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India: Changing Identities

When India got its independence from Britain 70 years ago this week, it was founded as a secular democracy – secular because it acknowledged the status and rights of Muslims, Sikhs, Christians and other religious minorities as equal to those of the Hindu majority. Mahatma Gandhi, the great hero of the independence movement, was a devout Hindu, but he was murdered by a Hindu fanatic for defending Muslim rights after Partition.

It was one of the most fortunate assassinations in history, because Hindu radicals had been using Pakistan’s declaration that it was a “Muslim state” to demand that India be declared a “Hindu state”. After Gandhi’s murder, Jawaharlal Nehru, the country’s first prime minister, was able to round up tens of thousands of Hindu extremists and exploit popular reverence for Gandhi to nail down India’s identity as a secular state.

India is still a democracy, but a portrait of one of the men who conspired to assassinate Gandhi now hangs in India’s parliament. The prime minister, Narendra Modi, leads the BJP (Indian People’s Party), which was created as the political wing of the RSS (National Volunteer Organsation), a Hindu supremacist paramilitary organisation. And secular is now spelled “sickular” by the Hindutva trolls on Twitter.

Hindutva is Hindu exceptionalism of the kind that gives rise to the trope that “to be Hindu is to constantly take offence.” It sees India as a “wounded civilisation” because it has spent most of the past thousand years under the rule of various foreign invaders (hardly a unique experience), and proposes to remedy that with a highly simplified, almost kitch version of politicised Hinduism.

It’s just another brand of populism, in other words, but its chief Indian proponent, Narendra Modi, must deal with far deeper divisions in society than his American counterpart, Donald Trump. He is a much more disciplined man, however, and he does not waste his time in tweeting insults and picking fights with random people.

Modi is relentlessly focussed on economic growth, and in particular on raising the living standards of the lower-middle-class Indians who are his strongest supporters. But to get and keep the parliamentary majority that would let him carry out his programme he must appeal to a broader audience.

For more than half a century India got along with the secular principle that religion is a private matter, but Modi supported a national ban on cow slaughter (many states already banned it) when he took office. More recently he banned the slaughter of buffalo as well. So it’s hardly surprising that “cow protection” vigilantes have been attacking people suspected of trading in beef; half a dozen have been beaten to death in the past couple of years.

Modi supports the ban because high-caste Hindus (the group from which the BJP draws most of its support) believe that cows are sacred and must not be eaten. However, lower-caste Hindus, the so-called Dalits (untouchables), do eat beef, and they make up about a quarter of India’s voting population. This poses a serious political problem for the BJP.

Muslims, who dominate the beef and leather trades, make up another 14 percent of the voters, but Modi doesn’t worry about losing their votes because they were never going to vote for the BJP anyway. He cares very much about the Dalit vote, because they are the key to making the BJP the natural party of government.

Modi won a landslide majority in 2014 in the Lok Sabha (the lower house of parliament), but he did it on only 31 percent of the popular vote. The first-past-the-post system regularly delivers such lopsided results. But the Rajya Sabha (upper house or senate) is elected by the state legislatures, where Dalits are often quite prominent politically. The BJP will never get a majority in the senate without Dalit support.

So Modi walks a tightrope on the issue of sacred cows, promoting their protection to appeal to his upper-caste voters, while weakly condemning the murder of butchers and leather workers by “cow protection” vigilantes (who are backed by the RSS, the BJP’s parent organisation).

Indeed, Modi’s whole take on Hinduism is quite ambivalent. Two years ago, for example, talking about health care in India, he got off track and started talking about the elephant-headed god Ganesha: “We worship Lord Ganesha. There must have been some plastic surgeon at that time who got an elephant’s head on the body of a human being and began the practice of plastic surgery.”

It is certainly not Hindu orthodoxy to suggest that Ganesha was a chimera created by ancient plastic surgeons. On the other hand, the idea that India led the world in plastic surgery a few thousand years ago will appeal to the more naive Indian nationalists. It’s a bizarre mixture of ideas, but not untypical in populist politics.

The bottom line, alas, is that the “sickular libtards” are in retreat, the religious minorities are being marginalised, and the people who define India as a “Hindu country” are in charge. It’s too early to say that this is an irreversible change, but it’s a radical departure from the country’s founding values. It’s still a democracy, but it’s starting to look a lot more like Pakistan.
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To shorten to 725 words, omit paragraphs 12 and 13. (“Indeed…politics”)

Coal is Dead

“My administration is putting an end to the war on coal,” said Donald Trump, surrounded by the usual gaggle of officials and (in this case) coal-miners, as he put his super-size signature on the Energy Independence Executive Order. But coal is dying as a major energy source in the United States for reasons far beyond the reach of executive orders.

“The miners are coming back,” Trump boasted at a rally in Kentucky last week, but no less an authority than Robert Murray, founder and CEO of Murray Energy, the biggest US coal company, promptly rained on his parade. “I suggested that (Trump) temper his expectations,” he said. “He can’t bring them back.”

Trump’s latest executive order is not just about coal, of course. It’s a frontal assault on all the Obama-era regulations that aimed at curbing climate change. But while it will slow the decline in US greenhouse gas emissions, it will not have a major impact on global emissions.

That is partly because US accounts for only 16 percent of global emissions. Compared to China’s 29 percent, it doesn’t matter all that much, and China remains committed to big cuts.

In January China scrapped plans for 104 new coal-fired power plants, and it intends to invest $361 billion (equal to half the US defence budget) in renewable energy between now and 2020. The Chinese government is spending that kind of money because it is rightly terrified about what global warming will do to China’s economy and above all to its food supply.

Like the Indians, the Europeans, and pretty much everybody else, the Chinese remain committed to the climate goals agreed at Paris in December 2015 even though the United States has defected. Their own futures depend on meeting those goals – and they know that the American defection does not destroy all hope of success. Globally speaking, it’s not that big a deal.

It would seem like a much bigger deal, however, if they were not confident that American greenhouse gas emissions will continue to decline under Trump, though not as fast as they would under a less ignorant and less compromised administration. Coal provides an excellent example of why.

In 2009, when Barack Obama entered the White House, coal provided 52 percent of US electricity. In only eight years it has fallen to 33 percent, and the decline has little to do with Obama’s Clean Power Plan. First cheap gas from fracking undercut the coal price, and then even solar power got cheaper than coal – so 411 coal-fired plants closed down, and more than fifty coal-mining companies went bankrupt.

Half the 765 remaining big coal-fired plants in the United States were built before 1972. Since the average age when American coal-fired plants are scrapped is 58 years, half of them will soon be gone no matter what Trump does, and even he cannot make it economically attractive to build new ones. (Only 9 percent of American coal-fired plants were built in the past quarter-century.)

Coal is by far the most polluting of the fossil fuels, producing twice as much carbon dioxide as gas does for the same amount of energy, but that alone wasn’t enough to turn the energy industry against it. It’s the cost per per kilowatt-hour of electricity that matters, and coal has simply been overtaken by cheaper forms of energy.

Even in India, the most heavily coal-dependent of the big economies and a country with vast amounts of coal, solar energy prices are now on a par with coal. Sheer inertia means that India will go on expanding coal-fired generation for a few more years, but its National Electricity Plan projects no further increase in coal-based capacity after 2022. King Coal truly is dead.

You don’t need good intentions to do the right thing for climate safety any more; just common sense. From fuel efficiency in automobiles to replacing coal-fired plants with natural gas or solar arrays, saving money goes hand-in-hand with cutting emissions. The economy is not your enemy; it’s your ally. So Trump won’t do nearly as much harm as people feared.

President Obama promised last year to cut US greenhouse gas emissions by about 26 per cent from the 2005 level by 2025. About half of that 26 percent cut would have come in Trump’s first and maybe only term (2017-20), so say 13 percent. The US accounts for 16 percent of global emissions, so do the math: 13 percent of 16 percent equals about 2 percent of global emissions.

That’s what would be at stake over the next four years if Trump’s presidency stopped all the anticipated reductions in greenhouse emissions that Obama based his promise on – but it won’t. A lot of those emission cuts are going to happen anyway, because they just make economic sense. At a guess, around half of them.

So how much damage can Trump do to the global fight against climate change over the next four years? He can keep global emissions about one percent higher than they would have been if the United States had kept its promise to the Paris conference. And that’s all.
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To shorten to 725 words, omit paragraphs 10 and 11. (“Coal…dead”)

Davos: The Rich Are Worried

“I can’t wait to see how the incoming administration deals with AI (artificial intelligence),” said US Secretary of State John Kerry, in a less-than-gracious reference to the fact that the Trump team hasn’t got a clue about the real driving force in the changing world economy.

What was striking was that Kerry didn’t have to clarify his remark for the 2,000 “global leaders” – politicians, bureaucrats, business representatives and public intellectuals – who are in the Swiss alpine town of Davos for the annual World Economic Forum (WEF). They all know what he’s talking about.

This year’s Davos gathering is actually focused on the rise of populism and simple-minded attacks on globalisation (Donald Trump, Brexit et al.). That’s only to be expected, since the world’s ultra-rich are potentially threatened by that sort of thing. But they didn’t get rich by being stupid, and they have a fairly sophisticated analysis of what’s causing it.

The headline event on the first day of Davos was an hour-long speech by China’s President Xi Jinping in which he laid claim to the leadership role on free trade, globalisation and the struggle to contain climate change that is being abandoned by the United States under Trump. His main concern was to fight the rise of protectionism: “No one will emerge as a winner in a trade war,” he said.

But Xi didn’t go into the sources of the anger that fuels the populist revolt (for China is not a democratic country, and it hasn’t happened there yet). John Kerry did get into it, and he went well beyond the usual platitudes about rising unemployment and under-employment, stagnating wages, and the widening gulf between the rich and the rest. “Trade is not to blame for job losses,” he said. Automation is.

Quite a few American manufacturing jobs did go abroad in the early stages of globalisation, in the 1980s and 1990s, but that’s old news. Eighty-five percent of the almost 6 million American manufacturing jobs that disappeared between 2000 and 2010 did not go anywhere; they just evaporated. The workers were replaced by tireless, uncomplaining machines that could do their jobs more cheaply.

Although Kerry did not mention it, the same thing is now happening in China: relatively cheap Chinese labour is still more expensive than the automation that replaces it. Even in India, where wages are lower still, there is now talk of “premature deindustrialisation”.

It’s a misleading phrase, because it suggests that India will never become fully industrialised. It probably will – but perhaps without ever creating a huge industrial working class with reasonably good and steady wages. Further industrial growth is likely to come mainly through automation, and employment in manufacturing may be peaking right now.

So Donald Trump is barking up the wrong tree, as are the other populists emerging all across Europe, and their emulators who are beginning to appear in the developing world. Why do they all persist in blaming free trade and globalisation instead of automation? Because you can’t do anything about automation.

It’s like the old story about the man looking for his car-keys under the street-light. “Where did you lose them?” “Over there.” “Then why are you looking for them here?” “The light’s better here.”

If you are a politician, then it’s better to blame globalisation because you can do something about that. You can build walls, impose tariffs, make all sorts of impressive gestures to stop the free trade that is allegedly destroying the good jobs. Or more precisely, you can win political power by claiming that you will do those things and thereby solve the problem.

Whereas nobody will believe you if you say that automation is what is really changing the economy, and so you are going to stop the automation. That’s Luddism, and everybody (or at least, everybody at Davos) knows that that doesn’t work. So the rich and the powerful are way out ahead of the pack in accepting that growing automation really is going to destroy large numbers of jobs.

A recent Citibank research note forecasts that automation will eliminate 57 percent of all existing jobs in the developed countries within the next 20 years. In China, 77 percent of manufacturing jobs are at risk over the same period. And the notion that the economy will create other, better jobs to replace them is just a comforting myth. Most of the new jobs that are being created are MacJobs.

If more than half the workforce ends up unemployed – and therefore humiliated and broke – then their anger will be so great that it could sweep away the comfortable world of the ultra-rich. Which is why there are sessions at Davos this year considering radical ideas like a “Universal Basic Income”.

To stop the populism, first you have to deal with the anger.
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To shorten to 725 words, omit paragraphs 8 and 10. (“It’s…now”; and “It’s…here”)

2016 Year-Ender

The main message of 2016 was that we are entering a period of economic and political upheaval comparable to the industrial revolution of 1780-1850, and nothing expressed that message more clearly than Donald Trump’s appointment of Andrew Puzder as Secretary of Labour. Even though it’s clear that neither man understands the message.

Puzder bears a large part of the responsibility for fulfilling Trump’s election promise to “bring back” America’s lost industrial jobs: seven million in the past 35 years. That’s what created the Rust Belt and the popular anger that put Trump in power. But Puzder is a fast-food magnate who got rich by shrinking his costs, and he has never met a computer he didn’t like.

“They’re always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age-, sex-, or race-discrimination case,” he rhapsodised. They also never take lunch or toilet breaks, they’ll work 24 hours a day, and they don’t have to be paid. So out with the workers and in with the robots.

It was not evil foreigners who “stole” most of those seven million American jobs, and will probably eliminate up to 50 million more in the next 20 years. It’s the ‘intelligent machines’ that did most of the damage, starting with simple assembly-line robots and ATMs. (”Every Automated Teller Machine contains the ghosts of three bank tellers.”)

But the automation keeps moving up the skill sets. The first self-driving cars are now on the road in the United States. That’s another four million jobs down the drain, starting with taxi drivers and long-distance truckers. In recent years eight American manufacturing jobs have been lost to automation for every one lost to “globalisation”, and it will only get worse.

A 2013 study concluded that 47 percent of existing jobs in the United States are vulnerable to automation in the next 20 years, and the numbers are as bad or worse for the other developed countries. This is what is really driving the “populist revolution” that caused two of the world’s oldest democracies to make bizarre, self-harming political choices in the past year. First Brexit, then Trump.

Leaving the European Union will hurt Britain’s economy badly, and putting a man like Donald Trump in the US presidency is a serious mistake. Yet half the voters in each country were so angry that they didn’t care about the likely negative consequences of their vote.

There is more to come. Beppe Grillo’s populist Five-Star Movement may win the next election in Italy. Marine Le Pen’s National Front (no longer openly anti-Semitic, but still basically neo-fascist) could win the French presidential election next spring. The Netherlands and Germany may see hard-right, anti-immigrant parties in governing coalitions after their forthcoming elections.

Some people fear that we are seeing a re-run of the 1930s. Economic growth has slowed since the crash of 2008, and unemployment is much higher than it looks. The official US unemployment figure is only 5 percent, but almost one-third of American men between the ages of 25 and 54 are “economically inactive”. So angry populist leaders are popping up again all across the developed world.

The ‘Dirty Thirties’ ended in the Second World War, and there are obvious parallels today. The European Union is fraying at the edges, and Donald Trump has talked about curtailing US support for NATO. He has also threatened to slap huge tariffs on Chinese exports to the US, and it’s probably a bad idea to push China too hard when it is already in grave economic trouble.

But this is not the 1930s. There are no ranting dictators promising revenge for lost wars, and government benefits mean that unemployment is no longer a catastrophe for most people in Western countries. The old white working class (and some of the middle class) are angry because jobs are disappearing and because immigration is changing the ethnic balance in their countries, but they are not angry enough to want a war.

Trump’s election means that we are in for a wild ride in the next four years, but he will ultimately disappoint his supporters because he is barking up the wrong tree. He cannot bring back the jobs that were lost, because most of them were not lost to his favourite culprits: free trade and uncontrolled immigration.

Even if Trump understood this, he could not admit it in public, because there is nothing he can do about it. He might ban immigrants coming in to “steal American jobs”, and he can tear up free-trade deals to his heart’s content, but his own cabinet contains people who have built their careers on eliminating jobs through automation.

This is change on the scale of the (first) industrial revolution, and you can’t fight it. But then, you really don’t need to. American industry has shed seven million jobs since 1979, but the value of US factory production has more than doubled (in constant dollars). It is only jobs that are being destroyed, not wealth.

It is not a disaster for a rich society to reach a point where the same goods are being produced and the same services are being provided, but most people no longer have to work 40 or 50 hours a week (in jobs that most of them hate). Or rather, it’s not a disaster UNLESS HAVING NO WORK MEANS HAVING NO MONEY OR SELF-RESPECT.

The main political task for the next generation (post-Trump) in the developed countries will be to ensure that those without work have an income they can live on, and don’t lose their self-respect. Other ways will doubtless be suggested, but one way of achieving this that is already getting attention is a Universal Basic Income (UBI).

The UBI would provide everybody with enough to live on. Since everybody got it, there would be no stigma involved in living on it. And 53 percent of today’s jobs will still be there in 2033, so those who really wanted to work could top up their UBI with earned income. There would still be millionaires.

The first national referendum on UBI was held in Switzerland last June. It was a radical new idea, so of course it was overwhelmingly rejected. But this idea will not go away, and there will be more like it. The rich countries can stay rich and stable if they understand the nature of the task – but the developing countries may face a grim future.

No UBI for them — they are not rich enough, not even China. But automation is eating into their newly gained industrial jobs too. A recent Citibank report estimated that 77 percent of Chinese jobs are at risk from automation, and in India there is talk of “premature deindustrialisation” (i.e. industrial jobs in India may be peaking right now, and will then go into decline).

That would not just mean continuing poverty for many, but huge political turmoil – populist revolutions and super-Trumps. The future (including the near future) will be quite interesting.
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This article is longer than usual at 1175 words. To shorten to 850 words, omit paragraphs 7-11. (“Leaving…a war”)

To shorten further to 725 words, omit also paragraphs 5 and 13. (“But…worse”; and “Even if…automation”)