No More Animal Spirits, Please !

Any more infusion of animal spirits into our economy will  result in even more squirreling away of the national wealth in Antigua and the Cayman Islands, and wildebeest type of migrations of our uber rich to greener pastures abroad

The joke goes something like this: A physicist, a NASA scientist and a World Bank economist are sitting in a bar discussing their respective contributions to the discovery of the Universe. The NASA guy boasts that they were the ones who  made space travel and discovery of planets possible. The physicist claims that NASA’s work would not have been possible if physics had not revealed the science behind the creation of a universe out of the cosmic chaos. The economist remains silent.

“What about you guys,” asks the NASA man, ” what is the contribution of economics to the universe?”

The World Bank economist smiles: “Who do you think created the chaos?” he asks.

The Chaos (Hill Post Graphic)

We in India can vouch for the fact that no truer word was ever said, the confused economic goulash dished out  since 1947 is ample proof of that, and the last five years leave no doubts whatsoever. Our economists, both the home grown variety and the imported IMF/ World Bank types, have tried out every known theory and school of economics on us: classical, neo-classical, Marxian, Market economics, Chartalism, Behavioural economics, New Keynesian, Post Keynesian, even Modinomics ( which is more a political doctrine than an economic one, for it ensures that the BJP keeps winning elections even as the country goes to the dogs). We have been lectured to ad- nauseam by the desi economists of National Advisory Council fame and by the international eminences taking a toilet break in India on their way from Geneva or Davos to Harvard or Berkeley. But nothing seems to have worked: we still have more than 200 million people below the poverty line, 40% of our children are stunted from lack of nutrition, 13000 farmers commit suicide every year, we are amongst the most inequitable countries in the world, endemic unemployment continues to haunt our youth, and now we can no longer even rely on our economic statistics or budget figures! It is, therefore, no surprise that our newly minted Chief Economic Advisor has now offered us the latest nostrum: Animal Spirits. What India needs, he has declared, is an infusion of Animal Spirits into our economy and society!

This advice from the Animal Farm school of economics may not surprise us, but it is certainly a cause for alarm. For if there is one thing India has a  surplus of these days it is animal spirits. Its earlier version had resulted in Mr. Somnath Bharti’s dog being interrogated in a Delhi police station, the Jallikattu bull being elevated to the status of a Holy Cow in Tamil Nadu, and an Interpol Look-Out notice being issued for Mr. Azham Khan’s missing buffaloes in UP. In more recent times this unholy ardor has resulted in the mob lynching of dozens of people, the rapes of more than 30000 women every year, the culling of alleged criminals by gung-ho cops in choreographed encounters, the transformation of Parliament into a latter day Colosseum, the conversion of state Assemblies into fish markets where regular auctions are held for newly arrived minnows, and similar activities more suited to a jungle than a civilised society. Any more infusion of animal spirits into our economy will, to carry the analogy further,  result in even more squirreling away of the national wealth in Antigua and the Cayman Islands, and wildebeest type of migrations of our uber rich to greener pastures abroad. No, sir, we don’t need more of animal spirits; what we could do with instead is a touch of the human spirit, something which both our economists and politicians have forgotten about.

Perhaps the Chief Minister of Himachal Pradesh, Mr. Jai Ram Thakur, has got it right: he has ignored the animal bit and concentrated on the pure spirit part. Spirits- the 80 degree proof type- is the new vehicle for Himachal’s development: he has imposed two cesses on all liquor sold in the state- one to fund ” gaushalas” or cattle shelters, and the other to fund a new Film Policy. In addition, every vend and bar now has to sell a minimum quantity of liquor or face stiff penalties! This is Himachal’s spirited version of Minimum Income Guarantee or Minimum Support Price. Liquor is the new milch cow of the state- how’s this for combining economics and gau raksha? It may be time to appoint Baba Ramdev as our Chief Economic Advisor.

Avay Shukla retired from the Indian Administrative Service in December 2010. He is a keen environmentalist and loves the mountains. He divides his time between Delhi and his cottage in a small village above Shimla. He used to play golf at one time but has now run out of balls. He blogs at http://avayshukla.blogspot.in/

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