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Letters: Economic policy as social justice

Business Standard  |  New Delhi 

The of April 13 carried a review by Bibek Debroy of India’s New Economic Policy: A Critical Analysis (“Exonomic’ principles”). As one of the editors of the book, I would like to comment.

The review opens by making fun of a typo, where “exonomic” appears instead of “economic”. Sorry, these things happen in 320 pages of text.

It then diverges into the Indian poverty statistics, to argue that things have improved for everyone under the new policy regime since 1991. Our own view, expressed at length in the book, is that the poverty statistics are utterly unreliable.

The review ventures bravely into the table of contents, discovering that eight of the chapters “touch on land issues in one way or the other”, before diverging again into a vague statement that “one should make things transparent…and remove discretion”…(that’s the best I can make of the paragraph).

It then returns from this intrepid journey into the book’s interior, to pick up a statement from our Introduction, where we say that poverty is caused by inequality. For example, landlords are rich because tenants pay them rent and are impoverished by the transaction. Debroy says we cannot make such an argument, because poverty is an absolute concept, while inequality is relative. Convenient — the poverty-inequality connection is made to disappear by terminological fiat!

The review concludes by saying that, with three authors from Jawaharlal Nehru University (JNU), the book indicates market failure in higher education. “How much of slum population can be resided in the prime real estate JNU occupies?” This is not a JNU book; and if this phrase is typical of the writing ability of the intellectual elite, then Indian education is failing indeed.

Here we have a reviewer, who reads bits of the Introduction, glances through the list of chapters, and writes what he already believes, because as a member of the Mont Perelin Society, he is committed to attacking Keynesianism, social democracy, socialism, or any other left-progressive cause, statement or sentiment, and he is willing to say we “froth at the mouth” in doing so. The mentor of the Mont Perelin Society, founded in 1947 to propagate laissez-faire capitalism, was Friedrich von Hayek, an Austrian economist who glorified the “classical liberalism” of late 19th century Britain as the perfect form of society. (My own view is more along the line of 19th century Britain being a case of classical imperialism!) From a person with right-wing, neoliberal, Hayekian commitments, we cannot expect a fair review. But we might expect at least a competent review.

So let me recount the book’s actual coverage. There are two chapters critically analysing India’s macro-economy over the last two decades. There are six chapters on India’s cities under neoliberal urban policy — the “something to do with land use” bit in the “review”. Then follow two chapters on food security, bio-fuels and climate change in contemporary India, one chapter on special economic zones, and two chapters on rural distress and peasant social-movements. We tried to perform the most extensive critique of India’s recent development policies to generate discussions and debates. Let me quote from our conclusion:

“Neoliberalism in the form of the New Economic Policy in India has not meant a triumph of the new over the entrenched habits of the old, as the conventional (pro-business) media always phrase it. Instead it has meant lots more money and power for a relative few, located in the elite spaces of India’s glittering cities, and utter deprivation and exploitation for the masses, sleeping on the streets, encamped in urban slums, and struggling to survive in over half a million villages. This policy regime must be changed.”

Richard Peet, Professor, Clark University, USA

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First Published: Fri, April 22 2011. 00:19 IST