ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Wealth and Poverty

Non-economic factors have as much, if not more, to do with the wealth and poverty of nations as endlessly argued fiscal deficits and interest rates. Do the cultural value systems of people and organisations foster learning, innovation, enterprise and debate? While on the subject, when did we last hear of a major Indian politician or policy-maker saying that we need to learn – say, about microcredit from Bangladesh?

Too often, economic analysis focuses on numbers – as if growth is an end result merely of fiscal balance and low inflation, or exchange and interest rates, or other macroeconomic variables. David Landes of Harvard University argues the importance of non-economic factors to The Wealth and Poverty of Nations in a book of that title published last year. The name of the book is of course a take-off on Adam Smith’s classic. Landes believes that cultural mores and value systems, the willingness or unwillingness to learn and innovate, the attitude toward knowledge and work, etc, are far more important to the wealth and poverty of nations, and focuses on a series of examples from economic history. Why did the industrial revolution begin in England and Europe? Why, within Europe, for centuries, the northern, mostly Protestant countries went far ahead of the southern, mostly Catholic countries like Spain and Italy? Why did India and China, the western civilisation’s ‘oriental heritage’ (in Will Durant’s words) go down in the league of world civilisations, for much of the second millennium? In what ways did the Chinese and Japanese responses to western intrusions in the nineteenth century differ? Landes argues such questions provocatively, brilliantly, stimulatingly and from a vast historical perspective. A book not to be missed!

One key issue identified by Landes is responsiveness to outside influences. It can hardly be denied that at its zenith in the first millennium, Indian civilisation had a very much global outlook, ‘global’ in the sense of the means of sea transport then available. Clearly, it had made major inroads in southeast Asia as Bali and the Angkor Vat temples, the Sanskrit influenced languages and names in that part of the world, etc, still bear witness to. The biggest cultural/ religious export of course was Buddhism, prevalent even today all over east Asia.

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