THE middle class never starves; it can afford to think beyond immediate necessities. It is, of course, susceptible to the vicissitudes of the economy; but it reacts to economic changes with a lag, and its mood depends to a greater extent on its sense of ease with the society and history. I remember how sombre the mood was in my childhood. World War II was being fought; it was as close as Assam. Prices were rising day by day. There were daily shortages only partly mitigated by rationing; but there was rampant starvation in Bengal, and crops requisitioned for the army rotted. There was no question of growth and expanding opportunities; just carrying on was a struggle.

With such hardships in the recent past, the years that followed, though they brought modest enough gains, were a period of great cheer. This sense of improvement made the socialist experiment, then just started, tolerable. The payments crisis of 1950s was an entirely avoidable result of gross mismanagement. The defeat in the Sino-Indian war of 1962 was the result of the most elementary miscalculation. The crisis of 1965-66 was the direct result of socialist folly. But no one saw it that way. Everyone saw a great improvement in economic growth compared to the arid inter-war years; so everyone was cheerful and forgiving of an incompetent government.

But the travails of the late 1960s left their mark; young people who could not get a meal on Mondays because Shastri ordered all restaurants closed to save food felt less than enthusiastic about the glories of socialism. But all politicians are prisoners of discredited shibboleths; so was Indira Gandhi. Her cure for failed socialism was more socialism. Banks were nationalized; if we had been slightly unluckier, Kumaramangalam would have nationalized wholesale trade. With that India would have been unbeatable in the corruption stakes. Even without it, it has put in a sterling performance.

And as Indira Gandhi went from strength to strength, the middle class’s mood went sour. Rajiv’s years saw the best economic growth in India’s recorded history; Narasimha Rao’s were not far behind. But they did not cheer up the middle class. Its pride had received too many blows: the emergency, the Sikh insurgency, the Bofors scandal, the Shah Bano case. With venom in its heart, it embraced the Bharatiya Janata Party. And the BJP gave it the rewards it longed for – the nuclear ceremony, the Kargil sacrifice, the military standoff with Pakistan, the patriotized school textbooks. At last the government has fulfilled all middle class aspirations. India has never before beaten its chest with such resonance.

It should be a time of celebration, there should be exhilaration in the air. The BJP should be sweeping the floor with the Congress. But it is not happening. Has the middle class turned ungrateful? Is it getting affected by economic miseries?

No; I think its depression is due to a new, unprecedented phenomenon – the revolt of its children. For millennia India has had a snail-paced economy. In any economy where there are few opportunities and where little changes, parents have the upper hand. They possess the land that the young must inherit, the skills that the young must learn, and the rituals that divide the society into castes and classes. For the first time in its history, economic change has accelerated; if it goes on like this, the young will no longer need their parents. Though yet subliminal, that thought has unhinged India’s grown-ups. Let me illustrate this from the Gujarati society with which I am familiar.

There was a time, not even three decades ago, when shopkeepers waited eagerly for the festive season, for that is when customers streamed in. The days before Diwali were the time to buy new clothes, new footwear, new jewellery. Today, shopkeepers wait listlessly while customers go off to Mauritius and Malaysia over Diwali.

 

 

There was a time, just about three decades ago, when Navratri was a family festival. A Gujarati family that was numerous and prosperous enough might organize a garba; but that was not the centre of the celebrations. The entire season from Navratri to Diwali was a season for visiting and entertaining friends. The mass garbas in Gujarati cities, where thousands mill around and fleetingly meet strangers of the opposite sex, were not only unknown, but their very idea would have shocked middle class Gujaratis.

These bewildering changes are the manifestation of deep, underlying transformations in our economy. Diwali was the season after the kharif harvest; the crop was in, the grain bins were full, and the sale of the harvest had brought in money; it was this prosperity that brought custom to shopkeepers and cheer to the festivals. The prosperity was celebrated because it was brief; soon the coffers and the granaries would empty, and the people – and even more, their cattle – would have to struggle through the harsh summer when nothing grew. The cycle was familiar in all countries with pronounced seasons, although the seasons of prosperity and hardship were different.

 

 

Thus, the major festival in the parts of India which have a winter harvest falls in spring – for instance, Onam in the south and Lohri in Punjab. Europe chose Christmas because that is when the shortage of fodder began to be felt; that was the time to slaughter and feast on cattle that could not be fed through the winter. Now the harvest or the winter cull has lost its significance. Even in India agriculture accounts for just a quarter of the national income; in richer countries its share is down to 3-4 per cent. As a result, old festivals have lost their context; they can continue only if they find a new context.

The mass garbas of today signify the integration of the Gujarati society that would have been unthinkable a quarter of a century ago. Then, parents would have chosen brides for their sons and bridegrooms for their daughters from an extremely dispersed but well-knit caste. Castes emerged locally but spread over vast distances over time; if they were to survive as endogamous groups, a mechanism for collecting and sharing information about their members was necessary. The mechanism consisted of gossip over good food in the festive season.

Today, however, both young men and women work; some men even prefer to marry working women. At work they come in contact with colleagues from all over India, colleagues speaking different languages, born in different religions, educated in different schools. If they marry those they encounter, are attracted to, fall in love with, they may well move away from their parents. They may not support their parents in old age; worse, they may distance themselves, and their children may not even recognize their grandparents.

The fear is very real amongst Gujaratis. Gujaratis are naturally peripatetic, and large communities have spread into the white countries. The loss of cohesion and identity are real possibilities for them; thousands of their children marry not just non-Gujaratis, but non-Indians and drift away from their parents. The danger is brought home by the fact that Jains are the only religious group in India whose population has declined. So many Jains are Gujaratis, and culturally they differ so little from other middle class Gujaratis that their children have been marrying non-Jains in hordes.

 

 

So Gujaratis have developed institutions to keep together. In garbas, young men and women get together from different castes, but they are all middle class and rather conventional. They are one institutional innovation to keep young people within the fold. And it is not just Gujaratis who try. Agarwals organize vast get-togethers in sports stadiums where parents and children can get acquainted with fellow caste-members – with children’s engagement in mind. Others have not found the solution, but still face the problem.

For instance, so many Namboodri Brahmins of Kerala have gone abroad, and their children have married non-Namboodris. At the same time, the community is so prosperous that no one wants to become a priest and spend his time repeating the same prayers over and over again in a temple. So it has relaxed the rules and allowed children of Namboodri and non-Namboodri mixed marriages to become priests – although it does not recognize them as proper Namboodris.

 

 

The resurgence of religion in recent years owes itself to the same forces. In the 1960s and 1970s, many Sikh boys were shaving off beards and marrying non-Sikh girls; and non-Sikh boys found Sikh girls particularly attractive. The revolt of parents against the perfidy of their children was behind the Sikh extremism of the 1980s. It was most virulent where the danger of youth secession was the greatest – amongst the small, prosperous Sikh communities that were so conspicuous in the homogenous societies of North America and Britain.

For them, Khalistan was to be a dreamland where their children would be protected from the wiles of attractive non-Sikh youth. Similarly, the exhibitionist religiosity of the Sangh family is above all a device for keeping children from straying away and – horror of horrors – marrying Christians and Muslims. The fact that the latter so often marry non-religionists only makes matters worse.

The same forces act somewhat differently amongst Muslims. They have suffered a catastrophic decline of their upper class. First the British decimated the Muslim nobility of the Mughal court. Then, at the time of independence, the better-off Muslims – the remnants of nobility, the zamindars of Punjab and UP, rich Khojas of Bombay and Gujarat – emigrated to Pakistan. Those that stayed were predominantly poor labourers and craftsmen; and the latter have suffered from the mechanization of the last 50 years.

Second, westernization under the British was confined to the rich amongst the Muslims; and after they migrated to Pakistan, the rest remained distinctly less westernized and hence less capable of exploiting the benefits of industrialization and growth of government. And finally, after independence there was discrimination in employment.

It was not overall or systematic; it was more in the private sector than in government, and more in some states than in others. But as a result, the economic ladders for rising have been less available to Muslims than to others. If, today, Muslims are more conspicuous by their beards and caps, if they have changed over less to trousers and spindly moustaches, it is because they have remained more Indian; and they are more indigenous because they have been left behind by the tide of westernization.

 

 

But exclusion and backwardness have their own social consequences. Unemployment makes children more dependent till later in life on their parents, and increases the latter’s control. The society of the poor is a harsher and crueler one; paranoia and distrust come more naturally to the poor. Charity and dependence play a greater role amongst the poor; and after the 1970s, the sudden wealth of the Arab countries meant that the charity often came from abroad. In these ways, Muslims – especially North Indian Muslims – have been marginalized in Indian society, and have acquired the attitudes of marginal minorities all over the world.

Paranoid Hindus tend to suspect treason and terrorism amongst the Muslims. There is precious little of either; however, what is there is a sullen sense of grievance. Attitudes will find an articulation; their logic is immaterial. Just as paranoid Hindus get themselves in a sweat over a temple destroyed 470 years ago, paranoid Muslims suspect universal discrimination and injustice.

The Muslims’ problem is made worse by the fact that economic failure feeds the forces of inwardness, and the entire Muslim world has failed economically in the past 20 years. If the economy does not grow fast enough to give the population growing employment and income, it will accumulate pools of idle people whose stress will take collective forms. This is why internationalist, extremist movements have taken root even in Egypt whose government is entirely hostile to them and in Saudi Arabia which in other ways is a very conservative society.

 

 

This is why Pakistan proved such a willing ally in the dirty, labour intensive war in Afghanistan, and why it finds it so difficult to suppress violent sectarian movements at home, let alone stop their export to India. Indians have fundamentally and systematically misunderstood Musharraf: he is not intent on exporting terrorists to India. He finds it too much hard work to stop their export, since doing so would put him at odds with the terrorist agencies in Pakistan; he asks what would he get if he stopped them. India’s answer is, nothing; it wants an end to terrorism without paying any price for it. And you cannot get something for nothing.

However, it is not only in the Muslim world that economic failure has caused social disruption in various ways. It has done so far more spectacularly in Africa, where entire nations like Congo have collapsed in endemic civil wars. It has led respectable middleclass housewives to march, beating a cacophony on frying pans, to the palace of Argentina’s president. The half century that has passed since World War II is seen as a period of peace and growing prosperity. But there is little prosperity in most of the developing world, there is even less peace in parts of it. What there is a lot of is leisure; there are millions of able-bodied people with little to do in poor countries.

Liberals divert attention from this fact by pointing to East Asia, and paradoxically, China; these are exhibited as examples of the prosperity that open economies can experience. These economies are open only in the sense that their commodity exports rose very rapidly. They all had varieties of protectionist policies, at least to start with. Then, as they earned more foreign exchange than they knew what to do with, they opened up to imports, but each in its own way; there was no systematic bias in favour of free trade and low import barriers.

But what was common to them all was that they latched on to a handful of large industrial country markets – principally the US, but also Japan, and to a lesser extent, Europe – finding markets in these countries and building up huge exports. Now that China is emerging as a big trader, they are latching on to it.

 

 

The entire developing world cannot follow in their footsteps; industrial countries’ markets are not large enough, and many of them are difficult to enter. But India could have, and still can; its location, its large skilled labour force, and its managerial and technological capacity, still make it possible. The biggest hurdle to India’s emergence as a major exporter has been its import barriers: if it protects an industry with a tariff of 40 per cent, that industry can never become a significant exporter.

East Asian countries managed to combine protection with exports by insulating exporting industries from the high levels of protection. India has imitated them with its duty drawbacks and import replenishments. But its bureaucracy is too corrupt to let these arrangements function; that is why India needs a regime of low, ideally no, duties. The fear that duty reduction will kill domestic industries is misconceived.

 

 

At least till India begins to attract large amounts of capital, its imports will be limited by its exports; for every rupee of imports that competes with local industry there must be a rupee of exports that creates a market abroad for it. The exporting industry may – will generally – be different from the import-competing industry; to that extent more trade will expand some industries and shrink others. Thus there may be rapid, sometimes painful structural change; but on balance, trade can make India only richer, as it did East Asia.

But foreign trade alone cannot make India rich. It did not East Asian countries; and India, being larger, will get even less stimulus from trade. Ultimately, a country can get richer only by producing more value per worker. Trade helps by changing the relative prices, and by raising production of those goods which find markets abroad at prices higher than at home. But a more powerful force for increasing labour productivity is change in production methods. And producers change their methods if competition forces them.

We in India think of reforms in terms of regulation and privatization, but we seldom think of increasing competition and making it more effective. We think of trifurcating state electricity boards and appointing state electricity regulatory commissions. But we never think of de-merging the state electricity boards and making each power plant a separate, competing company. We never think of making a one-line law, that anyone can sell electricity to anyone else. When the US decided to abolish the telephone monopoly of Bell, it de-merged a large number of Baby Bells out of Bell, and prohibited Bell from competing with them until they had achieved a certain size and strength.

We began to subsidize farmers when we were short of food; we have multiplied the subsidies manifold and continued them into a time when we are producing more food than we know what to do with. We have raised foodgrain prices so much that we cannot even export them without a loss. And a farmer can earn the subsidy only by selling to a government monopoly. If he must be subsidized, why not give him a lump-sum subsidy, let him do what he likes with it, let him sell whatever he finds profitable and sell it to whomever would pay him the best price?

 

 

These and other policies for improving India’s growth and competitiveness are possible and practicable. And if we follow them, there will be more jobs. Young people will find their feet faster, they will be thrown together in their workplaces, they will grow out of the religions and customs into which they have been indoctrinated by their parents, and they will develop a pan-Indian culture. But if we continue with our measly growth, they will hang around the homes and cadge pocket money from their mothers; they will be slaves of their parents’ parochialism.

If we want a model of what happens to countries that fail economically, we only have to look at the Middle East. Pakistan, Israel, Palestine – they are our future if we fail to make India grow. And it will not matter if it is a devoutly Hindu Palestine – the misery of the people will be the same however much they pray, in whichever language and to whichever God.