Thursday, April 06, 2017

Why Trump’s pro-war aide quotes the Gita


Most Indians are unaware that Steve Bannon, President Donald Trump’s chief strategist and member of his national security council, is not only the most powerful person in the White House today but he is also a great admirer of the Bhagavad Gita. Bannon is militarily inclined and believes in waging a holy war against Islam “to establish dharma in the world”. His long-time collaborator Julia Jones says, “He used to talk a lot about dharma — he felt very strongly about dharma… one of the strongest principles throughout the Gita.”


Like Krishna in the Gita, Bannon believes that the world is in moral crisis. The West is declining politically and economically from a lack of mooring in traditional Judeo-Christian values. “We’re at the very beginning stages of a very brutal and bloody conflict… (and we) need to fight for our beliefs against this new barbarity that’s starting, that will completely eradicate everything that we’ve been bequeathed over the last 2,000-2,500 years,’’ he told an audience at the Vatican in 2014. In his apocalyptic view, the world is a cosmic battlefield in a clash of civilisations. He is reportedly behind the United States’ recent attempt to bar nationals of Muslim countries from entering America — a first step, in his mind, towards an eventual victory against Islam.
Deeply religious Hindus will be outraged at the idea that one of their holiest texts is being misused for militaristic purposes. The intriguing question, however, is how can the moral idea of ‘dharma’ attract both the militarist, Steve Bannon, and the pacifist, Mahatma Gandhi? One answer to this question is that the Gita has something for both. To the warrior, it proclaims, do your dharmic duty and fight a just war. To the philosopher and the devotee, it offers the paths of wisdom and love (via jnana and bhakti yoga). A second answer is that the great texts lend themselves to multiple interpretations. To Gandhi, the war of the Mahabharata was an allegorical, ongoing battle between dharma and adharma inside every human being. The very first word of the Gita, ‘dharmakshetre’, signals that this is no ordinary battlefield; it is also a field of righteousness.
A third possible answer lies in the opposing positions of Arjuna and Krishna. When Arjuna refuses to fight, he is giving the following message to all rulers: before declaring war, consider its moral consequences — is it worth dying for? Normally, our rulers only consider political and economic consequences. There would be far fewer wars if rulers thought that they, in fact, might be killed. A fourth answer lies in two different meanings of dharma in the Gita. Gandhi was attracted to sadharana dharma, which consists of the inner virtues of the conscience — ahimsa, ‘not hurting another’ or satya, ‘telling the truth’. Bannon is attracted to sva-dharma or social duty, which translates to: “I am a Kshatriya and my duty is to wage a just war.” Thus, the Gita can be read both as a pro-war text and an anti-war text.
Finally, the difference between Gandhi’s and Bannon’s positions comes down to the problem of means versus ends. Krishna believes that the end of preserving the world justifies fighting a just war. In hesitating to fight, Arjuna obviously feels that there are limits to making war even if the end is worth pursuing. One can empathise with both — human beings are susceptible to both types of moral intuition. Many Indian nationalists — Tilak, Hedgewar, Lajpat Rai, and even Aurobindo — would have been on Bannon’s side when it came to fighting for India’s freedom. But of course, Mahatma Gandhi prevailed.
Indians should worry that Bannon might unleash a disastrous war in the Middle East. “Steve is a strong militarist, he’s in love with war — it’s almost poetry to him,” says Jones. Bannon is not unintelligent — he was considered among the three most intelligent by his classmates at Harvard Business School — and this makes him more dangerous. It is worrisome that an American president, who has enormous war-making powers, has Bannon as his closest adviser. Before undertaking a war, Bannon would do well to go back to dharma and the Gita and re-examine the rich ambiguity of both. He might well come up with a different answer, perhaps inspired by Arjuna’s refusal to fight in the Gita or by Gandhi’s ethic of non-violence.

Wednesday, March 01, 2017

Why classic liberals don’t win elections, and populists do


We are in the midst of another election season in India, and each time a poll rolls around, I get depressed at the thought that we are about to elect criminals, corrupt populists, and members of political dynasties rather than upright, independent, reform-minded liberals.
On this occasion, l’affaire Sasikala and Donald Trump’s shocking win in America also weigh on the mind. As a solution, I have earlier advocated setting up a classical liberal political party in India. A young, aspiring India in the 21st century deserves a secular party that trusts markets rather than officials for economic outcomes and focuses on the reform of governance institutions. It may not win votes quickly but it would bring governance reform to centrestage and gradually prove to voters that open markets and rule-based government are the only sensible way to lift living standards and achieve shared prosperity.
Based on this reasoning, Sanjeev Sabhlok formed Swarna Bharat, a genuine liberal political party in 2013. But it has not gained widespread support. I feel guilty that I have not done enough for it; nor have my liberal friends joined it. As I think about our failure, I have come to a startling conclusion. I have realized that a party based on classical liberal principles has almost no chance of winning at the polls  unless it ties itself to an ‘identity’ party.

Dancing heads: Both Thatcher and Reagan were free market proponents

A populist candidate who promises subsidised electricity and food will always defeat a liberal who advocates private initiative and competition. It is hard to sell the free market at the polls because the ‘invisible hand’ of the market is not visible to the voter whereas the state’s visible hand is only too visible. A ‘left liberal’, however, is likely to be more successful as he advocates an extensive welfare state via state intervention.
For this reason, classical liberals everywhere have chosen to join parties with cultural or social identities. In America, they went on to become ‘liberal Republicans’ or ‘conservative Democrats’. In both cases, they helped to change the economic agenda of their parties.
But as a price, they had to put up with the ‘anti-abortion’ Christian agenda and the gun lobby of the Republicans and the rigid, inept unions of the Democratic Party. In the UK, Margaret Thatcher tolerated Tory’s social ideals of ‘traditional Englishness’ as a price for converting her party (and the nation) in favour of the market.
Similarly, Tony Blair taught the Labour Party to trust market outcomes rather than state intervention. Adenauer and Erhard, both classical liberals in Germany, tolerated the Protestantism of the Christian Democrats while creating the great post-war economic miracle. In a recent volume of essays, Liberalism in India, Jaithirth Rao has argued that even the most successful liberal party in history, the Whigs, who were a force in British politics for over two centuries, had a ‘Low Church’ identity in contrast to ‘High Church’ Tories.
In India too, many liberals support Modi’s vikas agenda but do not subscribe to BJP’s cultural baggage of Hindutva. Modi’s miraculous success at the polls in 2014 was the result of a liberal appeal of ‘maximum governance, minimum government’ to the aspiring young. As a result, he created space in the BJP for market liberals, and the BJP has matured into a full-fledged right-of-centre party with a clear division between an ‘economic’ and a ‘cultural’ right. Modi, however, is not a classical liberal like Thatcher, with ideological commitment to economic and institutional reforms. He is closer to an East Asian ‘moderniser’ and he reforms on a pragmatic basis. It is still early to say if Modi will deliver, but if he wants to retain his liberal supporters, he will have to keep the cultural wing of his party under tight control. As it is, the latter is unhappy with him for not pursuing Hindutva vigorously.
I feel sad that a liberal party does not have a future in India or elsewhere. Liberalism has driven political action in the world in the past three centuries. “It has won much of the political argument in the 20th century,” says Barun Mitra of the Liberty Institute. It won India’s fight for freedom from colonial rule; it was responsible for the collapse of communism; and it drove India’s economic reforms. But liberals did not take credit for these reforms and hence we continue to reform by stealth. Liberals are no saints but it is a shame that emotional appeals to race, religion and caste identities still matter more to voters than rational arguments for prosperity and governance.

Sunday, January 29, 2017

The Budget will tell if aspirational Modi is now a populist Modi

The question on our minds is: has the Prime Minister changed? Is Narendra Modi turning populist? We shall have the answer on Wednesday when the finance minister presents the Budget. The nation elected Mr Modi on an aspirational platform of creating jobs, containing inflation, and stopping corruption. Indeed, in the first half of his term, he has pursued responsible policies to meet these goals. As a result, the economy has turned around; inflation has been licked; fiscal indicators are healthy. The big weakness is the lack of jobs, an objective that has suffered a setback in the past three months by a badly executed demonetisation. Modi has recognised this, and is this why his rhetoric has changed?

Instead of the aspirational talk of opportunities and jobs — of startups, ease of doing business, make in India — we have begun to hear the tired, pro-poor rhetoric of the Congress party. Nowhere was this more obvious than on New Year's Eve when Modi peppered his defensive speech with populist giveaways to farmers, pregnant women, senior citizens, etc. Gone was the refreshing talk of personal responsibility that we heard during his election campaign: 'India doesn't owe you cheap diesel, free electricity and loan waivers; the only thing it owes you is good governance; after that, it's up to you to work hard, pull yourself up, pay your taxes, and make India a great nation.'

So, what should we expect from this coming Budget? Let us hope the government will stay the course with the sound strategies pursued so far. Let's not take high growth for granted. Every rupee given away in populist doles is a rupee not available for job creation. Remember, recent state elections have also been won through purposive, long-term development, not giveaways. The window of opportunity for a grand demographic dividend is limited to the next decade, and it would be tragic to lose it to populism.

Job growth has been weak because the economy has been firing on a single cylinder: consumption. The other cylinders — private investment and exports — have failed. It is easy to get discouraged when jobs are disappearing around the world through technological change. The best course is to stay focused on bettering infrastructure, logistics, ease of doing business, implementing sectoral plans — such as the fine package for the labour-intensive textile industry — and resolving NPAs (non-performing assets) of public sector banks. The long-term solution is to bite the bullet and privatise these banks; eliminate the power of politicians to tamper with state electricity boards, and reform labour laws. So, no new schemes, please! Tell people that achhe din will take time; if you are honest, they will believe you.

Since non-farm jobs will take time, keep improving the productivity of farm jobs by allowing traders and farmers to buy and sell freely via e-NAMs (National Agriculture Market), thus ending the APMC (Agricultural Produce Marketing Committee) raj. Have a predictable export-import regime for farm products rather than the present switch-on, switch-off policy. Get over the unscientific bias against genetically modified crops, which is holding back productivity. On taxes, keep lowering corporate tax rate by 1% a year as committed (while eliminating exemptions) until we get to the effective rate of competitors. Move indirect tax rates closer to where they will be in the Goods and Services Tax. On personal income, stretch out the slabs rather than raising the limit for tax-free income to protect the tax base. Only implement the universal basic income scheme when all subsidies have been scrapped and supporting infrastructure is in place.

Whatever the cost-benefit of demonetisation, the Budget must snatch its long-term gains of a wider tax base, higher savings rate, and more resources for investment. Technology has offered a chance to bring banking to the masses. If we seize the opportunity, the aam aadmi can leapfrog over the bank branch into a digital banking future, just as he hopped over the landline with the cellphone. The Budget can fuel this revolution and keep alive the moral crusade against black money.

It was a fresh voice that reminded us in early 2014 that the state did not owe us anything except good governance, and it won Modi the election. People want opportunities and jobs, not loan waivers and sops. In fact, Arun Jaitley would do well on Wednesday to quantify the jobs that each lakh of rupees in the Budget will bring. It would be a pity to lose the Narendra Modi who wanted to make vikas a 'jan andolan', a mass movement.

Sunday, January 01, 2017

As stagnant West gets meaner, rising India spells hope but there’s a big if

2016 was a dreadful year and it is a relief that it's over. The values I cherish most took a profound battering. As a classic liberal, I want equal rights for all; I reject racial and caste discrimination; I revere religious freedom; I seek a free economy based on competition; and I uphold dissent. These beliefs have been undermined by Donald Trump's election in America, Britain's exit from Europe, and rising racism, intolerance and nationalism in the world, including in India where Narendra Modi has made his first big mistake with ill-considered notebandi. The fault partly lies with privileged liberals who have ignored growing discontent in their backyard.

A quarter century ago, at the fall of communism, the political scientist, Francis Fukuyama proclaimed the triumph of liberal democracy based on free markets. He called it the 'end of history' and predicted that the liberal order would spread globally as it best served the human desire for peace, liberty and prosperity. But the willingness to risk one's life for abstract goals and daring acts of imagination and idealism would be replaced by the satisfaction of ever more sophisticated consumer needs. Hence, he warned that the 'end of history' might become a boring place.

Today, it appears that Fukuyama was wrong. Liberal democracy and globalisation are under attack. China's 'Marxist capitalism' has delivered enormous wealth without freedom. The Middle East has seen the rise of violent Islamic fundamentalism instead of democracy. The 2008 global downturn has challenged the deregulation of banking and finance. Thomas Piketty, the French economist, has persuaded us that free markets have enlarged the gap between rich and poor. And white working class men in the West have let out a wail against outsiders because their political system has ignored them and religion's loss has left them with monotony without meaning.

Yet the post-war globalised liberal order has been one of the best periods in world history. It has been relatively peaceful. It has seen the spread of prosperity and decline in poverty, especially after the rise of China and India. The number of democracies have risen from 35 in 1974 to 120 in 2013. But there have also been job losses in the West due to technological change and the failure to compete with Chinese, Indian, and Third World workers, amidst economic growth that has mainly favoured the top one percent.

Despite electoral setbacks in 2016, the present world order is not in danger of dying. Yes, it will undergo change but Fukuyama's basic thesis remains sound. For one thing, there is no competitor. Radicals in the Middle East may dream of restoring an Islamist caliphate but the average Muslim does not want it. Neither is the rest of the world attracted to a 'China model' that mixes dictatorship, market economy and technocratic competence.

The model might, in fact, collapse in China as growth slows and people clamour for freedom. Ironically, many Indians admire China because it has delivered what the aam aadmi wants from the government: personal security, growing prosperity, and functioning public services. Although India's democracy is impressive, it has not delivered good governance.

In these dark times, India's prospects look bright. Unlike economic stagnation in the West, India has a rapidly growing economy with an upwardly mobile middle class, which is traditionally a bulwark of democracy. Stagnation has made the West meaner, less generous, and suspicious of people who look different. India's historical strength is its diversity. With over 50 tribal groups and 3,000 sub-castes, we are used to 'people who look different'. This is why the majoritarian project of the RSS is doomed to failure, although we must be wary of the intolerance of saffron groups in the short term. India's soft underbelly is governance. A confident new middle class, which pays taxes and feels entitled to hold public officials accountable, may well provide a cure in the long run.

Although a badly executed demonetisation has been a profound economic setback, it has not turned political sentiment against Modi. Ours is an age of rising expectations in India unlike the mood of diminished expectations in the West. India's ascent after 1991 has been based on the classical liberal values of democracy and free markets with multiplying connections to the global economy, Thus, India offers the best endorsement of Fukuyama's thesis. If only Modi could control cultural intolerance, India could become an inspiration to the world, helping restore faith in a liberal future. But it is a big 'if'.