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The swadeshi serpent bites its tail; and a response - The Indian Express

Sauvik Chakraverti ()
21 December 1996

Title : The swadeshi serpent bites its tail
Author : Sauvik Chakraverti
Publication : The Indian Express
Date : December 21, 1996

History does not reveal the lurid picture of colonial exploitation that
Indian economic historiographers have painted in our minds. Well into this
century, when laissez-faire ruled British thinking, it was quite clear that
foreign capital was a good thing, and that foreign capitalists were
profit-seeking individuals with interests quite distinct from that of the
imperial state. Further, that the laissezfaire imperial state providing high
quality administration should perhaps be the 'model' to be emulated today,
given the dismal record of socialist interventionism.

India had its trains and telecom decades before Japan (Perry presented the
Shogun with a miniature railway), and Indian cities had modern, efficient and
economical electric mass transportation system - so it is quite clear that
infrastructural development was proceeding rapidly with the inflow of foreign
funds, much of it private.

When we examine the mind of the foreign capitalist, there does not seem to be
any indication that he is an agent of the imperialist state: he is a private
man, interested in private gain. The mistake made by exponents of swadeshi
(or those who see a sinister neo-imperialism at work in the global market) is
that they do not see individuals: they see states. Where liberals look upon
the state with unconcealed scepticism, they see states in business, and they
want their state to protect their businesses - at our expense of course.

The real problem with swadeshi - as with any other false ideology - begins
when you place yourself at the receiving end: when the serpent bites its
tail. If it was true that the best way to ensure national prosperity and
general well-being is to consume only locally-produced goods, India wouldn't
have had a caste of trader, or entire communities of them. Trade would be
uneconomical, unintelligent, and not worth the trouble. If you look at our
traders carefully, you do not see them as political agents they are economic

They work in a self-regulating civic society, buying and selling for a
margin. You see them everywhere: from the North-East to the deep South, you
will find shopkeepers who all hail from some part of western India. They
contribute to the local economy. What do they do when swadeshi strikes deep,
and sub-national political movements espouse ideologies that look towards
Indians from other parts of the country as foreigners? Keeping Indian
markets for Indians may be fine for some big industrialists, but what happens
when people want Maharashtra for Maharashtrians, Assam for the Assamese and
so on.

Not having thought out its economic ideology clearly, the Government of India
is making a fool of itself 'protecting national interests'- as at the WTO
meet in Singapore. Where children study the swadeshi movement in
government-approved textbooks as a logically correct way of securing national
prosperity, how can our bureaucrats think differently? The ideology filters
through and is adopted at sub-national level by sub-nationalists. Fast-food
outlets owned by Americans are demolished by those who do not bother to
notice that ITC was free to set up Indian food restaurants in the US: the
Government of India's exchange regulations were the only hindrance!

Swadeshi is not truth. Chandni Chowk, where the world came to do business in
a prosperous India, is. Swadeshi is merely the ideology of Congress
nationalism. It should not be the ideology of the Government of India. It
should also not be taught to children in the manner in which it is done
today. They will soon be young voters, and so should be politically aware.
Economic historiography should not be nationalist propaganda that borders on
hysteria. Congress Raj - socialist and nationalist - must be compared with
British Raj - imperial and liberal.

It will be seen that we had a far greater share of world trade then than we
do now. That money was coming into the infrastructure. The government was
standing by, running things, and not getting in the way. That money was
convertible, and we were freer, economically. Big cities were built.
Municipalities worked. Is Seshan calling for a second freedom movement?



Ashok V Chowgule
72, Dr G Deshmukh Marg,
Mumbai 400026.

December 21, 1996.


It is quite obvious that Shri Sauvik Chakraverti ("The swadeshi spirit bites
its tail", Dec 21) has not understood the true spirit of swadeshi. Only one
who is trained in the westernised philosophical concept will look at it from
an exclusively materialistic concept. Swadeshi means to examine the issues
keeping the nation's interests at heart. When Japan developed its car
industry, it made sure that it kept out General Motors and Volkswagen. In
the protection provided, the Japanese car manufacturers were able to set up
world standard facilities, and develope their own brand name. At the same
time, to ensure that the domestic consumer is not taken for a ride, there was
fierce internal competition. Similarly, the Koreans developed its electronic
industry by preventing Sony and National selling in their domestic market.
Here, too, internal competition was actively encouraged.

The Nehruvian model, designed by the very ones who are the opponents of the
swadeshi model, not only kept out imports, but they prevented domestic
competition, by restricting capacity, and keeping the prices high through a
usury tax system. At the same time, when Shri Sanjay Gandhi decided that he
wanted to be a car tycoon, they manipulated the policy to give all sorts of
benefits to him to the exclusion of the existing manufacturers. By stifling
indigenous entreprenuership, India has not been able to create international
giants of the same class as Samsung, Sony, etc. Thus, Thums Up was forced to
sell to Coca Cola, while it is only a McDonald which has the financial muscle
to bear the losses of the first few years of their business.

It is very unfortunate that the so-called intellectuals of this country are
not able to see the woods for the trees. One needs to ask them where they
were when there was an active programme of putting all sorts of artificial
obstacles on the growth of indigenous businesses. But, when they point out
that 'ITC was free to set up Indian food restaurants in the US' as a
justification for allowing McDonalds in this country, they are essentially
mouthing the same thoughts that the American ambassador has recently done.
One has to ask them which country's interests is paramount in their thinking.

Yours sincerely,

(Ashok Chowgule)

The Editor, The Indian Express,
Express Tower, Nariman Point,
Mumbai 400 021.

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