India and Socialism

India and Socialism

This is election year in America and there is a lot of talk about socialism. Republicans portray Obama as a socialist. And the truth is Democrats come as close as they can in America to socialism.

India has had its own long love affair with socialism. The Indian economy has grown almost tenfold since its breakup with socialism (1991: 200+ billion to a 2012 estimate close to 2 trillion). There is still some hangover from its socialist past which I think India will overcome soon.

I am a hardcore capitalist and I will not go into a debate about capitalism vs socialism. I am going to cover another aspect of socialism, and that is how it kills people and their wealth.

There is a saying that “A guaranteed way to stay broke is to hate rich people.” And hating rich and successful people is what socialism teaches you.

Coming back to socialism in America, the following is a quote from one of the articles Fareed Zakaria wrote a few weeks back:

“Americans are generally aspirational, not envious. Over the years voters tend to support a government that focuses on creating opportunity rather than one that tries to reduce inequality.”

This quote tells so clearly about what capitalism stands for. It’s the aspiration that if “he can do it, I can do it” rather than envy and animosity.

While India is moving towards free markets, America is becoming plagued with an entitlement culture.

The problem with lightweight socialism in America or hardcore socialism in the former Soviet Union is that it looks too good in theory. When it comes to practice, it falls apart. The fall of the Soviet Union and India’s Hindu rate of growth are good examples of this.