The question as to why some societies (or countries) become rich, and some do not, has exercised philosophers, statesmen, politicians, ideologues, reformers, academicians, and the economists since the time immemorial.
On the face of it, it should have been easy to answer. After all, both the rich and the poor societies exist during most of the eras, and by studying the dynamics in both the type of societies, it should have been readily possible to answer the question. But it is a sad fact of life that when it comes to empirical observations of interactions among men; almost each observer/student observes entirely different facts, assigns different importance to the different factors, and there is no agreement on causal relationships.
Though from Greek philosophers to modern economists a very large number of famous persons have offered their own theories explaining why some societies become rich, and some stay poor; the most enduring explanation is from Marx. Of course he did not concentrate on different societies with different economic development, but on why in the same society some people become rich and some stay poor. But his explanation has endured because it suits those who control the narrative in any society- academicians, writers, artists, artistes, journalists, and politicians. Leaving out politician, the remaining are generally grouped together under the name of “intellectuals.” The word intellectual itself is a product of the Marxist worldview, and was needed to meet a certain need as will be elaborated soon. Marx essentially said that the whole society working together produces the total of goods and services, and the rich are those who unjustly commandeer disproportionate share of the product of the society. All that is needed is that the society takes control of its product, and redistribute it in a just and fair manner. As an example, he chiefly concentrated on the modern factory, and said that though it was the workers who produced all goods in it, but they were paid very low wages, and the owner, who did nothing, simply kept for himself most of the product of the workers. To correct the situation, the society should take over the factory, and decide just compensation for the workers and those in management. He extended the argument he developed for a factory to all the production of the society, and stated that academicians, writers, artists, artistes, journalists, and politicians in society, though they do not work in a factory, are still workers, because they produce for the society abstract things using their intellect. Therefore, though they do not work using their hands, they should also receive just and fair compensation, because they are “intellectual” workers. This is the genesis of the word “intellectual.” And this is also at the root of the current economic misery of the world. Once the “intellectuals” were coopted by Marx into his proletariat, they never looked back. They happily came to believe that because they were the most intelligent members of the society, certainly more intelligent than the bald, potbellied “moneybags,” so in any just and fair redistribution of the collectivized product of the society, their share would only increase from the present, and would certainly be greater than the present factory owners. And so, they became, and continue to be, the most enthusiastic torch bearers of the most destructive economic and political theory: Marxism. The so called “intellectuals” are the best examples of the very sad fact of human nature: if men benefit, or hope to benefit, from a certain arrangement of human affairs, they seldom examine its morality, or even its usefulness for the society as a whole. In fact they positively block any investigation of its total consequences.
So, even as the Marx inspired collectivisation ravages every country where it is tried, intellectuals all over the world continue to support it, promote it, teach it, and demand it. They savage anybody who challenges it, using their monopoly on the creation and propagation of opinion and control on information. They use misery in the world as the justification for that one more trial of Marx’s ideas, claiming after its every failure that it was not correctly followed.
In reality, any objective study would show that the societies which respect and protect Private Property, and in which private individuals are free to enter into contracts among themselves, the contracts which are then enforced by the State, become richer than the societies which do not follow these two basic abstract rules, over a long passage of time. Evidently, such societies also grant their citizens Freedom of Expression, Right to Life, and Equality before Law. So, in such societies, we see most innovations, new ideas, new discoveries, and new entrepreneurs who constantly upstage existing businessmen. Therefore, in nutshell, key to prosperity in a society is how sacred is the Right to Private Property in it. (Freedom of Expression, Right to Life, and Equality before Law flow from, and are protected by Private Property only). In modern times, the principle that A Man’s Hut Is His Castle, inviolable by State, was pronounced first in England (It was practiced in ancient India before that), and therefore, the countries of the Anglosphere (countries that have descended from England) remain the most prosperous and freest societies on the earth.
The British, who were ruling India till 1947, therefore created a fairly robust Free Market System in India also. When they left, India had a very good manufacturing sector, banking and financial sector, and free trade. But to the misfortune of India, the successors of the British were socialists, who set about in right earnest to destroy the Free Market System immediately upon Independence. First they created State monopolies in major sectors like electricity and Railway, second they made industrial licensing compulsory and used that to deny the private sector opportunity to set up big industrial plants, which were set up by the government instead. Within a decade or so, they started taking over existing private enterprises, and confiscated (nationalisation they called it) one industrial plant after another, airlines, and finally the banks. Controls were placed on trade, strangulating it, and free contract between worker and employer was totally destroyed by enacting labour laws.
Result was that by 1990, India was bankrupt, its industries were dying, trade was comatose. and unemployment rate was climbing ever newer heights.
With bankruptcy looming, socialism was partially rolled back in 1991. And the result has been blooming of entrepreneurship in India, prosperity, and new avenues of employment.
Some time in medieval India, Caste and its profession got frozen, with the result that persons had no choice of profession, it got made for them by the accident of their birth. That is, monopolies by birth of professions got created, leading to what all monopolies always lead to -stagnation and decay in economy, in academics, in culture, in society as a whole. To break this cultural tradition, framers of Indian Constitution thought of job reservations in government jobs for the Castes which were not allowed earlier to participate in governance.
Government is not a chief employer in any society which can boast of a good economy. Government is supposed to be small in the society that respects private property, and therefore has very few jobs to offer, all in administrative capacity. But soon the whole idea of job reservations in India was corrupted to mean a tool to uplift the poor out of poverty. A simple reflection would have shown that number of government jobs available per capita would mean that these jobs can not make any dent in the average economic condition of the Castes which were given job reservations. But the socialists who took over academia, media, bureaucracy, and culture in India were not only not interested in thinking, they were not even interested in facts. And so reservations soon came to be seen as the ticket to economic prosperity for the Castes which are given this benefit, instead of just breakers of the cultural stereotypes which they were meant to be and the only thing that they can be.
But not only the job reservations did not lift any Castes out of poverty, socialism, which is the reigning philosophy in India, made sure that otherwise also the economy did not expand, and so the poor stayed where they were-poor. Socialists, instead of accepting the simple fact that the poor can only prosper if the size of the pie increases, always demand that the existing pie be “redistributed” in more fair and just manner than at present, that is collectivise and redistribute the wealth, that is Marxism.
Liberalisation of 1991 has created a growing class of entrepreneurs in India, who are creating wealth in new sectors of economy which are not under the control of the government. Horrified at the freedom of entrepreneurs, Leftists are all the time piling on new regulations. No labour laws of full blown socialist era are allowed to be repealed. Instead, new regulations, in the name of environment, and in the name of preventing malpractices, etc., are being added all the time.
But now the Leftists of India have come up with the most sinister idea-nationalisation of all the private enterprises by stealth. They are now proposing to extend job reservations to private sector. That is, they plan to grant the government the power to tell a private individual, the owner and manager of his business, who he can hire, who he has to hire. This is nothing but nationalisation by stealth of all private businesses in India. In fact this is even more sinister than outright confiscation of private property. In nationalisation of earlier decades, the owner was divested of his property, but he was at least set free from the burden of running the business. In the case of job reservation in private sector the owner of the private business will be a classic slave. He will have to labour, will have no release, and will have no right on the fruits of his labour. Jobs are the products of the business of an entrepreneur, and job reservation in private sector would mean the owner will have no right on the products of his business, he will have to surrender them to government.
This nationalisation by stealth of the private sector will have exactly the same effect as the earlier open nationalisation. It will completely destroy the industry, business, and trade in India. Without the modern economy, there is no way India will be able to feed 125 crore human beings. Thus, even the existence of India will get directly threatened.
But the way India has been reduced from Constitutional Republic to democracy (51 people out of 100 coming together and doing as they please), it is more likely than not that this ultimate folly of the Leftists will get tried. No political party that hopes to remain in the business of electoral politics will be able to oppose it. And our Supreme Court, the Constitutionally appointed guardian of the Constitution, now consistently allows to stand unconstitutional laws which violate Private Property and private contracts. Apart from the old most glaring examples of Rent control laws and labour laws, it has allowed to stand the Right to Education law, Food Security Act (both are collectivisation of wealth), and hosts of Tribunals like National Green Tribunal which have no business to exist in a society that has rule of law.
Therefore, prospects for the private businesses are very grim in India. Once the nationalisation by stealth, that is job reservations in private sector, is accepted on principle, politicians would quickly move for the kill, and would extend all possible power over the private businesses. We would become a full blown socialist state, and would then be visited by its inescapable consequences- decay, decline, and collapse: the horrible destruction of the world of 125 crore human beings.
Citizens who understand implications of destruction of the Private Property Rights, need to come together, and do whatever it takes to block this latest Leftist thuggery-the job reservation in private sector, the nationalisation of private businesses by stealth. There is no other way to save Indian economy, and India itself. Electoral politics offer little hope, but we the citizens can surely force the Supreme Court to make india what the Constitution envisages it to be- the democracy limited by the Constitution which is limited by the Natural Rights of man.