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Thursday, October 16, 2003

Welcome to Reuben

As you will see the team at IEW is growing. Today I would like to welcome Reuben Abraham on board. Perhaps the best introduction to Reuben I can offer are his comments on some points I made to him in a mail. Basically we were talking about why it is that India is so strong in IT and China is so strong in manufacturing. This, I think, is going to be one of the key areas of investigation and research her at IEW. My hunch is that there is something deep in Indian culture that is being expressed here. But perhaps at this stage, if I said more I would only reveal my own ignorance. So I'll let Reuben reply:

You talk about wondering about Indian affinity to IT. Let me introduce you to some more of my theories.

If you look at Indian and Chinese contributions to the world, you'll see one big difference -- The Chinese have always made tangible contributions (gunpowder, rocketry etc) whereas the Indians have always made intangible contributions, be it the zero, base 10 maths and so on. And this pattern sort-of holds at a general level right across the centuries. If you were to extend this argument into the current scenario, is it any surprise then that the Chinese have been extraordinarily competent in manufacturing and hardware while the Indians have been fantastic is services and software. Of course, if Indian manufacturing starts to explode, I am proven wrong.

But, I suspect Indians will never be able to compete globally (except for niches) with the Chinese in manufacturing, though the domestic markets will sustain the manufacturing sector.

You have always talked about demography and you touch upon it briefly here as well. One thing most long run projections, including the BRIC projections seem to ignore is that India will overtake China in terms of population in about 25-35 years. Does that also mean the Indian economy will eventually grow to be larger than the Chinese economy? I dont know the answer, but I have seldom heard this question being asked.

Secondly, if one were to look at the influence that an economy wields over the world -- the way the U.S. does today -- I suspect that the Indian economy might actually wield greater influence for one reason soft power. The Chinese have nothing in the same ballpark as the Indians when it comes to wielding soft power.

Well, those are my theories du jour.

Well, if these are only Reuben's theories of the day, and there are as we say here in Catalonia 'more days than sausages', then I guess we're in for an interesting ride. Rajesh, who never seems to be far away when these debates are going on, immediately came across with an interesting link:

Chetan Parikh: On behalf of Capitalideasonline and Oxford Bookstore I would like to welcome all of you to a talk on "Economic Development in China and East Asia -- Lessons for India". This is to be given by the distinguished speaker, who has taken time out to be with us -- Professor Leslie Young.

Professor Young: Next thing I want to talk about which has an impact on modern governance is the religion, the philosophy and we can trace the differences -- I am sure you have some deep knowledge of Indian religion and philosophy and you have some knowledge that China is very different. And I say firstly that we can understand this difference and we ought to look at its impact on modern China.

First of all it seems to me that what happened in India was that you had a 1000 years in which you had a period of old culture -- the Vedic period in which you developed a certain kind of philosophy which was -basically it said that there was inside your self was the whole universe. So this was a deep philosophy which then had to deal with another issue which arose when you started writing and writing kind of separates you from the world.. And so you had a tension between two philosophies.

I mention this because in the very long term had an impact on China and on Japan.
But by contrast in China what you had is the following. You had a different writing system, which was a pictorial and videographic writing system that mixed up pictures with abstract symbols and therefore Chinese philosophy developed in quite a different path. What it did was to view the world not in transcendental terms, that is in terms of there is some abstract world up there and there is a real world down here, but the Chinese view is that the real world is all that there is but it has an internal structure and this view of the world meant that on one hand you had Taoism which was looking for the structure of the world and this inside the world itself not above it and this led to ideas like free markets, spontaneous order of society. The view was that society orders itself. It wasn't a God given order -- it was a society that ordered itself. This is the first viewpoint.

The second point was Confucianism, which basically took the family as a metaphor for government. So it used -- the metaphor for politics was an extended family you might say.

And the last thing, the least positive aspect of it is something that you probably even haven't heard of, called legalism. Which was a very tough minded ruthless philosophy of control. That a large state was held together by very tight government and these three philosophies kind of supported each other. The legalism was too tough and the first empire that tried it, the Qin empire, which gave China its name lasted only two emperors, then got kicked out. It was too harsh an area and then the next dynasty, the Han dynasty learned from that and installed Confucianism to come and soften it. To impose obligations on the rulers, to make the emperor, the father of the people to soften harshness of legalism.

And the third that point is that Taoism then lead to the notion that the classic experiment is you should rule an empire like you cook a small fish. That is you leave at alone. You leave it alone. So the notion was that the administrators, the rulers of China should really let the market work and stand back. So this I emphasize is an idea that originated in China and one can find in Chinese history and text that spoke the idea of invisible hand 2000 years ago.

So these three things if you see complemented each other. The notion of a tough harsh government, top down government, nevertheless which took responsibility for the people -- and took responsibility, but left them alone as much as possible. So these three things balanced each other..............

One another thing -- this shows Chinese leadership were strangely enough, you must think of them as liberal arts graduates, they specialized in the essay writing, in poetry, in calligraphy -- these were the rulers of China. However this was balanced by the duty -- the books that they studied were the Confucian classics and they imposed on the social leaders, the elite, the duty to look after everyone else. And this meant -- and this is something that I noticed when I come to India that it seems to me that the elite of India don't feel the duty to provide practical leadership. They have the duty to provide theoretical leadership but not practical leadership. I will give you an example.
In the campus of the Indian School of Business there are lots of women who sweep the streets, sweep the roads, sweep the paths and they have a little broom made of twigs and the broom is this long. And they spend their lives sweeping the path. Now why can't somebody tell them to put a stick in the middle and then they could stand up and sweep the path. Then their lives will be transformed if only somebody would take the trouble to do that. Once you put the stick in the middle -- you can find a stick anywhere -- right? And this to me is amazing.

Now contrast that with the invention that you know about. The Chinese -- it was the Chinese who invented the wheelbarrow. I don't see wheelbarrows in India. People carry baskets of dirt on their heads. So this is - now anyone in this room is capable of inventing a wheelbarrow -- there is no question of that -- right? But no one has done it for these guys moving dirt around.

So that's what I mean by a duty to provide practical leadership which seems to me that the leaders in India provide intellectual, philosophical, religious, something leadership but they don't feel the duty to provide practical leadership.

And there are whole provinces in China that were made fertile because some engineer came and designed an irrigation system and he was a scholar. He started out as a scholar but being put in charge of a province he said why don't I fix this problem. So this is I think one of these historical traditions that are very important for explaining, for understanding what's happening in China today.
Source: Economic Development in China - Lessons for India, Lecture by Professor Lesie Young

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