February 1, 2016
The way Donald Trump wants to see the world matches the model of driving in India. Somehow there are codes of individual self-discipline in a system with no obvious collective rules. This is what Trump and ideological right wingers all over the world yearn for. They want an economic system where there is no state control but where individual humans acting in their own interest will thrive. This is the cornerstone of Adam Smith’s 18th-century writings. Driving in India is a prime example of Adam’s Smith’s “invisible hand” at work.
Here in Jaipur, people drive dementedly, often on the wrong side of the road, in tiny, packed streets where cows amble between tuk tuks, buses, trucks, cars and millions of pedestrians. Together with hawkers of all sorts, lads waiting for a “start”, camels and elephants – the whole road is in competition for a spare few centimetres of space. It is pandemonium. With virtually no traffic lights, it isn’t easy for a pedestrian to cross the road. And yet, in this total chaos, in a deafening din of horns hooting, trucks revving and rickshaw drivers roaring, there are few accidents.
Inexplicably, the system works.
Somehow at the very last millisecond, the oncoming bus, whose driver might be texting and smoking, swerves left and you are safe before the next car hurtles headlong towards your bonnet.
My tuk tuk driver, the exotically and implausibly named Sheik Musharraf, is unfazed, weaving his way this way and that, chirping away, pointing out a monkey here or a temple there. Only collective telepathy is keeping us safe.
Despite the melee, everyone is on the ball, watching out for the faintest signal of a sudden stop, an unexpected lurch leftwards or (as this is India) a lazy cow, prone in the middle of the road nonchalantly munching marigolds. No one wants to hit a cow here, believe me. That’s serious trouble.
Few drivers are insured – and maybe that’s the reason for everyone’s excessive alertness. If you do prang anything, no third party is paying the bill!
It works because everyone trusts everyone else to look after his or her own property and life. Trust is crucial because if you trust each other, you don’t need rules: you just need self-interest. This is exactly what Adam Smith outlined in the Wealth of Nations.
So free-market libertarians – Donald Trump types – can point to a successful traffic model of luxuriantly free markets, with no rules, no government intervention, and where no one abides by obvious regulations.
What Trump is peddling to the US electorate could be termed the Jaipur Commuter Approach to Economics. Trump suggests that if the US can just get rid of the government and liberate the free spirits of commerce and entrepreneurial activity, America will be great again.
But here’s the thing: what might work for traffic doesn’t seem to work for the society at large. There is no absence of commerce and entrepreneurial activity here on the streets in India. In fact, the very opposite is the case. Everyone is flogging something. Indian streets are capitalism to the power of 10,000. Yet for all this self-interest and all this entrepreneurialism, people are terribly poor.
Here, where there is no safety net, people buy and sell what they can. The rule is simple. If you don’t succeed, you end up with the beggars. So how do we square the incessant commercial activity on the streets with the lack of any real upward social mobility? How can you have non-stop capitalism without wealth?
There are many possible explanations, but I want to focus on one: without proper institutions of state and the infrastructure of stability, commerce only staves off calamity rather than serving as a springboard to prosperity. Without a welfare state that allows people to stop worrying about survival tomorrow and gives them respite to plan for the future, people are simply on a daily treadmill with no end in sight. People have no savings and are living hand to mouth.
Savings give you the breathing space to stop worrying about the next few hours and perspective to plan a career. Savings allow you to postpone work, giving you the time to invest in your future. This is what happened in Ireland.
This has yet to happen in India, and it will take a long, long time. This absence of a solid welfare state is why you get the busy free market side by side with extreme poverty. Unlike the false narrative peddled by Trump and his mates, who claim poverty is the result of personal laziness, in India the people who work hardest, also seem to die youngest and poorest. Poverty has nothing to do with effort and everything to do with circumstance – as was the case in Europe in the 19th and early 20th century.
This may explain why the Indian middle class, although large in absolute numbers, is still tiny. The Indian middle class is estimated to be 70 million people; this might sound huge, but in a population of over 1.2 billion, it’s miniscule. While these middle class Indians might live in India, they are a race apart and are a bigger population than France. They speak English like us, are online all the time and they work in the international cosmopolitan world. They may watch Bollywood, but they read the Economist. They live in India but they compete in the West.
More than anything they want education, and particularly international education. They are obsessed with studying abroad and gaining academic qualifications outside India. Students here want to go abroad – and their parents, realising that international experience and connections are what middle class Indians lack, will pay for this.
Like South African Indians who have come in large numbers to study medicine at the College of Surgeons, these mobile middle class Indians constitute a huge opportunity for Ireland and Irish universities. Irish education has deep roots in India since the priests and nuns went there in the 1960s and 1970s. These connections are deep. They are already open to us.
This is the market we should compete in. The private education market is just beginning and it will become more and more valuable in the years ahead.
Other small English-speaking countries have opened themselves up with some significant success. One such country is New Zealand. It has had an ‘education as an export’ strategy in place since the 1990s. In 1998, less than 4 per cent of New Zealand students were foreign-born. In Ireland, that figure was 5 per cent.
In 2008, 24.4 per cent of New Zealand students were foreign-born, while in Ireland it was a trifling 7.2 per cent. In Australia, 25 per cent of students are foreign-born and the education export sector is valued at €8.9 billion, making it the third-largest exporting sector in the entire economy.
At the Amber Fort, site of the extraordinary learning of the Mughal Empire, I clamber out of the tuk tuk in one piece. It seems to me that educating India – or a tiny bit of it – is precisely the sort of sustainable export industry that Ireland should consider.