Barack Obama'sspectacular victory in the US Presidential election is largely attributed to the economic mess created by the Republican George W Bush. Obama promised to mainstream economics from Wall Street. He understood that economics has wider connotation than corporate. Indian politicians have widely welcomed Obama'sascent. Many of them are inspired by the magic of change that he symbolised. They are likely to imitate him in more ways than one. Can they jell with the spirit?
Ever since the American financial crisis hit the headlines Indian Prime Minister Dr. Manmohan Singh and Finance Minister P Chidambaram are flooded with memos for bailout from Indian tycoons. There may not be a consensus on many national issues between ruling and opposition political parties but on corporate bailouts nobody will stand in the way.
We have forgotten the days politicians went to the people to raise election funds. The last I remember is when Choudhary Devilal popularised that mesmerizing battle cry ?One note, One vote? in Haryana in mid-eighties. Contemporary Indian politicians loath the idea of going to the people with a begging bowl. They normally avoid such a gruelling exercise. Especially when corporate contribution is lavish enough to run multi-billion election budget. When the voter donates to a political party, it becomes a matter of involvement and a pledge of support for the cause.
In a US election big money plays a big role. Where did Obama get all his billions? In his first post-election speech he narrated with poetic passion how small trickles from far-off hamlets, factories, small units funded his campaign. ?It was built by working men and women who dug into what little savings they had to give $5 and $10and $20 to the cause. It grew strength from the young people who rejected the myth of their generation'sapathy?who left their homes and their families for jobs that offered little pay and less sleep.? Touching. Inspiring. Real Indian stuff. How many Indian leaders can honestly speak this language?
There are many reports, some of them very intriguing, about the huge election fund Obama raised through small donations. Some of them even suggested disguised IsIamic funding. He raised $650 million and spent $570 million against McCain's$360 million collected and $270 spent by the third week of October .(The final figures are not available). What illustrates here is the inspirational quality of leadership. To win an election, especially to make it a people'smandate parties have to look beyond corporate interest
India with its 700 million poor people is not the best laboratory to experiment trickle down theory. The UPA has manipulated the present economic recession to fast forward clandestine finance sector liberalisation by circumventing and relaxing rules for debentures, promissory notes, futures and speculation. It has raised the FDI limit in banks and insurance and working on measures to bailout tycoons in the fa?ade of protecting jobs. The parties that should have protested are silent. ?There might be flaws,? we are being repeatedly told, ?but like democracy, capitalism is the best system and there is no other alternative.?
So on Bush'sinvitation India will also go for the G-20 conclave to save capitalism.
This is but the age of uncertainty, as John Kenneth Galbraith once wrote. He wrote about a different milieu, but it still rings appropriate by wide agreement. He wrote, ?In the last century capitalists were certain of the success of capitalism, socialists of socialism, imperialists of colonialism, and ruling classes knew they were meant to rule. Little of this certainty now survives. Given the dismaying complexity of the problems mankind now faces, it would surely be odd if it did.?
People and governments are guided by the ideas ruling the time. In economics, decisions are influenced not only by ideas and by vested economic interest. They are also subject to the tyranny of circumstances, he emphasised.
Obama'sstunning win has cast a shadow of gloom in the spivvy segment of money market. He is for state intervention for better distribution of wealth through capital gains tax, tax benefit for middle class, health insurance, more spending on education, health care and job guarantee. The globalisation maniacs in India have long been asking the government to withdraw from health, education, public utilities, even supply of water and electricity. They speak as if they want to wreak some revenge on the masses. They represent only the elite, they believe. And their faith in the private sector is implicit. ?Why should the government make steel, aluminium or bread??, they ask.
Health care in India is unreachable for the commoner, so is good education. Private sector makes huge profits in all this. After power and water supply were privatised the charges have sky-rocketed. A study said the increase was four-fold. But there is no improvement in distribution, quality and there is no accountability. Corrupt politicians protect corrupt businessmen. That is why when politicians aggressively advocate privatisation and disinvestment, they become unpopular. The NDA lost in 2004, because of the common perception that the reform overdrive was hurting the poor and making the rich richer.
Globalisation made all talk about poverty unfashionable. Economists who talked about it were branded Communist. Today, Manmohan Singh, P Chidambaram and Montek Singh Ahluwalia in public perception represent not the common good but the IMF. Dr. Singh is appointing more IMF economists to advise him, though he himself pretends to be the greatest ex-IMF economist.
India is so complex for even an Indian to comprehend. How can IMF suggest remedy for Indian problems? Those who have not lived in villages will never understand what Indian villages want. These five-star arm-chair economists think Dalal Street is the main street. All the steps the UPA has taken in the last two months were intended to inspire confidence in the stock market. They have not offered any relief to the average Indian. There is no impact of these on prices of essential commodities. Petrol and diesel prices were increased when the crude was sold at dollar 120 per barrel. Now the crude price has fallen to one third of the peak price, but the consumer is paying the old price. Duty rebate on ATF is reduced twice, airline operators were given a number of sops, but they have not reduced fare. The government has pumped in Rs 2.5 lakh crore to ensure liquidity. Has the commoner got any benefit? This is crony capitalism.
Socialism is supposed to be a slanderous term in American politics. But Obama won this unprecedented mandate talking enlightened socialism. In the Indian context this is akin to Integral Humanism of Deendayal Upadhyaya. The problems of poverty are the same anywhere in the world. There could be differences in attitudes and approach. Obama by far is the most outspoken critic of capitalism in US to make it to Presidency. It will reopen several debates that many in India pretended as closed in their hurry to import American model. The popular mood in Europe is also catching up. Politicians there are talking of ?robust? state intervention and kicking out laissez-faire. The tragedy in India is most politicians are either ignorant or indifferent to economics. In their weariness they leave economy to the IMF or its cronies.
Obama could inspire so many millions because he spoke a new idiom. His approach was direct and patriotic, the message was unity.. The language of the people, about their problems, as one of them. That was soul stirring. He attacked the dubious ?trickle down theory? of ?casino capitalism? imposed on the world through institutions like World Bank and IMF. Exposed the fancy idea of magic of wealth creation by money market manipulation. ?The last thing we can afford is ?the tired old theory that says we should give more to billionaires and big corporations and hope that prosperity trickles down?, he said. Obama campaigned and convinced his people. Our politicians still have great faith in the wisdom of IMF. And they fail to inspire.
(The views expressed in this column are personal. The writer can be contacted at [email protected])