Government has never been central to our lives PDF Print E-mail
Wednesday, 14 September 2011 00:00
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The editor of a 15-part Penguin history series charms Sunil Jain with ancient Indian tales about education and enterprise, temples and trade, monks and money

Is it better to give out road contracts on a cost-plus basis, or is build-own-operate-transfer better? Should the government do everything for citizens (be the maai-baap basically), or is that the responsibility of citizen groups? What is the role of the temple in society—is it just a place of worship or is its role similar to that of what’s today called civil society?

Questions such as these, and many more, are the subject of a 15-part forthcoming Penguin history series on the great business and economic ideas that have shaped commerce in the Indian sub-continent. Except, the series is largely based on ancient Indian texts. Series editor Gurcharan Das—author of books such as India Unbound and The Difficulty of Being Good: On the Subtle Art of Dharma—goes over some of the highlights of the books over a frugal lunch at the India International Centre, some dal, aaloo and khasta roti (I share this) for Das, and grilled fish for me. It seems he has spent his life, in almost equal measure so far, being an executive with an MNC selling consumables and learning Sanskrit and trying to interpret life through ancient scriptures.

A Jain merchant’s diary (Ardhakathanak) in around 1640—Das hasn’t got the manuscript on this one yet—reflects on the business environment during the Moghul period; the volume on the Three Merchants of Bombay—Tarwady Arjunjee Nathjee, Jamsetjee Jeejeebhoy and Premchand Raychand—chronicles how the centre of commerce shifted from Surat to Bombay once the British came in (essential reading, one presumes, for Percy Mistry, who wanted to make Mumbai an international financial centre!) … The lunch has a lot more interesting fare than what’s on the table.

Even the Arthashastra (this volume is being written by Tom Trautman), Das says by way of an opening gambit, is sort of counter-intuitive: the reason why it talks of statecraft and the setting up of a strong state is precisely because there is no strong state. Did I read his article in last Sunday’s Hindu on the Sree Padmanabhaswamy temple treasures, Das asks. No I didn’t ... Anyway, he says, the treasure of the temple that’s so in the news nowadays is the best proof of how central the temple was to our lives—even the king donated to the temple, which ran most aspects of a citizen’s lives. Tamil texts Silappadikaram and Manimekalai—interpreted by Kanakalatha Mukund—Das says, tell us that even the king’s people used to meet in the temple; in other words, he says, the government or the king was a sort of an overlay on a system that was already working.

What do ancient texts tell us, I ask, about education? Das, who reads some of the texts in the original Sanskrit, says he’ll get a better idea when he reads all the texts in his series, but the Kutchi and Marwari books talk of a vigorous apprentice system where young men apprenticed with trading families and were, alongside, expected to run their own small enterprises—in later years, Das points out, this has been best described by GD Birla who was an apprentice to a Shroff family. Birla talked of how at the end of each day, the apprentices would all gather around to hear the exploits of various businessmen. It was like a modern-day Harvard case study in the making, night after night.

As talk moves to more contemporary themes, Das says earnestly that India is really reverting to mean now, and not just in terms of the role/importance that civil society has begun to exercise. Ancient India, he says, accounted for a very significant share of global GDP and trade. Roman Senator Pliny, among others, would talk of how Indians never seemed to want anything from the countries they exported to and were anxious to just settle in terms of gold—a bit like the China problem, my guest grins, except they’re happy to buy the modern-day equivalent of gold, the US dollar. Pliny, Das recounts, exhorts Roman women to stop buying Indian textile and spices as it is depleting the Roman empire of its gold. Other volumes in the series, such as on the Multani traders, Kutchi traders and the Chettiars, all trace this fascinating spread of Indian enterprise. The rise in India’s share of global GDP and trade, although it still has a long way to go, is reclaiming that lost heritage, argues Das. So is greater primacy to civil society and less to government. Traditionally, Das avers (and he’s built this up in an essay he’s written for the fourth magazine of an Express series on reforms, out soon), India has never had a very strong ruler/government and society (through the temple) stepped in to fulfil this role.

To that extent, he says, Nehru’s overwhelming state (in terms of its ability to stop private enterprise) was really an aberration; economic reforms in 1991 took away this negative power from the state to a large extent; it is in the unreformed areas where the government is still an important player (mining rights, for instance) that you have the large scope for corruption. Kanaklata Mukund’s volume on the Tamil merchant, Das points out, tells us that this maai-baap role of the state was played by the temple. The volume traces India’s rising influence in east Asia (Singapore is actually Singha Pura or city of the lions!) through the trade route.

Das says he doesn’t buy the traditional view that the British did India in—it was, he says, the industrial revolution that caused a sharp fall in global imports from India. India’s share of global industrial production fell from 17.6% in 1830 to 1.7% in 1900 while that of Britain rose from 9.5% to 18.6%. But, to be honest, he says, he’s not able to square the circle—if we were once so rich, why are we today so poor?

To be sure, he says passionately, Nehru’s policies, which stopped Indian firms from even importing looms, were a big factor in India losing out, but the decline took place long before independence. Das rattles off figures of the global textile trade Indian firms controlled by the end of the war and how this fell thanks to government clamping down on imports of machinery (Vinay Bharat Ram’s From the brink of bankruptcy: The DCM story has a first-hand account of what it did to his family’s

fortunes). After 1850, Indian entrepreneurs began to set up their own modern textile mills and by 1875, Das quotes from India Unbound, India began to export textiles again and slowly recaptured the domestic market. In 1896, Indian mills supplied only 8% of total cloth consumed in India; in 1913, 20%; in 1936, 62%; and in 1945, 76%. Manufacturing output grew 5.6% per annum between 1913-38, well above the world average of 3.3%. The share of industry in India’s GNP doubled from 3.8% (in 1913) to 7.5% (in 1947) and the share of manufactures in her exports rose from 22.4% (in 1913) to 30% (in 1947)—Nehru’s licence raj broke the momentum.

If the state was an overlay, I get back to the topic like a school teacher with a wayward child, does this mean merchants had a larger role to play? Not really, comes the reply, as in any agrarian society, the merchant was looked at with some suspicion. Don’t forget the Bible had the concept of how it is easier for a camel to thread the eye of a needle than it is for a rich man to enter the gates of heaven. But, Das says, the situation was very different in coastal areas where the merchant was highly respected, often the hero of folklore in the Kathasaritsagar (ocean of stories, literally) for example—he travels to new lands, has all the money, all the adventure, meets lovely women, and so on, Das says, as his eyes begin to glint. In Gujarat, he cites another volume from the series he’s editing, the nagarsheth (merchant of the town, literally) was the preferred dispenser of justice on commercial matters. Kanakalatha Mukund’s Tamil merchants volume has a description of the yavana (merchant) colonies—the volume, says Das, talks of cities being built by merchants, not kings.

A wonderful exposition of the role of the state and the temple, Das says, is the text on a Buddhist monastery in the second century. In one part in the texts, it appears, the monk is asking himself where he should invest the money; in another place, the monk is wrestling with the consequences of what happens if he takes too much of a donation from the king or from the merchants … best, the monk concludes, to keep a fine balance between the two. It wasn’t unusual to find religious places organised along commercial lines. Das reminds me of European texts that deal with the best way to grow and press grapes (think of Benedictine!) and how well the Vatican is organised, right down to the bank.

Das is brimming with excitement over the first of the series, Tirthankar Roy’s volume on the East India Company which, he avers, is a bridge that connects the pre-modern with the modern in history—an authoritative guide, if I recall the words correctly, for someone who wishes to make the crossing. The East India Company introduced for the first time the concept of the modern joint stock company, divorcing ownership from control, introducing concepts like mitigation of risk, management of complex information flows and even being ‘glocal’—be global, act local. There’s an interesting story about how the Company tried to ban its employees from doing their own business—the most notorious employee-competitor, Das writes in his foreword, was Thomas Pitt who “returned home with a great fortune, including one of the world’s largest diamonds, which eventually went on to adorn Marie Antoinette’s crown and Napoleon’s sword. Pitt went to acquire a seat in Parliament from where he attacked the Company’s monopoly”! And since the Company needed to deal with larger companies, it promoted the concept of the Great Firm on the Indian side—the modern corporation is, in more ways than one, the child of the East India Company.

Most books on the Indian Railways, Das starts winding down his story as we debate how to split the desert (I’m happy with my caramel custard but Das insists we share his ice cream as well), talk of how the Railways were developed as an instrument of exploitation, to be able to get to the indigo for instance. Our book, he says, is more balanced and tries to get at questions like whether the Railways made money, whether a guaranteed return on investment was a better way to get entrepreneurs to build Railways (think gold-plating) or whether a non-guarantee Build-Own-Operate (BOO) system was better (essential reading for Gajendra Haldea at the Planning Commission!).

We return to current times, and Das’s recent trip to China—he’s on the board of Mars and is amazed at how the company has built up a $2.2 billion business in that country in 15 years even though the Chinese don’t eat chewing gum or have pets (pet foods and chewing gum are Mars’ staple). Wrigley’s took 100 years in the US to build up the business, he says, and China has done half of that in just 15. The centre of the world is changing.

India hasn’t done quite as well, but it’s made a start—the last of the Express Group’s series on 20 years of reforms has an essay on precisely this, on companies whose India business is now bigger than that in the parent country (Maruti began producing more cars than Suzuki did in Japan some years ago!). The present, Das is right, is in many ways just a re-run of the past. Chew on that.

Last Updated ( Sunday, 27 November 2011 16:27 )

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