In our recent trip to China, whilst we were thoroughly impressed with the dynamism of Chinese business and efficiency of the state, we couldn’t fully comprehend where India fell short. This blog from David Oks provides an angle from history around human development and social reform – how the two countries diverged on these aspects.
Whilst both countries began their independent journeys around the same time (1950s), their first few decades were in complete contrast: “The Communists’ leader, Mao Zedong, immediately embarked on campaigns of vengeance against enemies of all stripes, murdering well over a million people in the process; he then launched on an ill-fated agricultural modernization campaign, the Great Leap Forward, that produced the largest famine in history, killing somewhere between 30 and 45 million people; and then a frenzied period of ideological radicalization, the Cultural Revolution, that suspended national life for a decade and killed another 1.6 million. By the time that Mao died in 1976, China was internationally isolated, economically stagnant, and still desperately poor.
…India enjoyed long decades of peace, stability, and democratic rule. It was led by a broad-minded secularist named Jawaharlal Nehru, who had been educated at the finest British institutions and governed in the name of science, reason, and social progress; and throughout its entire post-independence period India maintained open elections, an independent judiciary, and a free press. It never experienced anything like the Great Leap Forward or the Cultural Revolution.”
Indeed, around the 80s, much like the author most would have bet on India: “As late as 1985, prominent economists were writing articles in the New York Times suggesting that “far more than China today, India is an economic miracle waiting to happen.”
However, this is what transpired thereafter: “In 1987, median purchasing-power adjusted income in China was $1.88 per day, compared to $2.94 per day in India. Chinese median wages surpassed Indian ones in the early 2000s; and by 2022, China recorded a median income of $13.36, against $5.54 in India. In the 35 years between 1987 and 2022, Chinese median income rose 611 percent, while Indian median income rose only 88 percent.”
The author then goes on to explain what he thinks made the difference: “Rapid industrial development requires human capital: workers who are literate enough to be trained, healthy enough to show up, disciplined enough to come in on time, and sufficiently unencumbered by traditional life that they can sell their labor to whoever offers the most for it. Traditional agrarian societies produce almost none of these people: the peasants who made up the bulk of both India and China in 1950 tended to be illiterate, sickly, and restricted in all sorts of ways. For people to be productive workers in modern economies, all of that must be cut away. The more advanced European states spent much of the last millennium doing exactly that. And between 1950 and 1980, China succeeded—frequently through brutal means—in replicating that process: over the course of a few decades, the Chinese state modernized its society at the barrel of a gun. By 1980, as its economy opened to the world, China was a socially modern country that just happened to be extraordinarily poor. It had the human capital for rapid industrialization.
…But India never underwent that transformation. Its traditional social order survived independence more or less intact; and the Indian state never managed to develop its people’s human capital as China had. When India finally opened its economy to the world in 1991, its people were simply not prepared for industrial modernity in the way that China’s were. China invested in its people; India did not.”
So, how did China unleash its human capital despite the horrors under Mao: “Decisions that had once been vested in families and elders—about, say, marriage or the allocation of land—were stripped and transferred either to individuals (in the case of marriage) or the state (in the case of land). In 1950, the Chinese government passed the New Marriage Law, which banned arranged marriage, concubinage, and child betrothal, gave women the right to own property and divorce freely, and allowed women to keep their own names upon marriage….The mass mobilization of women into the workforce, under the slogan that “women hold up half the sky,” was similarly transformative: tens of millions of women were pulled out of domestic seclusion and into economic life, and thus freed from the control of their families. And so the traditional Chinese kinship unit—not merely a “family” but an autonomous institution governing the lives of its members—was destroyed.
…Economic development always eluded Mao; but human development—mass education and mass health—proved more attainable. Literacy campaigns and mass education helped raise the literacy rate from roughly 20 percent in 1949 to almost 70 percent by 1982. These gains were concentrated among women: Chinese women went from “virtual complete illiteracy” to a literacy rate of about 50 percent during the same period. The progress in health was similarly rapid: child mortality fell by 80 percent between the early 1950s and the late 1970s. Even with all the horrors of Maoist rule—including, it should be remembered, the largest famine in history—between 1949 and 1976 China recorded one of the largest sustained increases in life expectancy of any country in history, rising from about 41 years in 1949 to 61 by 1976. And for the first time in history, Chinese women were meaningfully included in public life: by the late 1970s, China had a female labor force participation rate exceeding that of many rich countries.
…When analysts from the World Bank visited China in the early 1980s, they reported that its low-income groups were “far better off in terms of basic needs than their counterparts in most other poor countries”; if China’s “immense wealth of human talent, effort and discipline can be combined with policies that increase the efficiency of resource use,” their report said, “China will be able, within a generation or so, to achieve a substantial increase in the living standards of its people.” And that’s exactly what happened.”
Ironically India despite having a similar social reform agenda legislatively, failed at enforcing it: “Nehru, who served as prime minister from independence until his death in 1964, had a strong dislike for the “superstition and deadening custom and tradition” of traditional Indian life, and wanted to solve the “insanitation and illiteracy” and “hunger and poverty” that marked the country. But Congress wasn’t united behind him: Nehru simply didn’t have the power to achieve this in a real way.
…In 1950, for example, Nehru and his law minister—the famed lower-caste activist B. R. Ambedkar—introduced the Hindu Code Bill, a sweeping reform of Hindu personal law…The bill would have outlawed polygamy, granted women the right to divorce and inherit property, and permitted inter-caste marriage. It was similar in structure to the New Marriage Law that the Chinese government passed the same year, though it stopped short of banning arranged marriages like the New Marriage Law had. But the Chinese government had imposed the New Marriage Law by fiat and steamrolled those who stood in its way. Nehru and Ambedkar, by contrast, found themselves frustrated by a wave of opposition from Hindu traditionalists: even India’s president attacked the bill, suggesting that introducing concepts “foreign to Hindu law” would “cause disruption in every family.”…And so the Hindu Code Bill died in parliament. Ambedkar resigned in disgust
…Just as it was unable to reform social life, it was unable to provide effective services; health outcomes remained dismal. Within a single generation, India’s health outcomes went from comparable to Chinese ones to dramatically worse. The gap between Indian and Chinese life expectancy widened from three years in 1950 to 11 years in 1980. Child mortality told the same story. In 1950, 27 percent of Indian children died before the age of five, compared to 32 percent of Chinese children; by 1980 it was 17 percent in India, against 6.3 percent in China.
And the same with education. Nehru and his successors were keenly interested in technology and the peaks of scientific achievement; but they could never muster similar enthusiasm for mass education. So India established a network of world-class technical institutions, like the Indian Institutes of Technology and the Indian Institutes of Management, while neglecting everything else: even today, India’s elite technical universities receive the majority of government funding for higher education, while educating only 2.6 percent of the university population.
Indian mass education, meanwhile, remained abysmal. In 1990, only 55 percent of Indian children had completed primary school three to five years after the expected completion age, against 87 percent of Chinese children; and even those who did go to school often got little out of it. In 2009, when India participated in PISA—the Programme for International Student Assessment, which ranks students across countries based on test scores in math, science, and reading—it ranked 72nd out of 73 countries. (China ranked at the top.)
… All of this meant that by the time that India liberalized its economy in the early 1990s, it simply didn’t have the pool of high-quality, low-wage labor that China could command. Thanks to its elite technical universities, India did have a relatively small number of highly-educated engineers, who became the backbone for India’s IT services economy; but it didn’t have the workforce for manufacturing-led growth. Its workers were less literate, less healthy, and less productive than what China could offer; they were bound by caste and kinship obligations that made them reluctant to migrate for work or sell their labor freely; and because so few women participated in the labor force, India had a higher dependency ratio than China, with each working Indian supporting far more people who weren’t working”
Whilst no one can justify the brute force under which these changes were brought in China, it is hard to deny the importance of human development and social reform for a nation’s progress.
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