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If most people of the great Indian middle class yearn to send their sons and daughters to Harvard Business School, it’s hardly surprising, given the Indian obsession for job-oriented training rather than liberal arts education. When your children get into elite business schools, you feel you’ve fulfilled your dharma. After that, they get lucrative jobs in Goldman Sachs, Morgan Stanley, Lehman Brothers and the like. There they work with men and women from around the world whose Arjuna-like focus is to make piles of money and purchase an apartment on the Upper East Side of Manhattan, a spectacular beach house in the Hamptons, take skiing holidays in the Alps, summer in the south of France or a villa in Tuscany, an apartment in Paris or a great London hotel.
Well, just as American assumptions about making easy money in finance have been upturned by the dismal reality of economics, your idea of dharma is about to take a beating. The chickens have come home to roost. Twenty-eight years after the fall of the Berlin Wall and the unlamented demise of Soviet communism, we are witnessing a massive assault on runaway capitalism unleashed by global finance. When a bunch of ambitious yuppies is given run of the markets, you should expect immature behaviour. Accustomed to manipulating markets a thousand points up, a few thousand points down at will, masters of the universe who thought they were invincible, have got their comeuppance.
We’ve also seen this happen in India in the first four decades of independence. Young people with means and connections attended elite universities such as Oxford and Cambridge and returned to high positions from where they pushed the intellectual ideas of the day. The result was Fabian socialism which created a pampered elite. The leftist intellectuals who ran the country advanced distorted notions about egalitarian growth from positions of privilege. They pushed weird ideas: “commanding heights of the economy” for the public sector; restrictions on private enterprise; outright nationalisation of ‘core’ sector industries deemed vital to the country; development banking and subsidies populism.
This entire edifice came crashing down in 1991 when the government went bankrupt. Slowly and painfully, a new structure arose in its place: a tentative reforms regime frequently held hostage to mindless moffusil politics practiced by con men and goons, bigots and activists who fill party offices. One thing is obvious; the old elite has had to make way for ambitious interlopers, in politics and business. The old elite’s next generation largely opted out of public service and made their homes in the global financial community: in New York, London, Hong Kong and Singapore.
This is where the story becomes intriguing: at the intersection of the next generation of the Indian elite and the world of global finance. Once a secure and lucrative sinecure, it is now the centre of the meltdown. If recovery is long in coming, these young men and women are likely to head home. As they pour in looking for elite perches, they will encounter the crass interlopers who now occupy these positions. It could make for an interesting political turn. In alliance with modern-minded politicians found in the Congress and in some regional parties, they could power a new equation in the country’s politics.
The global financial bust could actually re-invigorate politics. The moffusil mafia now holding the Indian state to ransom could face a challenge. Chances of overcoming the current anarchy could improve dramatically. As things stand today, civil society (not leftist jholewallahs but the real thing: a middle class with civic values) is under assault. All manner of low life, including criminals, assembles under a ‘leader’ and wreaks mayhem in cities, towns and villages, without let or hindrance.
These disruptive scenarios are being played out at a time when the economy is notching up record growth. The minuscule middle class has grown to critical mass and can irreversibly transform the country into a stable, modern democracy. Sadly, no political party speaks for this emergent group. Virtually all political parties are preoccupied with caste, religion and populism. It is a measure of the narrow worldview of political leaders that no one has been able to grasp the significance of this demographic development. The closest any leader came to recognising the growing middle class is prime minister Manmohan Singh. This much was clear from his relentless advocacy of the Indo-US civilian nuclear agreement. He fought the odds and emerged triumphant and the middle class applauded. Can he persuade his reluctant party to solicit the support of this vital new constituency?
Interesting possibilities lie ahead. For instance, the financial bust has focused the debate in the US presidential campaign on the crisis management capabilities of the candidates. This has favoured the analytical Barack Obama, with his cool temperament, over the mercurial John McCain. In the next few weeks, American voters will have the chance to send a powerful signal by selecting their president. A President Obama has a better chance of restoring sanity to a fearful and avaricious global financial system.
(Rajiv Desai is president of Comma Consulting and a well-known Delhi-based columnist)