The Peninsula Foundation

Category: Book Review

  • The Gated Republic: India’s Public Policy Failures and Private Solutions

    The Gated Republic: India’s Public Policy Failures and Private Solutions

    Book Review
     
    The Gated Republic: India’s Public Policy Failures and Private Solutions
    Author: Shankkar Aiyar
    Publisher:  Harper Collins India
    Date: 01 September 2020
     

    India has always been statist. All its political parties are Statist in one way or the other; from Jawaharlal Nehru to Narendra Modi, the State has been thought of as the most important player in economic and social affairs. However, even with all this undue importance, the Indian State has failed to deliver even basic goods to its citizens in more than seventy years since independence. Political journalist and author Shankkar Aiyar analyses these government failures and explores the private solutions offered for such problems in his new book The Gated Republic: India’s Public Policy Failures and Private Solutions.

    Without engaging in the debate on how small or big a government should be, the author asserts that providing basic amenities is a moral obligation of the State to its citizens. The basic amenities namely Water, Health, Education, Power and Security are the titles of the chapters where he analyses issues surrounding each one of them individually. The issues are well researched, and every argument is substantiated with facts, so much so that one might find the sheer number of facts overwhelming.

    Shankkar Aiyar, however, does not stop with just facts, he gives us anecdotal stories on how failed government policies affect real people. And disproportionately such affected people are poor. Aiyar argues that this is because ‘those who can find solutions- where they find them and when they can pay for them- have already migrated to private solutions. Two conclusions can be deduced from this analysis. One, the poor are left out without even basic amenities of life, thereby increasing inequality. And two, the people who can pay for private solutions are ‘paying for services they have already been taxed for’. Either way, the author argues that the government has let down its citizenry.

    The fact that there is a rationed hourly quota for water in Mawsynram, the region of the highest rainfall in India and that even after seventy-three years after independence, less than 50% of class V students can read class II level text is a testament to the magnitude of the failures of the government.

    The State is, however, not ignorant of these issues. ‘Every decade saw a new committee’ and Aiyar lists out all of them from various sectors, sometimes even from the British period. In public policy, it is said that what gets measured gets managed but even with so many committees, there have not been desirable improvements. The fact that there is a rationed hourly quota for water in Mawsynram, the region of the highest rainfall in India and that even after seventy-three years after independence, less than 50% of class V students can read class II level text is a testament to the magnitude of the failures of the government. It is not that the government is not doing anything, but this dire situation is the result of sloth-like bureaucracy and something Aiyar calls the ‘announcement approach’ of the politicians. Aiyar argues that successive governments have stopped themselves with lucrative announcements and rebranding of old schemes with new slogans instead of rectifying ill-thought-out policies. For example, he talks about the Accelerated Rural Water Supply Program (ARWSP) which was introduced in 1973. Through the years it has gone through different transitions from being included in the twenty point program during the emergency to Technology Mission on Drinking Water in 1986, Rajiv Gandhi National Drinking Water Mission in 1992, becoming a separate Department of Drinking Water under Ministry of Rural Development in 1999, morphing into the Department of Drinking Water and Sanitation in 2010 and finally becoming Drinking Water and Sanitation Ministry in 2011. Now the ministry is renamed as the Ministry of Jal Shakthi. Even after all these measures, clean piped water is still a distant dream to many Indians.

    In a democracy, incompetent policies and politicians should be punished in the polls but Aiyar argues that there is a ‘divorce of authority from accountability’. He does not dwell too deep into why such a gap between government failures and electoral politics exists because the question, although imminent to understand this state of affairs, is beyond the scope of the book. However, he points out at various places in the book where such a gap exists and how ‘normal’ it has come to be. For example, the use of tanker lorries by the governments to ferry and provide water to its citizens is a shift from the actual problem of the lack of capacity to provide piped water. And the fact that water tankers are a ‘normal’ in reality is a testament to how public policy failures are divorced from electoral politics.

    Although people have not kept the State accountable, they have come up with solutions to address government failures on their own. There is an opinion echoed by many others that in India that problems are solved not by the government but despite the government. Aiyar explores so many places where the above statement holds. We get to know about ‘Bisleri’, the first bottled water and how its name evolved, the story of Apollo group of hospitals, many budget private schools and teaching fellowships, the ubiquity of inverters, private security firms who grossly outnumber police force 83:17 and so on. Each private solution is the result of incompetent government services and inefficient public policies. Aiyar dives deep into how the solutions came to be and how it has helped normal people. Take, for example, the power sector. Even though India is the world’s third-largest electricity producer, not every household has electricity. And inverters, diesel and battery, have made a huge impact on households. So much so that, in 2011, the sixty-eighth National Sample Survey (NSS) report created a new entry for inverters in household consumption of goods and services. Aiyar discusses many other problems and their private solutions in the book.

    What is interesting is that people, even poor people, prefer private solutions though it is costlier. For example, the author points out that about ‘78% of rural and 81% of urban Indians’ preferred private hospitals. This shows a lack of faith in government services. These are the symptoms of decades of ill-thought-out public policies that do not address the root cause of the issue.

    What is even more interesting is that now, these private solutions are rebranded as government initiatives. The Adoption of water purifiers and dispensers in government offices and public places is an example of such rebranding. More recently, NEET coaching classes by government schools in Tamilnadu can also be boxed into that category. While both measures are desirable, they are only short-time fixes that address the symptoms of government failure. Through these measures, the author argues that the tragedy of the issue is lost, and the irony is ignored.

    the book paints a rather gloomy picture of the state of affairs where people are exiting from government services for private solutions. Although this ‘exodus’ is natural for rich people, abject government failures are pushing everyone into private solutions irrespective of affordability.

    To summarize, the book paints a rather gloomy picture of the state of affairs where people are exiting from government services for private solutions. Although this ‘exodus’ is natural for rich people, abject government failures are pushing everyone into private solutions irrespective of affordability. The book argues that people are assembling themselves into gated communities where these failures of government policies are taken care of by private solutions. The author has accomplished what he has set out to do- to show us in a platter, the sorry state of public policies and the many failures that it begot. It remains for the civil servants, politicians and the voting citizens on what their line of action will be.

  • Poor Economics: Rethinking Poverty & The Ways To End It

    Poor Economics: Rethinking Poverty & The Ways To End It

    I finished Poor Economics: Rethinking Poverty & the Ways to End it, by Nobel laureates Abhijit Banerjee and Esther Duflo, this past week. Before getting on with the review, it must be said that this is an old book written almost a decade ago. A few suggestions made in the book are now being implemented as government schemes and others by private enterprises. Nevertheless, the book stands the test of time because of its focus on the fundamental approach on how to think about poverty and the factors that help sustain it.

    While the extremes are always loud, the truth mostly lies somewhere in between or somewhere that is unrelated to the needless binary. The authors understand this and try to stay away from the one-size-fits-all arguments to bring people out of poverty. Instead, they try to find solutions on a case by case basis, researching the problem on the ground and coming up with specialized and localized solutions. This problem solving is achieved with the help of the numerous Randomized Control Trials (RCTs) that have been done in eighteen countries of the developing world including India, Indonesia and countries in Sub-Saharan Africa.

    The book contains ten chapters divided into two sections, namely Private Lives and Institutions. In private lives, the authors dwell on the private problems of poor people including immunization, nutrition, education and so on. And in Institutions, they deal with social institutions of credit facilities, entrepreneurship and the politics of policymaking, which the authors feel, has a tremendous impact on the private lives of the poor.


     

    Early on, they introduce two graphs namely the ‘S-shaped’ graph and the ‘inverted L-shaped’ graph. The S-shaped graph represents a world with a poverty trap which the poor will not be able to get out of unless there is an intervention, through government or foreign aid.

    On the other hand, the inverted L-shaped graph represents the worldview which does not believe such a poverty trap exists. This graph posits that there is potential for growth if liberty and markets are allowed to flourish. And that foreign aid will only act as an incentive for the corrupt governments of poor countries to not provide free markets for their people.

    Although the book goes on to deal with other problems dealing with poverty, the running theme of the book is the examination of these two graphs with real-life problems faced by the poor. The readers might find themselves marking ‘S’ or ‘L’ on their book at various places (unless you’re a puritan who does not mark their book, in that case, at least you would think of ‘S’ or ‘L’). The authors argue that while there are problems where a poverty trap is obvious, there are also areas where there is no trap per se and therefore even well-intentioned interventions can prove to be counterproductive. They substantiate their claims with an eighteen-country data set which they have collected over the years through field research.

    To really answer the question of whether there are poverty traps, we need to know whether the real world is better represented by one graph, or by the other. And we need to make this assessment case by case

    The authors tell us stories of Pak Sudarno’s big family of nine children, Ibu Tina’s woes due to a robbery, Jennifer Auma’s saving method and so on. These identified lives help the reader understand the decision-making process of the poor; for example, why a poor family spends money on ‘rich food’ rather than spending money on nutrient-rich food even though their children are malnourished, or why a fruit vendor drinks an extra tea even when he is aware that saving money would mean less high- interest debt. The book goes on to provide insights on various problems including the lack of self-control, poor’s relationship with risk-taking, the present bias leading to undesirable future repercussions and so on.

    Although there is no one silver bullet to rid the poor of all their problems, the authors argue that they ‘do know a number of things about how to improve the lives of the poor’. They give us five key lessons to understand the poor better. One, they believe there is a market failure of asymmetric information wherein the poor ‘often lack critical pieces of information’. Two, the poor are responsible for too many aspects of their life; for example, think of drinking water- a poor person has to decide if he has to use chlorine in water as opposed to a richer person for whom clean water is made available by other people, therefore less decision making. Psychological researches say that the quality of the decision erodes if we have to decide so many things (thus successful geniuses and trademark attire).

    Three, there are ‘good reasons that some markets are missing for the poor or that they face unfavourable prices’, for example, the poor pay higher rates on their loans. Four, the failures in a poor country have less to do with ‘some grand conspiracy of the elites’ to maintain the status quo and more to do with avoidable flaws in the designing of public policies. And finally, five, a vicious circle of low expectations and low growth.

    To make use of these lessons, there has to be dynamic politics willing to get rid of the societal sin of absolute poverty. But the authors argue that politics and governments are, unfortunately, infested with what they call ‘three Is’- Ideology, Ignorance and Inertia. Nevertheless, the authors believe that good policies will help realise good politics. Although one could understand the pragmatism and the optimistic hue of such an argument, bad politics should not be underestimated. Bad politics could stagnate even good policies and create even further problems.

    The authors understand the complex issues of poverty and know that there is ‘no lever guaranteed’ to eradicate it. Therefore, they bank on small changes to bring about big effects, for example, one additional year of deworming for kids in Kenya brought about a 20 per cent increase in income when they became adults. In a sense, the book works itself through small steps to bring an understanding of the poor into mainstream policymaking. But as the authors acknowledge, fighting poverty is not a sprint, it is a marathon, one that is worth running. They are willing to commit to the marathon, but will governments of the developing world show such commitment? Such suspicion should last until absolute poverty is completely eradicated.

  • Good Economics For Hard Times

    Good Economics For Hard Times

    Title : Good Economics for Hard Times

    By Esther Duflo and Abhijit Bannerjee

    Published by Public Affairs, Hachette Book Group, New York

    Year :  November 2019

    Honesty is a quality seldom found among economists. More often than not, economists refuse to acknowledge the limitations of economic models that rely on, at times, completely unrealistic assumptions. That is, fortunately, not the case with this book. This book does not over-simplify economic issues and makes a compelling argument against making sweeping generalizations in a profession that relies on studying human behaviour.

    One of the best things about this book is its accessibility, it is as accessible to a layman as it is to a seasoned economist. This book, in a significant departure from their first book Poor Economics, focuses on the burning issues of wealthy countries instead. The writing is witty and succinct, full of interesting personal anecdotes.

    They start with the politically sensitive issue of immigration and show why conventional models of supply and demand don’t work for labour markets. Conventional theory, and critics of immigration, would have us believe that an influx of immigrants would drive down wages in the area and result in job losses for the natives. But Banerjee and Duflo show that the immigrants don’t just increase the labour force, they’re also consumers. Thus, they increase demand and by extension, employment and GDP in the area. They also point out that there is no strong evidence that even large influxes impact wages severely.

    However, when it comes to growth they’re not as clear as they are about the impact of immigration. They make a case as to why nobody really knows what drives growth in the long term and why prominent growth economists (Sollow, Romer etc) were all right as well as wrong at the same time. According to them, both the optimists and pessimists make sound arguments and it is impossible to predict if growth will continue or perish given the humongous number of variables involved and the sheer unpredictability of technology.

    Their support for free trade, unsurprisingly, is not unconditional. They don’t think it is the panacea that the neo-liberal discourse makes it out to be. Expansion of trade, they believe, is the driver of despair globally because of its random behaviour as they write, “Trade has created a more volatile world where jobs suddenly vanish only to turn up a thousand miles away.” They also present evidence showing that, at times, free trade has done more harm than good and argue that the state must provide proper support to the losers from trade if they want to mitigate the damage.

    Cutting tax rates for the rich has long been argued as a certain method to improve growth by many economists. Banerjee and Duflo, however, disagree. They write “In a policy world that has mostly abandoned reason … let’s be clear: Tax cuts for the wealthy do not produce economic growth.” They argue that even the (in)famous Reagan-Thatcher era tax cuts did little to revive growth. Instead, those tax cuts, accompanied by cuts in welfare spending contributed immensely to income inequality. Advocates of tax cuts often argue that raising taxes stifle innovation, but that is clearly false as Bill Gates himself argues here.

    Where a lot of economists fail and they excel, is bringing the social science aspect into economics. They don’t see people just as means to an end (growth) and emphasize on prioritising non-economic goals that don’t necessarily result into higher growth but instead improve overall happiness, dignity, self-respect and give people a sense of purpose. According to them, in this growing environment of despair, it is important to provide people with a sense of purpose.

    They argue, quite successfully, that we should change our policy response to poverty and stop letting only poverty define poor people. They recommend that poor people be seen just like normal people who have dreams and desires and policymakers need to stop believing that they know better about what poor people need than the people themselves.

    Lastly, they say that the message of policy interventions should not be ‘you are being rescued by the state’ and instead ‘this is the state’s support to ensure you have the basic rights you deserve.’ It is vital that they’re given the respect they deserve if we want them to lead dignified lives and not make them feel like they’re living on handouts from the state as even the needy hate being dependent on others. Restoring the dignity of the poor is an important step in eradicating poverty, they say.

    This book’s brilliance, in my opinion, is evident from the fact that economists across the ideological spectrum, from Sollow to Piketty, are all in awe of this work of art. To be honest, I have learnt more about economics and policymaking from this book than I did as an economics graduate.

    The arguments put forth in this book were, to an extent, eye-opening for me. I found them compelling and I believe you will too.

    Mohit Verma is a Research Intern in TPF. He is pursuing his Masters at the Madras School of Economics (MSE), Chennai.

  • Value Of Everything: Making And Taking In The Global Economy

    Value Of Everything: Making And Taking In The Global Economy

    Title : Value of Everything: Making and Taking in the Global Economy

    Winner of the 2018 Leontief prize for advancing the frontiers of economic thought ─ “Value of Everything: Making and Taking in the Global Economy” by Mariana Mazzucato is an extremely important addition to the contemporary debates in development economics. Fundamental ideas presented in the book are very relevant in the current pandemic environment as it gives us an opportunity to reframe approach to policy making. Limitations in the state’s capacity to handle a crisis of this scale might be true but the larger objective to ensure an economic and social value based ecosystem is the main idea that emerges from this book.
    The core focus of the book is on the ‘understanding of value’, as Mariana states – “much of what is passing for value creation is just value extraction in disguise”. By examining what is value the book leads us to understanding who creates value.
    Initial chapters set out to explain the core interpretation of ‘value’ adopting a historical framework by discussing influential economists. Beginning with Mercantilists in an inchoate system that was not linked with any theories to explain the creation of wealth, they believed trade creates wealth and hence, ‘value’ lies within trade. A group of 18th century French economists developed a formal economic theory ‘physiocracy’ that prioritized agriculture and land to be the ultimate source of value. There was a clear production boundary that was developed during the time of physiocrats with agriculture being productive and household, government, service, industry packed together as unproductive. Countering the Mercantilists, Adam Smith theories became prominent to understand the idea of value where wealth creation lies in an optimal economic policy encouraging surplus revenue to be reinvested in production for the nation to become richer. The author points to the theories put forth by Smith to be ambiguous yet made progress in building the concept of wealth creation. David Ricardo– a British political economist extensively wrote about rent and assumed land to be a fixed factor. As opposed to Physiocrats, Ricardo’s theory on value was beyond the production boundary and placed emphasis on financing the surplus into productive spending. The author briefly evaluates the classical theories including Marx’s labour value theory and the recent development of Marginalists under the neoclassical economics. It is worth contesting the idea of value in the marginalist approach where the price is equated to value and individual utility is studied over collective public utility . Although the theories in principle might not be relevant today but the evolution of value in the history of economic thought is a prerequisite to identify the flaws in our structure.
    A key focal point that grabs attention of the reader is the ambiguity present in determining the value of products and services. Reluctance to debate the idea of value with the current system has caused trouble in various sectors and the book reflects Mazzucato’s effort to place value in the centre-stage. She begins to make her case by lucidly explaining the fundamental shortcomings in finance deregulation. In the context of the 2008 financial crisis, much of the blame is on the finance market with excessive mortgaging strategy. Although finance is not a categorical reason for the crisis, the real estate bubble was artificially inflated by the short term objectives of finance companies and clearly proved to be unsuccessful. There are two relevant points that the author notes that will hold relevance across the waves of industrialization. First, economic value added by a finance sector largely remains disproportionate to the value added by other sectors. As a resource facilitator, she asserts, banking corporations are required to invest in productive business that adds further economic value in the society. Mere exchange of financial instruments does not guarantee increased output or welfare in an economy. It has taken a crisis for us to understand the need for steering the discussion on ‘Value Creation’. Second, financial markets bolstering private businesses model prioritizes immediate gains with limited attention paid to the long-run sustainability of the business.
    The book is a scathing indictment of the current global financial system. In the authors view the finance entrepreneurs are overrated, and contrary to popular perception they are not ‘value creaters’ but are ruthless ‘value extractors’ and parasitic. Professor Mazzucato finds the shareholder driven model to be problematic for business innovation and proposes a wider concept of stakeholder based operations. An unequivocal argument is presented to question ‘value extraction’ in the 21 century economy- in public choice theory it would mean rent seeking, a concept of increasing existing share of one’s wealth without creating more wealth. Although the author did not specifically mention the Asian countries, in Indian context, value extraction is much difficult to identify given the informality in credit market, labour market and commodities. But the unsustainable mode of executing business is evident in a corporate company that is motivated to spend on company image than Research and Development. Most importantly, the government bears the cost to repair the system with social tension and inequality that follows the failure of excess financialization. The author’s discussion on development and welfare throughout the chapters encourages readers to view the economy beyond numbers and growth rate– a propensity stemming from modern heterodox economics school of thought
    Mariana Mazucatto, founder of the Institute for Innovation and Public Purpose, draws attention to value extraction prevailing in the innovation economy. She illustrates three sources of innovation; cumulative innovation, uncertain innovation and collective innovation. She clearly articulates the engaging role of the public sector in facilitating innovation. Where most experts talk about innovation as an exclusive achievement of the private sector– Mariana challenges that notion and argues the risks of the innovation are borne by the public but the rewards are monopolized by the private business. It is impossible to deny the role of public sector in the process of innovation but it seems the author tends to credit the government more. All innovation need not create value- an extensive literature is presented to understand the way patents can be used to gain economically yet not create value. Highlighting the case of pharmaceuticals, she argues that most of the drug companies are monopolies that use the patent strategy and the rigid demand to inflate the prices for enormous profit although the production cost is a small percentage of the price. This process explains the high priced medicines in the USA and rekindles the fundamental flaw in pricing of a drug. An extreme private model with little clarity and transparency on value of the service has collapsed the healthcare system in the US, which is starkly evident in the current COVID-19 pandemic. To extend this idea, American healthcare contributes more to the Gross Domestic Product compared to the Japanese, yet citizens of the latter have higher life expectancy than of the former. The illusion of GDP contribution is more apparent when the system fails to serve the purpose it was designed for, like in the case of healthcare. Innovations in any industry can turn out to be unproductive; dismissing any single command approach from the government– the chapter ends by propounding a contract between public and private to adopt innovation as a means to achieve public value.
    In contemporary discourse, the author is concerned about the narrow definition of public sector as simply a saviour or a disturbance to private operations. A powerful narrative set to describe government to be inefficient and just an institution fixing market failure will deter the collective process of value creation. The recent economic stimulus announced by India is founded on the logic that public debt is bad, slashing interest rates would enhance business and privatization would lead to better economic growth. As Mazucatto argues, during an economic crisis public sector must seize the opportunity to invest in value creation simply because interest rates are neither market phenomena nor make firms sensitive to the change. The underrated value of the Keynesian ‘Multiplier Effect’ of public investment and considering the return on public investment to be zero are flaws in defining the role of government in contributing to growth of the economy.
    Prevailing public choice theorists’ fear of government failure over and above the threat posed by market failure runs the risk of ignoring the value created by the state. The author makes a compelling case to view government as an investor rather than spender and as a risk taker rather than a facilitator. She highlights the importance of the state’s part in the collective value creation process by disputing the marginalists definition of individual value in obtaining market value. Knitting back to the initial problem stated regarding price equal to value– identifying profit and rent becomes confusing thereby encouraging private players to extract or destroy value. The mainstream metrics used to assess the value also discourages actual value creators like the government to imitate the private sector. The government as a facilitator also faces the risk of lobbying from the private individuals and companies that hamper the process of development. The last chapter – ‘Economics of Hope’– summarizes the main ideas presented throughout the book and emphasises that the ultimate goal of the economy is to serve the people and ensure welfare along with sustainable and equitable development. The real challenge still lies in estimating the precise amount of government intervention in the process of value creation. Value of everything remains a convincing genesis of the debate on the central idea of value that could possibly be a dynamic tool to achieve the goals of an economic system.
    As Mariana Mazucato argues in this penetrating and passionate book, if we are to reform capitalism to radically transforman increasingly sick system rather than continue feeding it we urgently need to rethink where wealth comes from; who is creating it, who is extracting it, and who is destroying it. Answers to these questions are key if we want to replace the current parasitic system with atype of capitalism that is more sustainable, more symbiotic, that works for all.

  • Power Shift: Knowledge, Wealth, and Violence at the edge of the 21st Century

    Power Shift: Knowledge, Wealth, and Violence at the edge of the 21st Century

    “Power Shift: Knowledge, Wealth, and Violence at the edge of the 21st Century” by Alvin Toffler, Bantam Books, 1990. New York

    Alvin Toffler

    Last book of the trilogy, ‘Powershift’ published in the 1990s still continues to be an impressive intellectual handbook to understand the transformation of power in a rapidly evolving technological, economic, and social environment. Toffler argues the nature of power in any epoch is determined by knowledge, wealth and violence. By acknowledging the inevitable emergence of new age knowledge economy, Toffler sets to describe the set of changes in the power dynamics at the turn of the 21st century. A gradual shift in power succeeds with knowledge through control of information in a super symbolic economy. Post third wave of industrialization, smoke stack industries would be replaced by decentralized industries with technology and information playing critical roles. China in the past few decades has designed its economy based on knowledge and gained technological sovereignty in Asia threatening the West’s global dominance. He asserts the pattern of powershift in politics, economics and business would be integrated and the hierarchy of power would get dissolved. A mosaic of power structure would emerge, ‘demassyifying’ production that determines the future of an economy. Recent developments in 3D printing, artificial intelligence etc have changed the paradigm of manufacturing – the country investing and comprehending the impact of innovation and disruptive technologies would gain economic superiority. By providing substantial case studies and thorough qualitative analysis, the futurist predicts millennials to redefine the defence for democracy with technology, information and knowledge. There exists a conspicuous relationship between power, wealth and knowledge since the beginning of the industrial revolution. While power has traditionally been symbolised by brute military power and economic power until the end of the world wars, the post 1945 transformation of power is contained in a triangle of military power, economic power, and knowledge (science and technology) power, Knowledge has now transformed the very notion and effectiveness of power. Power structure in the 21st century, according to the writer, will be redefined by knowledge.

    Power Shift: Knowledge, Wealth, and Violence at the edge of the 21st Century

    Violence and wealth function as important tools to consolidate power – politicians, bureaucrats and business people have always used violence & wealth to move up the hierarchy. Changing levels of technology and innovation has advanced knowledge to be a source of high quality power. Toffler firmly argued that power shift era will not be about competing nations or institutions for power, rather the dynamics between violence, wealth and knowledge would be the most intimidating transformation of power. Twenty odd years later it is clear that his analysis is spot on. An important note has been made on three key factors that bolster power accumulation – military, economic and technological power. Any country claiming superiority over these three could garner superpower status. Testing this hypothesis in the case of scandanavian countries proves that despite achieving superior economic and technological capabilities these countries could never realise great power status due to lack of strong military power. Toffler highlights, however, that the nature of military power now symbolises the critical influence of knowledge power. Tofflers’ concepts, also echoed by Joseph Nye as ‘smart power’ (combination of soft and hard power), justifies the end of the Cold-War era power struggle. Political values, culture and foreign policy were fundamental for soft power, traditional marxist and liberals considered economic might to be foundational to soft power. Global power centre of gravity shifting from west to east at the turn of the 21st century is a reflection of not just the rise of Asia but also the transformation of power and hence, the powershift. China’s ambitious Belt and Road initiative aims to consolidate its economic power within the western framework and then transform it. Undoubtedly, power transformation across the region and within a country is an outcome of increasing control of and access to advanced technology. A successful super symbolic economy would operate only in a country which manages to maintain monopoly of knowledge for a brief time frame until the knowledge can be commercialized to boost the economy further.Toffler has made assumptions by partially ignoring the role of domestic government structure in accumulating wealth by gaining access to control of knowledge. The inextricable link between local framework in materializing as an influential player in the global market cannot be ignored. Toffler’s following statement rings even more relevant today than ever before – “Knowledge itself … turns out to be not only the source of the highest-quality power, but also the most important ingredient of force and wealth. Put differently, knowledge has gone from being an adjunct of money power and muscle power, to being their very essence. It is, in fact, the ultimate amplifier. This is the key to the powershift that lies ahead, and it explains why the battle for control of knowledge and the means of communication is heating up all over the world.” By using the term knowledge liberally, author assumes a fluidity in defining knowledge as a tool in the era of powershift. Beyond logical thinking, knowledge is related to the ability of learning, unlearning and relearning. Any information and data can be reproduced with value as a product of passion and innovation. India at this juncture must position herself to strategically become a strong emerging power in a multi polar world. Counter balancing China’s growth in Asia, India has to permeate the knowledge economy by investing in technology and innovation. It might be fallacious to idealize China’s path, but it is critical to recognise the changing dynamics of knowledge in the current world order. An exhilarating text presenting an inspiring account of the future which we currently live in. The book remains germane as we experience knowledge of technology shaping the power structure and reiterates the dictum ‘knowledge is power’.

  • The Many Faces of Political Islam: Religion and Politics in the Muslim World

    The Many Faces of Political Islam: Religion and Politics in the Muslim World

    Click to Purchase

    Author: Mohammed Ayoob. The University of Michigan Press, 2007, 232 pp.

        One of the major misconceptions about Islam in the modern world, Mohammed Ayoob argues, is that it is a monolithic, inherently violent religion. The purpose of Ayoob’s book, in a nutshell, appears to be to rectify these misconceptions. He elaborates on the diverse nature of Islamist groups that currently exist or have existed in the past, shedding light on the divergent paths taken by them in order achieve their respective ideologies.

        A key argument brought forth is that a number of political groups with strict Islamist ideologies are turning towards pragmatism and opening up to the process of moderation and democratisation. Ayoob, a Distinguished Professor of International Relations at Michigan State University, repeatedly emphasises the importance of context, using meticulous case studies to augment his points. Additionally, he demonstrates how external factors, influences and interferences over the years have shaped the Middle East—specifically how the incomplete and forced process of state-making and nation-building is at the root of the unstable reality in a number of nations today.

    Style & Content

        The Many Faces of Political Islam provides a unique but crucial perspective that remains relevant today. It elucidates aspects commonly ignored by the mass media, and does so in a largely unbiased, objective manner. Ayoob, however, tends to downplay violent tendencies of the Islamist groups he talks about, including Hezbollah and Hamas. One might wonder why, but perhaps this is because it’s an aspect that audiences are already familiar with, having dominated global headlines particularly since 9/11.

        Incidentally, many historical aspects are presented in a summarised manner, such as the events leading up to the 1979 Islamic Revolution in Iran, or the characteristics of the Nasser, Sadat and Mubarak regimes and their respective relations with the United States. In this regard, basic knowledge about the region is required. Ayoob’s method of comparing and contrasting, his intricate detailing of the ‘where, when, why and how’ of various political groups and movements that have taken shape in the last couple of centuries further facilitates one’s understanding of the subject.

    Key Themes

        Ayoob states that the nature and intensity of the opposition depends upon and is directly proportional to the degree of repression created by the regimes in place. To reference one of the quotes employed in the book, one by Carrie Rosefsky Wickham: “political openings [even short of democratization] can encourage Islamist opposition leaders to moderate their tactics.” (p. 80, line 38)

        Several essential arguments, such as Islam being a non-monolithic religion, extremist factions being fringe elements whose agendas are only marginal to the pertinent issues that mainstream Islamist groups are concerned with, and how mainstream parties are moving in the direction of moderation and democratisation, are frequently recalled throughout the course of the book.

        Ayoob has produced a comprehensive, easy-to-follow analysis on the enormous diversity in a domain broadly categorised as political Islam. The book exemplifies how authoritative regimes, foreign occupation and external interference in the region have produced varied forms of opposition groups, and raises questions regarding the biased perception of Islam in present-day societies, particularly in the West. Those seeking to gain a nuanced understanding of the subject, as well as those harbouring opposing viewpoints, will find The Many Faces of Political Islam to be an enlightening read.