Decoding Piketty @ JILF 2016
In his book ‘Capital in the Twenty First Century — the Economics of Inequality’ a wide ranging study of the cause and consequences of inequality in modern times, Thomas Piketty did not include India, China and Africa, instead, focusing on the developed world. While Piketty prefers to see inequality bridged even at the cost of economic growth even in the developing world, it was interesting to see his Co-Panelist at the session today, India’s Chief Economic Advisor, Arvind Subramanian advocate growth over inequality stressing the fact that the developing world could worry about inequality only after it has produced wealth. This was not unexpected. Piketty is an academic and therefore can report more honestly what he see in the data — whereas Subramanian, a world bank economist, on lien to the Indian government continues to peddle a medicine not only past its expiry date but one that has often been held responsible for creating the very disease it has been hitherto believed to cure. Perhaps the most pertinent point was made by Bhanu Pratap Mehta an absolutely admirable public intellectual and a well grounded policy expert, when he provoked the Panel to consider whether the very presence and stickiness of inequality may indeed be responsible for lack of economic growth — explaining India’s own history of failure at consistent growth.
Sitting through another session yesterday evening, I saw Amitabh Kant — the reformist civil servant, as he likes to describe himself, face an embarrassing audience that questioned the ability of the ‘Make in India’ initiative to generate the much promised jobs for India’s teeming unemployed after eighteen months of expensive and publicized launch. While speaking innuendoes and stating vague facts on the success of Make in India and its long term potential he directed his attention to ‘StartUp India’ as a way for the unemployed to ‘create their own jobs’.
Looks like ‘StartUp India’ is the ultimate masterstroke — the last remaining excuse for the government to justify its inability to produce the promised jobs and for its youth to look beyond the obvious. I am not sure how long Mr Modi can continue to watch the ‘unemployment time bomb’ ticking in the hope that one day he will able to, as if by magic, gather the resources to diffuse it. He may soon run out of Ponzi schemes after the ‘StartUp India’ unravels into another impending disaster.
The morning news papers shockingly reported that thousands of MBAs and Engineers have applied for jobs as Sweepers in a government department. While Mr Subramanian challenged the Piketty thesis, Mr Kant could not explain why Indian engineers and MBAs prefer to choose Sweeper’s jobs within the government, ignoring the massive incentives his ministry has made available via Start Up and other such schemes — dragging its feet over genuine structural reforms at the same time.
Piketty is not afraid to place the blame for India’s backwardness on its business, political and cultural elite — the disconnected lot that continue to run its national institutions and… continue to undermine them.
For those willing to listen rather than counter Piketty, it is a message worth receiving. Yet, in the cacophony of India’s chaotic growth it is a message more likely to get lost than be heard.
