In 1943 Ayn rand wrote the novel “The Fountain head” it manifested in it the ideas of objectivism, cherishing the idea of individual and their own self interest. Her 1953 novel “The atlas shrugged” furthered this philosophy-she believed the proper moral purpose of one's life is the pursuit of one's own happiness or rational self-interest; that the only social system consistent with this morality is full respect for individual rights, embodied in pure laissez faire capitalism. Her Philosophy vehemently opposed collectivism, communism and a welfare state. These ideas influenced many individuals these novels had cult followings. It was a potent idea, seemingly remote to the ideals of post independent India. As a young student in 1999 I read her books, convinced that the tenets of this philosophy & economics will never be implemented any country or region, apart from the United States. The idea was powerful- its propagation and implementation in its original form in India- impossible. Many among my friends undermined the power of such philosophical ideas.
Alan Greenspan an American economist and the ex Chairman of the Federal Reserve of the United States from 1987 to 2006 influenced US and the world economy for over 2 decades. As a student I read about him in news papers, his policies and views always interested me in my graduate college. He was a determined intellectual, delicately balancing the role of central banker, being at the helm of affairs at US Federal reserve he had considerable influence across the globe. His economics was free markets and neoliberal capitalism. He demonstrated in US economy the success of free markets. A fierce critic of trade barrier, it would be understatement to concede that Greenspan “influenced” opinion worldwide. His policies and observations had great influence on the corporate world, An example of the effect of his closely parsed comments was his December 5, 1996 remark about "irrational exuberance and unduly escalating stock prices" that led Japanese stocks to fall 3.2%.
The Indian economy was liberalized on account of its near bankruptcy in the year 1991. The reforms progressed furthest in the areas of opening up to foreign investment, reforming capital markets, deregulating domestic business, and reforming the trade regime. Liberalization had done away with the Licence Raj (investment, industrial and import licensing) and ended many public monopolies, allowing automatic approval of foreign direct investment in many sectors. Thus came down the socialist policies of the state. Total foreign investment in India grew from a minuscule US $132 million in 1991-92 to $5.3 billion in 1995-96. Cities like Bangalore, Hyderabad, Pune and Ahmadabad have risen in prominence and economic importance became centres of rising industries and destination for foreign investment and firms. What a socialist state could not achieve in decades was achieved in less than 15 years by free markets. The efficiency of free markets, created new opportunities destroyed old inefficient ways of doing things and created the new post liberalization India.
The aim of social upliftment was best achieved by a capitalist model along with spread of education. The markets had unique ways of creating demand and in India’s case demand for cheap tell-callers and outsourced software maintenance in the US gave more employment than any socialist could have imagined. The demand and supply dynamics brought costs down and improved standard of living. The futility of old socialist model as enumerated by rand in her novels- now looked self evident.
The journey of India from a socialist economy to its present form is long, but unarguable it is deeply influenced by the World bank, IMF and the United states. Mr Greenspan as the head of US fed bank definitely influenced to propagate free markets in his own circle of influence. While reading the autobiography of Alan Greenspan, I realized that Ayn Rand significantly influenced Greenspan, They argued over various tenets of objectivism & capitalism- Rand thus fine-tuning her thoughts on them and Greenspan amazed at her intellectual capital. Thus objectivism and lassie fair capitalism as enumerated in Rands epic novels where propagated by economic policies of Greenspan in the US. The liberalization of India’s economy was in effect trickledown effect of the policies of US. What I though unattainable as a young student was already happening in India- the philosophies of rational self interest, free market and capitalism had already being absorbed in Indian ethos. I realized that irrespective of socialist vision of India, an idea whose time had come could not be stopped it flowed in and was absorbed.
I realized the complete futility of communism and inefficiency of a welfare state, these very ideas were vehemently opposed by Rand and Greenspan. The concepts of creative destruction, job losses, improving standard of living all made sense to me now. What I read as a comment on society, literature was economic theory in action.
Thus the foundation or ideals on which India was formed evolved and morphed itself to the Ideals of free market as propounded by Adam Smith, are like universal laws. Objectivism as proposed by Ayn Rand and Alan Greenspan, just promoted and propagated these ideals far beyond Adam Smith would have ever imagined as possible.
Ideas are most potent weapons once unleashed they form their own life and grow.
