F Scott Fitzgerald is renowned for being the chronicler of America's 'Gilded Age'. That was the period between the First World War and the Depression, when American plutocracy came into its own, and unabashedly celebrated its arrival on the world stage replacing a smashed, disoriented Europe.
These musings are prompted by the intensity of Delhi's intellectual and social season this winter, still only at the half-way mark. India needs a writer of Fitzgerald's skill to capture India's current 'age of excess': the weddings, the parties, the celebration of private wealth that now visibly set the tone of public rhetoric.
While I cannot claim any expertise at covering the social calendar, the intellectual calendar too has been overflowing, with extended visits by Joseph Stiglitz, Amartya Sen, Sir Nicholas Stern, George Soros, Deepak Lal, Lord Meghnad Desai, and, most recently, Jagdish Bhagwati.
Delhi seems particularly spoiled by these intellectual riches. Visitors from Mumbai speak of much leaner pickings, despite the much greater wealth available there, and a much longer and more distinguished tradition of civic engagement.
Delhi, by contrast, has only over the last decade developed an ecosystem of economic chambers, think tanks, private foundations and government ministries, which are willing to host such distinguished visitors, and to provide them with a platform and an
audience.
In turn, given the celebrity status of these speakers, the Delhi-based business press has individually given them wide coverage. So it would be redundant for me to recount their individual presentations.
Instead, I would like to draw out certain themes that recurred through several of the presentations, and their potential implications for India. These themes included the now inevitable contrasts and comparisons between India and China; India's role in the management of the international economy; and the risks and rewards of rapid integration with the global financial system.
As intellectual fashions go, India-China has become the intellectual equivalent of Agatha Christie's The Mousetrap, or of Margaret Thatcher: it goes on and on. Yet each year brings a new nuance and a new twist.
This year there was a greater awareness of the vulnerability and fragility of the Chinese model, and, by contrast, greater appreciation of the inner political and financial robustness of the Indian path.
This was expressed perhaps most forcefully by Deepak Lal. At his presentation at the India International Centre he argued that the Chinese financial system was in an enormous mess, and that the huge valuations being put on Chinese banks by international investors represented the triumph of hope over experience.
The same point was also made by Nicholas Lardy of the Peterson Institute of International Economics in Washington D.C. at a seminar co-sponsored by the Asia Society India Centre and the NCAER.
But it was Lal's additional point that really caught my attention. He expressed considerable pessimism on the prospects of significant state reform in either China or India, each with its problems of corruption and state failure in delivery of public services. Yet he felt that the consequences of such failure were likely to be much less serious for
India than for China, because
of India's much more vibrant and tensile civil society tradition.
By contrast state failure in China is a much more serious matter. (Meghnad Desai has drawn a similar distinction between the importance of the state in India and China in a recent volume published by the International Monetary Fund.)
Global governance was a theme touched on by both Sir Nicholas Stern and Joseph Stiglitz in their different spheres of expertise. Sir Nicholas was here to present the results of the Stern Review on climate change, while Professor Stiglitz was presenting the arguments from his most recent book, 'Making Globalization Work'. Both scholars were urging India to play a more central role in the management of the global economy,
each for rather different reasons.
Stern accepted India's argument that the developed countries had generated the stock of greenhouse gases currently in the atmosphere, and bore the primary responsibility for adjustment. But both on grounds of pragmatic political economy and because India was likely to be severely affected by climate change, he urged that India play a constructive
role, together with China. Much Indian officialdom resists this advice, suspecting a trap designed to restrain India's rise.
Such instincts would have been further fanned by listening to Prof. Stiglitz's account of the hypocritical and unjust conduct of the Uruguay Round of trade negotiations, the hidden agendas of the OECD countries in the Doha Development Round, and the perverse flows of funds in the global financial system under the present rules of the game.
Prof. Stiglitz' solution to these asymmetries, both in his book and in his presentations, was not disengagement, but curing the "democracy deficit" in the institutions of global governance, particularly the International Monetary Fund, but presumably the World Bank as well.
Finally, both Stiglitz and George Soros spoke on the issue of capital account liberalisation. Their common view on the matter (also articulated by Jagdish Bhagwati in his writings) is that there are considerable risks and uncertain gains associated with "premature" liberalisation of the capital account, and that the burden of proof should be on the liberalisers rather than those wishing to retain controls a while longer. While this is a position for India today with which I personally disagree, the degree of professional agreement is certainly impressive.
Delhi (and India) is certainly better off being exposed to this broad array of opinions. It is also clear that, in a pluralist democracy like ours, strongly held opinions by eminent experts will be used by protagonists on one or another side of the issue. This is entirely appropriate. But what we really need to learn from people at this level are other skills: wide reading and experience; a coherent ideological and empirical world view; professionalism in presentation; and a constant dialogue between theory and experience.
Economic policy and economic diplomacy are imperfect, context-specific arts, where the knowledge of the local reality is all-important. Visitors and advisors, no matter how distinguished, cannot substitute for spirited local debate. Their most important contribution is to stimulate it.
The author is director-general NCAER. The views expressed here are personal.
