 2013. A lot of young and middle-aged educated acquaintances of mine support AAP. They shout against corruption. But then a moment later they have no problems giving a bribe, not only to get a passport or a driving license, for which bribes are necessary, but also to gain an unfair advantage over others. They will worship a cow, garland it, and offer it freshly made food, prostrate themselves before it, sing religious hymns, and lovingly caress its neck. Then soon thereafter, once the ritual is over, pick up a thick, heavy stick and slam it hard on the back of the cow, to make it leave.
The biggest voting block of AAP was the “educated class,” taxi drivers, and housewives. You must constantly haggle with taxi drivers in Delhi. “Anti-corruption” was the taxi drivers’ way to get AAP to stop the police from interfering and extracting bribes for overcharging. Middle-class women voted for AAP because it promised cheap or free water and electricity. These two segments had at least a partly rational, albeit dishonest, financial interest in mind. But the “educated class” failed to connect some very simple dots.
The anti-corruption movement (witness what “holy cow” means in practice, as shown above), was steeped in hypocrisy and irrationality. Deep thinkers might find this unbelievable, for to them it should create such massive cognitive dissonance that the protagonists would be forced to stop at least one pattern of action: either hit the cow or worship it. In reality, there is no dissonance, for such people process the world through pre-rationality. Even a very high-level education can survive on the foundations of irrationality, if what is learned is accepted as a belief, on faith, through rote learning.
AAP soon found that it could not meet the heightened expectations of the masses. People believed that anti-corruption was a magic wand to get free stuff. Moreover, they wanted others to stop being corrupt, but still wanted a free license to be corrupt themselves. The AAP government fell a mere 49 days after coming to power.
Indians now want a strong leader, the latest fashion among voters lacking in rational moorings and a symptom of their keenness to deify someone, hoping to generate top- down growth without effort, on this occasion through leadership rather than any reduction of corruption.
The history of post-English India has shown that the country has done best when its government was weak. Two Indian prime ministers, Indira Gandhi and her son Rajiv, were assassinated in the ’80s. That left the federal government very weak. This weakness, along with a few other circumstances, helped entrepreneurs unleash business activity in the early ’90s. But that lasted just a decade. Socialism reared its ugly face again, for India had never addressed its fundamental problems. It liberalized for a decade, not so much because it saw value in doing so, but because it was cornered into a place where it had no other choice.
The rudderless system that was by default moving in the right direction has now been adrift again for a decade.
Today, the work ethic is weaker and corruption is worse. A decade of distribution of free TVs, bicycles (which can be sold off for alcohol), free grains, and guaranteed government work at higher-than-market wages means that it has become difficult to find workers. With a very high level of uneducated, untrained, mostly rural people, the last thing India needed was people who did not want to work. A heavy sense of entitlement has set in, worse than what was there before.
India’s failure to comprehend causality results in its doing more of exactly what made it a wretched place.
Even in respect to very basic goods, the Indian market is flooded with products from China. While economists might claim it makes no difference whether the economy is oriented toward service or manufacturing, the reality is that factories help society become more rational, for the workers can visually and mentally experience what causes what effects. It teaches them rationality and a sense of causality.
Now to dissect Modi . . . Narendra Modi, chief minister of the state of Gujarat, is a product of identity-lacking, rich, nationalistic, Indian lobbyists in the US. They prefer a romantic relationship with India — from a distance. Gujarat has done relatively well. But that is not because of Modi, but because of the fact that Gujaratis are all over the world. They have brought capital and competencies into Gujarat over the past two decades, in the way that Chinese in Taiwan and Hong Kong brought them into China. Gujarat is a relatively entrepreneurial place anyway, and a reasonably safe place too.
Gujarat would have done relatively well even without Modi, and perhaps much better without him. Alas, Modi has been able to claim credit for growth in Gujarat. He has found a sympathetic place in the hearts of those — particularly in the West — who are worried about Islamic fanaticism.
Under Modi’s government there was a massacre of 2,000 Muslims in 2002, while those in his party roamed around the street unhindered, with impunity. Men were killed, pregnant women’s abdomens were slit open to remove their fetuses, and children were burned alive. Girls were raped and then mutilated. Houses were burned. The US still blacklists Modi for a visa, for his “alleged” offenses. Europe has only recently allowed him in.
Modi will prove a very divisive figure in a nation where 13.5% of the population is Muslim. People will soon realize that he has no magic wand to set India on a path to progress. A strong leader cannot create wealth, even if he were a good guy. Wealth must be created through hard work and systematic thinking.
Technology is advancing very rapidly around the world. Society, as a result, is becoming extremely complex. Any complex system needs distributed intelligence. The more complex a society becomes, the more it needs decentralization of power and the free market. Otherwise, stresses will keep building up in unknown corners of society, to blow up the brittle, totalitarian political structure. India certainly does not need a strong leader.
Indians have very superstitious and irrational ways of processing the world. For now, India’s social problems are increasing. India’s failure to comprehend causality results in its doing more of exactly what made it a wretched place. Perhaps the slow buildup of stresses in the system will make the political system implode one day, starting the process of letting people see causality.
But I hope that Indians — in whatever shape the country’s political geography takes — will one day realize that growth, peace, humanity, spirituality, and prosperity cannot be founded on a strong leader, but on a society of rational, free-thinking individuals with character.
Jayant Bhandari is constantly traveling the world to understand it and to look for investment opportunities, particularly in the natural resource sector. He advises institutional investors about his finds. He also runs a yearly seminar in Vancouver entitled "Capitalism & Morality."
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