Can Hindutva politics deliver economic growth?

July 17, 2017 by  
Filed under India, newsletter-india

New Delhi, July 17 2017: In his first address to fellow parliamentarians after becoming the Prime Minister in 2014, Narendra Modi mentioned in passing that India had been enslaved for 1,200 years, a point he reiterated in his Madison Square Garden speech later that year. Modi’s reference was undoubtedly to the long reign of Islamic rulers in the country, whom he chooses to see as the slave masters of India.

Modi’s unconventional view of India’s history may surprise many who consider the period of “slavery” to have begun only under British rule in the 18th century. But his view has the strong support of Hindutva votaries, as economist and politician Meghnad Desai pointed out in his 2016 book Making Sense of Modi’s India.

Votaries of Hindutva also tell us that ancient India (under Hindu rulers) had made exceptional strides in science and technology; developing aeroplanes, atomic bombs and plastic surgery. Even Modi has endorsed such claims. This narrative is accompanied by another claim: that India will regain its ancient glory under a prolonged spell of Bharatiya Janata Party (BJP) rule, and become one of the dominant forces in the world.

Can Hindutva-based politics deliver growth over the long run, as Hindutva votaries claim? Or would it derail progress, as their opponents argue?

A recent book by Jared Rubin, an associate professor of economics at Chapman University in California, can perhaps help us arrive at the answers to such questions. Rubin’s key argument is that whether or not religion derails economic growth depends on the balance of power between the religious and economic elite in a society. If the political elite draw legitimacy and sanction from the religious elite, a society’s institutions can pose obstacles to economic growth, his work shows.

An economic historian, Rubin draws on the lessons of history to throw light on these issues in Rulers, Religion, and Riches: Why the West Got Rich and the Middle East Did Not. Till a point in time, the Arab world under the Ottoman Empire was much more advanced than its Western European counterpart in all walks of life. Despite this advantage, it was Europe which became the world’s leader in modern economic growth. Why did this happen?

It was under Islam that the Arab world gained its supremacy in the world and it was under Islam that its decline began. So simply blaming religion alone for backwardness would not suffice, argues Rubin.

Instead, he offers a more nuanced explanation. The rulers of the Arab world drew their legitimacy from the clergy. While this allowed the rulers to maintain order in a violent world without having to take recourse to military action very frequently, it also meant that the clergy came to have an outsized influence on Arab society and economy, stifling its growth over the long run.

Islamic codes prohibiting interest earnings became a fetter on growth of modern banking. This had an adverse effect on the development of capitalist enterprises. A 250-year-long ban on the printing press—to preserve the religious elite’s monopoly on knowledge—led to a decline in scholarship and innovation, impeding growth and development.

Rubin argues that there were similar forces at work even in the Christian world. The relative backwardness of Spain and the relative advancement of Britain since the end of the medieval era could be attributed to the differences in the role of religion in the politics of these countries, he argues.

As in the case of the Ottoman Empire, the political class in Spain drew its legitimacy from the clergy. So, a ban on printing presses in order to preserve the religious clergy’s monopoly over knowledge had to be accepted. Similarly, any scientific method of knowledge-seeking which questioned religious beliefs was suppressed.

Things were different in Britain. Protestant reformation had significantly undermined the influence of the church. In order to seek legitimacy, the king had to seek support from the economic elite in parliament. In return, the economic elite wanted progressive laws to facilitate commerce. And the economic elite won the day.

But why didn’t the economic elite in the Arab world (or Spain) demand changes in laws or codes which were impediments to economic development? The answer to this perhaps lies in the work of Timur Kuran, a professor of economics and political science at Duke University, who enunciated the concept of “preference falsification” to explain why Islamic societies fell behind others.

Simply put, this means that people supportive of change refrain from expressing their true preferences for fear of punishment or social opprobrium. In the absence of any criticism of the status quo, this situation might become self-perpetuating. So, it was the fear of persecution by the religious clergy that prevented people from demanding printing presses in the Arab world, according to this theory. Kuran argues that preference falsification per se does not decide the economic fortunes of a society. However, if it happens to appease views which are inimical to economic growth, economic backwardness is inevitable.

Rubin argues that Kuran’s work offers the demand-side explanation of why the Arab world fell behind. Rubin describes his own work as the supply-side explanation of this phenomenon.

Rubin’s addition to Kuran’s work has important bearings on one of the most influential schools of thought in development economics: the “institutional” school, which emphasizes the role of institutions in powering economic growth. The most powerful proponents of this school, Daron Acemoglu of the Massachusetts Institute of Technology and James Robinson of Chicago University, argued in their best-selling book Why Nations Fail: The Origins of Power, Prosperity, and Poverty that the prosperity of nations depend on whether their institutions are “extractive” or “inclusive”. Extractive institutions concentrate economic and political power in the hands of a small but powerful clique whereas inclusive institutions encourage competition and contests for power. Once a nation is able to establish inclusive institutions, it creates a virtuous cycle of positive feedback, driving growth and innovation, and ensuring the stability of such institutions, they argued.

However, recent developments in the advanced world, particularly in the US, have led to questions about this theory, and about the resilience of institutions in that country. Acemoglu himself seems to be having second thoughts about the theory. In a January 2017 Foreign Policy article, Acemoglu is sceptical (almost dismissive) about the ability of institutions in the US to survive the “personal rule” of Donald Trump . The article goes on to warn against “unwavering—and outdated—belief in the famed strength of America’s institutions” and compares Trump to the likes or Hugo Chavez, Vladimir Putin and Recep Tayyip Erdoğan.

What explains this break in the virtuous circle proposed earlier by Acemoglu and Robinson? In a blog post discussing Acemoglu’s Foreign Policy piece, Rubin answers this question. Inclusive economic institutions are often a by-product of other, more deeply entrenched institutions. These depend on what the political elite have to do to stay in power.

Rubin identifies two ways through which political power can be retained: coercion and hegemony. A dictator ruling through armed supporters uses the former. A democratically elected leader does not need an armed militia because he has hegemony or popular acceptance. Normally, democratic leaders champion inclusive institutions. This is what Acemoglu and Robinson refer to as the positive feedback loop in their work. Rubin, however, argues it is not necessary that a leader elected through democratic means must adhere to inclusive values.

This can happen if he can increase or even hold on to his support while undermining such principles and institutions. Trump’s campaign for the presidency and his continued attack on several important institutions of the US is one such example, argues Rubin.

“Past U.S. presidents with legitimacy derived from (relatively) free and fair elections tended to find inclusion beneficial for their legitimacy, so democracy in the U.S. tended to be associated with increasingly inclusive institutions (well, at least for white men),” writes Rubin. “But inclusive institutions are an outcome, not a cause… A president who can chip away at the institutions that constrained previous presidents while still maintaining some degree of legitimacy with a sufficient portion of the population can undermine inclusive institutions in the context of a democratic setting.”

Rubin’s work has disturbing implications for the world’s largest democracy, which has witnessed a rising affirmation of majoritarianism over the past few years. It would have been just mildly amusing if the rising tide of Hindutva politics only encouraged exaggerated claims about the past. But its effects have been far more pernicious.

The frenzy around cow protection, which has claimed the lives of several innocent Muslim men, is the latest example. While Modi has condemned the excesses of cow protection vigilantes, who have targeted Muslims in the guise of cow protection, he has continued to underline the need for cow protection itself. Besides, he himself had promised to bring an end to the so-called “pink revolution” in the country during the 2014 election campaign.

Ironically, the so-called “pink revolution” or the rapid rise in export of meat from India, has helped raise incomes for farmers, and has improved India’s export earnings. The current frenzy around cow protection not just hurts cattle farmers and the cattle trade but also poses an inflationary risk. Yet, it also has the potential to polarize the electorate and appease the BJP’s ideological core. Even among its young supporters, who otherwise profess liberal values, a large majority has strong objections to beef-eating, showed a Lokniti-CSDS survey.

To be sure, neither the dominance of politics over economics nor the use of majoritarian totems to polarize the polity is entirely new in this country. In his 2005 book, Votes and Violence: Electoral Competition and Communal Riots in India, political scientist Steven Wilkinson of Yale University pointed out that whether or not the Congress acted to suppress Hindu-Muslim conflicts in a particular region depended on the local party dynamics and the extent of Muslim support for the party in that region. The Congress party took a completely different stance on these issues in Uttar Pradesh as compared to Kerala, as political scientist Prerna Singh has documented. Cow protection itself was promoted by some of the tallest leaders of the Congress party, including Mahatma Gandhi, and found a place in the directive principles of the Indian Constitution despite the reservations of B.R. Ambedkar.

In his book, The Indian Ideology, Perry Anderson, a historian and sociologist at the University of California, Los Angeles, has argued that the pre-independence Congress was at its core a Hindu organization, with only a minuscule Muslim membership. Anderson, one of the sharpest critics of the Congress, argues that the party has promoted a weak form of secularism that has done precious little for Muslims in the country.

But even that limited form of secularism is today under strain with the BJP’s growing footprint in the country. While it is nobody’s case that all voters of the party subscribe to its exclusionary politics, its ideological core continues to favour Hindutva politics and tends to have a “Manichean world view”, as this newspaper once described it. The party continues to grapple with an inherent contradiction: on the one hand, there is a desire to foster innovation and prosperity, and be a powerful force on the global stage, and on the other hand, there is a desire to pander to social obscurantism and primordial tribalism.

The big question is whether that ideological core will prevail, or will be tamed. The future of India’s economy and society would depend on the answer. The work of Rubin and Kuran illustrate the dangers of relying on religion or religious activists for legitimacy. But their work also raises the hope that things can change if the elite, especially the economic elite, have the will and imagination to assert their true preferences, and to demand change.

– live mint

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