Books

Dark side of freedom

Economic Freedom of the World 2004 by James Gwartney and Robert Lawson; Academic Foundation in association with Centre for Civil Society; Price: Rs. 695; 189 pp

Perhaps the greatest tragedy of modern Indian history is that under the influence of the then newly liberated nation’s first prime minister, the late Jawaharlal Nehru — politically a true democrat — post-independence India opted for the centrally planned, control-and-command, Soviet-style economic development model. The theoretical rationale of central planning was that it would ensure balanced economic growth through measured canalisation of investment into every sector of the economy. Half a century later it’s painfully clear that the outcome of this disastrous wrong choice has been the mirror opposite of its intent. Contemporary India is one of the most inegalitarian societies worldwide characterised by sharp inter-sectoral inequalities — rural-urban, rich-poor, educated-illiterate among others.

Throughout the 20th century except perhaps in the last decade thereof, communist-inspired received wisdom in the newly independent nation states of the third world was that government — in reality ill-educated clerks spouting Marxist jargon — knew best and should be umpire, player, judge and jury to stimulate economic development. Surprisingly even nations with strong entrepreneurial traditions such as India bought this patently absurd proposition. Under the (mis)guidance of a series of self-serving messianic leaders they ignored the reality that businessmen know best how to establish, manage and grow businesses, which in turn spurs economic growth and national prosperity.

But despite an overwhelming body of evidence which indicates that the centrally planned economic development model has been an egregious failure, there’s no shortage of argumentative third world economists and intellectuals who still believe that with minor modifications, the command-and-control model is best suited to deliver the goods to the poverty stricken people of third world countries. The persistence of this widespread belief prompted Dr. Michael Walker of the Frazer Institute, USA under the guidance of economics Nobel prize winners Milton and Rose Friedman to commence publishing the Economic Freedom of the World reports in the mid 1980s, to measure the degrees of economic freedom within national economies and correlate their research output with economic growth.

Subsequently two other research foundations/ trusts, viz. Freedom House and the Heritage Foundation in collaboration with the Wall Street Journal have also begun to measure the relative degrees of economic freedoms citizens enjoy in over 100 countries worldwide. However James Gwartney a professor of economics at Florida University and Robert Lawson who teaches the subject at the Capital University, Columbus, Ohio, have devised a more rational measurement methodology in compiling the EFW index of economic freedom, argues Dr. Parth Shah of the Delhi-based Centre for Civil Society, in a lengthy footnote to his insightful introduction of this annual report. CCS has joined forces with the Academic Foundation (India) to publish this valuable special India edition of the EFW 2004 which also features a priceless interview with Milton Friedman.

The EFW index employs five criteria to measure the degree of economic freedom available to businessmen and entrepreneurs in 123 countries. They are: the weight of government upon the economy (size of government in total national expenditure, subsidies, investment and taxation); legal structure and security of property rights (judicial independence and integrity of the judicial system); access to sound money (government success in controlling inflation and freedom of the citizenry to switch currencies); freedom to trade internationally (degree of taxation of international trade, hidden and overt import barriers); and regulation of credit (credit market regulation, ownership of banks, inter-bank competition, interest rate controls), labour market and business regulations (price controls, time required to start a new business).

Any monitor of the Indian economy who reads through this list of economic freedom criteria is certain to experience the sinking feeling that the Indian economy is unlikely to fare well in comparative international ratings. And sure enough with a score of 6.3 (on a one-ten scale) it is placed in the bottom half of the index in the 68th position with Tanzania. The countries/ territories which top the index are Hong Kong, Singapore in the first two ranks and New Zealand, Switzerland, Britain and the United States tied in the third position with a common score of 8.2. However it’s some comfort to learn that China, Pakistan and Nigeria with an identical score of 5.7 are jointly ranked 90th in the EFW index. Another crumb of comfort is that post-liberalisation India’s score which was stagnant between 1970-90 at 4.1-4.9 rose to 6.3 last year, a confirmation that despite the best efforts of change-resistant politicians, bureaucrats and fellow-travelling academics, the liberalisation and deregulation of the hitherto asphyxiated Indian economy is on track.

This improved score is an important achievement because the issue of human rights aside, greater economic freedom yields bread and butter dividends. By superimposing the EFW index upon the World Bank’s World Development Indicators, EFW 2004 substantiates that countries with greater economic freedom have higher per capita incomes; higher economic growth rates; longer life expectancy; greater income equality; higher adult literacy; ‘much lower’ infant mortality; less child labour; greater access to treated water; they record greater ‘human development’ as defined by UNDP; suffer less corruption; enjoy greater political freedom and civil liberties and have smaller underground (black money) economies.

This is the heavy price in terms of lost opportunities for development that an entire generation of post-independence India’s citizens have had to pay for half a century of central planning and licence-permit-quota raj. EFW 2004 is mandatory reading for economists, academics and well-meaning citizens looking for ways and means to unshackle the Indian economy and help the nation’s highly aspirant youth to take the high road to sustainable economic development.

Dilip Thakore

True champion

It’s Not About the Bike by Lance Armstrong; Rupa & Co; Price: Rs. 250; 294 pp

This inspiring autobiography introduces subcontinental readers to ace American cyclist Lance Armstrong who not only successfully fought cancer and won the Tour de France, but has won this punishing endurance test a record six consecutive times. It’s Not About the Bike is this extraordinary super athlete’s account of conquering cancer and cycling’s most exacting competitive race.

The book begins with a recitation of Armstrong’s birth in the most humble circumstances to a single mother, growing up under an unkind foster father, and his mother’s gritty fight against the daily grind to raise him single-handedly. Early in life he learned from her example and homilies ("You never quit, son"), even as he experienced a strange anger against institutions, religion, and the world. Fortunately under his mother’s influence, young Lance channels his frustration into sport, realising that cycling is his passport out of his dreary childhood environment. "Athletes don’t have much use for poking around in their childhoods, because introspection doesn’t get you anywhere in a race… You need a dumb focus. But that said, it’s all stoked in there, fuel for the fire. Nothing goes to waste, you put it all to use, the old wounds and long-ago slights become the stuff of competitive energy," he writes.

The beginning of his career in competitive cycling was chequered. Some brilliant starts were frittered away by exhausting his energy too early. He was impetuous, arrogant and foolhardy. Luckily, two American cycling officials noticed his talent and groomed him, leading to some spectacular results, particularly in the 1993 World Championships in Oslo. Even so, Armstrong was never comfortable with the Tour de France. He was able to finish only portions of the race.

Cancer struck when everything was looking up. His fight against the dreaded disease now dominates the book… and from a heady feeling of being on the threshold of achievement, he descends into deep depression and gloom. Five chapters of the autobiography are devoted to detailing his fight with this dreaded disease from whose iron grip few escape. Perhaps it’s because of his identification with what he terms "the cancer community" that Armstrong believes the daily battles that people wage against this silent killer disease are under-narrated and takes it upon himself to describe what a typical cancer patient experiences.

It’s not comfortable reading. The detailed, grisly recitation is fearful, as he dilates upon the various stages of treatment and how he reacted to the prescribed drugs regimen; how time becomes inconsequential as the months transform into long periods of nausea and physical breakdown. It was Armstrong’s confrontation with cancer that trained him for the Tour de France: he cultivated a dogged determination and refusal to accept defeat.

For sportsmen, the book offers an insight into the personal characteristics and mindset required to excel. Comparisons between his fight against cancer and his fight for the Tour de France victor’s laurels are inevitable, and Armstrong explains how his cycling career helped him in this tumultuous battle.

Some credit for putting together this extraordinary saga of the triumph of the human spirit should also be given to co-writer Sally Jenkins. The narrative is taut and fresh in its detail of every milestone event in the career of this super hero. The intricacies of cycling and intrigues of the sport, the dangers that lurk around every bend in the road, the hard reality of pouring rain and scorching sun are all vividly narrated. As also the seldom discussed spiritual side of sport: "I had learned what it means to ride the Tour de France. It’s a metaphor for life, not only the longest race in the world but also the most exalting and heartbreaking and potentially tragic… The Tour is not just a bike race, not at all. It is a test."

In this compelling autobiography which Indian sportsmen who are widely faulted for lacking determination to succeed should read, Armstrong has taken care not to take all the credit; he constantly praises team mates, officials, and family. Perhaps the story could have included more about life on the road, in the hotel rooms and on the racing circuit. But this is wishful thinking. All things considered this inspirational memoir provides a good insight into the great heart and steadfast mind of a true champion.