Saturday, November 27, 2010

Discovery of Nehru

Discovery of Nehru
There were severe critiques of Nehru’s economic thinking in policymakers documents in the 1992-97 period and in 2004-05. There has been now an appreciative stance on his emphasis on knowledge creation and basic industrialisation. But most of the discussion is by the discussants based on bees in their bonnets and has little to do with what Nehru actually wrote. Since this is his birth-month, I decided to look at what he really said. Before Independence there was considerable thinking on the nature of the economic policies that would be followed after the country was free from colonial rule. The Congress Party’s National Planning Committee, under Nehru, the Bombay Plan produced by industrialists, a Gandhian Plan by SN Aggarwal and a People’s Plan by the radical humanist leader MN Roy, all contained first ideas on principles of economic organisation, embellished with some statistical details and targetery. Nehru’s work was the most detailed.

In this medley, a core of interrelated economic ideas underlies Nehru’s economic thinking through a long period. This comes out very strikingly if one compares sections of the Discovery of India (Ch VIII and X) and one of his last overall analysis of his own policies and views contained in the article on Changing India, published after the Chinese invasion in Foreign Affairs (April 1963).

To Nehru the harnessing of modern technology to economic development was very important. There were two implications of this. The first was an acceptance of the emphasis on heavy industries in the process of industrialisation. While there has been considerable controversy in India on large scale vs small scale industrialisation, Nehru himself had clinched the issue in his own mind even in his early economic thinking. This was perhaps one of the few economic choices he really made. Discussing the issue of the big machine vs cottage industries, he stated emphatically that “it is not a mere question if adjustment of the two forms of production and economy. One must be dominating and paramount, with the other as complementary to it, fitting in where it can. The economy bases on the latest technical achievements of the day must necessarily be the dominating one.” The second, wider implication of this approach was his emphasis on scientific education and research. He seems to have a particular fascination for the idea that under “proper” social conditions, experimentation with the machine would inculcate the “scientific temper” and widen he experience and outlook of men. Formal economics is now accepting this idea in the shape of the productivity implications of “learning theory approach”.

The economic implication of this to him was the emphasis on basic minimum needs. His earlier emphasis on rural development was argued with this end in view. (Later speeches accept the role of agricultural production as a constraint in the process of economic development). The role of cottage industries, albeit a secondary one, was argued from this objective, as also the long-term employment potential of heavy industrialisation.

Another basic economic idea for Nehru seems to be a concept of “national self-sufficiency”, with a strong autarchic element in it. Heavy industrialisation and a scientific research policy were argued partly with this end in view. The emphasis was conditioned by early experience. (“We were anxious to avoid being drawn into the whirlpool of economic imperialism.”)

There was in Nehru a genuine concern about the need for a peaceful transition through consensus in the developmental phase. There is frequent emphasis on the “social” implications of economic ideas and programmes. The late Prime Minister was liable to discuss it sometimes along “wider” national, international or even philosophical lines. The earlier method of “democratic collectivism” remains later in the shape of “democratic socialism” and the “mixed economy”. Equality of opportunity for all remains a basic theme.

This concern for a consensus comes out strikingly in his own words when he was writing about the work of the National Planning Committee set up by the Congress Party before Independence under his direction: constituted as we were, it was not easy for all of us to agree to any basic social policy or principles underlying social organisation. Any attempt to discuss these principles in the abstract was bound to lead to fundamental differences of approach at the outset and possibly to a splitting up the Committee. Not to have such a guiding policy was a serious drawback yet there was no help for it. We decided to consider the general problem of planning as well as each individual problem concretely and not in the abstract, and allow principles to develop out such consideration.” Those who mangle him need to read the man.

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