Thoughts on economics and liberty

What Would I Do If I Became India’s Prime Minister? #9 (and final)

Final Comments

The capitalism advocated in this book is not aboutunfettered freedom, but about a system of freedom with accountability. I don’t want to be told by anyone that I have been preaching unfettered, reckless freedom! Instead, this book has been clearly about self-discipline, moral responsibility, enlightened self-interest, even enlightened selfishness. There is a point where the philosophy of freedom merges seamlessly with the highest spiritual philosophies of mankind. However, ethical liberalism is a philosophy of action and does not tolerate corruption and decadence, unlike many spiritual perspectives which have no civic sense. Capitalism is a system of freedom with accountability. It is a delicate balance between competing needs.
I do not ask people to sit on their haunches like spiritualists do, watching their country go to the dogs even as their soul apparently achieves salvation. I do not believe that such methods will lead anyone to salvation, either. Inner peace, surely, but not salvation. There has to be a careful balance wrought between self-development and social development. The world we live in is the real test for what we stand for. Do we stand for humanity, for reason and for compassion? Or do we stand for extreme selfishness, so immersed in our soul that we lose all sense of our civic duties and responsibilities? No society will become free or remain free if its citizens are focused only on their own souls, to the neglect of vigilance over their temporal governments. Let us look after ourselves and our souls, but in doing so also discharge our duties and responsibilities as citizens. That will achieve the fine balance of enlightened selfishness, the greatest virtue of all.
And so stop just sitting there! Let us raise a commotion about corruption! Let us organize! I ask you to wake up. Freedom demands civil society; it demands voluntarism; it demands vigilance. This book can be summarized in the following scorecard:
Outcome for the Country and Society
Nehruvian Socialism
(Freedom, Equality of Opportunity)
Is the country a great place to raise our children?
Are its people independent, i.e. they do not ask the government to do everything for them?
Is justice delivered effectively and quickly?
Are the people largely ethical? Is the society a moral society?
Are the people secure? Is there law and order?
Is the government free of corruption?
Has poverty been banished?
Are many of its people deservingly rich? Is inequality encouraged and charity to able-bodied people discouraged?
Are religious and other discriminations severely punished?
Are all children well educated, at least to year 12?
Is the country’s infrastructure world class?
Is the country’s environment sustainable, and is its wildlife thriving?
Do citizens always seek to exceed the world’s highest standard in everything they do?
Vladimir Putin, the President of Russia, recently said in an interview in the Time magazine[i] that ‘One doesn’t have to be a particularly brighthighbrow to see the obvious, that the market economy has major advantages over an administrative system’. Even though Putin’s Russia is nowhere as free as this book intends India to become, it now sees a clear advantage in moving towards freedom. The poisonous ideas of Marx have been trashed in Russia, the land which espoused them so vehemently for 70 years. But Indian socialists and communists continue to thrive in their Marxian world as never before. So if Putin’s Russia can “get it” why can’t we – are we to conclude that we do not have sufficient people even as bright as ordinary Russians?
I trust that you are by now one with me on the virtues of freedom, capitalism, ethical liberalism, enlightened self-interest, enlightened selfishness…whatever you call it. And yet, I am keenly aware that I have made recommendations in this book some of which you may not agree with. Indeed, I have not only received many positive comments on this book but also some objections. So I would like to discuss some of these objections here. A few general comments before I do so:
  • Some readers pointed out that many good things are already happening in India. In accepting that, I would like to remind them that such good things have been motivated entirely by the initial burst of capitalism forced onto India by the IMF. We have still no internalized full-fledged capitalism, which is primarily about justice and good governance. We should not be content with morsels of capitalism when we can but should have it fully. There are still millions of poor and illiterate people in India. The task has barely begun, and good governance is not even on the horizon.
  • Some readers said they agreed with parts of this book but not with other parts. I suggest that such an approach is not logically consistent. I see this entire book as one piece. People have only one real choice: to either agree entirely with this book, or to disagree with it completely.While this may sound like the height of arrogance, the problem is that my recommendations have been derived exclusively from the principles of freedom and the value of life. The recommendations of this book flow as a mathematical proof would, being either completely right or completely wrong. There are no grey areas in this book; people can’t pick and choose. If you do, you will end up with a logically inconsistent model.
  • The claim of impracticability doesn’t hold water at all, either. For example, it could be claimed that we simply won’t find enough high quality economists today to recruit into each State Government in India. But such an objection is a matter of detail. It may mean that we need to get there slowly, or it may mean that we need to bring back our economists who are forced to teach in Western countries today (or like me, help Western governments to even further improve their countries) instead of teaching (or working) in India. But it doesn’t change our destination. Matters of practicality can always be worked out if there is a will.
Having said that, I can understand partial disagreements (a) where it can be shown that one of my particular recommendations is erroneous because it does not derive from freedom, or (b) if a better solution than the one I have suggested can be found, being equally or more compatible with freedom. As to the first of these, there is only one Truth, so please write to me at with your better arguments and evidence. I will discuss these suggestions on the blog I have created for this book. And I promise to change my mind wherever I am conclusively shown to be wrong. The second of these disagreements is quite possible. Interplays of technology and incentives could mean that I may have missed out a better solution. I would be pleased to incorporate good solutions into potential future versions of this blueprint. Do write to me. Let us interact! Let this not be a passive book or a one-sided monologue but the beginning of a conversation leading to clarification of thought and then to action. One way would be for people to consider joining the Freedom Team and working on improved solutions together. Now to a discussion of the detailed objections I have received, in Box 5.
Box 5
Some Objections to Views Expressed in this Book
‘Nehru did the right thing for his time’
A reader, commenting on a draft wrote, ‘after independence, industrialists were not willing to invest in industries requiring larger gestation period’. Therefore, ‘opening our economy to the world would have led to many a devastating effect’. The implication is that Nehru was right in taking upon himself the task of baking bread, making steel and stitching shirts for us instead of ensuring justice. The real point is not whether industry did or did not want to invest. It would be presumptuous for us to judge a particular investor’s constraints. In a free market, where people put their own money on the line, each investor must decide for himself. The question is whether Nehru focused his efforts exclusively on promoting our freedoms or not. And the answer is, he did not. That is the real concern raised by this book. A government must give us freedom of choice. We can then decide if we want to invest our money or not.
But for argument’s sake, let us examine the investment issue. Many Asian countries had opened up their economy well before India did in 1991. Japan opened up in the late nineteenth century, South Korea in the 1960s, China in 1979. None of these countries was ‘devastated’ when they increased the levels of economic freedom. They only became rich. There is no shred of evidence to indicate that our industrialists in 1947 were a bunch of fools who wouldn’t have invested even when opportunities arose. These people had invested even under British rule and created large steel and cotton mills under harsh conditions. Reading the Tata story (Creation of Wealth by Russi M Lala) shows that we had world class industrialists who fought and worked hard to produce wealth. But Nehru never bothered to give us the rule of law, justice and infrastructure and let these people make the investment. Instead, he blocked investments through quotas and licensing. The public sector became the ‘dog in the manger’, destroying our wealth even as it prevented citizens from investing. How can we possibly blame our industry to justify Nehru’s mindless attempts to become a government businessman?
‘Reservations and the uniform civil code are necessary’
            A reader has indicated that reservations and the uniforml civil code must continue. However, based on the principles of freedom I am clear that there is no place in India for such things (see Chapter 3). At the same time, we must create uniform prohibitions on certain actions, minimum standards of accountability in social matters, but most important of all, equality of opportunity through elimination of poverty and provision of school education for all children. Enforcing equal opportunity and taking action against discrimination will also help. Such policies will yield a far superior outcome to the unjust and anti-freedom strategies found in our Constitution.
Capitalism Leads to Exploitation and Guilt
An interesting objection I received against capitalism was that people are advocating corporate social responsibility (CSR) nowadays because of all the guilt that capitalism creates in the minds of chief executives (CEOs) of large companies who draw very large salaries. Apparently such people are exploitative and feel guilty. So they need to undertake CSR programmes. Two things: first, CEOs don’t steal their salaries; they are given this money by the owners of the company (shareholders) because the CEOs provide much greater value to the shareholders. There is no exploitation involved here. It is a pure negotiation, a trade. Second, an industrialist can’t ever feel guilty if he has produced wealth the right way. He has already contributed by providing employment to thousands of people; that is the biggest ‘CSR’.
The modern idea of CSR is often just a clever marketing strategy, and I don’t believe that such CSR programmes contributes one bit to a country. Countries don’t become great on the basis of charity of any sort. They become great by competition and by creating wealth. Let Indian companies focus exclusively on generating profits and not distract their attention from wealth creation. Let India become a thousand times richer first. That will be the greatest CSR.
These Solutions Are Too Ambitious and Too Radical
According to this view, we have to be ‘realistic’ about India. Its problems are too deep-rooted to allow changes of the sort I have proposed – particularly in the short time span of five years. But the rate of change I have proposed is neither too fast nor too slow. I would like to suggest that wherever successful change has been made, it has been made fairly quickly. Change requires will power, and if momentum is not maintained, vested interests will gain strength and block the change. They will sap the will of the change leaders. The real blocker to such change is the availability of the right people to lead India to freedom. This exercise could take many years just to start. That is India’s greatest challenge for the future, not the ambition or speed of these solutions, which can always be refined.
* * *
The observant reader would have noted that there is a deeper layer or message in this book. It is about becoming seekers of the Truth; about critical thinking. Tagore’s Heaven of Freedom is, after all, a state of mind that each of us can aspire for, irrespective of whether our entire society is free. The government or a society can block our body but it can never chain our mind. To that extent we can be free irrespective of the society in which we live. A key message of this book is therefore about free thought and reason, about finding out the best way we can to live. This book seeks a cultural shift in India from blind acceptance of what our seniors or leaders tell us to asking probing questions and personally examining the facts. It is crucial for everyone to discover the truth about capitalism or socialism or whatever the ‘ism’ is, for themselves. As Sri Aurobindo (1872–1950) wrote: ‘We must begin by accepting nothing on trust from any source whatsoever, by questioning everything and forming our own conclusions’.[ii] That was also the message of Socrates and Buddha 2,500 years ago. I’m adding my squeaky voice to that hoary message.
And therefore the way to proceed would be to question all my assumptions and all my conclusions – if you have not already done so. It is possible that I have been entirely wrong! The free man doesn’t claim, can never claim, complete knowledge and understanding. Also knock off all the dross and exaggeration you find in this book. Knock off anything that doesn’t ring true or make sense to you. I will have achieved my purpose only if the critical thinking processbehind the conclusions drawn in this book becomes your own. It is, of course, my hope that this thinking process will lead you to the same or similar conclusions as I have come to. If, after you have turned this book upside down and smacked it hard with a stick, it still manages to survive in one piece, then we can proceed to the next, last, steps of this journey – towards a new journey that you will need to create for yourself.
* * *
Once you have crossed that point, there is no time to look backward for even one more second! It is then time to face the future; time to make the future. What has happened is history – water under the bridge. Let’s forget it. There is absolutely no point in regretting Nehru’s misjudgements. We must follow Martin Luther King, Jr.’s counsel: ‘Let us not seek to satisfy our thirst for freedom by drinking from the cup of bitterness […] We must forever conduct our struggle on the high plane of dignity and discipline’.[iii] And so with sprightly steps we now turn towards the next journey.
We have many urgent tasks before us. We need to ponder carefully over how each of us can become, or help inspire, ‘leaders of ability, vision, and moral character’[iv] to represent the citizens of free India. That India desperately needs good political representation is not in doubt. But the problem is it won’t happen on its own. On the other hand, merely jumping into politics with brash fervour will not solve any of India’s problems, either. There has to be a systematic effort. This is my suggested outline of the systematic effort India needs now to initiate its real freedom movement:
  • Let any two believers in freedom come together with the aim of building a Freedom Team of India to an initial size of 1500 persons. I am happy to coordinate an electronic platform for this if it will help anyone.[v] Using this platform is purely optional – any platform will do.
  • The Freedom Team of India (or whatever else it is called) will then need to agree on what the new India will look like and how its members will deliver the reforms if they were to ever come to power. I’ll be pleased if Chapters 2 and 6 inform the answers to some of these questions. But of course, the blueprint would entirely be the work of the Freedom Team.
  • After that will come the question of who. Once ready, this group of 1500 should select outstanding leaders from among itself and form a new, ethics- and freedom-based political platform.
  • Its leaders and supporters should then go from village to village, explaining the proposed policies to people.
  • Finally, about 550 outstanding leaders should contest elections. With the right effort and good luck, a majority of them will hopefully get elected.
  • After that it would be a matter of disciplined implementation of the planned reforms.
  • It going to be that simple to change India!

Till now I have largely continued with the expositional tone of an Indian citizen because this book was started to support my political efforts of 2004–5 while I was still a citizen. After three failed attempts to establish a platform to reform India’s governance, I forfeited my Indian citizenship on 17 November 2005 upon acquiring Australian citizenship. I am now an overseas Indian citizen. I can therefore play only a limited role in India’s future unless India agrees to full dual citizenship in the future. However, the task I had started upon is still incomplete. Indeed, it has not even been started.

I have taken you along with me on a short journey, but the much longer journey lies ahead. The ball is in your court. You should carefully consider whether you wish to take up the personal challenge to lead India to greatness and the world to the new era of harmony, peace and freedom. If you are willing to give it a go, and keep learning on the way, then I applaud and welcome your initiative and appeal to India to join you in working for true freedom and greatness. I don’t often pray, for I don’t know if it works, but in this case I wish you Godspeed!
* * *
The final end of the State consists not in dominating over men, restraining them by fear, subjecting them to the will of others. Rather, it has for its end so to act that its citizens shall in security develop soul and body and make free use of their reason. For the true end of the State is Liberty.
Baruch Spinoza (1632–77)

[Note: This is an extract from my book, Breaking Free of Nehru]

[i] Time, 31 December 2007 – 7 January 2008, p.31.

[ii] Published posthumously, written c.1912. See [].

[iii] In his ‘I Have a Dream’ speech.

[iv] Fears, J Rufus, Lectures on History of Freedom, The Teaching Company. Cited at

[v] The Freedom Team of India group at [].

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