Socialism kills

Via, this.

As the world approaches the 20th anniversary of the fall of communism, it is worth investigating the costs borne by countries like India that did not become communist but drew heavily on the Soviet model. For three decades after its independence in 1947, India strove for self-sufficiency instead of the gains of international trade, and gave the state an ever-increasing role in controlling the means of production. These policies yielded economic growth of 3.5 percent per year, which was half that of export-oriented Asian countries, and yielded slow progress in social indicators, too. Growth per capita in India was even slower, at 1.49 percent per year. It accelerated after reforms started tentatively in 1981, and shot up to 6.78 percent per year after reforms deepened in the current decade.

What would the impact on social indicators have been had India commenced economic reform one decade earlier, and enjoyed correspondingly faster economic growth and improvements in human development indicators? This paper seeks to estimate the number of \”missing children,\” \”missing literates,\” and \”missing non-poor\” resulting from delayed reform, slower economic growth, and hence, slower improvement of social indicators. It finds that with earlier reform, 14.5 million more children would have survived, 261 million more Indians would have become literate, and 109 million more people would have risen above the poverty line. The delay in economic reform represents an enormous social tragedy. It drives home the point that India\’s socialist era, which claimed it would deliver growth with social justice, delivered neither.

Us bastard neo-liberals, eh? Suggesting things that allow children to live, the people to become literate and the poor to become rich.

What cunts we must be.

4 thoughts on “Socialism kills”

  1. India is a neoliberal success story?

    What planet are you on? Its more liberal than it was but its not that liberal.

    The state still played a massive role in the economy and their domestic industries sit behind relatively high tariffs, and sat behind higher tariffs still until around a decade after their initial domestic reforms.

    You also ignore the work which was done building infant industries in the period characterised by the “Hindu rate of growth.” India entered the world economy in a much stronger position than if it had liberalised in the 1940s after we left.

    Tim adds: What planet am I on? How about this one? The real world?

    India liberalised: India grew faster, pulling more people out of poverty, after it liberalised. I call that a win for liberalisation. But of course, don’t mind me, someone who has actually done business in India. At one point I was being charged 300% import duties on software toolkits….yes, the tools that you then use to make other software that can be exported. You carry on with socialism, don’t worry about us observing the real world outside the library windows.

    Do, of course, remember a few things. 1) If the infant industry argument is correct then we (ie, if infant industry is your argument in favour of tariffs and trade barriers), as a mature economy, should not have any trade barriers or tariffs. Prepared to argue that one? That all EU tariffs should be destroyed?

    2) China’s economy in 1979 was vastly more fucked up than India’s in 1991. China liberalised in 1979/81 and India a decade later. China’s growth rate has been such that it went from well behind India to well ahead of India over that time period. So, umm, there seems to be little evidence that India’s economy was better placed to deal with liberalisation than China’s as a result of the import subsititution, the infant industries fostered, over the Indian period of protection. Actually, it would seem that the opposite is true.

    3) Of course, the infant industry argument is not correct: as India shows. It’s all too easily captured by rent seeking businessmen and politicians. Which is another reason that India is poorer than it should be. It’s easy enough to state that of course, in a better political system, that this rent capture won’t happen. At which point you’ve got to explain your father’s support for aid to the incredibly unimportant British owned car industry in those incredibly important West Midlands marginals.

    Young Mr. Straw: as and when you are prepared to take note of, let alone understand, empirical evidence, you might be worth debating with. Until then, well, you’re just yet another ideologue on the make.

    (In my defence, this is a post beer comment.)

  2. Yep, I’m with those Socialists who argued for the abolition of the Corn Laws, cheaper stuff for the working classes. The UK can adopt Free Trade unilaterally and be better off. I’m in.

    I’ll respond ore fully later so I’ll just address two things.

    One, you claim India is a neoliberal success story and then switch in your response to say it was a success for “liberalisation.” They are very different things indeed.

    India is more liberal than it was, and I agree the tariffs on certain good were ridiculous. That does not mean the Cato institute or neoliberals can take credit for its success, no that would more likely go to Freidrich List.

    Infant Industry Protection strategies can be captured by certain strategies, but this isn’t unavoidable.

    Peter Evan’s coined the term embedded autonomy to describe the sort of approach states need to oversea economic transformations like those in India, Korea or Brazil.

    Oh and are you working under the impression that I am Will Straw of Left Foot Forward (the father you refer to being Jack Straw I assume, although I’ve no knowledge of Will’s ancestry), or some other straw? Or that I’m setting up straw men?

    I’m not any of those things. I would love to run Left Foot Forward if that’s what you’re implying but sadly I am stuck with my lowly blog for now.

    Tim adds: Yes, I most certainly was making that last mistake.

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