There’s a very interesting piece in today’s New York Times about the sudden interest in politics among the Indian middle class.
They’ve finally got fed up with the astounding level of corruption in Indian politics – the problem being that the people who elect the politicians are the poor, who far outnumber the middle class.
When I first went to India in 1987 I commented to a friend that they had some of the cleverest business people on earth struggling against a government determined to make doing business as near as dammit impossible through a poisonous combination of bureaucracy and corruption.
That was because those running things were a) socialists and b) thieves. The socialism may have gone to a large degree, but the theft remains, allied to a worrying and growing amount of religious bigotry.
Can a country be truly successful when it is so greatly corrupt? I look at places like China, Kazakhstan, Belarus, Ukraine and Russia – not to mention Italy – and doubt it.
Interesting Indian statistic: McKinsey reckons the Indian middle class will be 600 million by 2030 – the size of the entire population when I first went there.
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Bill Bonner, writing in The Daily Reckoning suggests that it’s no surprise people are protesting about inequality – and if he were in their place he would, too. He also draws a compelling comparison with the past:
When the US embraced its empire it condemned its middle classes. Why? Because that’s how empires work. They bring in cheap goods — and sometimes money itself — from outside. Whether they are taken as booty or traded for the imperial currency, the effect is about the same; they undermine local industries and local wages.
Ancient Rome imported wheat from Egypt, by the boatload, and gave it to citizens (an early form of food stamps). Result: the price of wheat collapsed. Small farmers couldn’t compete with free wheat. They couldn’t earn a living.
The Romans also brought in slaves. Rich, politically-connected Romans took over the small farms, consolidated them into big plantations, and ran them with slave labor. Again, the local labor was out of luck.
Things got so bad for the small farmers that they sold their children into slavery…and then, themselves. Then, in alarm, an edict prohibited Roman farmers from selling themselves into slavery. They were required to remain on their farms…and at work.
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When I see British complaints about immigrants taking their jobs I too am reminded of ancient Rome.
In its decline Rome recruited barbarian mercenaries into the legions because they couldn’t get enough of their own citizens to do the job.
One day a man called Alaric – a Goth from Romania – sacked Rome … and not too many years later the Roman Emperor was a man called Odoacer. Nobody knows if he was a Hun or a German or even a Turk.
What gave him the power was that he controlled the army – the foederati – made up of barbarians recruited to defend the empire.
Please don’t criticise my casual history. I’m just making a point.
Talking about India making things
nigh-on impossible for business to take place reminds me so much of
Burma. To buy a new (used) car, for example, you have to pay the full price plus commission
to your broker in Japan, then 100% of the price in import duty to the Burmese junta –
that's if you can get an import permit (available if you have enough
dollars). Then, when you've finally got the car on the road, you're subject to a petrol
quota each week – and the only petrol stations are run by the junta. Of
course, there's a thriving black market, where you can sell off the
petrol you don't use each week, or top up if you're using more than your
“fair share”. It's corruption that keeps the bastards in power – on top of a certain amount of complacency on the part of a large sector of the population, who feel it's their lot to suffer in this way.
I have just finished reading a very good book, largely about Burma, called The Glass Palace by Amitav Ghosh. What a tragedy that Aung Sen was assassinated!
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