Reason as the Leading Motive

Atlas Shrugged in India

Posted by Jerry on June 21, 2007

Vinod over at Sepia Mutiny has a brilliant article highlighting the surprising similarities between the fictional dystopia charted out by Ayn Rand in Atlas Shrugged and the actual history of Indian economics over the 60s, 70, and 80s.

Take this tidbit for example:

In the novel, a key milestone as the world plummets into dysfunction and chaos is the passage of the innocuously titled Directive 10-289 by the government. It opens with a rather lofty goal –

“In the name of the general welfare to protect the people’s security, to achieve full equality and total stability…

A few specific excerpts from Directive 10-289 carry this outsized focus on stability to a certain logical end –

Point One: All workers, wage earners, and employees of any kind whatsoever shall henceforth be attached to their jobs and shall not leave nor be dismissed nor change employment, under penalty of a term in jail…

Point Two: All industrial, commercial, manufacturing, and business establishments of any nature whatsoever shall henceforth remain in operation, and the owners of such establishments shall not quit, nor leave, nor retire, nor close, sell or transfer their business, under penalty of the nationalization of their establishment and of any or all their property.

Point Three: All patents and copyrights, pertaining to any devices, inventions, formulas, processes, and works of any nature whatsoever, shall be turned over to the nation … the Unification Board shall then license the use of such patents and copyrights to all applicants, equally and without discrimination, for the purpose of elimination monopolistic practices, discarding obsolete products and making the best available to the whole nation…

…Point Eight: All cases arising from and rules not specifically provided for in this directive, shall be settled and determined by the Unification Board, whose decisions shall be final.

We don’t even need to go back too far into Desi economic history to find a situation where 10-289 played out almost exactly. First, a little background on the License Raj

…Nehru chose the goal of economic self-sufficiency with economic development to be achieved by central planning modeled on that of the Soviet Union. By cutting off imports India gave a protected market to domestic producers.

…The planning and adminstration of the economic did not emerge full blown. The first five year plan, 1951-55, called for the planned development of only a few industries, the one that private industry had not developed for one reason or another. In the first five year plan the other industries were left to the market.

It’s in the second 5-yr plan where you start retreading chunks of 10-289 almost word for word –

The second five year plan (1956-1961), the product of P.C. Mahalanobis’ work, was more inteventionist. It tried to implemented the terms of British socialism and combine them with the tenets of Mahatma Gandhi. It tried to eliminate the importation of consumer goods, particularly luxuries, by means of high tariffs and low quotas or banning some items altogether. The large enterprises in seventeen industries were nationalized. License were required for starting new companies, for producing new products or expanding production capacities. This is when India got its License Raj, the bureaucratic control over the economy. Not only did the Indian Government require businesses get bureaucratic approval for expanding productive capacity businesses had to have bureaucratic approval for laying off workings and for shutting down. When a business was loosing money the Government would prevent them from shutting down and to keep the business going would provide assistance and subsidies. When a business was hopeless an owner might take away, illegally, all the equipment that could be moved and disappear themselves. In such cases the Government would try to keep the business functioning by means of subsidies to the employees.

Now, please go read the rest of Vinod’s article for a more detailed account of the parallels in Atlas Shrugged and what transpired during the Indian economic history. I particularly like how Vinod ends his article–very aptly and pointedly; I won’t tell you how–go read it for yourself. 🙂

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: