Friday, January 7, 2011

India's elite faces potential revolt

FOR a country with 1.2 billion people, India is ruled by a surprisingly small elite, which runs everything from the government to large companies and even sports bodies. But a series of scandals, some involving billions of dollars, has now seriously undermined that elite's standing in the eyes of the public.

Almost anyone in a position of power in India, including well-known print and television journalists, is now viewed with suspicion. This is occurring at a time when economic growth is pulling a young and upwardly mobile population into the urban middle class. This new middle class is no longer constrained by the patronage systems of the village, but it also does not enjoy the cozy relationship that links the old middle class with the elite. Could this crisis of the elite trigger India's own Tiananmen Square moment?

Except in totalitarian regimes, a country's elite depends on a degree of popular acceptance, which is mostly derived from the belief that the elite is broadly "fair" in its dealings. Following the recent series of scandals, the average Indian does not believe this any more.

Of course, doubts about the ruling elite are not unique to India. Almost all countries undergoing a shift from a pre-industrial equilibrium based on patronage to one based on modern institutions and the rule of law have faced such crises of legitimacy.
Until the early 19th century, for example, British politics was extraordinarily corrupt. The old aristocracy not only dominated the House of Lords, but also used its influence to get relatives, friends and family retainers elected to the House of Commons by exploiting a key institutional weakness -- the existence of "rotten boroughs" that could be bought and sold.

The Duke of Newcastle alone is said to have controlled seven such boroughs, each with two representatives. Meanwhile, large and populous industrial cities like Birmingham and Manchester were barely represented. In 1819, a crowd of 60,000 gathered in Manchester to demand reform, but were charged by the cavalry. Fifteen people were killed and many more injured in what is remembered as the Peterloo Massacre.

Given the recent memory of the violent French Revolution, the British elite reluctantly agreed to democratising reforms. Ultimately, the Reform Act of 1832 abolished the rotten boroughs and extended the franchise to the new middle class (the working class and women would have to wait).

The United States, too, went though a period of robber baron industrialisation in the 1870s and 1880s. The greed and corruption of that era were satirised in 1873 by Mark Twain and Charles Dudley Warner in their book The Gilded Age: A Tale of Today. The period ended with the depression of 1893-96, and was followed by the major political reforms of the Progressive Era.

For Britain and the US, the transition in the nature of the governing elite was relatively smooth. But there are many examples where such change was sudden and violent -- the French and Russian Revolutions, for example. In Germany, the old Prussian elite successfully managed the country's industrialisation in the late 19th century, but was discredited by defeat in World War 1. Nazism filled the ensuing vacuum, and a new equilibrium would be established only after World War 2.

Similar shifts have been witnessed in Asia. Japan saw two shifts -- the Meiji Restoration of 1868 and the period after World War 2. South Korea was ruled by generals until widespread student protests led to a democratic transition in 1987. (Many of the country's top businessmen faced prosecution in subsequent years). Indonesia experienced its shift more recently, in 1998.

When China confronted this moment during the Tiananmen Square protests of 1989, the communist state repressed the students with an iron fist, but has since maintained a single-minded focus on economic growth. Corruption remains a major problem, but the authorities take care to punish the worst excesses in a highly visible way. Still, as the recent controversy over the Nobel Peace Prize demonstrated, the government remains nervous about any dissent that challenges the legitimacy of the ruling elite.

Even adjusted for purchasing power, India's middle class today probably totals no more than 70 million (far smaller than is generally assumed). But, in the coming decade, today's established middle class will be swamped by newcomers working their way up from the country's slums, small towns and villages.

One can see them everywhere -- learning English in "coaching centres", working anonymously in the new malls and call centres, or suddenly famous as sports stars. Never before has India experienced such social mobility. So far, this new group has been too busy climbing the income ladder to express their resentment at the excesses of the elite, but one can feel a growing sense of anger among its members.

It is impossible to predict when the shift will happen or what form it will take. Given India's democratic traditions, it is likely that the change will be peaceful. One possibility is that it will take place province by province -- the previously ungovernable state of Bihar being a prime example.

But we might also see an unpredictable turn, with a new political leader or movement suddenly capturing the popular imagination and sweeping aside the old arrangements. As we know from Nazi Germany and other cases, such movements do not always lead to a happy outcome.

Perhaps India's existing elite will learn from history, purge itself, and then open itself up to new talent. Many investigations have been ordered into the current corruption scandals. Over the course of this year, Indians will find out if such efforts are serious and whether they will lead to reform -- or merely to deeper crisis. -- Project Syndicate

By Sanjeev Sanyal author of The Indian Renaissance: India's Rise after a Thousand Years of Decline
New Straits Times Kuala Lumpur

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