2ndlook

PT Barnum – Seven Pillars of Western Wisdom

Sanitize and smuggle

With passage of time, the real harm to the Indian society by some of the foreign rulers is forgotten. For instance, the Mughal period saw the impoverishment of the Indian farmer, due to uncertainty over land title, whimsical tax regimes – and not the religious agenda, which has been ‘sold’ to Indians. By latter colonial rulers, the British.

We may see a repeat of the same phenomenon, this time, seeing the colonial rule through rose-tinted glasses. Colonialism was an unmitigated disaster – and should be clearly remembered as such.

We may see attempts to cover up the colonial misrule, by ‘academics’ whose motives are not always obvious or in the open. One such ‘academic’ is Kishore Mahbubani.

Kishore Mahbubani

Kishore Mahbubani

Gushing Press

H.E.Professor Dr.Kishore Mahbubani, of the National University of Singapore, Dean, Lee Kuan Yew School of Public Policy has recently written a book.

In an interview with The Times Of India he opined, a cloying, subservient and ignorant view of the modern history. “Asia has benefited immensely from the western seven pillars of wisdom — free market, science and technology, meritocracy, pragmatism, culture of peace, rule of law and education” says Mahbubani.

On Mahbubani, comments The Economist, very patronisingly, “Kishore Mahbubani makes some sensible recommendations.” Strangely, The Economist, says this is “an anti-Western polemic, designed to wake up Americans and Europeans by making them angry. In that goal, it will certainly be successful.” Reportedly, The Economist, has decided that Kishore Mahbubani is an “Asian Toynbee preoccupied with the rise and fall of civilisations.”

Echoing The Economist, is The Shanghai Daily, which pronounces “Singaporean author Kishore Mahbubani has been likened to an Asian Toynbee”. Joining the fray, The Deccan Herald chips in with “Kishore Mahbubani is the ultimate foreign policy guru.” Niranjan Rajadhyaksa of The Mint (a HT-WSJ publication) intones,“Asia has both suffered and learnt a lot from the West … Mahbubani has been extremely fair.”

I tried disagreeing. I thought I had overwhelming evidence. But after the Mahbubani experience, with liberal doses of assistance from St.Barnum’s (patron saint of propaganda), I must admit, I was enlightened.

And I also want to know, who your PR agency is, Kishorbhai!

Ulta Chor Kotwal Ko Datein

1. Free Markets

I was a non-believer in Western commitment to free markets. After reading Kishore Mahbubani, I realized, I was reading too much propaganda about how Indian mangoes could not be exported to USA for the last 18 years – because of pesticide residues.

India, (wrongly) disallowed imports of allegedly, ‘over-priced, gas-guzzling, polluting’ Harley-Davidson motorcycles. USA, in turn taught India a thing or two about free trade. After a sufficiently, enlightened India, lifted restrictions on imports of Harley-Davidson motorcycles, pesticide residues disappeared, and the US allowed imports of Indian mangoes again.

I am sure that Indian farmers, with some devious trickery, ensured that pesticide residues vanished.

For the last 300 years, the West restricted imports of fabrics and garments. Dhaka’s de-urbanization due to this in the 1800-1900 is written into history – wrongly. The last law was the MFA agreement which created a quota-based regime for textiles, in the West.

Agricultural subsidies of nearly US$20 billion dollars by USA and EU, to their farmers are also in the spirit of free trade. For the benefit of the starving Rest, the West is giving these subsidies to Western farmers, to lower food prices. How does it matter that the agricultural economy of the recipient nations gets destroyed!

West Is Best!!

Things like non-tariff barriers are hokum and over-worked Eastern imagination. The story of repeated and frequent rejection of mushroom exports from India is also in the spirit of free trade.

Indian applications for ‘equivalence’ certificates have been pending with EU for the last 7-8 years – and not processed for the last 7-8 years due to lack of manpower. Interim annuals approvals are given instead – in the spirit of free trade, after some ‘concessions’.

Of course, the Western zeal for free trade extends to enforcing opium trade (just ask the Chinese). Kishorebhai, I only wish, ignorant Easterner that I am, is that we in India can enforce ‘free trade’ in opium today in USA and the Europe.

When the ignorant East, did not see the benefits of Western invention of free trade, the West was compelled to use force (remember Commodore Perry? For more details, ask the Japanese).

St.Barnum’s Says

Mahbubani’s assertions are right. These ‘facts’ above are like a bikini. What they reveal is indicative, what they conceal is vital! In this case, the Western spirit of free trade. How can the ignorant East, question Western wisdom – or ethics, integrity, motives? Of course, all these cases and incidents are a conspiracy to defame the West.

2. Science & Technology

Before Western invention of Science and Technology, what did the East know?

Zilch. Zero. Sifr. Shunya. That is all. This claim about India inventing the zero and infinity is probably right. Because they had infinite knowledge about Zero – and nothing else. All their books about geometry (Aryabhatta, Bhaskara) are just figments of Eastern imagination. Eastern knowledge about eclipse prediction has now been proved wrong by Kishore Mahbubani’s expose. Indian shipbuilders and steel technology was just puffery – as demonstrated by Kishore Mahbubani.The Hulk Dropped The Easter Island Statues

Of course as Hegel said, there is no African history. I realize after reading Kishore Mahbubani’s interview that there is only Western Science and Technology. It must have been some Westerners behind the ‘achievements’ of China, Africa and India.

How ignorant I was before being enlightened by Kishorebhai!

PT Barnum adds - Are you not forgetting the option of crediting aliens?

3.Meritocracy

Poor ‘Blacks’!

They were always mislead by their leaders. The only place in the world that they could find equity, was in the West. If the West had not ‘bought’ these poor ‘Blacks’ and allegedly ‘enslaved’ them, they would have still have been in Africa – and lost the benefits of the Western meritocracy. Some Black leaders are today claiming that they have even contributed to Western technology.

The sheer audacity!

Xenophobia

Similarly, if the Gypsies had not left India, (supposedly) a thousand years ago, they would have lost all the benefits of Western civilization. Early Punjabi settlers in USA did not properly understand their position in Western society. They were basically inferior people who demanded equality to their White masters.

This mis-perception, of course, created misdirected protests. These ignorant immigrants from the East did not properly understand Western meritocracy.

The Wisdom Of St.Barnum - If Japanese and Chinese immigrants faced discrimination in the USA, it was their fault – why did they have to look different?

4. Pragmatism

I agree that the West is truly pragmatic!

Dr.RA Mashelkar, a senior scientist and administrator, writes:

“A recent study by an Indian expert group examined randomly selected 762 US patents, which were granted under A61K35/78 and other IPC classes, having a direct relationship with medicinal plants in terms of their full text. Out of these patents, 374 patents were found to be based on traditional knowledge …”

After annihilating the Australian Aborigines, the Australian Government decided to apologize. What more does the world expect? This apology from the magnanimous West was as pragmatic as anyone can get! Kishorebhai, we have a saying in India, about cats going on a pilgrimage after killing a hundred rats. In this case, of course, the West went one better. They killed millions of humans – and apologized for that!

Western practice of Pragmatism at its best!

St.Barnum sez - What could be more pragmatic? I agree with Kishore Mahbubani!The Pollution Conundrum

5. Culture Of Peace

The Native Americans were wiped out – nearly the entire race! Today they are a relic – a tourist attraction! Like rare animals in a zoo!

Aborigines in Australia have similarly been annihilated. Two world wars in a space of 40 years. The entire Jewish population of the world has been reduced to 10 million – by the West.

But, Kishore Mahbubani says, the Western civilization is about peace! And he is right!

These wars were forced upon the West – and were fought to bring peace on Earth. Now since there are no Native Americans  and Aborigines, how can there be a war with the Native Americans and Aborigines. Similarly, if there are no Jews, there cannot be a war with the Jews. The West is also trying to cleanse the earth of all Muslims. Then there cannot be a war with Muslims also.

St.Barnum pays a tribute to Kishore Mahbubani - Kishorebhai, you concept of culture of peace is stunning to say the least. Hats off.

6.Rule of Law

Completely true and a matter of fact!

Consider the Western laws on slavery! And those related to minorities! Or current laws in the UK and US to deal with terrorism.

The disenfranchisement laws came into effect by the 1890’s – that continue till today. This ensured that the disproportionate numbers of ‘Blacks’ could not vote – and George Bush became the President of the USA for the 2nd time. After some 60,000 ‘Black’ Voters were disenfranchised, George Bush technically, won by less than 1000 votes (most of the disenfranchised voters were expected to vote against George Bush).

Petty crime (where poor) ‘Blacks’ were convicted in higher ratios were grounds for disenfranchisement. These laws ensured that 10 times higher number of ‘Blacks’ were disqualified compared to Whites. If that is not bad enough, it continues till now. Such tactics continue to be used to limit Black participation in democracy.

In 1904, the US pressured Tomas Estrada Palma, a ‘puppet’ Cuban President, to sign the Platt Amendment. This allowed US intervention in Cuban affairs, if ‘vital’ US  interests were at risk (meaning at US will) – finally modified only in 1934. The many laws which made Gypsy hunting legal – like laws which made hunting animals legal. The latest news in that Italians are going to crack down on Gypsies – as per a EU law.

St.Barnum confirms - Yes, Kishore Sir! The West believes in laws.

The Usual Suspects

7.Education

I must admit, that Western education does achieve its goals!

West does produce leaders, generation after generation, who relentlessly execute the same agenda. The annihilation, the massacre, the pogroms – against natives in America and Australia, minorities like Gypsies, Jews and various Christian sects. The kidnapping of Aboriginal and Gypsy children. The massacres in Africa – from Roman times to 20th century. And now the specter of Islamic Demonization.

St.Barnum adds - This degree of continuity and consistency is missing with others. There is something about Western education Mr.Mahbubani, I agree.

Country Model of the West

The real country model that the West manages itself on is something else Mr.Mahbubani. Loot – of gold, resources, ideas. And slavery. Add significant amounts of fraud.

Nothing more and nothing less. And their strategy to ‘white wash’ this – propaganda. With Kishorebhai’s plausible sincerity, I am not quite able to decide if Kishorebhai is an innocent and ignorant victim of Western propaganda or a part of the propaganda.

Either way, his book and his ideas are trash – and this post is a case of intellectual slumming.

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India’s Colonial Cousins – The Drag Coefficient of Indian Bureaucracy

Posted in British Raj, Current Affairs, History, India by Anuraag Sanghi on April 15, 2008

If India’s new age regulators are anything to go by. Indian bureaucracy may be shedding its colonial paradigms.

Colonial Institutions

On April 1st, 1934, while the ‘Squeeze India’ campaign was under execution – choreographed by Montagu Norman, Neville Chamberlain, Winston Churchill (some sickness … some racism) Lord Willingdon, India’s banking authority was set up.

The objective of setting up RBI – this colonial money authority, was to devise a policy structure for creating a ‘money famine’ needed by colonial British masters. From that April Fool’s day till now, RBI character has not changed. RBI resorts to creating these money famines every few years – even today. The last RBI ‘money famine’ in 1996 saw inter-corporate interest rates shoot to 40% – and a recession that lasted for 4 years.

RBI remains isolated, out of touch with the India – and looks at India through colonial viewing glasses. The tragedy is that RBI is not alone. The IAS (a successor to the colonial ICS) and the Planning Commission are the other two. The IFS has been pre-occupied with diplomatically engaging the West, fixated with Pakistan, while India’s relations in neighbourhood are at a historic low.

Compare that with the brilliant track record of modern Indian regulators and organizations like the SEBI, TRAI. Or even the IPS. India has the lowest prison population in the world – and also the lowest police-to-population ratio.

SEBI Logo

Modern Indian Institutions

Till 1990-95 Indian stock trading was largely done done through the open outcry system, physical paper settlements, long settlement periods – and rampant manipulation. Indian stock trading systems was a closed club – and did not attract any serious investors.

Between, 1900-1995, SEBI, NSE, BSE and NSDL designed and managed the transition from the physical platform with the open outcry system to a complete electronic trading platform of the NSE and BSE.

BSE Logo

NSE Logo

Today, the BSE/NSE trading system is the most advanced in the world – in terms of trade volumes, transaction volumes and automation. The NSE does more trades in a day than any other exchange in the world. Compared to the less than 20 lakh (2.0 million) trades on the NASDAQ, the NSE did nearly 70 lakh (7.0 million) transactions(on 3rd January 2008). The BSE (Mumbai Stock Exchange) has more than 6,000 companies listed – equaling NYSE and NASDAQ combined.

All this when less than 5% of Indians are investors in equities.

Nearly one year after this post, soe information about the NSE /NSDL success came out in the public sphere. CB Bhave, who was instrumental in setting up the NSDL revealed, that

NSDL revolutionised the capital market by getting market players to accept the new system of dematerialised shares and debentures. He won buyers’ support by arguing that demat would eliminate bad deliveries of shares and impressed upon the sellers that this would facilitate early settlement and early payments. Setting up of a depository that converts physical share certificates into an electronic form was not easy, but the NSDL set up the depository at under Rs 100 crore, or a seventh of the original estimate, and achieved paperless trading within just three years, the fastest in the world. (from Lunch with BS: C B Bhave)

CB Bhave, who set up the dematerialised share repository, NSDL, revealed some interesting facts. The most interesting is that he felt the need to resign from the IAS – for things to happen.

Bhave resigned from the IAS in 1996, to take up what was then seen as a rather low-profile job — to create India’s first share depository, even though he had the option of going there on deputation. “The job needed full-time commitment from me and from the team I was recruiting. How would I get it, if I did not burn my boats myself?” he says. (via Lunch with BS: C B Bhave).

Telecom In India

Mobile Usage Trickles Down

By 2000, India had less than 4 crore phones. Most of the 100 crore (1billion) Indians were unconnected – and disconnected from the world. Governments monopolies, BSNL and MTNL, ruled the roost. Pricing was based on scarcity – rather than any commercial costing or margin strategy.

Mobile phone services had just been introduced – and were exorbitantly priced. Cell phones were status symbols, out of reach for ‘middle class’ Indians too. With low subscriber base and high prices, it seemed like the investments made in the mobile networks would have to be written off. TRAI, the telecom regulator was finding its feet – and being pulled in many directions by lobbyists. It looked like a classic vicious cycle – which could not be broken.

A Kolkata slum dweller with a mobile  |  Photograph: Jayanta Shaw/Reuters/Corbis; courtesy - guardian.co.uk, Wednesday 24 November 2010 11.22 GMT  |  Click for image.

A Kolkata slum dweller with a mobile | Photograph: Jayanta Shaw/Reuters/Corbis; courtesy – guardian.co.uk, Wednesday 24 November 2010 11.22 GMT | Click for image.

By 2001, the BJP led Government came to power. The telecom regulator in a series of bold moves, changed policies – and equations. Tariffs declined by nearly 5000% – from roughly 50 cents to 1 cent per minute. User base ballooned to 20 crores – from 4 crores. In 7 years more telecom users were added than in the previous 70 years. For the first time, the poor in India are beginning to benefit from technology.

India today is one of the fastest growing markets – and one of the largest. It is dominated by profitable operators, providing possibly the lowest tariffs in the world. The next major test for TRAI is the phasing in the new slate of operators who have been granted licences.

All this when just 20% of India is connected.

Indian Railways

After the boycott of the Simon Commission, from 1927, and the death of Lala Lajpat Rai, it was clear (especially to the British) that their days were numbered. Facing problems at home and abroad, the significant British interest in India was extraction of remaining wealth in Indian hands.

A prime example of that was the railways.

Steam Engines

During WW2, nearly 40% rolling stock from India was diverted to the Middle East. More than 50% of the track system was the outdated metre gauge and narrow gauge. Track systems were nearly a century old. 40% of the railway system went to Pakistan. 32 of the forty-two separate railway systems operating in India, were owned by the former Indian princely states. So much for the British gift of railways to India. More than 8000 outdated steam engines were used as motive power – and less than 20 diesel locomotives were in use.

Starved of investments and maintenance, the railways infrastructure at the time of British departure was crumbling. Colonial British (subsequently, the Indian also) response was to affix the blame onto the employee at the lowest rung and move onto the next one accident.

Post Independent India continued with this practice – till LB Shastri called a halt to this. In 1956, the Madras-Tuticorin express plunged into a river when when a bridge at Ariyalur (Tamil Nadu) was washed away in floods. 144 (some records suggest 156) passengers died. He resigned from the Union Cabinet – claiming moral responsibility for the railway accident.

Indian Railways

This resignation saw LB Shastri become a political legend. This (resignation) also changed the mindset of the Indian Railways. After fresh elections of 1957, one year later, he was re-inducted into the Union Cabinet. Steadily, as railways infrastructure was upgraded, accidents decreased.

It took a non-Congress Government in 1977 to change the face of Indian Railways. Prof.Madhu Dandavate, the Railway Minister in the 1977 Janata Government started the railway renaissance in India. 3rd class railway travel was abolished. Wooden-slat seats were abolished. Cushioned 2nd class seating system was made minimum and standard. Train time tables were re-configured. Reservation systems improved. Railways started getting profitable.

The de-colonization of Indian Railways began effectively in 1977 – 30 years after British departure. Symbolically, that was also the year that the Rail Museum was set up. The progress after that has been remarkable. Today for a US$5, an Indian can travel for a 1000 km.

All this when only 25% of Indians travel by rail at least once a year.

New Paradigms

India needs new paradigms.

Unlike Indian Railways, RBI’s colonial paradigms are a drag on India – and is beyond redemption.

The IAS, is too imperial for any use to India. The IAS with an overwhelming colonial bias towards creating a ‘compliance over-load’ on the back of every Indian has resulted in a Frankenstein of a corruption prone administration.

Planning Commission’s signal failures over the years, in managing economic growth resulted in the Planning Commission being nearly disbanded in the 1991-95 period.


India’s Money Lenders – The Colonial Stereotypes

Posted in Business, Current Affairs, European History, Feminist Issues, Gold Reserves, History, Media by Anuraag Sanghi on April 1, 2008

“Families have lost land, farmers have been asked to prostitute their wives to pay off debts …” writes Krittivas Mukherjee / Reuters.

Market Share Of Indian Money Lenders

Outdated Bollywood Style

I wonder what is the source of Krittivas’s article. I wonder how many prostitutes these money lenders have – from their 2,00,00,000 farmer-borrowers. Which era are you in, Bro. Krittivas? Apparently, the ghost of East India Company is alive, well and kicking. Is this the kind of grovelling that has to be done to be a part of Reuters, Krittivas? Friend Krittivas is reading a lot of colonial era propaganda – and seeing old Bollywood movies.

Even Bollywood has stopped this kind of portrayal of money lenders now. TV serials these days have business families as stars of the show.

A financial newspaper, The Mint, dutifully carries this Reuters article. Published jointly by The Hindustan Times and The Wall Street Journal, The Mint, regularly carries such bloopers. In yet another article that the Mint carried, for instance, writes how Indian “cities began suffering chronic milk shortages soon after independence in 1947″ – implying that colonial India was the land of milk and honey. This kind of editorial blindness nearly makes me believe that the Indian Government got it right with the previous policy of excluding foreign media.

Some Stats About Money Lenders

There are 34,000 money lenders – and they have lent money to more than 2,00,00,000 farmers. They account for nearly 30% of the rural credit flows – and more credit than all the nationalized banks put together. They charge between 18% to 36% p.a. interest generally. Lesser than what most ‘educated’ credit card users pay – and what ‘modern’ banks charge their English-speaking customers.

So much about ‘usury’ by money lenders.

The Seths Who Funded The East India Companies

The vilification of the money lender by the British Colonial Raj at various times for political and economic gains has unfortunately been carried forward in post-colonial India. The English East India Company (EEIC) was initially funded and grew on Indian capital. The House Of Jagat Seth was most famous – and one of the largest banking families in the world. Virji Vora, Shantidas were other merchant bankers who funded the various European Indian Charter Companies in their trade. EEIC officials could not forget their supplicant status with these ‘seths’ – when they were desperate borrowers.

After 1757, and the occupation of the Bengal, Bihar and Orissa, transactions with the East India Company caused the ruin of many Indian lenders.

The other reason why money lenders were portrayed as villains by the the Colonial administrations was merchandise. Instead of bonded producers of Europe, Indian producers were free to sell their product to the highest bidder. The EEIC found that their contracts could be annulled by repaying the advance amounts. And the weavers and other producers could repay the advances by borrowing from the local money lender.

20th Century Vilification

Later during the Great Depression and the so-called ‘Indian currency crises’, Britain was extracting gold from Indian peasants, to overcome its own problems. For British loot to happen and to make their policies effective, they needed to leave the peasant without options. The only way to do that was to curb the money lender. To achieve this aim, between 1925-1940, enquiry commissions were created – and propaganda ‘reports’ flooded the system.

The colonial India Government passed many of the laws restricting money lending activities. These reports - Central Banking Enquiry Committee (CBEC) report (1929) and its associated Provincial Banking Enquiry Committee reports (of Assam, Bombay, Burma, Ceylon, Central Provinces, Bengal, Punjab, et al) of which the Madras Provincial Banking Enquiry Committee (MPBEC) report is cited by lazy academics and out-moded bureaucrats as authoritative – even in post-colonial era.

April Fool Jokers?

April Fool Jokers?

April Fool Joke – The RBI

On April 1st, 1934, while the ‘Squeeze India’ campaign was under execution India’s banking authority was set up – choreographed by Montagu Norman, Neville Chamberlain, Winston Churchill (some sickness … some racism) Lord Willingdon. From that April Fool’s day till now, RBI’s character has not changed. It remains isolated, out of touch with the India – and looks at India through colonial viewing glasses.

The tragedy is that RBI is not alone. The IAS (a successor to the ICS) and the Planning Commission are the other two. Compare that with the brilliant track record of modern Indian regulators and organizations like the SEBI, TRAI.

Legalized Harassment & Extortion

Debt Conciliation Acts were passed between 1933 and 1936 by the governments of Assam, Bengal, Central Provinces and Berar, Madras and Punjab; the Punjab Regulation of Accounts Act (1930) and the Debtors Protection Acts of 1935 and other such burdensome laws buried the money lender in mountains of paperwork and licences. These laws required money lenders to comply with extensive and prolonged compulsory licensing and registration – and extensive recording of transactions and accounts.

What these laws achieved was what was desired – a license for police and other ‘inspectors’ to start an extortion racket from money lenders (these days called corruption). A bureaucrat from colonial Punjab, Malcolm Darling (1925) shedding crocodile tears stated “the Indian peasant is born in debt, lives in debt and dies in debt” became a by line for tarring the money lender – while the cause was extractive, colonial revenue practices.

Options Foreclosed

These restrictions on money lending foreclosed the liquidity option for the Indian peasant, which would have averted the gold outflow from India and the impoverishment of the Indian peasant. With this legalized persecution, money lenders’ activities were curtailed all over India. RBI joined in this hounding of the money lenders – which continues to this day. The Bengal Burma link of the ages was broken. Chettiar money lenders were thrown out of Burma. From being a granary of Asia, Burma started declining – and there was no rice for exports. Result – The Bengal Famine of 1943. Tally – 40-50 lakh deaths. Similarly, the role of Chettiars in Singapore was wiped clean.

After the fall of Singapore, and the rapid Japanese advance, with Subhash Chandra Bose in the vicinity, a revolt by Bengal would have had catastrophic effect on the colonial administration. Howard Fast, in his novel ‘The Pledge’ believes that the Bengal Famine was deliberate creation- possibly to weaken the local population.

Subhash Chandra Bose occupied a large mindshare within and outside India. (Image source and courtesy - editstreet.com). Click for a larger image.

Subhash Chandra Bose occupied a large mindshare within and outside India. (Image source and courtesy - editstreet.com). Click for a larger image.

The RBI, a colonial era body, continues with these colonial anti-Indian policies. They keep ever-greening and recycle colonial policies. Old laws with new labels and different wordings are made – with the same intent. Kill the money lender. In all this, it is Indian agriculture and the peasant who suffers.

Even the rare modern supporter of the money lender does not see the colonial baggage that India and Indians governance carries, sees only half the picture – and little opportunity.

The Pre-WW2 Currency Crisis

After (colonial) India’s accession to the world gold standard in 1898, India rapidly built up a export surplus - and British reserves of gold started drying up – in spite of gold export restrictions to India by the USA, Britain and much of the Western world. There was hysteria in popular press and politicians on the subject of India and its appetite for gold. To overcome this payment crisis, it was decided to pay India in silver released by the Pittman Act. Subsequently, even payments in silver became difficult. India then started getting paid by Bank Of England credit notes.

By WW1 end, it was evident that sooner rather than later, India would obtain independence. Between 1920-40, in a series of measures, it was decided to reverse this policy. Central bankers from the USA, Britain, France and Germany had many meetings to “coordinate monetary policy.” The agenda – gold flow management between themselves and an obvious understanding - don’t let the browns get the gold. They (Hjalmar Schacht, Governor, Reichsbank, Charles Rist, Deputy Governor, Banque de France, Benjamin Strong, USA Federal Reserve, Montagu Norman, Bank Of England) agreed that Indian demand for gold had a “deflationary effect on global liquidity,” therefore “Indian demand for gold had to be regulated.” So, while the West consumed Indian production and goods, they regulated Indian demand for gold!! The result – Bengal Famine of 1943 which killed 40-50 lakh Indians. As Gideon Polya has pointed out, Australian sheep have lower mortality rates.

Like much of Western history, the British (Lord Willingdon, Neville Chamberlain, Montagu Norman, Winston Churchill – as the Chancellor of the Exchequer) executed a scorched earth policy in India. (After all what is brown life worth?) They implemented a series of economic and administrative measures that killed millions in the Bengal Famine would impoverish India – and sustain the empire.

Montagu Norman, Winston Churchill (then the Chancellor of the Exchequer) returned to the gold standard – with the famous prediction by Keynes that this action would result in a world wide recession – of which much came to pass. Churchill confessed “I’m lost and reduced to groping,” but went along with Montagu Norman, united by their racism.

The National GovernmentOn October 27th, 1931, the Ramsey Macdonald led “National” Government (Conservatives and Liberals coalition, fearful of the rising Labour Party) in Britain won a huge majority of 554 MPs of 615. The economic crisis of September (misnamed as the Indian Currency Crisis), ensuing Depression era problems in the US, the Weimar Republic problems – and other issues pushed this ‘National’ government to ram through a series of measures (page 130-131) that depressed silver prices, inflated gold prices and raised interest rates in India.

Done over the protests by Gandhiji, trade bodies and merchants and threats of resignation by the Viceroy and his Executive Council , the resulting ‘money famine’ (page 155) had the Lord Willingdon ecstatically say ‘… Indians are disgorging gold … (page 156). Indians have a different reason to revile Neville Chamberlain who with great satisfaction said “…The astonishing gold mine that we have discovered in India’s hordes has put us in clover …”after impoverishment of the Indian serf.

What Can be Done

The largest rural credit agency system, which knows Indian agriculture like the back of its hand, is available to the Indian economy. Trash the colonial propaganda – and use these money lenders.

Step 1 – Stop calling them money lenders. This term was used and has acquired pejorative connotations.

Step 2 – Bring them under SEBI – an effective organization, not reputed for corruption.

Step 3 – Increase credit supply – and interest rates will automatically fall. Allow re-finance to these ‘banias’ – based on their loan books.

Step 4 – Create credit enhancement tools – by use of traditional adhatiyas, other money lenders, property collateral of the end user, etc.

Step 5 – Induce competition by simplifying registration and inducing initial success for existing and new comers.

These credit experts can become low cost credit delivery mechanisms – which will revolutionize Indian agriculture. Will Indian planners grow out of their colonial moulds? Will Indian legislation go native? Sooner the better.

What Can The Money Lenders Do?

Under generations of persecution, extortion and discrimination has blunted the organizational capability of the ‘native money lender.’ He needs to look at himself afresh – and exploit business opportunities and use his knowledge of the Indian financial ‘consumer.’

A simple outline of an action plan for the money lenders to reclaim their position can be as follows: -

1. Incorporate a holding company.

2. Contribute one lakh rupees capital per member – with 34,000 members.

3. Create a paid up promoter capital of Rs.340 crores – and an IPO for 660 crores.

4. Obtain RBI licence for a rural bank with this paid up capital of 1000 crores.

5. Enrol all money lender members as DSAs.

6. Refinance money lender portfolio – and create further liquidity.

7. Use the money lender network to raise deposits, sell insurance, obtain refinance mortgage for housing, etc.

Even a conservative estimate of Rs.1.00 crore lending, guaranteed by these money lenders can inject Rs.34,000 crores of investment in the agricultural economy in India. SEBI can be co-opted to create appropriate supervisory and oversight measures.

Post Script – The source of Krittivas’s article

It is 6 months and Krittivas has not seen it fit to give sources or details of his dubious charges. So, let me give the details. This entire story of prostitution of wives to money lenders was a colonial idea that the British plagiarised from a very successful French Emile Zola novel, Germinal (1885).

Of course, most of Zola’s work was propaganda for the Socialist causes that were dear to him. The Vatican banned Germinal – and proscribed its reading by Catholics. India’s vernacular press fighting for survival had no sources to overcome this propaganda. Indian English press was, of course, under colonial domination. When Emile Zola died in 1902, he was given a State funeral and the crowd chanted ‘Germinal, Germinal’.

Does this give you some idea, Bro.Krittivas, on how much propaganda we are targetted with, before you start hitting the keyboard.

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