Sunday, July 10, 2011

Middle class gets back its dignity

A year ago no one could have imagined that cabinet ministers, powerful politicians, senior officials and CEOs would be in Tihar jail awaiting trial. Corruption is no longer the news about India; it is our unexpected and puzzling response to it. What explains the unending movement against bribery is an increasingly self-assured and impatient new middle class, which has finally attained self respect and dignity and is being taken seriously by the media. The middle class will become 50% of India’s population by 2020, and when that happens our politics will also change. What we are seeing today could either destabilize the system or lead to something profoundly good.

The big story of our own times is not Islamic terrorism or even the global financial crisis but how China and India have embraced liberal economic ideas and have risen. In both countries the middle class has attained a sense of dignity which was denied to it for so long. Deirdre McCloskey’s new book, Bourgeois Dignity: Why economics can’t explain the modern world, reveals that the West rose after 1800 not only because of economic factors but also because the discourse about markets, enterprise, and innovation changed. People became enthusiastic and encouraging of entrepreneurs. The development of the West is explained not as much by colonialism and imperialism; not by Marx’s theory of classes; not by Max Weber and his Protestant ethic; not even by Douglass North and the central role of institutions. It has much more to do with how people’s perceptions and expectations changed.

Robert Lucas, the Nobel Prize winner, says that ‘for income growth to occur in a society, a large fraction of people must experience changes in the possible lives they imagine for themselves and their children…economic development requires a million mutinies’. There are still vast areas of horrible poverty and deprivation in India but there is also a critical mass of people who can see that their lot is palpably better than their parents; their future is open, not pre-determined, and can be changed by their own actions. They feel that dignity is being bestowed on their middle class dreams as their children are getting MBAs and aspire to become CEOs. Ordinary conversations over chai and chaat are about markets and innovation. Even leftist theorists at JNU and in the Congress Party have been forced to rethink their old prejudices. What has changed is ‘habits of the mind’ as India has become a ‘business respecting civilization’ in Schumpeter’s words.

Indians won political liberty in 1947 but they gained economic liberty only in 1991, and gradually they have attained dignity. Dignity is a state of mind engendered by social, political, and economic liberty. For too long Indians have been denied dignity by public officials who ride around with lights flashing on top of their cars and announce their dignity either by making citizens wait while they pass or by placing endless red tape in issuing a birth certificate, a ration card, a passport or whatever a citizen is owed as a matter of right. Liberty without dignity is self-despising; dignity without liberty makes for status without hope; but liberty with dignity is hugely empowering.

If our new found prosperity and dignity is founded on the reforms, how does one explain the lack of reform in the past seven years of the UPA government—especially when the father of the1991 reforms is our Prime Minister? And why is sullen BJP not supporting the Goods and Services tax (GST), which is possibly the biggest future reform in the country’s financial life? Sonia Gandhi, in particular, needs to comprehend that no country became successful by trying to spend its way to prosperity through populist welfare programs. Food inflation would not be hurting as much today if we had reformed agriculture. Black money would be far less if we had reformed the real estate sector. People would be less angry if the UPA government had fulfilled its promise to make the bureaucracy more accountable through administrative reforms.

What politicians of all parties need to understand is that the newly emerged middle class, having attained hard fought dignity, will no longer allow itself to be humiliated by public officials as in the pre-reform decades of the Licence Raj. It sees today a dramatic contrast between its own private life of accountability—if you don’t perform, you lose your job--and the public life where you are rewarded even if you don’t perform or are corrupt. It just won’t put up with it. Since its voice is not heard in Parliament, it expresses itself in the only way it can, through rage on television night after night. Rising expectations are creating pressures on leaders and these could either undermine the political system or be a transformative force for the good. Bourgeois dignity is the key to an Indian puzzle.



Anonymous said...

I think the anger is getting directed at politicians is misplaced, the anger should be on the bureaucrats who are with these guys and help in bending all the rules to their whims, I think they are the biggest threat to country than the politicians who are under threat of getting thrown out of power every 5 years. We should also make a political reform that will not allow politicians to take government salary and benefits for more than 10 years, let's give opportunity to their benami's if needed(as they do today for their ill earned wealth), let's bring them out to public view!.

MythsAndMeanings said...

I share your optimism about the possibility of the forces of discontent in the middle class, the power of being able to dream of a different future, and I also share your caution about exactly how this public upswelling will play out.

I will add one caveat, though: You point to how the perceived disparities between private and public have enraged the people; I say that it is precisely because that distinction has been eroded that change in India rests on such a thin knife-edge. if the same middle class imagination is unable to permanently re-conceive the public space and think of it as co-owned at the same time that they see some concrete good result from their push for reform, not much will change in the long run.

I hope for the best, but what I see of the general tendencies of the not-yet-NRI Indian middle-class does not encourage me.

Rachit said...

I do agree with you sir that things are changing for all good reasons but when reports of special VIP treatments of the ministers guilty in crimes against the country comes in limelight, it do lowers the image of the already sullen government.

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Anonymous said...

I am one of the millions of disillusioned youth who has left India to pursue a livelihood abroad. Reading your blog and your book 'India Unbound' has made me realize that all is not lost.

A_N_Nanda said...

It's a tremendously happy reading for the simple reason that one must tell I'm happy to be anywhere near happiness. That ends the jubilation and let's say the reality. Does it need to be said in many words? Ok, then. People who clamour about the need for an upright environ and even go to undertake fast is found guilty of quackery just the next moment.

Where I'm decidedly one with you, sir, is your recognition of a rising phenomenon of a shared sentiment. Again, any such sentiment has tendency to degenerate. We've seen that during our freedom movement. (I've recently read Khushwant Singh's "Train 2 Pakistan") There's a thin line of distinction between revolution and reign of terror. If I remember well, the famous line from the French Revolution is "Oh Liberty, how many crimes are commited in thy name" or something of that sort. For the present, there's no harm in interpreting this shared sentiment as the dignity of the middle class.

Thank you, sir, I liked your post.

Achin Jain said...

India growth story is old. This is more of the India's literate middle class.
More than GoI penning the bill, I think it has to be joint effort of both Govt and People of nation. I think people need to take steps themselves not to make their life easy by giving bribes. They need to follow the hard path and bring the people asking to bribes to court.
Govt needs to bring the independent judiciary and police to core. They cant always run with it and make things worse as they are currently.

Passing a bill is one thing but implementing to the complete body is completely different and current UPA Govt (even when it is anchored / headed by MMS) is far far away from that.

I also agree with you that growth and welfare schemes are no longer valid so are 5yrs plans that planning commission makes.

Whole new environment and one with ownership and responsibility needs to be created.

Proto said...

Looking forward to your take on the latest Anna episode. I feel what he is doing is morally correct. If left to the Parliament they would surely stall it for another 40 years. There is a saying I grew up hearing, attributed to Krishna (though I am unable to google and locate it today) "Maargam alla, Lakshyam aanu pradhaanam", meaning "The goal is more important than the path". I was deeply moved by your book DoBG, and based on its light, I am interested in knowing how you would interpret the events.

saravanan said...

you got great point there.

Vaish Words said...

I agree. I know India stands divided on Anna's means and motives but perhaps now is the time to rally behind the cause (which we do all believe in) and make sure this transformation we are witnessing is a good one and the de-stabilising one it could become.

wisdomjobs said...

From my childhood I heard India is a Developing Country from my ancestors. When I grown I am seeing India is a Developing Country.......hmmmmmm. Let us all wait to see India a Developed Country in future

Shalu Sharma said...

Corruption is one single thing that plagues this country to the most. Time is ripe we demand change.

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