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Will India Recover?

A few days ago, the following tweet was retweeted approvingly by many Indians, no doubt out of a sense pride and patriotism. “Look, look,” they seemed to say, “Look, how great India was. In 1870, India’s GDP was higher than UK, US, Russia, Germany, France and Italy. In fact, India’s GDP was over four times that of Italy.”



I can’t fathom what motivates such mindless jingoism. Only those incapable of basic arithmetic are prone to such idiocy. As the late great John McCarthy used to say, “He who refuses to do arithmetic is doomed to talk nonsense.” Nothing significant can be gleamed from raw numbers alone. At the very least, aggregate numbers are meaningless unless one contextualizes them. The simplest contextualization requires that you normalize them. I wrote about it here in Aug 2004:

. . . any raw number is essentially meaningless. We need to normalize the raw numbers before they can be meaningful. For instance, India is the largest producer of milk and produces 38,945,021 gallons of milk a year as compared to Denmark with only produces 1,045,983 gallons a year. India therefore produces 30 times more milk than Denmark. But that is meaningless unless one also knows that India’s population is 300 times that of Denmark. The proper normalization in this case is per capita milk production and consumption. That is, you take the raw milk production numbers and divide it by the respective population numbers to get the meaningful statistic that Indians only produce 10 gallons per year per capita while Denmark produces 100 gallons per year per capita.

It is simple arithmetic and those who refuse to do arithmetic are doomed to speak nonsense.

(Disclaimer: All the numbers above are straight out of a hat. They are definitely not accurate. They are for illustrative purposes only. The exact numbers are left as an exercise for the interested reader. For all others who are basically lazy like me, the fake numbers should suffice. You gets what you pays for.) [Source: High Population Considered Necessary but not Sufficient for Poverty.]

So let’s do the basic arithmetic and then see how India stacks up against those other countries in 1870. To save time, let me illustrate what I mean by deriving the normalized GDP figures for India and US only for 1870. India’s population was around 306 million (this site puts it at 306 million) and that of the US was around 38 million (this site puts it as 38,558,371 with astonishing accuracy). Per capita GDP in 1870 thus works out to be $438 for India and $2,579 for the US. Thus the US per capita GDP appears to be almost six times that of India.

Here I am merely illustrating a point that I keep making that raw numbers are meaningless. I don’t know where @INTLSpectator got those GDP numbers but to me they do sound suspect because the implied India’s per capita GDP of $438 in 1870 does not appear realistic.

I believe that in the past — perhaps a thousand years ago — India was not significantly poorer than the rest of the world, and perhaps it was richer. But it was impoverished by forces internal and external. Then a series of unfortunate things happened: the British Raj and after they left, the Congress raj of Mr Nehru and his progeny. Nehruvian socialism basically buried India. Will India recover? I don’t know. But I suspect that it will take the kind of policies that we are unlikely to see.

Atanu Dey on India's Development

Atanu Dey
Chapters
PJ O’Rourke: Every government is a parliament of whores
The Amazing Power of Technology
Swami Vivekanand: To the 4th of July
No True Islamic State
Herbert Simon — Information consumes attention
Yoga has no Religion
Hayek on “The Mirage of Social Justice”
An Open Letter to PM Shri Modi
Prefer a Functioning Economy
Political Discrimination is Socially Harmful
Markets & Competition
Ministry of Power, Coal, and New and Renewable Energy
John Stuart Mill on the Liberty of Thought and Discussion
Reading Ronald Coase
Universal Literacy
Man versus the State
What Comes Before
An ad from 1947: “The Uphill Task Ahead”
Pohela Boishakh, Vishu, and Puthandu Greetings
Rich People Spend More
Goodbye, Mr Lee Kuan Yew
Friday the 13th, Pi Day the 14th & Beware the Ides of March
Money is the root of all Evil
Warren Buffet’s Letter to the Shareholders
The Man Lee Kuan Yew Admires the Most
An Informed Citizenry is the Bulwark of a Democracy
Problems and Solutions
People I Admire – Part Doh
Nelson Mandela on Education
Criticizing Modern Indian Holy Cows Considered Dangerous
Richard Dawkins on the Monotheistic God
List of Pages on Teresa the Merciless
People I Admire
Lee Kuan Yew is under Intensive Care
On Monkeys, Cats & the Generality Principle
The Great Indian Bamboozle has to Stop
2400 hours of electricity for Delhi — every year?
Make India first to “Make in India”
Republic Day Thoughts on Reading the Constitution
A Day of Shame and National Mourning for India
The most dangerous man to any government
Socialism, Competition and Politicians
Open Thread: Ask me anything
Aakash, the “iPad Killer”, Vaporware has Evaporated
The Dreamer and the Dream
Circular Firing Squad of Flying Attack Monkeys Target Rajiv Malhotra
We need more Anandamide, not Jihadamide
Constitutions Matter in our Daily Lives
The Only Home We’ve Ever Known
Adam Smith on the Division of Labor
The Passing of Former President Mr APJ Abdul Kalam
Socialism Works its Wonders in Venezuela - also in West Bengal
Why the terrorists killed the satirists of Charlie Hebdo
Islam Poses an Existential Threat
The Wisdom of the Crowd
On Knowing Enough to Know that You Don’t Know
NITI — New Initiatives for Transforming India
Will India Recover?
The Unbearable Stupidity of Controlling Prices
Nov 14th as the “Day of Shame and Lamentations for India.”
The Indian Constitution — Part 2
Hayek on Valuing Individuals
Mr Modi goes to Washington