In an interview on India

 Tell me about your first book, Guha’s India After Gandhi.

 This is a very detailed account of India over the past 60 years in one single volume. It’s a sort of one-stop shop on India. It is pro-Nehru, so it is a very secular view. 

Jawaharlal Nehru was of course India’s first and long-serving prime minister, in power all the way from 1947 though to 1964, and an advocate for socialism and the public sector as the means by which economic development can be achieved by poorer countries. 

And everybody was always saying: “Oh, India’s going to break up. It’s too diverse, there’s too much poverty, you’re going to have dictators.” But again and again India continues as a democracy. This is a book about how it happened in a country as large as Europe with diverse languages and religions. How can a place like this hold on to democracy? 

 How can it? 

 Well, the Western model says you need a middle class, you need literacy, you can’t do it with so much inequality, but India sets the example of the fact that it is possible. It is still a democracy with 700 million voters, 400 million of whom actually voted. The numbers are just mind-boggling. Even when Indira Gandhi imposed emergency rule, for 21 months from 1975-1977, the good sense of the Indian public got it all back, all their rights, and they don’t give up. Since independence the traditions of agitation and peaceful demonstration have upheld democracy. 

 Would you agree that the author has brought India very much to life in this book? 

 Well, he’s an anthropologist and, yes, he is a very good writer. I like that. It is a good read. It’s a portmanteau book on India. If you are going to read one book on India, one fat book, it would be this one.

In an interview on India

Your next choice is India after Gandhi, a post-independence history.

Yes, and the best bit of it, or the bit I enjoyed most, was the 1940s, 50s and 60s. What’s good about this book is that it’s almost like a conversational argument with the reader. It’s a very lively history. It makes you think. You’ll read one page and you’ll agree. You’ll read another page and you’ll disagree. And it gets right inside that period of the first few decades after independence in a way that I don’t think any other book does.

Do you need to know a lot about Nehru and the other important political figures of that era in order to fully enjoy it?

Not really. I think the best history books can be understood by any reader with basic knowledge, and yet they can also be stimulating and exciting to somebody who knows a lot about the subject. I’d say that this book manages to span both.

Can you give me some examples from the book, things you found really intriguing or surprising?

There are so many different things. It could be the situation in Kashmir and how and why the problem between India and Pakistan developed, or the account of the 1962 border war between India and China. There’s a level of very interesting social detail. For example, one of the things the author does quite cleverly is he goes back to the way that events were written about in newspapers at the time, and quotes from them. Or he quotes from people’s personal journals and letters. You really get a very vivid sense of how history was unfolding and, also, just how difficult a lot of the decisions were that faced the Indian leaders in the decades after independence. They had such huge things to deal with.

The book’s subtitle is The History of the World’s Largest Democracy. is that an overall theme – scepticism about whether democracy could work in a huge, poor country like India and how they succeeded?

It’s one of the themes. It’s a big book – it must be 700-800 pages – and it covers many different subjects. I do believe that even with a large country like India or China or the U.S., it is possible, if you have a good writer with an acute knowledge, to turn that into a single book which can be much more than its individual parts. It can tell you some larger truth about the country. I think that’s what this does.

In an interview on the Indian Economy

What about India After Gandhi: A History of the World’s Largest Democracy?

Ram Guha’s book is a popular history. As a book on recent India, it’s one of the best, maybe the best, that I’ve read – a mammoth amount of information, put together in a way that anybody can read. He’s a serious historian, but it’s written in a way that really makes you want to turn the page. If one wants to understand contemporary India, this is the book to read. It begins with [Mahatma] Gandhi’s assassination, and it tracks the way the politics and debate takes place in India. There’s jostling for political space between different parties, between Hindu fundamentalists and the secularists, with Nehru and Indira Gandhi in the latter category. If one were to read one book on India, this is the one that I would recommend.

It goes up to the present?

Yes, it comes right up to the present, to just a couple of years ago.

You mentioned in an email to me that your own book, Beyond the Invisible Hand, might be considered left wing, while as a policymaker you’re considered to be very pro-market – but that there is no contradiction between the two. Can you explain that to me?

I can try to. My book will be read by many as a left-wing book, but it is non-doctrinaire left. Left is usually associated with big government, whereas this is actually a small-government left-wing book. It makes the argument that for good policy you have to give space for the laws of the market; you have to give space for individual enterprise and entrepreneurial creativity. At the same time, I’m arguing that a vastly better, vastly fairer and more equitable world is possible. Just because the laws of the market are important, we must not become apologists for what currently prevails and the huge inequities that exist in society. We must not get complacent about that, and say that’s the only thing that can happen.

The book goes into economic theory, but it’s all in words, there is nothing technical in my book. It’s in the tradition of [George] Akerlof, Stiglitz and Sen – the way they have written about the reasons why you need income and wealth redistribution, and how the government should try to deliver on that.

The book talks about inheritance. I argue that it is morally wrong to give people huge advantages at birth. An ideal government isn’t large, it’s lean and small, but it makes transfers, taking from the rich and giving to the poor. It does not fatten itself up like most Communist governments did. A large government is like a sitting duck: it invariably gets captured by individuals and small groups, as happened in the Soviet Union. So, my book argues, we have to think of radicalism in a very different way.

I do believe that the book makes deep analytical points, for instance about how the law works and the limits of methodological individualism. It’s a book that I worked on for a very, very long time. I finished it one week before I joined the Indian government, which is good because I would never have the time to work on it now.

Now to my policymaking work. In our everyday life, we have to practice what I call normal economics. You have to recognise and respect the laws of the market, allow individual enterprise to flourish, international trade has to be open, and all the regular things economists say I would also repeat. At the same time we must not blight our chances of a more idealistic world. My book is based on two views of the invisible hand. For Adam Smith, the invisible hand was the little minions going about their everyday life, unwittingly creating order. That’s true in many domains, and its discovery was a major scientific breakthrough. But I contrast it with Kafka’s view, drawing on The Trial and The Castle, where little minions are going about their everyday chores without thinking about the larger implications of their actions and they create a horrific world. The book argues that both these visions have a role to play. Economists have given complete predominance and priority to the Smithian view, but we should be aware of the Kafkaesque view of what can happen and take guard against such a predicament.

Have you been able to move that into the policy world in your current job?

No. My work as a policymaker is to attend to everyday life. This is what I meant by normal economics. What I do now is normal economics. I have to make sure that prices don’t rise too fast, interest rates don’t fluctuate too much, India’s economic growth is rapid and sustained, and unemployment is low. There is a lot of standard economics that addresses these matters. We need to apply this accumulated wisdom well and that’s what I try to do my best with. To reject all standard economic theory as conspiracy, as some do, is a big mistake. It can only lead to policy failure. But, at the same time, we must not abandon the somewhat utopian project of creating a distinctly better world some day. This needs a lot of analysis and research. The possibility of such a world is what my book is about.

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