Economics is to politics is what lubricant is to an engine; it creates torque. In politics, welfare economics and protectionist economics clash, with the latter upholding the good of a few over collective prosperity. In developing nations, protectionism ironically brought public prosperity by boosting demand and hence growth, while in populist economics ideology drives the numbers. Since ideology is driven by personalities, economics acquires labels: Modinomics, Manmohanomics, Keynesian et al. Ultimately, economics is the art of a ruler discovering or redefining the means to bring prosperity to people and its political, financial and social costs.
Leaders are also only as good as their advisors. What advisors and economists have in common is the arrogance of “my way, or the highway”. Economics is data, whose interpretation will dictate whether a ruler can put happiness in the pockets of people. Economic advisors use esoterica to stay important until a policy flops and the next guy comes along.
The more obscure the counsel, the more exalted they are for what is economics but a rarefied plane where the common mind can never reach. Has such advice led the Indian economy to skydive? “Embrace the Narasimha Rao Revivalonomics.” “Go for Welfare.” “Squeeze the rich and give the poor Diwali every day.” “Bail out banks and jail the bankers.” “Tweak taxes.” Economics is the stormy petrel of advice. Boiled down to basics it just means:
Jobs.
Money.
Health and Happiness.
Socialist economics is about envying the rich. This changed when India embraced the world in the 1990s. More companies did business in new sectors, creating more jobs, products and a better lifestyle with their own positives and negatives. Human beings from blue collar workers to rural immigrants, from government employees to blue chip executives and from millionaires to billionaires have one goal—get rich. And the government makes more money by filling its tax coffers. Isn’t this true economics in a nutshell?
The reason for India’s periodic economic crisis is its vast, growing unskilled population and rural distress—the stepchildren of stilted development. They perpetuate a parallel economy of injustice run by touts, feudal overlords, middlemen, crooks, politicians and bureaucrats who profit without contributing to growth. In 1985, Rajiv Gandhi said that only 15 paise of every welfare rupee reaches the needy.
The success of current government housing schemes and farmers’ cash benefits has proved that with the right will and monitoring, the exploitation chain can be broken. Compassionate politics must be accompanied by compassionate economics under the strict rule of the law. Growth is not just data, it is also the evolution of mass conscience and social responsibility.