Charlie Munger is not a fan of India. In February of 2017, the then 93-year old vice chairman of Berkshire Hathaway said this about India in a speech. Anyone who cares about India, and understands what India is, will find his view hard to take. But Munger accurate in his assessment. Here’s a bit from his speech:
“Now you turn to India. And I would say, I’d rather work with a bunch of Chinese than I would the Indian civilization mired down, caste system, over-population, assimilated the worst stupidities of the democratic system, which by the way Lee Kuan Yew avoided, it’s hard to get anything done in India. And the bribes are just awful. So, all I can say is, it’s not going to be easy for India to follow the example of Lee Kuan Yew. I think that India will move ahead. But it is so defective as a get-ahead…the Indians I know are fabulous people. They’re just as talented as the Chinese, I’m speaking about the Indian populace. But the system and the poverty and the corruption and the crazy democratic thing where you let anybody who screams stop all progress? It mires India with problems that Lee Kuan Yew didn’t have. And I don’t think those Indian problems are always easy to fix. Let me give you an example.
“The Korean steel company, POSCO, invented a new way of creating steel out of lousy iron ore and lousy coal. And there’s some province in India that has lots of lousy iron ore and lot of lousy coal. Which is there’s not much use for. And this one process would take their lousy iron ore and the coal and make a lot of steel. And they got a lot of cheap labor. So POSCO and India were made for each other. And they made a deal with the province to get together and use the POSCO knowhow and the India lousy iron ore and lousy coal. And 8 or 9 or 10 years later with everybody screaming and objecting and farmers lying down in the road, or whatever’s going on, they canceled the whole thing. In China they would have just done it.
“Lee Kuan Yew would have done it in (Singapore). India is grossly defective because they’ve taken the worst aspects of our culture, allowing a whole bunch of idiots to scream and stop everything. And they copied it! And so they have taken the worst aspects of democracy and they forged their own chains and put them on themselves. And so no I do not like the prospects of India compared to the prospects of…and I don’t think India’s going to do as well as Lee Kuan Yew.”
Munger is a big fan of Lee Kuan Yew. So am I. Like me, Munger understands that India’s greatest enemy is its government. So do I. Munger is a huge fan of Costco. So am I. I tell you, great minds think alike. But seriously, every problem that India faces is due to the misgovernance.
Good governance can work miracles. Lee Kuan Yew demonstrated that. Bad governance can reduce a very capable nation to destitution. Nearly every government that India has had since 1947 has demonstrated that.
It is hard to avoid blaming Indians for the lousy leaders they elect. First, they are not very keen on understanding the problem. And when they are faced with hard truths, too many are too ready to find excuses to deny the reality.
I came across a bunch of comments from Indians about Charlie’s remarks in a blog (which I will not link to.) Screen shot of the comments:
The comments reveal a lot. “… May be with the Chinese system, this progress could have been greater, but that is the price of freedom.” That’s exactly wrong. Freedom does not impose a penalty on those who have it. Instead, the reward of freedom is prosperity.
The biggest misconception one can have about India is that Indians have freedom. Indians are no more free under the Indian governments than they were under the British colonial government.
“Everything is not about money.” That’s an idiotic way of understanding the world. Go tell a poor, starving person that everything is not about money. Only stupid people with money living comfortably can harbor the idiotic notion that money doesn’t matter.
Time to bring this to a close. Here’s some advice from Buffett and Munger.
Be well, do good work and keep in touch.