The Great Indian Crash
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  • Atanu Maulik

    Over the past decade, when cheap foreign money flooded into India or when the investment led boom in China led to a boom in commodity prices boosting nations from Brazil to South Africa to Indonesia, the leadership of those nations had the golden opportunity to lay the foundations for a long running economic boom. They could have invested the new found wealth wisely in infrastructure, education, healthcare and could have undertaken fundamental reforms to boost long term productivity. As it has become clear now the opportunity was squandered, the wealth was plundered (characteristic of third world leadership isn’t it ?). So now as the tide turns, the realization is suddenly dawning that nations cannot bluff their way to greatness. The easy money has left. A long hard slog now lies ahead.

  • lukelea

    WRM writes: India is an even more complicated place than the European Union, with more languages, more cultures and more religious diversity (and more people) than the EU.

    Reminds me of a bumper sticker I saw:


    • Jaldhar H. Vyas

      Another HBDChick disciple I see 🙂 While a lot of Indias problems are due to clannish behaviour based on caste, religion, language, and region it should be noted that India does have a sense of national identity that was not merely bolted on by colonial powers. India has despite a few bumps managed to remain a liberal democracy with Indira Gandhi the only leader who attempted dictatorship and she was swiftly trounced. Indias largest political parties do attempt to make a universal appeal to voters outside their particularist powerbases. So things are not quite as bad as in the Middle East. (“The Rule of the Clan” is well worth reading though.)

      No Indias biggest problem is a _lack_ of diversity in the political class. With the exception of a few pro-market types in the BJP and fewer in the Congress, the spectrum runs from center-left to stark raving looney left. No wonder all they can come up with is the same failed solutions again and again.

  • lukelea

    Maybe a little off topic, but here is a book WRM and his readers might find useful in understanding places like India and Southwest Asia and, indeed, most of the world: The Rule of the Clan

  • J R Yankovic

    Many thanks for (IMO) a superb, not to mention very neatly balanced, essay on a hard but crucial topic. Easily one of the best short pieces I’ve read on India in quite a while. Off the record, too, I think you’re spot-on re the keys parallels between our respective political parties. But if you want something equally good in what I think is a similar vein, may I suggest this post from my particular favorite “authority” on South Asian matters, Prof M D Nalapat:

    On the OTHER hand (sorry, I just can’t help it), I can imagine somebody ELSE, admittedly more red-bloodedly American than me, arguing:

    How dare you. How DARE you go through the trouble of highlighting just those predicaments facing modern India that MIGHT seem to warrant a US response different from our customary default modes. A set of modes properly consisting of either:

    1) Keeping as ignorant as possible of the godforsaken place, until “business as usual” requires otherwise;

    2) imposing some one-size-fits-all, preferably unhistorical (“history = bunk”), hamfisted (neo)liberal democratic agenda on it;

    3) blowing it out of the @#$&in’ water (wrong metaphor, I know);

    4) dithering, muddling and handwringing until the situation gets to a point where we can no longer make either a positive or a decisive difference. (What the hey, these things always sort themselves out eventually; sooner or later every foreigner [who counts] discovers his or her “inner American”; at the end of the day Almighty Trade Conquers All, etc, etc).

    Or preferably – just to show how irrelevant all these messed-up places are – all of the above.

    I mean, what’s your point? Next thing you’ll start proposing some of our bright, earnest, talented young people actually go over there to live for a while. Maybe start learning a language or two. Plus something of the culture(s). And the history. And the geography. I’d go on but the whole thing just makes me sick . . .

    Bottom line: It’s high time Via Meadia
    stopped offending against all the best canons of American Whig History. It’s time you faced the fact that it doesn’t REALLY matter what we do or learn about, because the force and attraction of American culture (“Make that CIVILIZATION, buster!”) are long-term irresistible. And, hey, if large parts of our future Americanized world end up consisting of political elements both bloodthirstily religious AND fanatically business-minded (e.g., the BJP on occasion), hey, go for it. Whatever helps you succeed, in this world or the next, right?

    In short, it’s high time you Meadians got with the REAL(ly) American program.

  • Jacksonian_Libertarian

    There is only one law of economics, “The Law of Supply and Demand”. If the Rupee is falling and the Dollar is rising, then there is an oversupply of Rupees, or an undersupply of Dollars, or both. Maintaining the supplies of currency is the responsibility of the Reserve Bank. So, it is the Reserve Bank’s fault for the present problems, and those in charge, should be fired for their incompetence. India has $290 Billion in foreign currency reserves, 10th largest in the world, so buying up Rupees to strengthen the Rupee would be easy. A program of buying $1 Billion worth of Rupees every day until the Rupee had recovered, would be the easy and prudent solution.

    Unfortunately this isn’t what the Government wants. They want the Rupee to decline, this raises the price of imports and lowers the price of exports. India is clearly making a play for the lion’s share of the Asian export market, and blaming the problems on any scapegoat that presents itself.

    Indian exporters are going to see a windfall of profits, and Indian businesses and entrepreneurs will gravitate to finding export niches of their own, taking market share from other Asian counties, especially China.

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