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Déjà View | The forecaster’s graveyard

LiveMint logoLiveMint 23-05-2014 Sidin Vadukut

India is a big, complex country. I know that sounds like the first line of a really bad book on India but bear with me here. There are bigger countries, in geographical terms, but how many have 17 languages on their currency? There are countries that deal with much greater levels of internal strife and instability. But how many of them are so big with so many people?

So the one thing you don’t want to do is make neat little predictions of what you think will happen to Indian politics, economy or even society. But many people do. And they are mostly wrong.

On 8 March 1931, at Albert Hall in London, Winston Churchill famously predicted that as soon as the British left India, “the whole efficiency of the services, defensive, administrative, medical, hygienic, judicial; railway, irrigation, public works and famine prevention, upon which the Indian masses depend for their culture and progress, will perish with it.” Indians must not be abandoned to the whims of a few Brahmins, he said, lest “the Indian people fall, as they would, to the level of China.”

Decades later many of those services continue to muddle along, whilst Indian politicians now dream of turning Mumbai into Shanghai. Dreams that, no doubt, will also be rendered asunder by India’s peculiar disregard for predictions.

As any volume of modern Indian history will tell you, India’s democratic downfall was an obsession with foreign and domestic observers for the first few decades of its existence.

Writing their own constitution? India is doomed. Nehru is dead? Doomed. Emergency has been declared? Finished. Markets have been opened up? Adieu India. And so on and so forth.

And now that a new Bharatiya Janata Party (BJP) government has been elected to power, a fresh set of predictions have begun to appear. Some of them are wildly optimistic. Some are wildly pessimistic. It is important to read into both keeping one thing in mind: even the best analysts in the world are generally bad at predicting the political and economic futures of nations.

Nothing illustrates this better than the collapse of the Soviet Union. In April 1994, Seymour Martin Lipset and Gyorgy Bence published a paper titled Anticipations of the Failure of Communism. In the paper, they try to explain what prevented so many experts and sovietologists from predicting the disintegration of the Soviet Union.

“Social scientists are good historians,” Lipset and Bence write, “they are able to understand the processes involved in what has already happened. But they have not been good forecasters.” The paper is available online and is a fascinating study of why most experts in the United States, undoubtedly the most ardent, well-funded and sophisticated observers of Soviet affairs, were caught by surprise when the Iron Curtain began to crumble. There are many reasons why political and economic predictions are so faulty. One reason could be the tendency to break a situation down into theoretical building blocks and then assume that these blocks always interact in the same way. A right-wing government. A disciplined military. A police force that panders to the state. What do you get when you put them together? Third Reich of course. A strongman leader. A message of reform. A propensity for technocrats. What does this mean? India is the next Singapore and Narendra Modi is the next Lee Kuan Yew surely!

Then there is the tendency to assume that history will repeat itself. If an uprising worked in Tunisia, surely it is going to work in Syria. If Modi was a successful/communal chief minister in Gujarat, this means he will also be a successful/communal prime minister in Delhi.

Other reasons for wonky predictions include the bias within commentators that force them to be hopeful rather than meaningful, and that old conundrum—the assumption that human beings will always function rationally.

The boring truth is that any, none or some of these predictions of Modi’s tenure can come true. Could the National Democratic Alliance (NDA) government radically reform governance whilst deepening social fractures? Absolutely. Could it clamp down on corruption and leakages without materially improving the state of infrastructure or services? Plausibly.

Many of those factors, of course, are upto Modi and his colleagues in power. But also, many of those factors aren’t. A string of bad monsoons, another global economic crisis, a chink in the energy pipeline could all derail ambitious reform plans. (And I am not even getting into the arena of unintended consequences and outcomes. One persistent failure of Indian governments has been an inability to boost exports, or to modernize the banking system. But if both these reforms had been completed many years ahead of the Lehman crisis, India’s economy could have been obliterated in 2008.) So I think it is best that we take all these predictions of boom and bust with a pinch of salt, a stack of teplas and a helping of chhundo. The Indian democracy has a tendency to muddle along, never getting blown too far off course, constantly correcting itself, and constantly frustrating naysayers.

Let us hope that under this new government we will muddle along even faster, with even greater solidity, in a positive direction. Or we may all kill each other in a civil war. You can never really tell.

Every week, Déjà View scours historical research and archives to make sense of current news and affairs.

Comments are welcome at views@livemint.com.

To read Sidin Vadukut’s previous columns, go to www.livemint.com/dejaview

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