‘India is now the fastest-growing economy on Earth — Donald Trump will need India's support as much as the other way around'

Time of India

3 days ago

Sir
Paul Collier
is Professor of Economics and Public Policy at the
Blavatnik School of Government
,
Oxford University
. Speaking with Srijana Mitra Das, he discussed capitalism, devolution — and the
India
story:
Q. What is the core of your research?
A. For many years, I've been concerned about places or communities that have fallen behind. My work partly showcases this fact and emphasises how it needs to be a responsibility, not just of those impacted, but the international community as well to help them catch up. I also focus on taking ownership of such situations — there are many examples in my latest book 'Left Behind' of communities that come together and find solutions to their problems.
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I've researched Africa,
Latin America
and Central Asia. Interestingly, India is a country that's very far from being left behind — it now sees its future and it's very exciting.
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Indians studying in the United Kingdom are keen to go back. It's similar to Chinese students, although some feel hesitant now as President Xi's style grows similar to Mao's centralisation mode. Some Chinese are growing wary — Indians, however, are proud of what India is achieving.
Q. President
Trump
called India's economy 'dead' — how do you view that?
A. India's economy is thriving now. President Trump will need India's support as much as India will need the US. I suspect this is an off-the-cuff comment — it will not reflect a long-lasting view.
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Q. Why are you so deeply concerned about the future of capitalism today?
A. There are two different faces of capitalism. One is vital for humanity to have a viable future through finding solutions. However, the second is massively unequal, where people at the top enrich themselves and monitor others constantly. Some new technologies are alarming because they help build systems of intense scrutiny.
We all know a massive global delivery conglomerate which features brilliant logistical technology but is basically about maximising profits for one person. This company's distribution system is based on huge warehousing, often in poor areas with cheap labour.
I was recently in Scunthorpe, England, a very poor town, among the few that still produce steel. Someone there told me he was working in one of these warehouses and offered a promotion to give penalties and incentives to others. He couldn't take dealing out monitoring and scrutiny to co-workers and quit what he saw as a hierarchy of humiliation.
However, capitalism has extremely positive features as well — it is great at devolving agency to find solutions. A boss should say, 'These are our objectives. I don't know how to do this, so you and your team work it out.' When you get experiments in parallel — different teams within a firm, different firms — all seeking the same thing, and somebody cracks it and they are copied, that's the genius of capitalism.
An interesting figure I celebrate is China's
Deng
Xiaoping. When he came to power in 1978, he inherited a highly centralised system, which, under Mao, had caused millions to perish. Historically, China had a great civil service and mandarin class. Building on that tradition, Deng said, 'We don't need knowledge of Confucius anymore — we need economics, hard sciences, maths.' He held an exam for young people — 20 million were eligible. Deng chose the top 40 from that. He told them, 'For the next five years, you'll be governors of one of our 40 provinces. You'll have full powers — we'll judge you on two objectives. There's an economic objective, like doubling your region's income, and a social one, like halving its infant mortality. We don't know how to do this — we'll watch your initiatives. If you don't try something new, you'll be removed.'
Imagine being sent to some unknown region with full powers — you'd likely think, 'I better ask doctors, nurses, farmers, etc., what to do here.' Experiments started in parallel within each region — Deng thus replicated the genius of capitalism. The duration of the system he created was 40 years of the biggest fall in human poverty ever seen in history. China's take-off encouraged India to rise — today, India is the fastest growing country in the world.
Q. During growth, must economics and environment remain mutually damaging?
A. I'm hopeful not because especially amongst young people now, there is a passion for tackling environmental problems. Some issues are global, like climate change — but many are localised, like air pollution. One principle I've learnt is the smaller the entity you're trying to get to cooperate, the easier cooperation becomes. Devolve to the lowest level because cooperation gets easier, the lower down we go — that's called subsidiarity.
Many ecological issues can be tackled at a localised level. Global warming and emissions are much harder. In 'The Future of Capitalism', I suggest the 'new G6' — six countries that must cooperate, namely India, China, Russia, Japan, the
European Union
and the United States. This G6 won't agree on much — but if climate change is one of the few issues on which all agree, it's very good for the world. Currently, we've got a ridiculously composed G7 — what are Britain and Canada doing in G7 and not India?
Q. BRICS has rejected the EU's Carbon Border Adjustment Mechanism, calling it unilateral — how do you read that?
A. I'm deeply opposed to moral imperialism or preaching by rich countries. We've seen Europe especially repeatedly preaching responsibilities to India, China, Africa. I'm sick of the Europeans with their imperial past and appetite for telling others what they should do — Europe should put its own house in order.
Views expressed are personal