Economists conventionally list land, labor and capital as the three factors of production. If combined appropriately using the right technology, stuff is produced. This produced stuff is then the total income. Productive efficiency is important of course for a society to be economically secure. Then there is the matter of equity. You have to distribute the stuff produced equitably. Productive efficiency and distributive equity must be part of a healthy economy. But then if sufficient factors of production exist and the technology is also available, then how does one account for the failure of some societies in overcoming poverty?
I believe that the choices that society makes depends on the cultural and institutional capital of the society. As much as land, labor, capital, and technology matter, the social capital — that is the cultural norms and values and institutions — matter fundamentally.
This line of thought was prompted by a report in the New York Times. It was the story of Shazia Khalid who was raped and then persecuted by all and sundry for her “sin.” This happened in Pakistan. The culture of that place is such that the victim is blamed. Rape is seen as a insult to the family honor which can only be restored by killing the woman who was violated.
The values of the society matter more than the availability of PCs and the ability to surf the internet and get neat stuff off the world wide web. Third world under-developed societies need a change of values desperately if they are to get out of the cycle of poverty. Unfortunately, values are endogenous and they can only change with great difficulty. They cannot be imposed externally any more than “democracy” be imposed externally as the US is ostensibly attempting to do in Iraq.
The sense of fairness and justice is, in my opinion, the major determinant of how developed a society is. And in some sense, development is the basis for economic development. Until a society has justice and fairness as its core values, it cannot get beyond a Hobbesian existence.
Atanu Dey : Life is a Random Draw 
And so at last we come to the crux of the matter. This is why I label you an India-hater. If it all comes down to culture, your entire blog is a waste of time. Indian culture is very different from those of the “developed” economies of the world. And it’s been going strong for 2000 years, warts and all. So why even bother talking about India’s “development”?
If it is culture that really matters, I’m curious, what culture, in your opinion breeds development?
A culture where students asking for democracy are mowed down by tanks?
A culture which breeds metal detectors in schools, and segregates Black and White people from drinking from the same water fountains, and going to the same school?
A culture which exhorts you to slaughter jews in gas chambers?
A sense of fairness and justice that imposes sanctions on a Democracy while selling F-16s to a dictatorship?
Which culture breeds success? I’m very curious.
Or could it be, that it is decisions taken purely on economic bases, which help in tempering a culture’s sense of fairness and justice?
Could it be that sound economic policy helps increase one’s upward mobility, thus helping them to counter a culture’s negative points (as such an individual is a little less at the mercy of cultural forces around him/her)
Could it be that imposing political and economic freedom simultaneously helps to create a new culture in and of itself? If all individuals in country are given the freedom to legally earn money, and apply innovative skills, does it matter what their background is?
But no, of course not. It is the culture that is bad. Why don’t you just call a spade a spade, and say that Indian culture stinks, and that Indians will never amount to anything. That is what you are implying after all, I think, even though the reference is made to Pakistan.
Would Pakistan still be this way if it were capitalist democracy? We can’t answer until it someday becomes one.
There are two causes behind why India is poor: It is either its culture, or unsound economic decisions (which you will of course argue are a product of the culture, which is just rubbish, in my opinion, and I have yet to see any evidence suggesting otherwise.)
As communists and socialist around the world say: “There’s nothing wrong with communism/socialism. It’s great in theory. It’s just human beings cannot live up to this ideal”. So of course, it is us humans/Indians that are stupid monkeys, but the systems themselves are beyond reproach.
I mean, could it be that a dictatorship might bread a certain kind of fanatic?
Could the situations necessary for survival in such a country require you to have a different sense of fairness or justice than that preached by Western post-enlightenment democracies? And would this code of values be tempered/changed if you were in an environment that allowed free speech, the rule of law, and freedom to set up your own business without being harassed?
Could requiring 7000 government permits breed corruption? Of course not. It’s culture. Hindus are dishonest crooks – the evidence is there in 2000 years of history. That’s why they pay bribes to circumvent those 7000 permits. Any upstanding Singaporean/American/Western European/Chinese citizen would go through those 7000 permits without a word, becaus e their culture is more “sophisticated”, “civilized” and “developed”.
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US and Europe developed at a time when their cultures were not exactly a shining example of decency. Take World War I and World War II. Take slavery and civil war in the USA. Take Japan for example. It was an imperial power with militaristic culture. But it was still very powerful and successful.
As for whether democracy can be imposed from outside or not, let’s see again what the history says. Slavery was removed forcefully by Lincoln in USA. Democracy was imposed from outside in Germany, and Japan.
I think economic development can go in parallel with the political and social reform. Some of reform can happen organically while others will need to be imposed by force (either through outside or inside). But remember most of the major reforms were preceded by violence and civil wars.
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TTG, interesting comments, though I completely missed the logic that leads you to label Atanu an “India-hater”! I have a few comments:
1. You said “There are two causes behind why India is poor: It is either its culture, or unsound economic decisions”. I think it is both, and these are not all the principal causes. ‘Culture’ is a term that can be used to encapsulate human motivation, behavior, and goal execution. In that sense, most reasons for success or failure can be swept under the rug of culture. Getting more specific, I believe India’s unacceptable population growth is _the_ root cause of most of its evils. I would say the two principal reasons for India’s poverty are (i) unchecked population, and (ii) by and large poor economic leadership and strategy through the first 40 years of independence. Just reversing the latter can cause us to exploit some benefits of the former as our impressive services industry has shown in the last few years. Sadly this will not be enough and we will continue to greatly suffer because of our crazy population level. The tragedy in Mumbai this week will throw the poor and deprived who were affected even deeper into their morass. As we all know, the situation is due to a complete lack of civic planning (by the administration) and civic sense (in the people), both directly attributable to the enormous challenge posed by the population. We have no one but ourselves to blame for our population growth. A precious few in our grandparent’s generation used birth control, and this included the enlightened.
An interesting aside: Ted turner who champions 0 population growth was asked why he had 5 kids. His answer, “Its too late to kill them now!”
2. You said: “Why don’t you just call a spade a spade, and say that Indian culture stinks, and that Indians will never amount to anything”. Perhaps the easiest way to improve oneself is to look at what people do better, and learn from it. For all the evils of western society, we must learn from it and adopt its best. All this “India Shining” philosophy is well and good in limits, but if strectched to simply dismiss comparing, soul-searching, and plagiarizing from systems that work, it would be to our great national detriment.
Living in the US, I carefully follow Noam Chomsky, a notorious and consistent so-called dissident. Sadly, many people throw away the baby along with the bath water, failing to address his very serious and valid points. In a 9/11 debate with Bill Bennett aired on national TV, Chomsky said: “I choose to live in what I think is the greatest country in the world, which is committing horrendous terrorist acts and should stop”. I think this sentence is very telling.
Cheers,
Uday
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Neat. very neat Atanu. But I am sure, even as we are discussing this, some folks around the globe would have already diagnosed Shazia case as a fundamentalist “Islamic sharia” issue. And you are bang on target, that no matter how much materialistic progress we strive for, it’s all bubbles unless it’s rooted in a just society – where there is equal respect for all, where victims are not treated as sinners. For me, the most telling part of that story is, when Dr. Shazia is forced to break down while claiming that “I am pure today, no matter what the world says.” It’s chilling..a strong statement of the times we live in.
TTG, the basis of your many points are beyond me. So I won’t comment on them. But allow me to ask just one question. Since when did taking a hard introspective look at our own land, became a mark of being a “India hater”? Going by your arguments, an India lover, will be a chauvinist patriot, who can do no wrong. To rephrase my question, do you believe in this quote :
“Patriotism is your conviction that this country is superior to all other countries because you were born in it” ~George Bernard Shaw
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Hey Uday – while I agree that unchecked population growth is a factor, how then do you explain successes in China and Japan?
While India’s population is large, Japan’s population density is much greater.
Is Chinese culture really more attuned to help bring its people out of poverty? As for Japan – you are right – it IS their culture – they have something we Indians lack. It is called PRIDE. They didn’t get this pride after they achieved a reasonable stage of development. They have ALWAYS had it. You can check any history book for this proof. Indians, and people of Indian Origin (NRIS, e.t.c.) on the other hand, are ready and waiting to put anything and everything down in our country and our culture, to emphasize the bad, and temper the good – or to at least shed some doubt on any positive achivement made. The software industry is doing well? Let’s attack it. The delhi metro is successful? But people are dying in village somewhere.
Suhail, please define what a “hard, introspective look” is? Saying that Indian culture is bad? Saying that Indians are bunch of clueless monkeys? (
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The rest of my refutations have been truncated. Ah well. Never mind
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I am not arguing for or against culture breeding development but that there are norms that govern our thoughts, norms that society dictates or norms that have been sometimes misinterpreted from religion. And these false norms dictate our laws to some extent. Take the ban on dance bars for example. What practical purpose does that serve? Not a significant one at all. Our politicians have their pride, false pride that is. They impose bans that will hold them high on moral grounds and earn them brownie points for upholding the ethics and values of traditional Indian culture. The ban would have been somewhat (very slightly) justified if the girls were given alternatives.But in our society which Indian wants to employ a former bar girl?
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Hi Atanu,
Very pithy and perceptive. The point on social capital is a very beautiful one. We often don’t realize the impact of the legacy that we leave behind socially.Take women’s rights for one, in India.No matter how much women’s groups flourish to help them, there will be no progress unless the women at all strata of society make an effort and put their foot down – at home. Like charity, change too begins at home.
Cheers
Jyoti
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TTG said: “Hey Uday – while I agree that unchecked population growth is a factor, how then do you explain successes in China and Japan?
While India’s population is large, Japan’s population density is much greater”.
TTG, this startles most: today the population density of Japan is 338 people per sq km. It is less than that of India’s which is 366 people per sq km! [Japan has 127 million people in 375,000 sq km. while India has 1.1 billion people in 3 million sq km. And for reference, China has 1.3 billion people in 9.4 million sq km at 138 people per sq km].
I believe that with a ‘smaller’ population (yes, even though it is in the millions) population density is less of a factor in influencing poverty. For instance, India’s population density is virtually the same as Belgium’s and 30% less than South Korea’s.
With a population that is 85% smaller, India’s population density is almost 3 times that of China’s. So India’s struggle to reduce poverty is significantly more challenging than China’s, even if/when China’s retarted political system gets corrected. China has no doubt enjoyed enormous success. Yet as World Bank initiatives indicate, regional inequalities and making further inroads to alleviate poverty are becoming tremendously difficult. Also, because of the totalitarianism, one rarely gets a balanced picture of the ground realities.
My point really is that massive populations with high population densities do not spell the end of success. But it tempers its quality perhaps more than any other single factor.
While on this topic, let us spare a though for Bangladesh. 144 million people in 135,000 square km for 1066 people per sq km. “MT” could have optimized her operations by moving further south-east!
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TTG said: “Hey Uday – while I agree that unchecked population growth is a factor, how then do you explain successes in China and Japan?
While India’s population is large, Japan’s population density is much greater”.
TTG, this startles most: today the population density of Japan is 338 people per sq km. It is less than that of India’s which is 366 people per sq km! [Japan has 127 million people in 375,000 sq km. while India has 1.1 billion people in 3 million sq km. And for reference, China has 1.3 billion people in 9.4 million sq km at 138 people per sq km].
I believe that with a ‘smaller’ population (yes, even though it is in the millions) population density is less of a factor in influencing poverty. For instance, India’s population density is virtually the same as Belgium’s and 30% less than South Korea’s.
With a population that is 85% smaller, India’s population density is almost 3 times that of China’s. So India’s struggle to reduce poverty is significantly more challenging than China’s, even if/when China’s retarted political system gets corrected. China has no doubt enjoyed enormous success. Yet as World Bank initiatives indicate, regional inequalities and making further inroads to alleviate poverty are becoming tremendously difficult. Also, because of the totalitarianism, one rarely gets a balanced picture of the ground realities.
My point really is that massive populations with high population densities do not spell the end of success. But it tempers its quality perhaps more than any other single factor.
While on this topic, let us spare a though for Bangladesh. 144 million people in 135,000 square km for 1066 people per sq km. “MT” could have optimized her operations by moving further south-east!
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Frequently Raised Objections to the Population Question
1. If you think that India’s population density is a causal factor in India’s poverty, how is it that Hong Kong, or the Netherlands, or {insert a high density small rich country name here} is not poor?
Answer: It is beyond simple naiveté to believe that population density is a simple un-dimensional factor in poverty. You have to consider the population density together with the resources available to that population. It is the resources relative to the population that matters. A high population density in a specific place may use as its resource base areas that are far removed from the local area which it inhabits. This is called the ecological footprint of the population. A small rich nation could occupy a huge area as its ecological footprint.
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Social values are a great factor in the policies of a country and it is apparent from number of laws levied on different states that synchronize with their values. But some questions arise here are: Is this the assumption of our debate that social values and society never changes? Are these social assets of our country hindering success? Is this social value of countries like USA, Japan etc. behind their economic and social development, if yes then how does the dependency curve looks like?
Though debate carries lots of weight but I would like to wind up my thoughts in some lines.
1. Social values and society are highly dynamic terms and got their dependency on people of that country in general and leaders (political, religious etc.) in specific. Now it’s very easy to decipher who governs whom and who is the root of all these mess…let it be the divide and rule policy of British or irresponsible actions of contemporary BJP, they all played with “juntaâ€s emotions.
2. Definitely they are. Why Punjab Govt. is adamant in giving free electricity to farmers in spite of knowing its direct loss of 433 crore (to secure its vote bank). Why our central Govt. is not adopting reservation on the basis of economic status instead of present cast, religion and sex based reservations (again to secure its vote bank and leaders of the respective communities). Why there is no strict population control laws? Answer is quite apparent by now, its not social values, its our leaders’ love for their positions…
3. Got to need more data and exposure…please update.
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TTG seems to assume that culture is an immutable. Far from it. Culture is being continuously shaped and moulded by the political, economic and legal institutions that dictate human interaction in a society. Seen from this perspective, and once you define high per capita GDP growth (say 7-8% per annum over an extended period of time) as success, it is clear that culture matters insofar as institutions matter. Indeed, economists have shown quite conclusively that institutions have a CAUSAL effect on growth, i.e., countries with better institutions grow faster BECAUSE they have better institutions. In fact, India’s growth performance since 1991 can largely be attributed to institutional reform, but there are still many gaps to be closed. Let us also not conflate the two terms – growth and development – they are distinct concepts to an economist and often conflicting objectives for a policymaker.
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Hi,
In your debate you have overlooked the impact of industrial revolution and the exploitation of natural resources of third world countries by the west; Atanu talks somewhere about ECOLOGICAL FOOTPRINTS.They must be huge in the african soil.
I would dissociate democracy from economic developement, as all combinations are possible.Compare China with Russia.
I don’t know a single country where the citizens are not chauvinistic in some way or other nor you can quote a nation without corruption.
Why doesn’t a few out of the bunch of intellectuals we produce from the universities and IITs muse on going to do politics.In France it is common practice to switch from education to politics and vice versa
Pardeshi
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Atanu,
1) Japan is not a small country.
2) Population is a problem for them, ecological footprint or not. Having graves on the 15th floor of a building, and living in sardine cans for hotels, I would think space and population are a signifiant problem for Japan. While there are people without roofs over their heads in India, we still have the space and resources to manage the population. Are those resources being utilised as they should? No. What is economics other than managing the FOPs. One of them works well (capitalism), one of them sucks (socialism). Which is the system has India followed? The end.
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