So far we’ve focused on bringing the moral case for free enterprise to America – where it’s desperately needed – but it’s important not to forget that the human flourishing brought by earned success matters across the globe. Thanks to free enterprise, the percentage of the world’s population living on less than a dollar a day (a traditional measure of poverty used by development economists) has decreased by over 80% since 1980.
But this isn’t good enough. We must continue to lift up the poor in areas struggling to realize the benefits of free enterprise. One of these areas is India. Though for a long time many economists considered India’s future promising, it now runs the risk of a credit downgrade. Economic growth has dropped. So the pivotal question is, as my AEI colleague Sadanand Dhume writes in yesterday’s “Wall Street Journal,” “how should reforms be packaged in a country where about a third of the population lives on less than $1.25 a day?”
Not surprisingly, his answer is the same as my answer for America: through moral language. He says:
“Reformers can’t afford to cede the language of poverty eradication to their opponents. Reforms in India make sense not because they place more Indian billionaires on Forbes magazine’s rich list, but because only faster growth can pull millions into the middle class. According to World Bank estimates, high growth rates reduced the percentage of India’s population living in poverty to 33% in 2010 from 42% in 2005. Without reforms this progress will sputter.
There’s also no evidence that Indian voters care particularly about concerns like inequality that leftists regularly tout. This is why Communist parties have been confined historically to two states—Kerala and West Bengal. Passers-by from the slums of Mumbai gather outside Reliance Industries’ chief Mukesh Ambani’s $1 billion home to gawk admiringly, not to throw rocks. For most people, what matters is a chance to live productively, and that their children’s lives are better than theirs.
What prevents politicians from explaining pro-market arguments is a failure of imagination and courage. Why not oppose the Congress Party’s flagship rural jobs scheme by pointing out that it’s unproductive and riddled with graft? A smart politician can make a moral case that New Delhi shouldn’t pour billions into loss-making Air India that could be put to better use building schools and roads. Yet it’s commonplace for even the smartest in parliament to spout the language of sops and benefits.“