Super Economies: America and India – Heritage Link, Democratic States – Positives Enough for Convergence !?

Super Economies

America, India, China and The Future of World

By Raghav Bahl

ISIN: 978-06-7008-812-6 ǁ Publishers: Random House ǁ Price: Rs. 699/-

In the first part, we looked at the preamble that Raghav Bahl builds for his case for India’s potential case in the coveted SuperEconomy club. In the second part, we then looked at the Raghav Bahl’s separate chapter-wise exploration of the past events of the international stage, wherein the involvement US, China and India, translated into the future case of ‘Shall it or shall it not ?’ for India’s Super Economy status.

In this third and penultimate part, we will see how Raghav Bahl views the points of common heritage, common systems of governance, a critical mass of Indian Americans and examines whether these two great parallels will ever, if at all, converge.

Super economies 2Foetal Siblings or Estranged Democracies?” draws on the pre- and post-independence America and India. The first common challenge both nation faced was to create a federal union out of the group of separate, sometimes disparate, states. Indeed, like America 150 years before, India was blessed at birth with a set of wise and principled leaders who guided the country with their foresight and courage. America’s experience in tackling the challenges that arose during its first century of free-market democracy can be instructive to India, from its transition from an agrarian economy to largely an industrial one.

As America grew and prospered in the nineteenth century, the Puritan ethics of simplicity, hard work and fair play gave way to a more materialistic, aspirational mind-set of what came to be known as “robber barons’. First used to describe medieval nobleman who ambushed traveling merchants and demanded payments or confiscated their goods, the term “robber baron” initially carried a negative connotation, implying ruthless, lawless money grabbing. As the America grew in its economic strength, the term got tagged to the ruthless new class who gained in the riches. This was partly as a result of technological innovation, boosting efficiency and competition which asked nothing of ideas of art and science, but the application towards ends of use and profit. The influx of some seven million immigrants between 1820 and 1870 only heightened the shift.

America’s first generation titans of industry started poor and scrappy. They found themselves torn between the national doctrine of ‘equality for all’ and the rise of ‘free-booting citizen’ who by his own efforts, by whatever methods, had wrested for himself a power that flung its shadow upon the liberties and privileges of others.

With the Government committed to free-market capitalism, it became frightfully easy for these industrialists to expand their holdings, in the process building up properties that East India Company would have envied.

Like the excesses of East India Company, which prompted London to step in, the behaviour of Gilded Age (end of 19th century period) tycoons spurred new legislation to help modulate America being free-market economy.

Since then, the period has undergone dramatic historic revision. After all, one man’s ‘robber baron’ is another’s ‘visionary entrepreneur’. The term ‘political entrepreneur’ who used government subsidies and patronage to build their empires and stifle competition and ‘market entrepreneur’ who simply built superior product at a lower cost now gained recognition.

Thanks in the large part to their legacy; today’s entrepreneurs operate in a drastically different world – one that is not only more global, but vastly more competitive, inclusive, regulated and democratic.

Post-1991-opening of the then regulated economy, Indian tycoons can be classified as ‘reform barons’, who seized the opportunities afforded by the economic liberalization. India now also has ‘first-generation barons’ who have built widely respected businesses from scratch.

Unfortunately, it is neither first generation nor reform barons who are dominating the headlines today. It is the another class, so-called less principled ones, the crony capitalists, who use corruption and cronyism to disproportionately benefit from the allocation of the country’s natural resources at stage-managed low costs.

Rather than allow similarities to let them take one another for granted or needless criticizing each other for the apparent flaws, America and India should use the core likeness and advance the self-correcting powers of the democratic form of governance.

In “The Centre Will Hold “ with a sub-title of ‘Democracy and Law’, Raghav Bahl takes up the subject of similarities in the forms of governance in USA and India, as the modern states, with respect to India’s tryst with the status of being (or failing) a SuperEconomy. George Bernard Shaw allegedly once quipped that America and England are ‘two counties separated by a common language’. Making a parallel comparison can also be made between America and India, Ogilvy & Mather’s India vice-chairman, Madhukar Sabnavis considers two counties separated by a common political system. Furthermore, both countries are home to multi-cultural populations. America’s diversity is largely the result of immigration of from across the world, whereas India’s diversity has grown out of its long history as a sprawling collection of isolated, highly territorial regional populations. That makes US qualify as traditional nation-state, while India is better defined as ‘state-nation’. While the traditional federal system is ‘symmetrical’, India’s is asymmetrical.

Holding together a collection of disparate factions requires far more strategic savvy and collective will….whatever the difference in form or style, however, American and Indian democracies share an essential character and spirit.

A successful democracy depends on achieving a balance between centralized and decentralized forces and serving the interests of powerful without excluding the disenfranchised. In this, both, US and India have largely succeeded.

A democratic system may not guarantee upstanding conduct, but it does guarantee demanding transparency, checking the power and pursuing the justice… the ability to speak freely is perhaps the most essential check on runaway power….In a democracy, no matter what goes wrong, the rule of law ultimately prevails…But no process better highlights the connection between US and India – and their disconnect with China – than the peaceful transfer of power. In a democracy, protocols exist to handle even the most unforeseen circumstances…The good news for China is that if it ever does decide to embrace democracy, India, more so than US, can provide a shining example of successful, multi-national state….In the meanwhile, India and US will draw closer, driven by a mutual appreciation of their democratic institutions, their drift towards centre, and the desire to overcome the diplomatic obstacles still blocking their way.

In “Treading Softly”, with a very speaking subtitle of ‘The Race to Win Investors and Other Admirers’ Raghav Bahl takes a very close look at the grass-root economic factors that can make, or unmake, India’s foray to the SuperEconomy club. In atmosphere that sometimes it takes more than three days just to transport goods across a state boundary…. Investors driven strictly by short-term bottom-line considerations would chose China. Gurcharan Das says that, ‘India is rising from below, unlike China which is rising from above. From below is more enduring, happens irrespective of who is ruling, the people make it happen’. What India needs, Gurcharan Das says, is a strong liberal state. Such a state would have the authority to take quick, decisive action; it would have the rule of law to ensure those actions are legitimate; and finally, it would be accountable to the people. But achieving this will not be easy, says Das, because India has historically had a weak state and a strong society.[ Reference: India Grows at Night : A Liberal Case for a Strong State][1] . In a Goldman Sachs Report “Ten Things for India to Achieve its 2050 Potential’ (Jim O’Neill and Tushar Poddar, 2008) notes that India could be 40 times bigger by 2050. For this to happen, it needs to implement many changes like improve the governance, control inflation, introduce credible fiscal policy, liberalize financial markets, increase trade with neighbours, raise its basic education standards, increase quality and quantity of its universities, boost agricultural productivity, improve its infrastructure and environmental quality……Hard power may still come more easily to China than soft power, but as it settles into the role of SuperEconomy, it will eventually figure out how to win hearts and minds naturally, instead of by cold calculations.

The Ties That Bind” is the Raghav Bahl analysis of The Power of the Indian Diaspora. In the globalized Age of SuperEconomies, the diaspora populations hold unprecedented economic and diplomatic advantage. Of all the America’s diaspora populations, Indians are the highest-earning ethnic group, in the fields from media to medicine….Other immigration groups view unparalleled success of America’s Asian Indians with a mix of admiration ad envy….Americans’ attitude towards Asians in their midst are inseparable from their feelings about Asia itself…Indian Americans may be the secret key to securing India’s future both as a twenty-first century SuperEconomy and as a steadfast US ally.

Raghav Bahl thus completes his panoramic analysis of the factors that brings India at the present critical junction of its future journey to the SuperEconomy status.

In the concluding part, on 6th March, 2016, we will join Raghav Bahl to see ‘Where Do We Go From Here?’.

[1] India Grows at Night: A Liberal Case for a Strong State


In July 2011, I opted to retire from my active career as a practicing management professional. In the 38 years that I pursued this career, I had opportunity to work in diverse capacities, in small-to-medium-to-large engineering companies. Whether I was setting up Greenfield projects or Brownfield projects, nurturing the new start-ups or accelerating the stabilized unit to a next phase growth, I had many more occasions to take the paths uncharted. The life then was so challenging! One of the biggest casualty in that phase was my disregards towards my hobbies - Be with The Family, Enjoy Music form Films of 1940s to mid-1970s period, write on whatever I liked to read, pursue amateur photography and indulge in solving the chess problems. So I commenced my Second Innings to focus on this area of my life as the primary occupation. At the end of four years, I am now quite a regular blogger. I have been able to build a few very strong pen-relationships. I maintain contact with 38-years of my First Innings as freelance trainer and process facilitator. And yet, The woods are lovely, dark and deep. But I have promises to keep, And miles to go before I sleep, And miles to go before I sleep.

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