Evidence for the global failure of
Statism and Dirigisme

[Preamble | Manifesto | Agenda]


Adam Smith mentioned that around 1750: "in manufacturing art and industry, China and Indostan, though inferior, seem to be not much inferior to any part of Europe" (cited in Coale, W.A. and Phyllis Deane (1965). "The Growth of National Incomes," in Habakkuk, H.J. and M.Postan (1965). The Cambridge Economic History of Europe. Volume VI. The Industrial Revolution and After: Incomes, Population and Technological Change. Cambridge University Press).


Even if one allows for the negative influence of the British between 1750 and 1950 (appx.), it remains to be seen why India fared among the worst performers in the past 50 years in its economic development.

Table 1a: Per Capita Income comparison, 1950

Per capita GDP in USD

USA

8,648

India

582

Number of times the US income was greater than India's income at the time of independence

14.8 times

Source: World Bank Tables on CD-ROM


Table 1b: Per Capita Income comparison, 1995

Per capita income in USD

Per capita income in PPP terms

USA

25,860

25,860

India

appx. 310

1,290

Number of times the US income is greater than India's income now

83 times

20 times

Source: World Development Report, 1997.


Table 2: Changes in per capita GNP of developed (capitalist) and less developed (noncapitalist) countries over the past 250 years (GNP per capita in 1960 dollars)

 

 

Presently developed countries

Presently less developed countries

Around 1750

180

180-190

Around 1930

780

190

Around 1980

3000

410

Source: Heilbroner, Robert L. (1988). Behind the Veil of Economics: Essays in the Worldly Philosophy. W.W. Norton & Company, New York, page 54.


Table 3: Growth in real per capita GDP in selected countries, 1960-1990.

Country

International Rank

Percent per year

South Korea

1

6.7

Singapore

2

6.5

Taiwan

4

6.2

Japan

5

5.3

Thailand

8

4.4

Indonesia

13

3.8

Egypt

31

2.9

Brazil

34

2.7

Germany

38

2.6

U.S.

53

2.0

Nigeria

56

1.9

India

61

1.7

Source: Robert Summers, Alan Heston, Bettina Aten, and Daniel A. Nuxoll. 1995. Penn World Tables. Mark 5.6a. Philadelphia: Center for International Comparisons, University of Pennsylvania.

Please also note that those nations which followed capitalism, essentially, and focused on economic growth, automatically had the lowest population growth rates, as well as the greatest drop in poverty. To do this they did not have to violate human rights as was done by China.

Tables 4: Population: How much of a problem?

Table 4a: Relative share of people of "undivided India," (including

Pakistan, Bangladesh and India) in world population

World

India

Share

1750

791

170

21.49

1800

978

186

19.02

1850

1262

222

17.59

1900

1650

285

17.27

1950

2517

439

17.44

1990

5295

1078

20.36

2025

8473

1882

22.21

Source: Data on world population till 1900, from Agarwala, 1972:2

Data on India's population from Lal, 1988:35

Data on world population from 1950, including data on

Pakistan, Bangladesh, etc., from World Resources Institute, 1994.

Table 4.b: Relative share of people of India, 1901-2025, in world population

World

India

Share

1900

1650

235

14.24

1950

2517

358

14.22

1990

5295

846

15.98

2025

8473

1394

16.45

Source: Data on India's population from 1901, from Ministry of Home Affairs, 1974:3

Other data from World Resources Institute, 1994.


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