Abhijit Banerjee In Conversation With Rahul Gandhi: The Sophist And The Sophisticate Repackage Socialist Snake Oil

by Venu Gopal Narayanan - May 5, 2020 04:06 PM +05:30 IST
Abhijit Banerjee In Conversation With Rahul Gandhi: The Sophist And The Sophisticate Repackage Socialist Snake OilAbhijit Banerjee and Rahul Gandhi
  • The Congress has done it again. And done itself in again too.

    By organising a meeting of minds — never mind their polarity — to ensure their prince and PM-in-waiting comes off as ‘intellectual’, they have actually turned a ‘Gandhian’ into an ‘ultracrepidarian’.

Last week, India was gifted some much-needed enlightenment, when Congress leader Rahul Gandhi engaged America-based economist, Raghuram Rajan, in a marvellous, free-wheeling interaction of astrally-cerebral proportions.

The Congress scion’s latest image-rebuilding exercise included a stunning revelation by Rajan – that the ongoing Wuhan Virus pandemic was an unprecedented crisis.

Even as an India under lockdown grappled with that shocking disclosure, and tried to figure out why no one had told Modi that a pandemic was also a crisis, there arrived part two of the public relations effort – Mr. Gandhi in conversation with none other than the distinguished American, Nobel Prize-winning economist, Abhijit Banerjee. This one was even more cerebral.

It began with the usual, mandatory fawning, to establish both the worth of a Nobel Prize, and the humility of its recipient.

Once done, Gandhi defined the dialogue’s frames of reference: since the current dispensation appeared to have junked his mother’s pet poverty alleviation schemes like MNREGA and others, how might one prevent these policy deficiencies from pushing millions of ‘the poor people’ back into poverty, amidst the economic devastation of the pandemic?

The Nobel laureate had his answer ready. Echoing his interlocutor, Banerjee said the problem was that the central government wasn’t using the Congress’s garibi-hatao tools enough. They needed to do more; much more.

So, in one stroke, it was established that the Centre’s inability to deal with the economic consequences of a health crisis (first identified as unprecedented by Rajan, mind you), stemmed from its refusal to replicate proven Congress poverty-alleviation tools in even greater measure.

In effect, the Union government needed to be more Congressi than the Congress, if India was to survive.

And what exactly was this still-undefined panacea which Modi was supposed to serve to ‘the poor people’?

Simple answer: cash handouts. That was it. For everything else, Banerjee said in the half-hour long discussion, this was the crux: the nation’s pandemic-inflicted economic miseries could be remedied by gifting money to people, who would then raise demand and effect a recovery stimulus by purchasing goods.

But not once were either the specifics, or the financial viability, of the solution discussed.

There was nothing on how much money was to be given to each individual, whether the nation could afford it, and how the treasury’s finances would have to be recast to meet this gargantuan outlay.

It is difficult to establish what is worse – that Banerjee said what he did, or that he meant what he said.

Because, here was an award winning economist singing the praises of massive, unregulated cash handouts — precisely the sort of voodoo economics which makes unaffordable welfare socialism the bane of the modern world.

Such advice actually reminds us of singer-songwriter Neil Young’s prophetic words, about a ‘kinder, gentler, machine-gun hand’; a poetically imaginative way of describing a non sequitur, or a contradiction.

But Banerjee, apparently oblivious to such implications, proceeded to offer more advice. Extending his remit, the American economist said that the cash dole had to be supplemented by free rations.

A time of crisis was not a time for proving identities, so at least 60 per cent of the population had to be issued temporary ration cards as well.

There was also a meandering aside about how only decentralization would work in this crisis, which was promptly and unwittingly self-contradicted by a view, that the migrant worker issue needed exactly the opposite.

It was a surreal spectacle, watching a senior politician and a distinguished economist speak as if direct benefit transfers using Aadhar and Jan Dhan accounts, and the distribution of emergency rations, weren’t happening in the country presently.

But that’s also when Banerjee appeared to wake out of his reverie, perhaps realizing that sticking to the script beyond a point might take the sheen off old Alfred Nobel’s gift.

On cue appeared the interjectory stutter, and the man with all the solutions to India’s problems, began to lather himself in caveats: er, yes, well, when he said cash handouts, he didn’t of course, naturally, mean to set a time frame, because, er, such unrestricted infusions might have some inflationary consequences.

Then what was he saying? That you had to issue cash handouts, but on second thoughts not, because that could drive prices through the ceiling; and not now, but soon, because doing it now might trigger inflation?

In which case, what were ‘the poor people’ supposed to do? Wait for that undefined point in the future when rapid infusions of money would fall into their laps without causing inflation?

Was there even such a future point of time, when the laws of demand and supply would temporarily pause, while Banerjee’s marvelous dreams were fulfilled by an indulgent Congress?

How soon was soon? And what would happen to ‘the poor people’s’ miseries in the interim?

This is precisely the sort of inchoate waffling which got the Congress booted out of office in the first place.

But to Banerjee, it was just another question posed by a Prime Minister-in-waiting. All he had to do was sound intelligent, and make Mr. Gandhi appear the same via some reflected glory, exactly as they had tried with the Nyay scheme during the 2019 general elections.

Ground realities really didn’t matter.

In fact, readers would recollect that the inherent vacuity of Nyay was proved over a year ago, when the idea was hooted out of the room.

So much so, that Banerjee actually had to try and dissociate himself from the scheme when he was awarded the Nobel Prize.

He failed, and as a result, ended up not being feted by the public as much as Nobel Prize winners of Indian origin usually are.

People had woken up, and the stigma of Nyay could not be removed.

That is why, although the Gandhi-Banerjee dialogue was ostensibly structured as an assessment of the pandemic’s economic implications upon India, these multi-faceted efforts have to be seen for what they actually are: the perpetual grooming of a forever-young prince for a flighty crown, a fresh stick to beat the government with, and above everything else, further political approval of Snake Oil Socialism.

Last week it was Raghuram Rajan. This week it is Abhijit Banerjee. Next week it could be Thomas Piketty. It’s the new social contract, where everyone is indigent unless otherwise proved, and proof is always in bad taste; an indenture, in which Neo-Marxist notions of income inequality redressal are elegantly repackaged, by the sophist and the sophisticate, in the urbane, ethnic chic of progressive politics; and economics and the epidemic be damned.

India beware.

Venu Gopal Narayanan is an independent upstream petroleum consultant who focuses on energy, geopolitics, current affairs and electoral arithmetic. He tweets at @ideorogue.
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