Bryan Caplan  

What If India Had Been an Asian Tiger?

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For decades after World War II, India was a Soviet-wannabe state.  While their ruling parties lacked the brutality to fully nationalize their economy, post-war India was an early version of "socialism with a human face."  Well, except for massive ethnic massacres, "population transfers," (a.k.a. "ethnic cleansing"), and all those forced sterilizations.  It's easy to look humane when you compare yourself to Stalin.

Anyway, how did socialism with Indian characteristics work out?  A clever new Cato policy analysis tallies the bad news.  The method:
This paper considers what would have happened if reforms had begun in 1971. It projects an early-reform, high-growth scenario in which the per capita GNP growth rate in each decade would have been as high as that actually achieved one decade later. That is, this scenario envisages that the trend per capita GNP growth rate actually achieved in the 1980s (2.89 percent per year) would have been achieved in the 1970s; the trend rate actually achieved in the 1990s (4.19 percent per year) would have been achieved in the 1980s; and the trend rate actually achieved in the early 21st century (6.78 percent per year) would have been achieved in the 1990s. I assume no further acceleration of growth for the 21st century. These conservative assumptions stay well within the limits of what, at the time, was achievable.
The measures: "how many children would have been saved from death by lower infant mortality; how many more Indians would have become literate; and how many more people would have risen above the poverty line."

The results:
[W]ith earlier reform, 14.5 million more children would have survived, 261 million more Indians would have become literate, and 109 million more people would have risen above the poverty line.
This makes me want to see the Chinese counterfactual where Deng's reforms started ten years earlier.  For that matter, I'd like to know where Russia would be today if Kerensky had hanged Lenin and Trotsky.  Progress is beautiful to see, but once it's underway, we sadly take it for granted.  In a just world, we'd remember Acton's admonition: "Suffer no man and no cause to escape the undying penalty which history has the power to inflict on wrong."


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COMMENTS (10 to date)
Kurbla writes:

Bryan:

    "massive ethnic massacres, "population transfers," (a.k.a. "ethnic cleansing"), and all those forced sterilizations. It's easy to look humane when you compare yourself to Stalin."

Interesting, I always thought about India as a capitalist country. And it looked humane compared with say, officially racist USA mass murdering millions of people in their neighbourhood in roughly same time.

    I'd like to know where Russia would be today if Kerensky had hanged Lenin and Trotsky.

Hanged? Ouch. Hard to know what would be the result of 70 years of capitalism. But, capitalism eventually got its chance, and there is little doubt that 20 years of capitalism is responsible for millions of premature deaths in Russia.


JPIrving writes:

Kurbla,

I have never heard of this mass murder in the U.S. during the 1940s, could you enlighten me? Perhaps you have misremembered the story and are referring the the mass murders which the U.S. ended in Japanese and in German occupied territory?

Also, if you look at the index of economic freedom, a rough measure of how relatively capitalistic a country is, you will see that Russia sits 146 out of 179 ranked countries. We can argue over the specific details of the index but I don't think we can call it a capitalist country.

Prasanna writes:

Er, Massive ethnic massacre, and that tagged to the Partition of India - if anyone should take the blame for it, its hardly India - for it happened when it was getting freed from British rule and partitioned!
You make India sound out to be a murderous state - which is hardly the case, considering that you only have links to 2 of your allegations, and of that is from 1947!!

The Indian state isnt perfect, no state is, or will be (and yes, it has had its share of screw-ups, HR violations). But hell, it isnt the monster you make it out to be!

Vadim writes:

So wait -- the ONLY thing that changed from the 1970s to the 1980s in India is economic liberalization? How about political stability? Worldwide oil prices? Aid from the USSR?

I don't know enough about the economic history of India, but the notion that you can just shift GDP growth by a decade and then draw some cardinal (rather than ordinal i.e. "people would've been better off with early reforms") conclusions from it is the kind of thing you'd expect in a hastily assembled high school project, not a respectable study.

BT writes:

"massive ethnic massacres, "population transfers," (a.k.a. "ethnic cleansing"), and all those forced sterilizations. It's easy to look humane when you compare yourself to Stalin."

What ethnic massacres? There are more muslims in India than the entire population of Pakistan in the 40's and now. In contrast while there were 38% Hindus in Pakistan before the partition there are 0.1% non-muslims there now. All of the rest were either forcibly converted, killed or elected to leave fearing for their lives. By far (more than 90%) of muslims decided to stay in India rather than move to Pakistan during the partition. Indian has over 200 millions muslims, the second largest muslim population in the world. So what ethnic cleansing? It was the Pakistani's that eliminated all non-muslims overnight from their country.

That same intollerance continues to this day. Currently Pakistan is at war with its millitant muslims. Taliban was a Pakistani outfit which was exported to Afganistan through the help of Pakistani version of the CIA and regular army. To this day many Taliban and Al Quida leaders hide in Pakistan.

Massive ethnic massacres did happen, but on the Pakistani side. There were deaths on the Indian side too, but the government did send in the Army to stop the violence. In fact, Gandhi's hunger strike was quite effective in stopping the violence on the Indian side. The remaining 200 million muslims are living proof that there were was no ethnic cleansing. Please check your facts.

-BT

Mr. Econotarian writes:

"This makes me want to see the Chinese counterfactual where Deng's reforms started ten years earlier. "

How about if China didn't starve 30 million people during the Great Leap forward? I want the counterfactual where the KMT wins against the Communists on the mainland.

Michael Spacek writes:

Your methodology is flawed. While you posit that had India embarked on reforms in 1971 than it's level of development would have been higher. You could only make this argument by holding all other variables equal... i.e. if India liberalised in the 70s rather than the 90s, all other variables would have to be the same as they were in the *90s*. There's no other way to measure this. Aside from it being problematic as India's economy would be very different in the 90s than it was had it liberalised in the 70s, there's the question of differing international conditions in the 70s than there were in the 90s.

In spite of its flaws, Indian protectionism fostered a large internal market, not to mention large Indian companies, which were able to compete once the economy opened.

Nothing like ideology masquerading as 'research'.

[Comment edited for crude language.--Econlib Ed.]

EM writes:

Because India aligned with the Soviet, Pakistan aligned with with the US, which is why Americans like this one, even today, seem to believe the lies that Pakistan creates about Partition and now, its state-sponsored terrorism.

Ritwik writes:

Bryan,

To attribute the partition violence to either socialism or the Indian state is to *massively* miss the point, or to have no sense of history.

The most inhumane face of the Indian state due to socialism shows up in the crony capitalism that we often indulge in and in our government's historical disregard for property rights.

India is(was) pretty much the antithesis of a libertarian society, except that we never went extreme in the intensity.

jr. writes:

Iraq? Vietnam? North Korea? Cuba? Venezuela? And now Honduras?
Also Greek?

It's hard to make the case. It's really really hard to make the case. To claim the successes is the easy part. The mission impossible is to really draw any lessons from the success stories.

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