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BREAKING THE MOLD

INDIA’S UNTRAVELED PATH TO PROSPERITY

A sobering economic study packed with useful ideas.

Two Indian American academics offer a stern assessment of the Indian economy, education system, and other institutions and why they have not risen to their full capabilities to propel the country forward.

Characterizing the current government as being “better at perception management and suppressing unpleasant facts than creating real well-being for the masses,” Rajan and Lamba, both of whom worked on economic issues within the Indian government, give a forthright accounting of the nation’s many faults and enormous unused potential—i.e., human capital. In three well-structured parts, the authors lay out their arguments. Regarding the rapid rise of the Indian economy, they side with India’s critics, rather than its “cheerleaders,” because of some hard, ugly facts. These involve persistent inequalities in society, lack of employment opportunity and sufficient education, the abysmal treatment of women, low-quality health care, lack of clean drinking water and proper nutrition, and rural blight and poverty, among other reasons. Today, India’s annual income per person is roughly $2,300; in China, that number is $12,500; Korea’s is around $35,000. “India is no longer in the middle of the pack; it is at the bottom by a long way,” write the authors. Rajan and Lamba do not think protectionism and subsidies to spur manufacturing are the way to a more vigorous economy for all. They argue that the government should turn away from low-wage manufacturing—in the past, “the ladder to riches”—to emphasize direct services exports as the Indian future. Using human capital also encompasses encouraging visionary entrepreneurs and new businesses, and the authors showcase many examples—e.g., the eyewear chain Lenskart. As the supply chain has changed drastically, the authors believe India should “embark on a more unique Indian way of development, one that is more aligned with India’s strengths.”

A sobering economic study packed with useful ideas.

Pub Date: May 28, 2024

ISBN: 9780691263632

Page Count: 336

Publisher: Princeton Univ.

Review Posted Online: March 8, 2024

Kirkus Reviews Issue: April 1, 2024

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WHAT WENT WRONG WITH CAPITALISM

Sure to generate debate, and of special interest to adherents of free market capitalism.

A book-length assertion that capitalism’s woes can be traced to government interventionism.

Sharma, an investments manager, financial journalist, and author of The 10 Rules of Successful Nations, The Rise and Fall of Nations, and other books, opens with the case of his native India. The author argues that it should be in a better position in the global marketplace, possessing an entrepreneurial culture and endless human capital. The culprit was “India’s lingering attachment to a state that overpromises and under-delivers,” one that privileged social welfare over infrastructure development. Much the same is true in the U.S., where today “President Joe Biden is promising to fix the crises of capitalism by enlarging a government that never shrank.” Refreshingly, Sharma places just as much blame on Ronald Reagan for the swollen state that introduced distortions into the market. Moreover, “flaws that economists blame on ‘market failures,’ including wealth inequality and inordinate corporate power, often flow more from government excesses.” One distortion is the government’s bloated debt, as it continues to fund itself by borrowing in order to pay for “the perennial deficit.” As any household budget manager would tell you, debt is ultimately unsustainable. Wealth concentration is another outcome of government tinkering that has, whether by design or not, concentrated wealth into the hands of a very small number of people, “a critical symptom of capitalism gone wrong, both inefficient and grossly unfair.” Perhaps surprisingly, Sharma notes that in quasi-socialist economies such as the Scandinavian nations, such interventions are fewer and shallower, while autocratic command economies are doomed to fail. “[T]oday every large developed country is a full-fledged democracy,” he writes, and the more freedom the better—but that freedom, he argues, is undermined by the U.S. government, which has accrued “the widest budget deficit in the developed world.”

Sure to generate debate, and of special interest to adherents of free market capitalism.

Pub Date: June 11, 2024

ISBN: 9781668008263

Page Count: 384

Publisher: Simon & Schuster

Review Posted Online: March 22, 2024

Kirkus Reviews Issue: April 15, 2024

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GOOD ECONOMICS FOR HARD TIMES

Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.

“Quality of life means more than just consumption”: Two MIT economists urge that a smarter, more politically aware economics be brought to bear on social issues.

It’s no secret, write Banerjee and Duflo (co-authors: Poor Economics: A Radical Rethinking of the Way To Fight Global Poverty, 2011), that “we seem to have fallen on hard times.” Immigration, trade, inequality, and taxation problems present themselves daily, and they seem to be intractable. Economics can be put to use in figuring out these big-issue questions. Data can be adduced, for example, to answer the question of whether immigration tends to suppress wages. The answer: “There is no evidence low-skilled migration to rich countries drives wage and employment down for the natives.” In fact, it opens up opportunities for those natives by freeing them to look for better work. The problem becomes thornier when it comes to the matter of free trade; as the authors observe, “left-behind people live in left-behind places,” which explains why regional poverty descended on Appalachia when so many manufacturing jobs left for China in the age of globalism, leaving behind not just left-behind people but also people ripe for exploitation by nationalist politicians. The authors add, interestingly, that the same thing occurred in parts of Germany, Spain, and Norway that fell victim to the “China shock.” In what they call a “slightly technical aside,” they build a case for addressing trade issues not with trade wars but with consumption taxes: “It makes no sense to ask agricultural workers to lose their jobs just so steelworkers can keep theirs, which is what tariffs accomplish.” Policymakers might want to consider such counsel, especially when it is coupled with the observation that free trade benefits workers in poor countries but punishes workers in rich ones.

Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.

Pub Date: Nov. 12, 2019

ISBN: 978-1-61039-950-0

Page Count: 432

Publisher: PublicAffairs

Review Posted Online: Aug. 28, 2019

Kirkus Reviews Issue: Sept. 15, 2019

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