Greetings friends in FLOW,
Platform this month features
Gary Hoover on “The Future of Mexico.” It is an optimistic
piece that will inspire a love for Mexico for those who haven’t
been and will rekindle a love for Mexico for those of who have
been. With a retailer’s eye, Gary focuses on those small
commercial details that are evidence of a better world.
Having spent much of my life in academia
and K-12 education, where one often encounters people who hate
markets, I have had to learn to appreciate the importance of
those small commercial details. Twenty
years ago I would have sneered at descriptions of the growing consumer
class in India:
[India’s] consuming class typically
owns a TV, cassette recorder, pressure cooker, ceiling fan, bicycle,
and a wristwatch. Two-thirds
of the consuming class own a scooter, a color TV, electric iron,
blender, and sewing machine, but less than half own a refrigerator.1
This class was about 6% in the 80s,
18% by the mid-90s, and it is estimated to be 40% today. This
is an extraordinary transformation of a large society.
Now my heart pounds with the vicarious
excitement of a family that buys its first ceiling fan or pressure
cooker! In a
country legendary for mass poverty, in the past fifteen years most
Indians have earned enough to buy their first wristwatch. Stop
and, with an empathetic heart, imagine 125 million people smiling
as they slip the band of a newly purchased watch around their wrist
for the first time in their lives.
Gurcharan Das’ India Unbound is
a beautiful, tragic tale of how the idealism of India’s Independence
under Nehru led to economic stagnation through socialism and,
ultimately dictatorship under Indira Ghandi in the 1970s. But
it is also the heroic tale of redemption through India’s free
market reforms in 1991, and the subsequent exciting tale of rapid
While he acknowledges, “in part, this is a story of the betrayal
of the last two generations by India’s rulers,” for the most part
Das is wise, rather than bitter, about the follies of socialism,
because he was once a believer himself:
When I was young, we passionately
believed in Jawaharlal Nehru’s dream of a modern and just India. But as the years went by,
we discovered that Nehru’s economic path was taking us to a dead
end, and the dream soured. Having set out to create socialism,
we found that instead we had created statism.2
He is acutely aware that his Harvard education was responsible
for his belief in socialism:
As I look back on my four years at
college, I am shocked that we were so concerned with the distribution
of wealth in those days that we ignored the whole subject of
wealth creation. . . . Caught up in the Western fashions, I did
not read the great Austrians, Schumpeter, Hayek, and Mises. Thus,
I missed the excitement of the capitalist revolution and the
romance of “creative destruction.”
As a consequence of the policies that
followed from these beliefs, by the 1970s tiny Hong Kong earned
more from exports than all of India. Indira Ghandi’s campaign to “End Poverty” perpetuated
and deepened poverty; through regulation and government ownership,
Indian manufacturing productivity declined half a percent per year
from 1960 to 1985. The result was straight out of Atlas
Anyone who lived in India in the 1970s
and 1980s felt the tremendous shortages. There were constant blackouts as power was unavailable. Railway
freight suddenly started declining. There were shortages
of coal, cement, and steel. One seemed to feed on the other. For
example, once railways started doing badly, then coal did not get
taken from the coal mine to the thermal plant that made electricity
from coal. If electricity was not generated, then enough
coal could not be mined. If coal and electric power suffered,
then the railways could not run.3
Das quietly provides insight into a real world struggle for economic
More and more young Indians insistently
ask how we could have created these terrible things. And why did so few protest
and demand economic freedom? The reason is that the
victims were unorganized private citizens – farmers, businessmen,
the unemployed, consumers. Businessmen are fine producers
of goods and jobs, but they are cowards and do not speak out. One
of them, Rahul Bajaj, did finally speak out at a hearing of the
Monopolies Commission. The court asked him why he should
not be prosecuted for producing more scooters than his licensed
capacity. Bajaj replied “Sir, my grandfather went to jail
for my country’s freedom. I stand ready to do the same
for producing on behalf of my motherland.”4
Das’ largely autobiographical story
provides a wealth of extraordinary detail that brings the value
of capitalism to life. More
than any book I know, India Unbound provides a living
sense of the quiet tragedy of democratic socialism, from a wise,
spiritual, literary man who lived through these events.
Pakistan and India are nuclear powers
that have been engaged in violent border disputes since independence. The first full-scale
nuclear war may take place there. Das knows there is another
How to change the thinking of politicians
from territory to trade? Economic
integration will do more to diffuse political conflict. It
is economic integration of the European Union that has ruled out
war between Germany and France. South Asian economic integration
can do the same for India and Pakistan.5
Peace through Commerce is not merely
a slogan. It is a way
to prevent the deaths of millions of human beings.
Our Peace through Commerce campaign kicks-off on September 30
in D.C.; please join us. Visit www.peacethroughcommerce.com for
more information. We are creating an extraordinarily diverse coalition
devoted to supporting peace through commerce, and we are very serious
about putting together this coalition in such a way that we do,
in fact, create a more peaceful world. Please spread the
Celebrate commerce for the sake of peace with us, and do not let
bullies discourage you!
CEO & Chief Visionary Officer
Please contact us at email@example.com with ideas, insights, and inspiration.
P.S. For a voice from the U.S. Army in support of Peace
through Commerce, see the article on our
home page by Major
Miemie Wynn Byrd, Combating
Terrorism: A Socio-Economic Strategy. We are delighted to
have Major Byrd’s support for our initiative.
P.P.S. Remember that FLOW is a non-profit organization that promotes economic freedom and broadly distributed prosperity. You can support FLOW through your financial contributions among other means.
- Gurcharan Das, India Unbound (New
York, NY: Anchor Books, 2002), p. 287.
- Ibid., p. x.
- Ibid., p. 159.
- Ibid., p. 174.
- Ibid., p. 321.
"Vision without action is a dream. Action without vision is simply passing the time. Action with Vision is making a positive difference." ~ Joel Barker
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