Millennium Post

No Way Down

No Way Down
‘There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.’

Thus spake Brutus and in these words Shakespeare seemed to encapsulate the secret to the success of the Roman Empire. Indeed, it feels like India is now well and truly bound in its shallows and miseries. Government inertia and infighting, high inflation and interest rates, innumerable scams and indifference to reform, declining growth of 6.1% versus increasing deficit of 5.9%, all seem to point to the fact that our growth story has got stuck in the sand. Unless we have a confident captain and courageous crew, pundits forecast, we can only sink further.

But let us examine this a little further. Brutus did indeed grasp the helm of his fortunes and set sail towards the great unknown, but it led only to destruction and death, including his own. The young Augustus Caesar, on the other hand, held the reins of government very loosely, and it led to his empire’s golden age.
 
Every nation will have its golden age, some may have a few more than others, because of their power or resources. A small island called Britain harnessed the best of is brains to create the industrial revolution and the people it exported to America helped create a new age of prosperity in a country where its original inhabitants lived for centuries in wigwams and hunting was the main source of sustenance.

India has not yet had its golden age. Granted it was once the envy of the old world and its rulers amassed riches that were the stuff of fables. But that was another time and another place. The modern age has its own rules and dynamics, where wealth must be both qualitative and quantitative, with prosperity spread horizontally instead of vertically. And we are so long overdue we can barely wait.

There comes a time when the only way you can go is up, because you are clawing your way from the bottom. Every man and every place has a time and a season, and this is India’s time in the sun. There is no way down for India, no matter what. The sheer law of probabilities will ensure the rise and rise of India, as India has had its time in the shade, its time of fear and famine. Like our monsoons, which now keep delivering year after year, India cannot fail for the foreseeable future, because of this is our time of plenty.

‘Breakout Nations’, by Morgan Stanley’s head of emerging markets, Ruchir Sharma, is an eye-opener of a book on the economic courses charted by various nations in the last century and this one. Peering through his looking glass, he says that the chances of India emerging as a breakout nation are only 50:50. That seems sobering at first glance, but hey, I’ll take it. 50-50 looks a much better shot than winning the lottery. And in the end what it comes down to is a spin of history’s roulette wheel.

Throughout history there have been great civilizations, but very little planning and reforms were involved in their creation, at least before the last century. The best and longest lasting were the ones where rulers did not indulge in needless and ceaseless wars but rather devoted time to building their fortunes, and by default, their state’s. The well-being of their people may not have been paramount in their minds, but in most cases, people were left well alone to get on with the business of making a living, leading to the free flow of goods and money. From the Renaissance to the American success story, everywhere men produced marvels when left to their devices, whether it was Bill gates or Steve Jobs, Leonardo Da Vinci or Galileo.

The inexorable rise and fall of civilizations has shown throughout history the predictability of the maxim that what goes up must come down and vice versa. No matter how many trillions of dollars the United States Federal Reserve prints and no matter if Ben Bernanke gifts his country zero per cent rates for decades, the United States has entered a trough and it has to climb all the way down before it can climb back up. And no matter what draconian measures the Reserve Bank of India takes to cool the overheated economy, no matter how absurdly high interest rates go, demand still keeps growing, inflation looms, and the very people who complain of rising prices of food and fuel, are the same people who go ahead with booking that new car or house.

Inertia is not always such a bad thing, as sometimes one can rush ahead of oneself and murphy’s law, ‘Anything that can go wrong will go wrong,’  will put you back you in your place. If India had not had a timid government and a stonewalling opposition creating its present woes, then it would have been something else. The USA wanted its citizens to build homes and lead comfortable lives by actively encouraging zero rate mortgages and borrowing on an unprecedented scale, but the same prosperity came back to bite them in the you-know-where.

Doing nothing is not always such a lame idea as opposed to doing everything all at once, as China may yet prove. Do we want a quick flood of riches, which is bound to be followed by the inevitable famine, or we can last a little longer and enjoy a steady downpour. Aesop’s rabbit and hare remind us that it is not the one that ran the fastest but the one who outlasted his competitors that won. We are not in a 100 m sprint here but a decades-long marathon.

The only rule is there are no rules. In spite of all China did and is doing, nothing could shield it from the global downturn though it should have been relatively better insulated. India and China felt equal reverberations and slowed down equally.

India suffered under socialism not because it did nothing but because it did too much, with monstrous five-year plans trying to regulate every aspect of the economy. We all know where that took us. We really had our back to the wall.  But we rose to the occasion and cleaned house to emerge again as an economic superpower.

Everything is relative. We have muddled along at 4 per cent from a very low base but the whole world is looking towards India. Taiwan and Korea are the only nations have grown consistently at 4 per cent for decades and enjoy enormous prosperity, but no one calls them superpowers.

There is no sure shot so let nature take its own sweet course. After millions of years of evolution nature could be our greatest teacher and show us that there is much to be said for laissez faire. If you try to control and direct the turn of events too tightly, nature may spring some nasty surprises. I may water my garden each day, cut and prune with a vengeance, and my trees may still die on me while my neighbor does nothing and is blessed with a riot of flowers and mellow fruitfulness. Life goes on and flourishes regardless of human intervention, and if you want an ordered landscape, then you lose out on the weird and the wonderful and the unexpected, on innovation and inventiveness. All the magical and wondrous things that are products of great civilizations have resulted from the imaginations and skills of geniuses. They flourished not because of full stomachs and a house with a backyard pool and a car in the front, which the Chinese believe may be a cure for all discontent, but because their minds roamed free and travelled into every forbidden nook and cranny.

Every organism will always grow and try to reach towards the sun, but letting it do so at its own pace, could be the best way, as we all vouch for the healthiness of organically grown vegetables versus those hurried along with the help of litres of chemicals.  Granted there are more weeds when nature has its way, but that is nature’s process of dampening down, of balance between thrift and waste, of yin and yang, so the earth is not depleted too quickly, so that we keep something for a rainy day. Of course, doing absolutely nothing at all may mean the weeds choke out all life, so a little pruning will be necessary, but not so much tilling and weeding that we artificially regulate all the health and goodness out of the earth and destroy its own talent for survival. We will end up throwing out the good with the bad and leave little scope for the earth to renew itself and retain its inherent wisdom.

So many formulas and theories for human betterment have come and gone. Marx failed and according to many, so did Keynes. Now we have many new pundits telling us what we should and shouldn’t do. Let them say what they must, as they try to make sense of these insane times. Let’s just get on with living. Let our garden grow.

China is destroying everything old in  its path in its haste to create more  glittering new highrises,  but what good will all its dams and highways be,  if its very engine of growth, the dreams and aspirations of it people, is ruthlessly fenced in, so that they’re unable to live and love as they please, so they lose their very will to thrive and prosper, and all the joie de vivre dries up in the arid sands of dictated development.  

On the other hand, there is no guarantee that India will continue to grow by 7%, no matter what happens. But is there ever a guarantee on permanence? How many companies from the fifties exist in the same avatar today? Evolution means turnover and churn, ebb and flow. You cannot plan for every storm and if you make development top-heavy, you have more to lose when the tsunami breaks. Either it breaks your back or you emerge stronger. How you react depends on your innate strength. Infection kills some, others have an immune system that helps them overcome. Is it better to throw everything you can at a growing child and hope that all of the good stuff sticks by a miracle of osmosis, or he becomes so cosseted that every passing wind leads to a chill, every bout of adversity leads to helplessness and despair. Rather, take his poorer street cousin, who gets the bare minimum to survive, his own natural instincts for survival and success kick into high gear so that a little goes a very long way. When the going got tough, India did get going.

So the odds are with us. Our poverty may drag us down but it could also be the genie in the bottle - the aspirations of a people so long denied, that once released it could never go back in. China is cresting the peak of its growth, which means that the trough is not so far away in the distant future, though it may be a shallow one. But capitalist markets  dictates that there is a constant search for new markets and new profits, and India is waiting eagerly in the wings to grab what china no longer needs or is able to accept.

So much else is already in place. Our rich natural wealth, the conditions that once made us so favourable as the world’s trading hub, as well as the resourcefulness and relative youth of a people raring at the bit to explore those endless opportunities. Services are the precious new commodity  in the global economy, and our skills will keep that industry chugging along nicely for sometime to come.

Thomas Jefferson said when his own country was on the cusp of greatness, 'There comes a time in the life of a nation, as in the life of an individual, when it must face great responsibilities, whether it will or no. We have now reached that time. We cannot avoid facing the fact that we occupy a new place among the people of the world... Our flag is a proud flag, and it stands for liberty and civilization.' Our vibrant democracy will keep that flag flying high.

But not to get too complacent, for our competitors lie not in China or the Americas, but in the sleeping giant of Africa, which is just about to wake from its long slumber. And what an earthquake that will be, enough to send the rest of us into a tizzy. But in the fitness of things, the wheel will have come full circle, for Africa is from where it all began, until the wheel starts to turn all over again.

So let us enjoy our time in the sun (while it lasts), instead of doubting, and despairing, as the naysayers may not be able to hold back the tide of prosperity, but they sure can dampen the fun of swimming in its wake.
Moutussi Acharyya

Moutussi Acharyya

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