On March 13, Professor Partha Ghosh of the Fletcher School gave a lecture entitled, “The Complex Puzzle of Growth: Embracing Modernity while Preserving Tradition in India and China”. Professor Ghosh has worked in various strata of careers, from managerial consulting to policy and strategic issue advising. His experience in these various fields gives him a unique perspective on the problem India and China are facing today.
Both India and China are significantly large economies, with China boasting a 9.3% growth rate. Though India is the world’s largest democracy and China is a Communist power, the two have similar tensions between different ethnic groups and socioeconomic classes. Development has not occurred proportionally throughout the countries, leaving poorer states out in the dark when cities such as Shanghai and Bangalore are in the spotlight. The biggest problem these two countries are facing, according to Professor Ghosh, is energy. The search for sustainable energy is nigh upon the rest of the world, but this poses a problem for a country whose capital city is blanketed in smog. Another challenge in this region is the proximity of three large nuclear powers- Pakistan, India, and China- and their unstable relations with one another. At a pivotal time when elections are happening in these countries, it is important to focus on how to bring them together, rather than set them apart.
Professor Ghosh brought up some very interesting points about resources. For Americans, it is easy to picture the world with limitless capital; consumerism ideal can allow us neatly ignore the fact that we are using exponentially more material than our predecessors could have imagined. However, if Chinese families attain the same standard of living as Americans do, they will also create the same amount of household waste. Professor Ghosh indicated that the US alone would be creating teratons of waste in 20 years. With China’s population, we could be looking at entire country-sized landfills. Current business models fuel unidirectional demand, that is, harvesting natural resources in order to create a product, which is then thrown away in order to get more advanced items, which use even more natural resources.
According to Professor Ghosh, there are three levels on which humans and the market operate: the foundational level in which basic human traits are codified, such as self-interest and survival of the fittest, the industrial level, which focuses on economies of scale and the consumerist “source to sink” linear model, and the individual level, which pits self above society, humans above nature, and instant gratification over gradual resolution. He believes that the way to change society is to shift our thinking to a new paradigm that is diametrically opposed to the way things have run for the past 500 years. India and China are the perfect locations to spearhead this shift in consciousness because many of the ideas of this new “paradigm X” are taken from old Confucian and Vedic wisdom. These include self-enlightenment, harmony with nature, mutual respect between the individual and society. A very important concept unifying both schools is multiple streams of inquiry- not taking things at face value but rather seeing how they got there, why they were created, and how to improve upon them. What society needs is to derive a balance between consumption and conservation, as well as between point and holistic solutions in regards to ecological preservation and economic advancement.
At the macroeconomic level, he believes that the unrestricted free market will not be able to create the changes he sees for the future. A mixed economy of government intervention and market cooperation is the only way to oversee such a large shift in thought. At the microeconomic level, he calls for innovative integration between Western technology and Eastern ancient values to build a global business model. While the current model is linear, a new possible archetype would be circular, including recycling and reuse. Ghosh argues that Adam Smith’s invisible hand works in the city-centric capitalist regime, but if we want to forward the goal of developing villages as self-sufficient titans of agriculture, we must use socialized networks and what Ghosh calls “cellular capitalism in a green economy”.
Though I agree with much of what Professor Ghosh had to say from an idealist’s standpoint, the feasibility of what he is proposing remains unclear. For one, China and India are not the only key economies in the market; if they employ this kind of circular model and no other country with economic hegemony joins them, they could be looking at large losses at a peak in their growth and development as nations. These countries cannot afford to make a costly paradigmatic shift unless others are on board as well. Another question to consider is who we would look to first to create this kind of change- the firms who run the current market, or the government who restricts it?
The Chinese government has already started taking steps toward reviving ancient roots. New industrial models include sustainable farming, intelligent power, and exploring alternative energy sources for powering at least 13 of the larger cities in Mainland China. India is still not making much progress on this front, which makes one wonder- what are the drawbacks for a nation like India that is attempting to change its economic model? I believe there are a variety of reasons. Firstly, a communist regime such a China will have more success with this because all that is needed is a can-do attitude from the leadership. Since they shape the market conditions and rules of firms, it will be much easier to regulate this shift than in the largest democracy of the world. China also has a positive trade balance- they have the ability to spend out of pocket for experimentation with innovative markets, whereas import-heavy countries such as India would not have the resources to make these changes. This also means that countries like the United States do not have the budget to pioneer such shifts. There is also the fear of disintegration if the Indian government encourages the buildup of villages as separate economies from the rest of the country.
While I do believe that Professor Ghosh raises some very important ethical and ecological concerns, his ideas may still be in a prototypical phase not ready to be applied to nations that are at the cusp of their economic potential. The Chinese standard of living is quite low and with a GDP rising at 10%, there is nowhere to go but up. For the rest of the world, however, it will take some time before we can put mind over market and others before ourselves. As much as we want to, completely disregarding Hobbesian theory will not save the planet any faster than taking small steps to improve each of the G8 countries’ economy and ecology before trying to unite the world in the purview of “paradigm X”.
This is a guest post by Neha Madhusoodanan, a student at Tufts University.