Has Ambekar "Beaten Gandhi Hollow"?

The dishonesties of newspaper columnists are usually petty and insignificant, but not so with Swaminathan Aiyar's assault on the Mahatma in the Times of India on 9 February; it is a very large attack on the truth.

Its first sentence claims that: "January 30, the death anniversary of Mahatma Gandhi, drove home the growing irrelevance of the father of the nation."

How?

Why, Trinamool cabinet ministers in Calcutta did not attend the official ceremonies on the occasion, and the Mayor of Mumbai forgot too. Also, a "newspaper poll some years ago," showed "two-thirds of all voters thought that Sonia Gandhi was related to Mahatma Gandhi."

This is very weak tea and Aiyar moves quickly to a new brew: he claims Bhimrao Ambedkar "has posthumously beaten the Mahatma hollow."

He does not explain how that contest was arranged. Perhaps the statement that Ambedkar is "the icon of all dalits" is a gesture in that direction. For some reason, Aiyar seems to disregard the millions of us non-dalits who also consider Babasaheb iconic; not to mention the hundreds of millions who consider both men heroes.
 
But all this is preliminary throat-clearing; Aiyar's main theme is Ambedkar's opposition to Gandhi's idea that India should be composed of self-ruling villages. He quotes Ambedkar's rejection of panchayat raj in the Bombay Legislative Council on the grounds that a “population which is hidebound by caste ... infected by ancient prejudices ... flouts equality of status and is dominated by notions of gradations in life" cannot "be expected to have the right notions even to discharge bare justice.”

That view "continues to ring true eight decades later," Aiyar declares. As evidence of village-level infamy he points to the "mass killing of Muslims in Muzaffarnagar; the regressive "khap panchayats" in Haryana and Punjab; the recent West Bengal khap panchayat that ordered gang rape of a woman with a Muslim lover; the 2012 arson in a Tamil Nadu village after a dalit boy eloped with a  Vanniyar girl; and, in the same state, the "several cases" of intimidation that kept dalits from occupying reserved panchayat seats.

That is still a very weak case against Panchayat Raj, and to shore it up Aiyar throws in a reference to World Bank "research" confirming that "the world over, central governments tend to be far more egalitarian and secular in outlook than villages." He adds: "What Ambedkar said of hidebound villages is a global truth."

As a student of the Bank's research output for over four decades, I find it a bit hard to believe that it produced that definitive hold-all finding. I could be wrong, but it sounds more like something out of an Oxfam brochure or, at a stretch, a Human Development Report from UNDP. 

If Aiyar had looked closer home he would have found that the actual Indian experience with Panchayati Raj has been overwhelmingly positive.

Things got off to a slow start because Ambedkar's fears were widely shared. Parliament took 40 years to enact constitutional provisions into law and enable a system of directly elected bodies with quotas for women and Scheduled Castes/Tribes; and in the early years funding was limited and progress slowed by a corrupt nexus of conservative bureaucrats and caste leaders threatened by democracy.

However, by the beginning of the 11th Five Year Plan (2007-2012), there were some 250,000 elected village-level bodies, with 3.2 million elected members, over a third of them women.

By then, their functioning had finally won the confidence of the Planning Commission. It increased funding 471 percent to Rs.775 crores (approximately $168 million), noting that although achievements in the past had not been commensurate with expenditures, the Panchayat system had proved to be a laboratory “of multi-level pluralist democracy, facilitating the achievements of consensus on development issues at the lowest level of government."

Experience had shown that at “the local level, groups learn to co-exist, cooperate, negotiate and arrive at acceptable decisions and even marginalized groups can gain confidence and move on from token participation to higher forms of direct social action for the collective good."

The realization of the effectiveness of Panchayat Raj has not led to any rethinking of the main thrust of Indian economic development. It has continued in the 12th Five Year Plan (2013 -2018) towards industrialization, with tall talk of "corridors" for manufacturing across the length and breadth of the country.

This points to a basic disconnect at the highest levels of Indian policy-making, and it should make ordinary Indians extremely anxious, for it shows that our leaders still think of "development" purely in terms of GDP growth and not the welfare of the people. Consider the following facts:

1. India is tooling itself to fit into a world economy that is in a state of terminal crisis. 
2. It is making itself part of patterns of global production and exchange that are killing the life-sustaining systems of the planet.
3. In the process, it is destroying the basis for Indian productivity, both by unbalancing the complex patterns of social and ecological interdependence in the countryside and by paving over rich farmland for luxury housing and shopping malls.
4. The result is an ever more obscene gap between the ultra-rich and everyone else: the net worth of India's billionaires increased 12-fold in 15 years. As IMF chief Christine Lagarde noted recently, that money could have eliminated poverty in the country -- twice over.
5. There is massive proof, made concrete in China, that rapid industrialization will cause a whole slew of new problems, including massive despoliation of air, land and water, and a huge new burden of environment-related illnesses, especially cancer.  
6. The more we industrialize, the sharper we will feel international pressures through manipulated energy prices and rigged currency markets. 

Mahatma Gandhi's advice that India should seek to revive its villages as the means of advance was not some idealistic pipedream. He knew Indian ground realities better than any other politician of his generation or since; what he proposed would have brought growth where it mattered most, to the poor. 

As things stand, if India is to survive with its traditions intact, we have no alternative but village-based development. 

Did China or India "Win" the Development Race?

Who has “won” the development race, China or India?

Steven Rattner, a Wall Streeter with a Washington revolving door background, declared in an opinion piece in the New York Times last Sunday (20 January) that it was China. 

Tyler Roylance of the Heritage Foundation weighed in with an opposing viewpoint three days later on the HF website.

“When a New York Times columnist feels the need to tell his readers, ‘Don’t get me wrong—I am hardly advocating totalitarian government,’ something has probably gone badly awry in his analysis,” he noted in a rebuttal that cited all the by now familiar points in favor of democratic India.

What was missing from both articles was the smoke and mirrors quality of Chinese success. (“Smoke and Mirrors,” by the way, is a must-read book about China by Pallavi Aiyar.)

I have noted in earlier posts the real estate and banking mess in China, both hidden by  statistical fraud but evident in the continuing rise of housing prices even as unsold and unoccupied buildings accumulate into brand new ghost cities.

There is also the officially reported fact that 50 percent of Chinese GDP is investment, foreign and domestic. That is an entirely unsustainable phenomenon, without precedent in economic history: like Lance Armstrong’s seven Tour de France victories, China’s spectacular growth rates are the result of artificially pumped-up muscle.

When that rate of investment slows – as it must – it will bring down the whole house of cards. That is because the mandarins of the Communist Party have chosen the appearance of growth over healthy development. They have hidden weaknesses and problems to support the pretense of success.

Corporate debt, for instance, is 180 percent of GDP. (India’s is 49 percent.) Despite that huge debt overhang, there has not been a single default on a Chinese corporate bond issue. That is because even one might start an unstoppable run on the house. So, when a corporation cannot pay back its loans and is in danger of default, local governments step in with public money.

Tyler Durden of Zerohedge.com summed up the situation yesterday: “China is proceeding with bail out after bail out of any company that threatens to expose the reality that Chinese corporations are massively undercapitalized and that absent Chinese state support this particular 180 percent debt/GDP bubble would pop immediately and have dire consequences around the world.”

The corporate bubble will not burst in isolation. It will take the banks with it, and the real estate market. Bank loans, much of it unrealizable and “hidden” in blatantly dishonest ways, are estimated to be 300 percent of GDP. 

The expectation that the Chinese economy has made a “soft landing” because its manufacturing index has shown a slight rise in the last few weeks is whistling in the dark. What has been happening is that the government has been paying ruined merchants to stay open. A few weeks ago The New Yorker reported on a new mall filled with shops carrying the identical range of products, all on the dole; there was not a shopper in sight.

Warehouses at ports and even decommissioned office buildings are reportedly storing imported commodities for which domestic demand has dropped radically.The regime has elected to hid the slowdown in demand.

How long can Beijing continue this charade? No one knows; but it cannot be for very long. A timeline might be suggested by China's huge increase in food imports -- reportedly four times its annual amount.

That is in line with the certainty that a crash in China will bring down the entire world economy. The financial system the IMF presides over with such aplomb is as insolvent as China’s. The trillions of notional dollars Western Central Banks pumped into national economies to prop up demand after the 2008 fall of Lehman Brothers must meet up with reality at some level, and when that happens, the results could be dire indeed.

To answer the question at the beginning of this piece: India has won; but that might not mean much if we do not survive China’s failure.