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by Jon P. Dorschner

India is at an economic turning point. The resounding victory of Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) in the 2014 parliamentary elections has largely been viewed by observers as a ringing endorsement of economic liberalization (a series of neo-liberal economic policies originating in the United States and often termed the “Washington consensus). During the election campaign Modi argued that the BJP is the party of economic development and pledged to implement quickly the neo-liberal economic package.

Economic liberalization calls for economic policies that include: the reduction or removal of “trade barriers” (tariffs), reduction or elimination of labor unions, opening the country to foreign investment, reducing the government’s role in the economy (often called reducing “red tape), reduction of government subsidies, privatization of the public sector, tax reduction, the creation of “export zones, tax holidays for foreign investors, and easing the ability of foreign companies to repatriate their profits.

Supporters of this package contend that a faithful enactment of this package will encourage economic growth (defined as a growth in gross national product—GNP, defined as the output of goods and services). This is called “growing the pie.” In this analogy, when the size of the pie grows, everyone consuming the pie is guaranteed a larger piece. This economic expansion leads to the creation of new jobs, eases unemployment, and results in economic prosperity. Proponents of these policies believe that there is no need to change the economic distribution system currently in place, as the benefits of economic growth automatically “trickle down,” through all levels of society. Since everyone benefits, this is called a “win win” paradigm.

Neo-liberalism is dominant in the United States. Most American media coverage portrays the implementation of neo-liberal economic policies in a positive light.  Modi and the BJP are well aware of this American bias and artfully emphasize their support for the neo-liberal package to win American support, which they view as crucial for their success.

American media provide exhaustive coverage of the Indian middle class and usually portray this group as the engine of Indian economic development. American articles often depict this group as inherently progressive and enlightened. They are seen as the skilled backbone that will successfully implement the neo-liberal agenda and propel India into prosperity.

How accurate are these portrayals? If the media is itself biased in favor of the neo-liberal economic agenda, its depiction of the Indian middle class may not be accurate. In fact, the Indian middle class may not be the engine of development, but rather an obstacle to the successful implementation of economic policies needed to truly tackle endemic poverty.

The American media also suffers from the usual ethnocentric bias found in the coverage of any foreign country. Americans tend to identify with the Indian middle class because it superfluously mirrors the American middle class. It is English speaking, English educated, and addicted to American popular culture. It increasingly eats American food, dresses in American clothes, watches American television programs, and listens to American popular music. The United States is the number one destination for higher education for the children of Indian middle class families. These students are often profoundly influenced by their American education.

This cultural overlap is seen as evidence that this class has internalized American cultural values. It ignores the actuality that the members of the Indian middle class are Indians first and foremost, and that much of their presumed American-ness is merely fashion and does not run very deep.

The Indian middle class differs from its American counterpart in many ways. These differences are not apparent over the short-term. It requires extensive interaction with the Indian middle class in India itself over the long-term to make an accurate assessment as to what this class represents and what its values actually are. The trained American observer must overcome the natural tendency to identify with people who seem to reflect the same culture and values. When Americans deal with Indian society, they often discover that the vast majority of the Indian population has little or no knowledge of American culture and ideas, and are rooted in a traditional Indian society that appears totally alien.

This leads many American observers to assume that in many ways the Indian middle class is little more than a clone of the American middle class. If this is not really the case, in what ways do Indian middle class people differ from their American counterparts?

Most sociologists would agree that the Indian middle class enjoys a higher education and income level than other Indians; makes up the professional and managerial background of the society, and that middle class Indians serve as opinion leaders and role models for the society at large. American popular media is fond of portraying the Indian middle class as a positive role model.

It is certainly true that many Indians from economically deprived backgrounds model their behavior on that of the Indian middle class. However, the middle class role model is in many ways negative rather than positive. The Indian middle class engages in negative behaviors that harm the country, the economy and the environment. Other Indians eagerly adopt these practices. These entrenched behaviors then become more widespread and pervasive and prevent the country from achieving serious economic development. The poverty persists, economic conditions continue to deteriorate, and the Indian environment declines.

The Indian middle class has a weak civic commitment. It does not take a strong interest in the political affairs of the country at large. This becomes apparent during elections. Members of India’s most poverty-stricken groups often demonstrate a strong (possibly misplaced) faith in the democratic process that is not evident in the middle class. Members of India’s poorest groups routinely show up early at the polling station and wait hours in line holding their election card to cast their vote. They are proud to participate. This is not generally true of the Indian middle Class. The proportion of middle class voters is much smaller. When asked why they do not vote, many middle class persons respond that it is too much trouble.

The Indian middle class has adopted a consumerist lifestyle. It is increasingly dominated by a need to project wealth through conspicuous consumption. This feeds the need for ever more and more elaborate consumer goods, such as computers, televisions, cars, jewelry, clothes, and real estate. In many cases this conspicuous consumption outstrips the legitimate income of the middle class consumer and in reality much of this consumption is funded by corruption. In a country where corruption is widespread, the Indian middle class fully participates in the consumerism/corruption nexus.

Indian corruption takes many forms. It can consist of nepotism, embezzlement, acceptance of bribes for performing services that are free, and deliberately overcharging invoices. A big component of Indian corruption is tax evasion. The Indian middle class are willing and eager participants in tax evasion. Research has recently confirmed that India’s real estate sector is largely conducted with cash. Real estate in India has become a principal outlet for “black money,” the underground Indian economic conducted totally in cash to evade taxation. The Indian middle class is enamored with real estate, which it views as one of the principal means of projecting economic prosperity and wealth to the world at large. It participates in the laundering of black money, by funding its real estate purchases with cash and concealing income from the tax department, especially when that income is from bribes, embezzlement or other forms of corruption

Critics of the neo-liberal economic development model have long contended that “trickle-down” economics does not work. They contend that while economic growth expands national wealth, neo-liberal economic policies do nothing to prevent or control the concentration of that wealth in fewer and fewer hands. In his book Capital in the Twenty First Century (Harvard Business School, 2014) Thomas Piketty utilizes a mountain of data to support his argument that it is an inherent trait of Capitalism to encourage the ever-greater concentration of wealth, and that this means that by definition, capitalism is an inherently inequitable system that results in injustice. The neo-liberals have to date not provided a systematic argument to reject this thesis. They have instead contended that the trickle down of wealth from elites to the masses provides them with sufficient benefits to encourage social and economic mobility.

Even if the trickle down argument is accepted as viable, in an age of media saturation consumer capitalism encourages the same desires for the consumption of consumer goods in all sectors of the society, whether low income or high income. If the amount of wealth trickling down to low income groups is insufficient to provide them with what they feel is adequate access to the consumer economy, it increases frustration and unhappiness and encourages social conflict. This is precisely what is happening in India.

The Indian middle class is a principal contributor to this effect. Its demands for consumer items often appear insatiable. It uses a combination of nepotism and corruption to help meet this demand. The proportion of the new wealth generated by economic growth that goes to the Indian middle class is considerably out of proportion to its size in the Indian population. As wealth is generated, Indian elites take their sizeable (and ever-growing) portion. It then “trickles down” to the middle class, which grabs as much as it possibly can. The portion left to trickle down to the low income masses is then quite small and all out of proportion to their size in the Indian population.

The Indian middle class serves as a negative role model in other ways. Instead of investing its increasing wealth in productive investment or personal development, it often indulges in conspicuous consumption, sometimes of a trivial nature. This includes large sums spent on weddings, dowries, and gold jewelry, for example. The middle class has also absorbed and mimics the worst in Western pop culture. Most Indians do not speak English and find Western pop culture to be incomprehensible. However, the values of Western pop culture, principally consumerism, individualism, and hedonism, are transferred to India’s low income groups through India’s Bollywood dominated popular culture in the Hindi language. The Indian middle class serve as agents in this transfer process, translating Western pop culture values into an Indian cultural medium.

This middle class obsession with westernization is also reflected in its consumption of American junk food. Middle class children are adopting an American diet consisting of processed food, snack food, and processed food. In addition, they have adopted the video games, computer games, and smart phones as part of the consumerist culture. This has resulted in an increasingly sedentary culture for children and young people. As a result, childhood obesity is increasing at a rapid rate, while the early onset of diabetes is becoming common among middle class Indians at younger and younger ages. Since the Indian middle class is a role model, low income Indians come to view this middle class diet as evidence of modernity and something they should aspire to.

This wholesale adoption of a consumer culture has been accompanied by a low emphasis on philanthropy. The pattern in the United States is for persons to increase their commitment to philanthropy as they cross economic thresholds. This philanthropy does not only extend to poverty reduction efforts, but includes a commitment to supporting the arts. In the USA this takes the form of sizeable donations to symphony orchestras, art galleries, and opera and ballet companies. In the US, this is viewed as a social exchange. In exchange for their financial support of charitable and cultural institutions, donors receive public acclaim and social status. The same mechanism does not exist in India, where there is no negative sanction attached to those who do not donate to worthy causes.

This reflects a basic difference in social organization between the American and Indian cultures. The Indian middle class views Westernization as largely a surface proposition, involving the adoption of Western cultural characteristics. There is often little inclination to dive deeper into western culture and examine western liberal values. This is particularly true since these liberal values can run counter to conservative Indian values in many ways, causing personal dislocation and discord. The lack of a social convention encouraging philanthropy is one such example of this phenomenon. The lack of a negative sanction against those who do not participate in the democratic process is another.

This Indian cultural orientation has been the subject of many articles in the literature. Most observers of India point out that Indian society has yet to develop a strong civic culture. Instead, Indians remain family oriented and inward looking, taking care of their own relatives first, and feeling little or no obligation to participate in civic life aimed at improving the community or the nation in the abstract.

Many members of the Indian middle class have been quick to adopt the western obsession with personal fulfillment, especially when it comes to immediate gratification. This is starting to have an impact on the Indian family structure. It was previously a cliché that Indians venerated the elderly and that Indian children felt obligated to take care of their parents in their old age. As the extended family begins to be replaced by the nuclear family, and Indians go all over the world in search of employment, it is becoming more difficult to look after the elderly. This is compounded by the almost total lack of a social safety net in India. It is precisely the Indian middle class that is most affected by this pattern and finds itself facing more and more difficulty looking after its elderly population.

The essential family orientation that has served as the basic foundation of Indian society for millennia is undermined by obsessive consumerism and its emphasis on individual fulfillment. Family duties once gladly accepted seem increasingly onerous. Formerly, it was the Indian ideal to be selfless when it came to the family. Women, in particular, but Indians in general were always taught that it was virtuous to sacrifice for the sake of others in the family. However, this runs counter to the consumerist emphasis on immediate satisfaction of material demands, and the ever increasing hedonism attached to it.

This is also reflected in the decline in patriotic expression in the younger generations of the Indian middle class. In 2007 director Rakeysh Omprakash Mehra, released his film “Rang de Basanti—Colors of Spring.” It depicted a spoiled generation of Indian middle class youth privileged and attending college in a country in which only 5% of the population has a chance to do so. The characters are cynical and ridicule one of their group who expresses patriotic sentiments and joins the Indian Air Force to “defend the country.” Most critics praised the film for its accuracy.

Critics of neo-liberal economic policy have pointed out a number of what they view to be basic flaws in this package. Proponents of neo-liberalism have made a series of extravagant claims regarding its potential, claiming it will be the engine that lifts countries like India out of endemic poverty. They argue that social mobility is a natural result of the implementation of neo-liberal economic policies. They predict that the Indian middle class will naturally grow and that increasing numbers of Indian working class families will make the transition to the Indian middle class in coming years.

This assumes, however, that the middle class has a progressive orientation and is interested in opening its ranks to newcomers from less privileged groups. What happens, however, if the middle class is not amenable to social change, and wants to sustain its privileged position in society? What if the middle class circles the wagons and decides to prevent low income individuals from progressing up the social ladder? What if pervasive economic factors limit the size of the middle class, leaving limited room for upwardly mobile individuals?

Liberalization proponents make serious claims for their policies, but what if there are cultural, social, and economic factors that render these claims untenable? What if low income groups simply hit a brick wall and are told to be satisfied with whatever trickles down to them? In a society like India’s there are few serious sanctions in place to discourage corruption and nepotism, and the economic pie cannot grow enough to provide opportunities to lift the large numbers of people currently living in poverty. In such a set-up, it is not difficult for a middle class that does not espouse liberal or progressive values to severely limit social mobility. If this proves to be the case, the expansive claims for neo-liberalism may prove to be stillborn.End.

American Diplomacy is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to American Diplomacy.


Author A native of Tucson, Arizona, Jon P. Dorschner earned a PhD. in South Asian studies from the University of Arizona. He currently teaches South Asian Studies and International Relations at his alma mater, and publishes articles and books on South Asian subjects. From 1983 until 2011, he was a career Foreign Service Officer. A Political Officer, Dr. Dorschner’s career specialties were internal politics and political/military affairs. He served in Germany, India, Pakistan, Bangladesh, Nigeria, the United States Military Academy at West Point and Washington. From 2003-2007 he headed the Internal Politics Unit at the U.S. Embassy in New Delhi, India. In 2007-2008 Dr. Dorschner completed a one-year assignment on an Italian Provincial Reconstruction Team (PRT) in Tallil, Iraq. From 2009-2011 he served as an Economic Officer, in Berlin, Germany.


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