The Speech
As the congratulatory messages poured on for his third successive Lok Sabha win, the decade-old Indian Prime Minister was living through the past. He knew the one big action item that lay ahead; this would require all his legendary persuasion skills. Even as he prepared the speech that would make his work over the past two terms almost irreversible by any future government, his mind went back to a similar defining moment almost exactly ten years ago.
Shortly after his return from Singapore after meeting Lee Kuan Yew, he had convened a meeting of a few economists from all over the world to dig deeper into the question he had often wondered: Why had some nations become rich even as India stayed India poor? Only after a deeper understanding of the past could he work through the roadmap for the future. He needed to get the basics right. The handpicked economists walked him through the history of the divergence in wealth creation across the world over the past two centuries. The Industrial Revolution that had begun in Great Britain even as their East India Company set about conquering nations began to change some and then many lives. The theoretical foundations were laid with Adam Smith’s book “The Wealth of Nations” which was published in 1776. The practical implementation happened in a newly independent America with its Constitution in 1789. From an understanding of these developments in the late 18th century through to the works of economists and philosophers like Hayek, Buchanan, Friedman and Nozick, the mental models of freedom and prosperity started getting formed.
So it was that on an evening in early June 2014, he made his famous address to the people of India. He traced the economic history of the past 250 years in India – how the British Raj had impoverished Indians, and sadly, how successive Indian governments after Independence had kept the same rules for exploitation and extraction in place. The result was that even as the skin colour of the rulers changed, outcomes did not – because Indians were still not free. He explained how the development of nations depended on the extent and nature of the freedoms that people have. Cultural, social and economic development required individual, civic and economic freedoms.
He contrasted India with China. Just 35 years ago, both countries were equally poor. But now, the average Chinese earns five times as much as the average Indian. For every extremely poor person in China, there are around 200 extremely poor Indians. How did that happen? How did China do that, and why is India not as successful in eradicating poverty? He answered: China succeeded because the Chinese gained economic freedom. India’s failure is because Indians don’t have economic freedom. And that is what he was going to do: make Indians free and rich.
