Column : Bombs, bankers and us

Written by Michael Walton | Michael Walton | Updated: May 21 2009, 08:11am hrs
The remarkable outcome of Indias election was fundamentally driven by domestic considerations. It could prove far-reaching in its implications for Indiafor the design of policy under the new government and for the restructuring of the political landscape.

However, it also has a significance that is global in reach. The Indian electorate has provided a sophisticated rejoinder to the seemingly rising tide of polarisation in the world. This is further linked, I believe, to the soul-searching around the management of capitalism. In this there is a bridge to other major democracies in the world. The two major crises of our times revolve around violent polarisation religious or ethnic identity and the functioning of capitalism. These have separate dynamics but also have links. And they have both global and local dimensions.

At the global level, polarisation and an attack on capitalism were symbolically joined in Al-Qaedas choice of the Twin Towers as one of their targets in 9/11. This set the stage for the USs polarising response, the reciprocal embrace between President Bushs war on terror and jihadist ideology, and the deepening economic and political crises from the Middle East to Pakistan.

But polarisations with quite distinct origins, of caste, religion and language, have also distorted political functioning at more local levels, and in the extreme have been a continuing source of violence, from attacks on Christians in Karnataka and Orissa to the tragic conflict in Sri Lanka. At a more subtle but still pernicious level, polarisation around identity has been a source of vote-bank politics and fights over reservation status.

Soul-searching over capitalism has recently been intensely preoccupied with the global financial crisis, that started in the American core of the capitalist system. But there have also been longer-term concerns, in India and elsewhere, over whether unleashed capitalism necessarily enriches the few with only limited benefits or causes displacement for weaker groups.

What has the Indian election to say about this The electorate has clearly been more resilient to the Mumbai attacks than the US was after the Twin Towers. The US went into collective trauma; the electorate even re-authorised the Bush administration on its polarising course. The opposite has occurred in India. And while the past government can be criticised for modest change in many areas, it clearly represented a continued commitment to capitalist advance combined with substantially strengthened efforts at social provisioning.

Here is the link with other democracies. Three of the most important democracies in the world todayin terms of intrinsic importance and emblematic reachare India, the United States and Brazil. All have histories of identity-based struggles, exclusion and unequal growth. Yet in each case, the electorate has returned governments which are now in power that support inclusion over polarisation and the development of an economic system that combines the dynamism of capitalism with state structures that assure equity. There is also a telling symbolism. President Obama of the US is black. President Lula of Brazil comes from a poor family in the Northeast of the country (the equivalent of a Bihari lower-caste migrant in India). Prime Minister Manmohan Singh comes from a religious minority.

All these great democracies face difficult policy and institutional challenges, both in the realm of restoring the basis for long-term growth and in achieving genuine inclusion. There are complex design issues around creating the institutions for genuine equity with capitalism. The politics of patronage, special interests and corruption remains a powerful force as do the social forces that underlie identity-based fights. India in particular is in an immensely difficult neighbourhood, surrounded by less consolidated and conflicted democracies, whose conflicts have implications for India. Yet here too the power of the election lies not only in its symbolic value, but in the political resources it provides for India to be a force for inclusive change at a regional level.

The last few years have seen a lot of bad news. There will undoubtedly be more troubles ahead, around both polarisation and the ill-effects of poorly managed capitalism. Yet the Indian election now provides an important, sophisticated and essentially optimistic indication of the response of the citizenry in the largest democracy in the world. This certainly matters for India, but it also matters for global change in the coming years.

The author is at the Harvard Kennedy School, the Institute for Social & Economic Change, and the Centre for Policy Research