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Economy Apr 9, 2013

Thatcher to Modi: Steering the economic discourse to the right

By Venky Vembu

News of Margaret Thatcher's death trickled in on Monday evening at about the same time that Gujarat Chief Minister Narendra Modi was warming up to the topic of "minimum government, maximum governance" at the #ThinkIndia session hosted by Network18 in New Delhi. "This must be cosmic," observed columnist Ashok Malik.

In the context of the specific subject that the forum was grappling with - the role of government, and the need to expand the space for economic conservatism in the mainstream discourse - the notion that Thatcher and Modi shared a 'karmic connection' at that moment isn't facile at all, even if there are significant distinctions between them.

For one thing, few world leaders in recent decades have taken the liberal economic discourse by the scruff of its neck, and stamped their conservative convictions on it with the full force of political authority, in the manner that Thatcher did. As the Economist noted in an obituary, several prime ministers may have occupied 10 Downing Street for as long as, or even longer than, Thatcher, but she remains its only occupant to have become an "-ism" in her lifetime.

Narendra Modi is the only Indian politician to talk openly of a small government. Reuters

Narendra Modi is the only Indian politician to talk openly of a small government. Reuters

It's true, of course, that Thatcher's legacy will be sharply contested, particularly by those who lost that argument and by others who fell off the social map because of her worldview. Yet, it's fair to say that she dismantled the vestiges of socialism within a Britain that had lurched too far to the left, broke the backs of militant trade unions, "right-sized" government, and, most importantly, cleared the cobwebs of the mind and inspired an alternative way of looking at government and society.

Modi's economic worldview is, of course, a lot less sharp-edged than Thatcher's. Even at the #ThinkIndia session, he was careful to nuance his pitch in a manner that suggested that he would wield a scalpel, not a battleaxe (in the way that Thatcher did), in cutting down on governmental flab. Even so, he remains the only elected leader in India today to summon up the courage to talk openly about "small government" and for opening up the space for private entrepreneurship in the way that Thatcher did during her time. In so doing, he too has fashioned a discourse centred around his "Moditva" model of development, even if it is a distant echo of "Thatcherism", which was characterised by the open embrace of free market capitalism.

Thatcher and Modi share another common characteristic: both of them are intensely polarising politicians, who have the striking capacity to summon up visceral hatred in their detractors and be valorised by their supporters. In Thatcher's case, the hatred manifested itself in a macabre "death watch" when she was around - and in perverse champagne binges and street parties to celebrate her passing. Modi, too, invokes venomous sentiments in the context of the 2002 riots, and yet is simultaneously elevated to godly status by his supporters, for whom he can do no wrong.

Of Thatcher, it was famously said that she virtually emasculated her entire Cabinet by centralising all decision-making authority in her hands. She, of course, actively fed that perception,, by noting pointedly that she "did not mind how much my ministers talk, as long as they do what I say." In Modi's case, too, the fact that he is virtually a one-man Cabinet in Gujarat has come in for much critical media commentary.

And, yet, for all the philosophical likeness, there are also critical distinctions between Thatcher and Modi.

At the #ThinkIndia session, for instance, the challenges that lie in steering the Indian economic discourse to the right also became manifest. As sociologist Dipankar Gupta observed, an unabashed embrace of the economic right would be undesirable in a country defined by so many complexities as India. Marketing consultant Rama Bijapurkar went one step further, claiming that a cocktail of social conservatism and economic conservatism would spell big trouble for India and spur crony capitalism of the worst kind.

Which is perhaps why, as Network18 (Web and Publishing) Editor-in-chief R Jagannathan observed, Modi is talking the language of the political left even whileturning right. Virtually every one of his right-leaning statements was caveated by a countervailing consideration. In the future, said Modi, he may consider the sale of public sector undertakings, but even if we run PSUs, will not run them at a loss.

In that sense, of course, Modi isn't quite a Thatcher who declared, famously, that "This lady is not for turning." On that count, he is if anything, like the Chinese leader Deng Xiaoping.

In her book The Elephant and the Dragon about the rise of India and China, author and journalist Robyn Meredith narrates a political joke about Deng, who is in many ways considered the man who opened up the Chinese economy. In the joke, Deng is seated in his car and reading a newspaper when his driver interrupts him to say: "Comrade, we're at a crossroads. The sign says turn left for Communism, turn right for Capitalism. Which way should I go?" And Deng says, "No problem, just signal left and turn right!"

China's model of "socialism with Chinese characteristics", as it was called, was in reality a way of ushering in a market economy on the sly, given the political limitations of leading a one-party state. Likewise, in India, too, even one so outspoken as Modi evidently needs to make some genuflections to the left in order to move the needle to the right.

Even so, our national discourse on economics, which has always been weighted in favour of the far left, needs a corrective balancing force of the sorts that we witnessed on Monday. Even the BJP, for all its record of advancing economic reforms between 1999 and 2004, has lost its nerve. That economic discourse, like much of the dead political thought that characterises the polity today, needs a countervailing force. It would be vastly improved by having a strong gust of wind whip up some creative destruction, engender a Clash of Ideas and clear the cobwebs.

Thatcherism did it effectively in Britain. "Moditva's" ability to do likewise in India faces more serious challenges . But the journey of a thousand miles may have begun on Monday with one small step.

by Venky Vembu

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