A guide to clear thinking, January 1, 2006

We live in unusual times. Who would have imagined in 1991, when communism died and our reforms began, that fourteen years later the Indian republic would become hostage to the extraordinary influence of the Left? For almost two years now, it has been instructive to observe the mind of the Indian Left. And if one compares it to the Chinese communist mind, the result is a guide to clear thinking.

Both Chinese and Indian communists claim to be compassionate, but the Chinese version of compassion is tough while the Indian is tender. The Chinese invest in roads; thus they create opportunities for private investment, which in turn generates productive and enduring jobs. India’s communists create jobs through the Employment Guarantee Act, which they claim will also create roads. If the Indian strategy is implemented brilliantly—an unhealthy assumption, but let it pass--it will put money in the pockets of the jobless, but the roads will get washed away in one monsoon. China’s strategy will give their people world class roads but not money. Both strategies are based on good intentions--Indian communists give fish to the hungry; Chinese communists teach them to fish. The tender impulse gives quick relief to the suffering; the tough impulse cures the disease.

Indian communists prefer to protect the jobs and perquisites of the lucky few (about 8 % of Indians) in the organised, unionised sector. Chinese communists care about the unlucky many who don’t have decent jobs. Indian communists stall labour reforms, defend an unviable public sector, and advocate high interest on pensions. Chinese communists work hard to build exports and create an investment friendly climate. This means, for example, that Chinese entrepreneurs can lay off workers when demand falls. Indian entrepreneurs cannot do so, and thus prefer to invest in machines rather than be saddled with workers with lifetime employment. Therefore, the Chinese are creating millions of productive, new jobs, while Indians are protecting thousands of unproductive old jobs. Chinese compassion is tough while Indian compassion is tender.

Chinese communists select potential gold medal winners for their Olympic team. India’s communists fight for Ganguly’s inclusion in our cricket team. More to the point, India’s Leftists sacrifice merit in advocating reservations in education and jobs. Hence, China will not only win gold medals at the Olympics, but it will create a society based on merit and excellence.

As we begin a new year we are fortunate to have at the helm three admirable reformers to guide our nation. They have a solid track record of economic reform grounded in tough compassion. They know, for example, that all Indians will only benefit from reforms if India creates an industrial revolution based on the export of labour intensive, low tech manufactures like toys, shoes and garments. It is the only way to broad scale prosperity. In order to achieve this goal, however, we need at the minimum labour and power reforms. But our tender hearted populists oppose these stridently. On this first day of 2006 it is the nation’s fervent hope that our reformers will find the courage to resist the opportunism of our political class which masquerades as tender compassion. So, the next time communists try to hijack a reform, our reformers should ask them, would they rather be a tender-minded, compassionate father who presents his son with a bike on his birthday or his tough-minded compassionate neighbour, who insists on the long-term kindness of teaching his son the work ethic and makes him earn the bike?