governance, political economy, institutional development and economic regulation

Restart

Mihir Sharma’s book (Random House 2015) is the one for you if you are a policy wonk but at a loss for arresting sound bites; a businessperson looking for bright and engaging things to say at your next meeting; a student of economics, politics or sociology grappling with the question why things are so difficult to do in India; or an expatriate keen to remain in touch with the undercurrent of “happening” things in India

Priced at Rs 1.38 per page this is an attractively packaged book for the itinerant reader, which is possibly the only kind of reader available today, in this networked, audio-video afflicted world. Its six parts consist of 68 handy chapters, each of just two to three pages, with its very own evocative title – very readable just after take-off; before landing or in those rare moments between the last public announcement and the arrival of the meal trolley.

Mihir is a master at reeling in the reader and keeping her engaged with very stark opinions, some of which are seemingly evidenced but all of which are likely to strike a chord in the reader….gosh! Wish I had thought of it that way or…wish I could have said that!

He is an entertainer at heart and pulls no punches in going all out at doing just that.

This is not however a 101 quickie to brush up on the Indian Economy complete with a statistical abstract. The relentless but sparkling wit is uplifting for those who like the play of language and know English well; have the time to be titillated and have a rudimentary awareness and interest in the Indian economy and politics.

For those who don’t share these interests “Restart” will most likely nudge them to delve deeper into more serious tomes on the subject or at the very least start reading the newspaper Mihir currently works for-Business Standard.

Despite the tough talk and brusque tone of the book, Mihir is at heart a romantic with a touching but wholly misguided belief in the possibility of “clean” or moral” capitalism.

Crony capitalism can’t “make in India”

He castigates Indian industrialists, as government stooges and mere rentiers, living off their ill-gotten gains gathered in cahoots with an obliging and corrupt government. This naïve 1990’s belief peddled by the multilateral and bilateral donors, principally to assure tax payers at home that their money is not going down the tubes as aid, assumes that it is possible to do business “nobly”.

Sadly the murky history of business fortunes, not just in India, but across the world, does not substantiate this belief except in the new age IT world where innovation trumps connections. But vast amounts of wealth is generally acquired by outwitting the next guy and hanging on to as many monopolies as one can. As Warren Buffet put it- owning the only bridge over a raging river is the best investment.

One would expect Mihir, the realist and straight talker, to defend business a bit more and castigate the government a lot, for perpetuating the crony capitalism we see around us. The job of business is to protect the bottom line of its shareholders in whatever environment it operates in. It is the job of the government to create the right environment.

Poor regulation and worse infrastructure-the missing link

His vision of manufacturing led growth and jobs is “old word” of huge assembly lines like in the US and China. In this world the key to competitiveness is producing to scale. No space here for the virtues of micro, village or small industry. Mihir uses harsh words, albeit deservedly, for industrial and labour regulations, which constrain scaling up by small but outstanding entrepreneurs.  This is now conventional wisdom. But are poor regulations really the key constraint to create an additional 6 million jobs a year or is there considerable scope for additional employment creation just by improving the abysmal and pervasive shortage of infrastructure-an outcome of poor governance and worse public decision making over the last decade?

The urban pot of gold

He subscribes to the view that there is no substitute for rapid urbanization- again something which has become conventional wisdom. Villages are sinks of depravity per Mihir. His analysis of why Indian cities do not live up to his expectation of being social modernisers- breaking down traditional social cleavages and forging new, modern identities is that they are not built as work places and instead are just better places to live in than villages.

Could his view be shaped by the cities he has lived in? Jamshedpur, the TATA exemplar industrial town; the ageing but genteel Calcutta with its heritage of absentee landlords languidly taking in the country air as their barge sailed up the Ganges on their annual soiree to collect rent and its more modern but still investment starved, going-to -pieces, version of Kolkata; babudom afflicted Delhi and Chandigarh where nothing is produced but files? Would he have a different view of he had grown up in Tirupur, Ludhiana or Dhanbad- workplace associated developments all. Is this vision also founded on a premise that good, rewarding work has to be associated with industrial activity? In Mihir’s words good work is that which produces things other people value and will pay for.

Washington calling?

He subscribes to the Washington consensus theology of markets, price decontrol, delicensing and private investment led growth to solve problems and unclog the pipes of the economy. But curiously, he is silent on the associated conundrum of increasing inequity in assets and income, highlighted by Thomas Piketty recently with concentration of wealth in the top 0.1% of the world population which threatens the consensus around growth and possibly throttles any chance of developing a less “angry” society sharply divided between the “haves” and the “have nots”.

The chicken or the egg of social change and economic development

Ironically, albeit correctly, for Mihir social change is fundamental for economic development. His silver bullet for social change, growth and economic development is to “get women working”. This may sound odd to those who believe women already do that and more, though not necessarily in a formal workplace. Consider that across the hilly and tribal regions of India it is women who are the “workers” at home and in the forests and yet this does not automatically lead to women’s empowerment or substantial change in aggregate economic outcomes.

Indeed, the evidence seems to show that it is economic development which provides new entry points by delinking financial reward from ritual status allowing those previously marginalized by culture, ethnicity or religion to empower themselves. This, in fact, is one key driver for migration of the marginalized to where work is available.

But this book is not about options or prescriptions for change. That will follow, one hopes, possibly in a Steven Levitt (Freakonomics) type problem solving sequel to Restart. This book is designed to perturb our placid intellect; churn the mind; force it to react, even aggressively, to challenge Mihir’s outrageous, cynical, trite, trivial and acerbic but always delightfully insightful, in-your-face, logic.

The publishers have been unfair to Mihir Sharma by marketing “Restart” merely as a book on the Indian economy and its problems. Yes, Restart does use the economy lens. But it is actually about all-of-India, in the style of a Ramachandra Guha epic- minus the scholarship.  This is of course as it must be because decision making, attitudes and behavior, which are at the heart of Mihir’s discourse, are interlinked processes.

Is this really the last chance for the Indian Economy as the title claims? I would seriously doubt that. These are turbulent times, which India is negotiating quite well, thank you. But I would have titled the book as “Restart: A pill to shake up India”.

 

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