Indians need to hone ability to create wealth

Historian

The pursuit of wealth is seldom about money. Rather, it is more about doing something valuable. Making money, though, remains one of the more common ways of measuring whether something valuable has been done. It is in this context that we suggest that India made a civilisational error in the early days of Independence when it dissed the creation of wealth in the hope of creating a society that was less unequal. Inequalities did not lessen; but, holding wealth in contempt did lead to putting the brakes on those who could create value for society.

To be sure, inequalities in pre-Independence India were extreme. It was in this context that Gandhiji adopted the ‘pancha’ and the ‘topi’as his attire when he dislodged the existing leaders of the Congress and became the supremo of the national movement in 1920. He preferred to insist that he was ‘the dictator’ of whichever movement he led. Gandhi’s point in advocating a simple life that mirrored that of the poor was merely this: that the more prosperous Indians, the ones who were in the liberal professions, the ones who were leading the movement for independence, needed to show some sensitivity and concern for the poorer Indians.

The Gandhi ‘topi’ used to be the headgear of the poorer peasants who could not afford the slightly more regal ‘pagri’ or the truly regal ‘saafa’, both of which took more than 10 times the cloth to make. The ‘pancha’ was a very short ‘dhoti’ worn by the peasants, not the proper 9-15-yard ‘dhoti’ which was worn by the more prosperous. In case you thought that the wearer of the ‘pancha’ was poor, please remember that the truly poor in pre-Independence India were those who did menial labour or scrounged their living from the forests and hunted small animals. They could afford to wear just a ‘langot’, a loin cloth.

This was also, by and large, the condition of the Indians before the British came. Abraham Eraly, in his extremely readable books on Islamic rule in India, has calculated that almost 90 per cent of the wealth of India was owned by a mere 400 families. Little wonder that the common Indian mostly did not deem it fit to oppose the destruction of these families and the transfer of power in India from them to the British.

Gandhi’s dramatised concern for the poor, however, had a most unfortunate consequence for Indians who combined Gandhian thought about empathy for the poor with the completely unGandhian Indian tradition of asceticism in which the truly rich ditched their prosperity to voluntarily follow a life of poverty in order to serve the people. They ignored the fact that there is a vast difference between the prince who abandons home and hearth voluntarily to serve the public and the poor who have no option but to live without a proper hearth or home.

This resulted in, we would suggest, a civilisational error being committed by Indians as soon as they became masters of their own destiny on gaining Independence.

The civilisational error, we think, was that Indians — those who were at the helm of the country in the first decades of Independence — began to follow policies that were detrimental to wealth creation. Sometimes, this hostility to wealth creation was justified in the name of socialism, sometimes in the name of being Gandhian. Whichever way it was, its impact was singularly unsocialistic and unGandhian.

It resulted in the transformation of India into a society which lost the instinct to create value. Soon enough, India became a society that was poor not just in money terms but also in everything else. The greatest poverty was in thought, in being unable to figure out ways of adding value to whatever a person was doing.

Money may not be able to buy happiness for an individual but when equitably distributed, it certainly makes for a society that is happier, less violent, more cooperative and more amiable.

Poverty, in contrast, results in the opposite. There is nothing noble about poverty. The poor die young, lead meaner lives, have more health problems and are more irascible; have poorer ability to cooperate, weak social networks and support systems.

India’s civilisational error lay in not realising that admiring poverty, or insisting that poverty is the result of victimisation ends up hobbling the natural instincts of a people to take pride in earning their livelihood. It also generates idea-sets that hinder us, as a society, from creating a fair environment for the growth of everyone. Regressive idea-sets, a belief that nothing can be done, or can be done only through criminal, underhand, corrupt means creates helplessness among all those who wish to lead an ethical life. A structured helplessness based on victimhood, however, creates obstacles for any desire to add value to one’s métier.

One of the most interesting examples that came our way was the famous Integrated Rural Development Programme of the Government of India. Launched in 1978, implemented in 1980, it was supposed to help the poor to cross the poverty line by giving them focused loans.

After spending Rs 32,171.97 crore, given to 143.69 lakh families, when a review of the scheme was done, it was discovered that in all of two decades, a mere 16 per cent of the beneficiaries had made any effort to cross the poverty line. In absolute numbers, this comes to, over a span of two decades, just about 23 lakh families that were able to cross the poverty line. The rest had simply frittered away the money given to them. They simply did not aspire to do anything to come out of poverty with the loan given to them under the IRDP. The poor remained poor and refused to develop the capacity to come out of poverty.

The ability to create wealth has to be developed; there is nothing natural about it. It is much easier to talk about the distribution of wealth than its creation. However, if you don’t create wealth in the first place, then there is nothing left to distribute.