James Crabtree’s book The Billionaire Raj is significant in that it explores the reality of the Indian experiment with market capitalism post liberalisation. It is exceedingly well-written, describing in vivid detail the excesses that great inequality and obscene wealth bring. He conjures up charming vignettes of an assortment of larger-than-life characters that populate the landscape of this new India.
The book demonstrates Crabtree’s extraordinary energy, travelling to the badlands of UP, Cyberabad in Andhra and other places to explore the fate of the infrastructure companies, but even as reportage, the book has its limitations. There are few interviews with the significant players, and an excessive reliance on secondary sources, something one would not expect from a Financial Times correspondent who spent nearly five years in India’s financial hub.
The book refers to the Gilded Age, as late 19th-century US was called, the high noon of the Robber Barons, the J.P. Morgans, Carnegies and the Vanderbilts, whose stupendous wealth was the foundation of great philanthropy and marked the prelude to the progressive era, the dawn of the democratic, liberal and capitalist paradigm. The central conceit in the book is Mark Twain’s caustic observation of the period that glittered on the surface, as if painted in gold, but was decaying underneath; that is a powerful trope which Crabtree prefers not to dwell on. To be fair though, he discusses the widening inequality and touches upon thinkers such as Amartya Sen and Thomas Piketty, but without really wanting to state what he thinks.
The most exasperating aspect of this book is that while he – understandably – avoids moralising or being judgmental, he just does not want to take a stand. He wants to tell us a story of what he describes as the critical moment in the national remaking. In a sense the term ‘remaking’ gives his game away, as one wonders whether this term masks an apologia for the billionaires and the present government whilst sedulously avoiding open criticism.
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These are the dangers of being an embedded journalist. Most financial journalists perforce have to spend most of their time with businessmen and the financial community, and there is a tendency to uncritically echo their sentiments and prejudices. So for example, Crabtree never misses an opportunity to berate Nehru, showing scant regard for the architect of the Indian democracy and builder and upholder of institutions which have endured, such as a vibrant parliament, free press and independent judiciary. In the current context, it is relevant to say that the IT revolution did not come out of nowhere, its genesis lay in the many IITs set up by Nehru in the 1950s, instilling a scientific temper. What Crabtree doesn’t get is the unspoken consensus in economic policy since independence; with the notable exception of the Swatantra Party and the Chandrababu Naidu reforms of the 1990s in Andhra Pradesh, most of the political class may have differences on secularism, caste issues and regionalism, but as regards economic policy there is very little to choose between them.
James Crabtree
The Billionaire Raj: A Journey Through India’s New Gilded Age
Tim Duggan Books, 2018
There are several egregious mistakes in the book which I think need to be pointed out. The first one relates to the land on which Antilia is built – he states that a Khoja trust was planning to establish an orphanage on the plot. On the contrary, there was already an orphanage existing on the plot for many decades set up by the Currimbhoy Trust. The property originally was bought by a Muslim cotton merchant (who acquired his baronetcy from Lloyd George) from the Maharaja of Gwalior. Mukesh Ambani purchased the plot cheaply because the end-use of the plot was confined to that of an orphanage; but after the sale went through, the end-use mysteriously changed to residential. Crony capitalism in action.
Crabtree also lauds Modi’s decision to publicly auction assets, such as coal and spectrum, as an example of new transparency; but Modi did not have a choice as the Supreme Court had directed that these assets be auctioned. I am not sure if Modi had a choice he would have gone down that road.
The inevitable difficulty with this book is that like most contemporary history, it gets overtaken by events. Crabtree correctly identifies much of the source of the black money and corruption in India as a consequence of political funding. He deals with this menace, remarking on how political parties grossly overspend above what is stipulated. If there was to be any remaking of the country, one would assume that this is something which Modi, if he were genuine in his stated desire to uproot black money and undermine crony capitalism, would address.
Post Crabtree’s book, the present government has sought to legitimise electoral funding though bonds with no requirement for the donors to identify the political party they are funding. The point being that these measures only increase the opaqueness of funding reinforcing the opportunities for influencing government through the back door.
What is inexcusable on Crabtree’s part is his overlooking of an important factor which writers such as Ruchir Sharma have pointed out: the increased protectionism followed by the Modi government and the somewhat arbitrary imposition of anti-dumping duties on various industries which has been a source of favouring one business over others, decreasing the scope for competition and providing impetus to crony capitalism.
Crabtree attempts to burnish his argument for the new binary or “remaking” by the example of Vijay Mallya and how the Modi government has pursued him as an example of a new resolve. This is not the best example as Mallya had on several occasions agreed to settle the banks on the basis of principal owed but the banks didn’t accept it. However, there is good reason to believe that Mallya was the perfect scapegoat, to showcase the crackdown on crony capitalism – Mallya living the life of unabashed hedonism and opulence, not paying his workers, was the textbook villain and, perhaps Modi saw mileage in his extradition prior to the 2019 elections as a vote winner.
James Crabtree
However, this is not the first example of prominent industrialist being incarcerated, if indeed that actually happens to Mallya. There is the case of Subrata Roy of Sahara who faced the wrath of SEBI and the Supreme Court and was imprisoned in Tihar jail for years. Even more extraordinary was the jailing of both D. Raja and Kanimozhi, two serving ministers in the UPA government, something without precedent. It is difficult to imagine any minister in this dispensation spending time in prison for an offence committed whilst in office.
It is also relevant to know that the 2G scam which was meant to be the scam to end all scams was not proved, the case against the accused collapsing without evidence despite most of the hearings being under Modi’s watch.
There are many things which Crabtree misses out on, whether by oversight or design I know not. For example, the rather ominous nexus between religion and crony capitalism that appears to be flourishing with the spectacular rise of Baba Ramdev and Patanjali where state governments feel obliged to give free land and benefits to essentially a commercial entity.
There is also the matter of competition and antitrust laws having been weakened in enforcement by the recent abolition the Competition Law Appellate Tribunal and merging with the NCLAT in Delhi, the tribunal members are all ex-bureaucrats appointed by the government and are grossly overburdened. Crony capitalism ideally flourishes in a non-competitive business environment and accordingly this move may be of a piece with diluted antitrust legislation. There is also the palpable interference with the judicial appointments, and control of the CBI and other enforcement agencies which allows the government and business nexus to operate on a mutual beneficial basis, proceedings being dropped or appeals not being pursued against favoured business houses. There are numerous instances under this regime of such actions which only makes sense in a state where ‘Bollygarchs’ rule the roost.
There is indeed a remaking, but not the way Crabtree seems to have envisioned. He talks of being optimistic – what he doesn’t seem to grasp is the unprecedented diminution of institutions in recent years concomitant with the concentration of power in the gang of two. The strength of institutions invariably determine whether societies prosper or fail; Modi may be transient but the damage he has inflicted may be permanent. Crabtree gives a range of possibilities of how India may develop including the worst-case scenario of a saffron tinged version of Russia. Since his book has been published, the growth of the surveillance state, the crackdown on the media, protectionism and denigration of institutions, Crabtree’s direst presentiment may be coming to pass.
Javed Gaya is a lawyer based in Mumbai.
