An American reader of this blog wrote an email (below my response) to which I'm responding publicly (but without disclosing his details).
Dear American friend
I agree entirely with the thrust of your message and indeed, have myself written clearly that India is the world's greatest free market laboratory today.
That said, I take a macro- and micro- picture of nations, and at the macro level India is currently doing at least 10 times worse than it should be.
There are good reasons why it is under-performing so badly. In my reckoning, India should have overtaken USA well before now had Nehruvian policies not destroyed India's potential. Many such policies continue today.
Being aware of the underlying drivers of growth (basically freedom) my aim is to make India a STRONG but MINIMAL state – where the government does only what it is supposed to do, and does that well.
Trust me, corruption is one of India's least problems. I've always said that. The justice machinery and law and order is virtually defunct. And you mention infrastructure. But also education is defunct. Health is defunct. And I'm not referring to a few elite cities here and the wealthy (like you) but to India's poor who live deep inside villages.
None of these need to be (necessarily) directly managed by the government, but the government has a role in getting these organised or in facilitating these areas through appropriate policies.
I agree that America is sinking, and have said so on numerous occasions. I'm not a great fan of USA (although it still is FAR more free than India). If you read my book, BFN, you'll find recommendations that US could do well to adopt. But America has lost its desire to be free. Instead, it wants (and votes for) a bigger and yet bigger role for government in the affairs of the people. I don't see that kind of a role for government. So trust me I'm NOT asking for the imposition of the American "model" on India!
The model of liberty I'm advocating for India doesn't yet exist anywhere else. It calls for an optimal level of government: what a government should do, it must do well. That is a radically different model to America's – where the government does things it simply should NOT do.
===EMAIL FROM AMERICAN BLOG READER===
I am a U.S. businessman, I've ran a company in India for nearly a year (CEO Position); married my wife from India, and now, after being back in U.S. for several years, concluded that we should have NEVER left (2007.) I would be most interested in communicating with you, learning more from your experience – as it is now very likely I will be either starting business back in India, or possibly moving back there. I would also like to share my views with you, so you might have a more balanced influence on your audience.
I read your blog with great interest, but I somewhat disagree.. that is, governance is not the end-all solution. From my view, what has made India flourish is that the government actually lightened up it's stranglehold in recent years – privatization has ignited a wonderful thing there! Just as much, Indian Government is weak to interfere with business, although it may try! This is GOOD!
U.S. on the other hand is now a 100% Socialist country, due to the crop of Idiotic Politicians, and 40% of our population now conditioned to have perpetual government hand-outs for the past 20 years! We are suffering from an advanced infection of Marxism, pure and simple. India if a MUCH MORE FREE COUNTRY THAN WE ARE TODAY.
As a veteran business exec, employer, I have NO CONFIDENCE to do business here, and in years past provided hundreds of jobs, that will likely never be again. You can hold a gun to my head before I do that now, in this country! To make matters worse, U.S. government has the most powerful technology to use against us! There is no escape from taxation! Businesses, and private people alike fear the IRS (Tax collection agency) like the Jews feared the SS! Just the threat of an audit is enough to NOT DO BUSINESS here, and earn as little as possible!
I love my country, what it was, and will always be a loyal citizen fighting to fix this mess, but when it comes to business, I have been FORCED OUT! I see no better place on earth than India right now.
India, while it may have high tax rates, on paper, in practice is wonderfully-lax in enforcement, and this in itself also allows business to thrive! I honestly think, some modest corruption (at the low levels, individuals and low-level government officials – such as small bribes to improve efficiency..) are PRICELESS, and actually a kind of check/balance to keep the government from getting too much power!
I do agree, Corruption at the higher levels, however, is the scourge of all nations. Banks and Large corporations in bed with politicians always hurts everyone. India will do well to leave small business to thrive, and keep some eye on the largest corps and banks. That formula used to work here in the USA. No more. It's all up-side-down.
So the picture is a bit more complex I think than perhaps what you see from your point of view. India certainly has major issues, mainly Filth and some infrastructure issues (especially public toilets, disease, managing Malaria.. clean water supply, etc.) but all seem to improve each time I visit! These things can, and MUST be corrected from the Private level as much as possible! I am eager to come and do my part for a fair opportunity to grow a business without Government breathing down my back! Too much power in the Government is the worst of all possible situations – ALWAYS. It starts with Taxation, then Socialism, then Marxism, then either a dictatorship (1 ruler) or Communism (a committee of rulers!) You MUST NOT ALLOW THE FIRST STAGES of this disease to ever start! India already saw what Socialism Does! Keep moving in the right direction, PLEASE!
I would love to discuss these things more, and perhaps meet you some time if it fits our travels.
Very best Regards,
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