Why Europe Grew Rich And Asia Did Not – Global Economic Divergence 1600-1850 --------- Prasannan Parthasarathi

 

The focus of the book under consideration is categorically elaborated in the title. The attempt is to understand why Asia got left behind in the economic race and Europe got ahead -- and hugely so. The debate on this ‘divergence’ is not new, but the arguments advanced by Prof. Parthasarathi in this fascinating book are both intriguing and stimulating.

The history that the debate attempts to understand is well known. In summary, from the late 18^th century onwards a series of technological innovations occurred in Britain that transformed certain sectors of the British economy. Productivity increased hugely, and the British economy became the global center of manufacturing by the mid-19^th century. Western Europe followed the British lead and Europe grew rich, while Asia in general and India in particular, did not.

Explanations for this ’divergence’ are manifold. The focus of all explanations is a stark difference between Europe and Asia. Some find the cultural/religious difference significant -- the Protestant ethic and related social orientation towards mastering nature by scientific exploration, hard work and frugal living. Others argue that European institutions were conducive to technical innovation and economic growth -- free(ish)markets, individual property rights and such economically dynamic structures were the major differentiators between a dynamic Europe and a static Asia. Other explanations are also on offer.

The author however, offers an entirely different perspective.

He argues that the economic, political, social and ecological context in any given period of time determines the possibilities open for a society to choose from. Choices are not determined, but certainly constrained by circumstance. In the 18^th century, the context, so defined, differed across geographies and led to different paths being chosen -- and rationally so -- by different ‘agents’.

This general argument needs elaboration and validation.

Trade between Europe and Asia via the Red Sea and The Persian Gulf had existed for centuries, before an all sea route via the Cape of Good Hope was discovered by the Portuguese and Vasco Da Gama reached Kerela in 1498. About a century later the Dutch and the English (the French took a little longer) also came by sea in search of profit. From an initial fixation on pepper and other spices the ‘Company of Merchants of London trading into the East Indies' (the East India Company, in short) found another hugely profitable commodity for trade -- Indian cotton cloth -- coloured, checked and even coarse white. Cotton was more comfortable to wear than the commonly used wool and linen, was available in a wide variety of colours and patterns, and held colour much better too! Soon a huge and growing demand for Indian cottons was created in Britain and elsewhere. The fancy, coloured stuff was for the English consumer and the coarse for buying slaves with on the West African coast; and also to clothe the slaves so bought, in the Americas—and that includes the Caribbean sugar plantations. The quality of Indian cottons and the volumes that sea transport made possible, created and helped meet a huge and growing demand for Indian cloth. Cotton was king. And kings have enemies!

The boom in Indian cotton called forth two distinct responses. The powerful wool and linen industry pushed very hard for protection, which was given to them; and when duties proved inadequate to stem the tide, they asked for a complete ban on imports for domestic consumption and that too was given to them!   Alongside this, a cotton textile industry took birth! The huge market for cotton coupled with the protection granted by a mercantilist state made the cotton sector very attractive indeed and tech innovation followed the possibility of profit. Innovations in spinning made it possible to produce more cotton yarn much cheaper than the Indian hand spinner could and the British Industrial Revolution, led by cotton textiles, was on its way. Tech breakthroughs in weaving followed in time, but the importer of finished cotton cloth became, in the 19^th century, an importer of raw cotton instead and an exporter to the world of cotton textiles!

Two other sectors were part of the revolution -- coal and iron and steel. The principal driver in this context was ecological change -- extensive deforestation resulting in declining availability and rising prices of wood and charcoal. When wood became unavailable at reasonable prices, coal, available in plenty, boomed. For coal mines to function at depth, water had to be pumped out and for that a source of power was needed. Animal, human and water power were inadequate for the purpose and the steam engine came into being. Once a coal fired source of power was available various possibilities for its application in areas other than coal mines were quickly realized and implemented. Add to this the innovation in smelting iron using coal instead of wood charcoal and we have cheaper iron and steel too. Things are ready for takeoff. The steam powered Iron Horse, iron rails for it to gallop on with wagons and coaches in tow, and of course, steam power for manufacturing on much larger scales than was possible earlier.

The context -- competition from Indian cotton textiles, deforestation and its impact on fuel use and the actions of a proactive state willing and able to look after domestic economic interests -- created the possibilities for the English economy. The responses of the society to this context created a path that led to what was a revolution in manufacturing and transport: the Industrial Revolution of the 19^th century.

The Indian context in the 18^th and 19^th centuries was very different. Fuel use patterns did not begin to change away from wood to coal till the late 19^th century; the colonial state subordinated Indian economic interests to British interests and despite rather sophisticated financial and trade structures in place, there was no movement in directions that could have taken India towards a coal-steel-mechanized cotton textile industry based development paradigm.

It was not culture or institutions or any other huge difference between the India and the England of the times that stood in the way, it was context and the compulsions thereof.

One may find some of Prof Parthasarthi’s arguments, (especially those relating to the potential for technological change in India) a trifle hard to accept, but his core argument -- the significance of context in determining the path of change adopted by a society -- is powerful and thought provoking.

Happy reading.

Liberalism and its Discontents--- Francis Fukuyama

 

 Prof. Fukuyama’s latest little book (less than 200 pages) is, as always, both educative and thought- provoking. Clarity of thought and expression are rarely found together in works about political philosophy/ideology but Fukuyama manages both with consummate ease.

The author works towards defining an ideal by choosing and defining Liberalism, elaborating the justifications for this particular political point of view, its relationship with democracy, its excesses and the course corrections necessary to build a progressive and just society under its aegis.

The author argues that Liberalism is founded on the basic notions of human dignity, equality and autonomy which in turn require rights to be vested primarily in individuals, not in groups and be enforceable under laws in a justice system that is itself autonomous.

 This approach to politics emphasizes individual freedoms-- of speech, transactions, faith amongst many others. A focus on individual autonomy necessarily implies limitations of the powers of the state by law and enforcement of such constraints by institutions that protect that autonomy- courts, bureaucracy and media.

Liberalism so defined is justified on practical , moral and economic grounds. Practically, it is the best way of ensuring peaceful and progressive management of diversity; morally, the dignity of the individual human being is a fundamental human imperative and economically, liberalism has given the human race remarkable returns in terms of technological change, growth and development. At least, so goes the argument.

Liberalism and democracy are related but distinct. Democracy may be defined as ‘rule by the people’ as ‘institutionalized in free and fair multiparty elections’ based on universal adult suffrage. Liberal values and institutions reinforce democracy and an attack on these values is usually followed by one on democracy too-the spirit if not always the letter. Putin’s Russia is just one of several modern examples of this truism.

The ‘discontents’ with Liberalism arise due to unwarranted and undesirable extensions of the Liberal ideology. Particularly delightful, for a one who suffered neoclassical notions of economics being force-fed into one’s ignorant mind a long time ago, is Fukuyama’s critique of the free- market religion built on the foundations of ‘physics envy’( the compulsion to imitate the mathematical elegance of physics) and resulting in wildly unrealistic assumptions about economic behavior and slick models wholly inapplicable to real life.

Another threat to Liberal doctrine arises from Liberalism’s own creation-the technological revolution of the late 20th century- the Internet and all that it brought along with it. Not only does new tech empower authoritarian states but it has also concentrated undue power to control the dissemination of information in the hands of a few giant corporations. Since, in social media, there is no vetting, peer review or democratic deliberation every voice has equal weight and the dissemination of false and weaponized information is a major growth industry. Echo chambers are created and individuals are targeted  with information that feeds their personal predilections as displayed on social media. People thus bask in the reassuring comfort of information that reinforces their personal idiosyncrasies, oblivious of alternative points of view, validated data and the rest of the world around them. Information flows are controlled and manipulated and so are minds.

The problem with information technology giants and their power is real and clearly highlighted, but solutions do not appear to be readily available.

Fukuyama’s book defines an ideal and justifies it but there is no clear path defined to get to it, and their lies the rub. How does a society achieve the ideal from a very suboptimal real? If human beings are as greedy, power hungry, intolerant and violence prone as history has established, just how do we change it?

It is perhaps unfair to expect to find all answers in one slim book but at least the problem and the ideal are clearly defined by Prof Fukuyama. And that makes the book a very interesting read.

Happy reading

 

 

The Scandal Of Empire -- India And The Creation Of Imperial Britain by Nicholas Dirks

 

 Historian Niall Ferguson, in the preface to his book Civilization: The West And The Rest quotes playwright Alan Bennet who in his History Boys wondered whether history should be taught as “...a mode of contrarian argumentation, a communion with past Truth and Beauty or just ‘one fucking thing after another’”.

For most of us, the last option was what was on offer in long gone school days. The inevitable result was an abiding impression that history was an exercise in mind numbing boredom to be abandoned at the very first opportunity.

Nicholas Dirks, however, makes the study of history not only educative but remarkably interesting -- fascinating even. Dirks writes, as is his wont, clearly, forcefully and with a wealth of detail to back up his, often rather aggressive, assertions. The Scandal Of Empire is a delightful read -- both informative and spicy.

Dirks uses the biggest public scandal of 18^th century England-the impeachment and subsequent trial of Warren Hastings, former Governor General of The East India Company’s empire in India, to examine the ‘ignominious origins of empire’ mired in greed and exploitation.

The process, driven by Edmund Burke, lasted about nine years between 1786 and 1795. Although it resulted in the acquittal of Hastings, the whole drama served many other purposes that Dirks excavates and brings to light. As he points out, the whole exercise was a critique of the activities of the Company’s servants in India, not of Empire itself. That a trading company under the protective umbrella of the British Crown and Parliament had mutated into a rogue state that made war, dispensed justice, coined money and levied taxes was not being questioned. The legitimacy of Empire was not in question, merely the conduct of its servants. The need of the hour was a cleansing and establishing of appropriate State control on the greedy and often unjust minions of the Company. After a thorough catharsis -- a sanitization -- the focus would shift to the scandal that was India – a derelict and degraded civilization in urgent need of the civilizing influence of a kind but firm paternal overlord.

Dirks informs us, rather tongue-in-cheek, that Edmund Burke himself had lost much of his fortune in speculation in East India Company shares and that the established aristocracy in England was increasingly disturbed by the return of hugely rich Nabobs -- Company officials with massive, ill-gotten gains -- who bought their way into positions of power and status, threatening the existing structures of privilege and power.

The author also establishes an interesting link between the rise of empire and Capitalism. The English stock market and the Company grew in parallel with EIC shares being the most significant market drivers in the early years; and incidentally both were accompanied by huge public scandals of bribery and corruption.

The chapter on corruption where he details the extractive process whereby huge fortunes were acquired by grasping and ruthless Company officials is downright delicious, verging on the gossipy.

The story of the British in India is both fascinating as story and significant as a primary means of understanding the structures of state and society that characterize modern India. Nicholas Dirks gives us glimpses of a portion of that history and does so in a skillful and hugely entertaining manner.

To entice you, dear reader, to read this book I shall end with a revealing quote from Robert Clive who was also accused of corruption, was also acquitted of the charge and had, among other things, replied as under:

“A great prince was dependent on my pleasure; an opulent city lay at my mercy... I walked through vaults which were thrown open to me alone, piled on either hand with gold and jewels. Mr Chairman, at this moment, I stand astonished at my own moderation.”

Happy reading.

 

Why Nations Fail—The Origins of Power Prosperity and Poverty by Daron Acemoglu and James Robinson

 

When eminent economists assert that the drivers of development have their roots in politics and that history matters a great deal in the process, it can come as a jolt to many modern policy makers and ideologues. This is particularly true of those who consider economic problems to be quasi technical issues solvable a with healthy dose of unregulated markets and free trade and capital flows. The hard science of economics does not -- in this view -- need any support from the conditional, qualified and often muddled propositions of the ‘soft’ disciplines.

Reading Acemoglu and Robinson is both exhilarating and educational, as they carefully and with a wealth of examples ranging from ancient Rome, medieval Japan and Europe to colonial America, take apart the traditional explanations of poverty and inequality and offer a powerfully convincing alternative.

The authors classify extant explanations of poverty and inequality into three broad groups:-

Geography: climate and related disease vectors and poor soil productivity

Culture and religion: other-worldliness if not downright indolence

Sheer ignorance: policy makers unaware of existing straightforward technical solutions

They then proceed to establish the inadequacy of these explanations in the real world.

The authors begin in a slightly dramatic fashion by looking at two identically named towns located close together, but on opposite sides of the US -Mexican border.

 

“The city of Nogales is cut in half by a fence……look north and you will see Nogales Arizona, USA. Life south of the fence, (in Nogales Sonora, Mexico) just a few feet away, is rather different."

 The towns share a common climate and the population has common racial-cultural roots, but one is a developed and prosperous township while the other is far from being so. The difference, the authors contend, lies in the institutions governing the political and economic life of the two towns. A more convincing example is that of the two Koreas—widely different development performance, but identical geographical and racial/cultural characteristics.

Historical contingencies, the authors contend, determine the evolution of political institutions in a society -- the manner in which power is distributed across the population and the constraints, if any, that regulate the exercise of political power. Political institutions in turn condition and support economic institutions -- the rules governing property, contracts and exchange -- the provision of public goods and also other critical institutions like those for dispensing justice and ensuring security and law and order. Institutions together determine economic growth and the distribution of income and wealth -- in effect, the development outcomes for the society.

Societies where inclusive institutions evolve, experience prosperity. Such institutions are characterized by pluralistic distribution of power, effective constraints on its use, secure property rights and the enforcement of economic and other contracts , effective centralized states that ensure availability of public goods, security and law and order.

The critical questions however is, why such institutions evolve in some societies and not in others. Here the authors emphasize the role of critical junctures in history.  The Black Death in 14th century Europe created conditions -- a drastic reduction in the labour force, primarily -- that pushed western Europe towards the gradual elimination of serfdom, but had quite the opposite effect in eastern Europe where ground conditions were different. In the authors words, “The outcome of events during critical junctures are shaped by the weight of history. The outcome, however, is not historically predetermined but contingent.” In effect, history matters! And the accidents of history matter!

More significantly for most of the world, the widespread European colonization of the Americas and much of Asia and Africa conditioned the nature of institutions that evolved in the colonized territories.

The authors go into great and fascinating detail about the colonization of the Americas. The story of Spanish and Portuguese colonization of South America is very different from the British efforts in North America and the different conditions that the colonizers found in the areas they reached, created different outcomes over time. South America saw the establishment of brutally extractive institutions and, because institutions tend to persist, iniquitous extractive institutions have been the norm South of the Rio Grande. Extractive institutions result in the failure of nations and the colonial legacy of South America is visible in the relative failure of both democracy and development in that region. North of the great river however, conditions were very different and all the initial efforts of feudal vested interests to establish a clone of feudal Britain failed.

 The colonial experience of Africa and the consequences thereof for post-colonial Africa, is another interesting area the authors examine.  

The story and accompanying analysis of how a critical juncture –colonialism -- created different trajectories of political, social and economic development in different environments is a fascinating one and for those of us without much exposure to world history, hugely educative.

The basic thesis, that extractive institutions do not enable sustained growth and that inclusive institutions are a necessary condition for development can perhaps be questioned on issues of definition. What is an ideal inclusive society and what an extractive one? Can there not be shades of grey here, and how will that impinge on growth paradigms?

Regardless of academic quibbles, the book is a long, but extremely interesting and informative read. The effort is well worth the reward.

Happy reading.

The British Industrial Revolution in Global Perspective --------- Robert C Allen

 

The Industrial Revolution in the 18^th century is generally considered to have heralded the modern age on Planet Earth. But why did this happen on a small island in North Western Europe and not elsewhere? And why at a particular juncture in history? And what brought it about and who? The questions are intriguing and the answers offered by economic historian, Robert C Allen, make for a fascinating read.

The story, the author asserts, begins with the Black Death in the mid-14^th century. The logic and sequence of events is as under:

Black Death --drastic drop in population --farms abandoned and much cultivated land reverts to pasture --sheep begin to eat better and the quality of their wool improves slowly, but very significantly, over time-- Britain, with better wool, produces better fabrics which find a big market in Europe --trade increases and along with it economic growth sets in with growing proto-industrialization (handicrafts produced in homes) urbanization, starting with London, and high wages. The labour shortage, of course, is primary in creating a high wage economy. A ban on export of raw wool encourages fabric export instead of raw wool export. State intervention is, therefore, very important here!

 Centuries go by.

 Population catches up, but trade driven growth backed by growing agricultural productivity and urbanization keep Britain a high wage economy. Innovations in printing reduce the cost of books and growing commercialization of the economy leads to increasing literacy and numeracy. The British economy is transformed over a couple of centuries.

The Scientific Revolution occurs in the 17^th century—people learn to control and manipulate nature instead of praying to it -- and this lays the foundation for the Industrial Revolution to come.

The Portuguese discover the sea route to the Indies via the Cape and the Spanish Crown funds the voyage of one Christopher Columbus. The first great Globalization begins and intra-European trade is replaced by inter-continental trade, helped along by the power of Brit arms, as the driver of growth in Britain.

So, we have a growing and high wage economy with an increasingly literate and numerate population and extensive proto-industrialization. The scientific revolution and globalization have occurred, Asian textiles and other exotic consumer goods have triggered some sort of consumerism and the 18^th century dawns.

The technological revolution that began in the 18^th century was primarily in cotton spinning, iron smelting with coke instead of charcoal and, of course, the use of steam for power -- the steam engine. And they all happened in Britain while the scientific revolution in the previous century happened to a great extent in Europe -- remember Galileo was Italian!

The question the author addresses is why the mechanization of cotton cleaning, carding and spinning, the use of steam for power and the change in the process of smelting iron evolved in Britain.

The answer in short is, for reasons economic. The pursuit of profit is what drove the effort that led to tech innovations in these areas. Many factors were necessary -- nature’s bounty (coal and iron ore in close proximity), consumerism, the scientific revolution and  an increasingly scientific outlook in society, but economic motivations, provided the tipping point.

Wages were high and coal was cheap and abundant. Wood was getting scarce and expensive and increasing coal use, initially for heating, was a logical step. This led to increasing demand for coal and for increasing coal production more effective means of draining the mines were essential. The Newcomen steam engine, which took Mr Newcomen ten years to build, did just that. The engine ran on coal, which at the mines was free, and despite its inefficiency, served a crucial commercial purpose -- enabling increased coal production. This was what the author calls a ‘macro invention’ which ‘set in train long trajectories of advance that resulted in great increases in productivity……. they also radically changed factor proportions, substituting energy and capital for labour.’

 

But these big inventions needed time and money and effort to create technologies that would exploit the full potential of the original macro invention. In the case of the steam engine, for example, a century plus was needed for steam engines to progress from only draining mines to powering machinery and later ships and, of course, the iron horse, the railways. This process of actualizing the potential of macro inventions by progressive improvements the author calls micro inventions. The forerunners to modern venture capitalists are to be found here, too, incidentally.

The author’s analysis of the three critical inventions that drove the industrial revolution, in terms of macro and micro inventions, is fascinating. The search for profit in the context of a high wage, urbanized, coal rich economy was a primary driver, but the particular stories in each case are extremely interesting. Who were the inventors? Upper class, rich university men or working-class weavers apprenticed to the trade as children? Who financed the invention processes? Did the patent system help innovation and did all innovators benefit from it? And what about industrial espionage? The questions go on and on…

 For students of economics, some curious issues surface: state intervention in general and trade restrictions and protection in particular have helped growth and neoclassical free markets are not the panacea that we were taught they were. Comparative advantage, the legitimate basis of trade, is a dynamic thing and can change dramatically over time when circumstances – technology, in particular -- change. Real life confounds a great deal of theory is the take away here.

Allen writes clearly, argues very convincingly and the book is, therefore, an easy read. For anyone interested in questions like Why Britain or Why the West and not the Rest, this is a must read.

Happy reading.

The Great Divergence -- China, Europe and the Making of the Modern World Economy -------- Kenneth Pomeranz

 

 

What accounts for the economic divergence of Europe from the rest of the world in the 19^th century? What was so special about Europe, or lacking in the Rest, that the Industrial Revolution happened in one place and nowhere else?

This issue, which has occupied a great deal of academic time and effort, is addressed by historian Kenneth Pomeranz in the book under consideration. In the interest of full disclosure, it must be said that it is a detailed, painstaking, academic work which makes it an occasionally tedious read for us non academics. That said, it offers the pleasure of fresh perspectives, qualified but categorical refutation of established ‘truths’, and fascinating insights into the workings of history. An extremely rewarding experience, all told.

The author argues that instead of simply asking why China did not become Western Europe, we also need to ask why Britain did not become the Yangtse Valley. This shift of perspective yields valuable insights.

Pomeranz insists that it is inappropriate to make historical comparisons using modern nation states as the entities being compared. Europe was very diverse before 1800 as was China. Comparisons of core areas in North Western Europe -- Britain, the Netherlands -- with core areas in China, and to an extent Japan and even India, are more appropriate. Comparing England with the Yangze Valley, the Japanese Kanto plains and perhaps Gujarat, would yield more valid results. The author focuses primarily on the Chinese core and establishes that before the 19^th century, North Western Europe in general had no significant edge over the Yangze valley; they were very similar. They all had commercialized agriculture, high and growing population, significant proto-industrialization (viz handicrafts) and reasonably developed markets. In fact, Chinese markets were perhaps more neo-classically ‘ideal’ than British markets. Europeans were no healthier than the Chinese who lived as long if not longer and Europe had no advantage in capital stock or even economic institutions that mattered in the context of the initial industrial breakout. The cotton textile industry that led the industrial revolution did not use joint stock companies to raise finance -- kin networks did the needful. Capital, in any case, was not the constraint at that point in time.

 The constraint was land and land-based products. This is the most important argument of the book. With rising populations, the cores at both ends of the Eurasian land mass were suffering from a growing supply problem of land-based products—wood for fuel and building, fiber for clothing and food. The cores were not quite at a Malthusian disaster stage, but supply problems had clearly emerged and were looming large. And here comes the divergence. The Chinese core could not resolve these problems while the European core – Britain -- managed to do so through a fortuitous combination of coal availability and acquisition of colonies.

 British coal was relatively easily available to the core, while Chinese coal was not, and that resolved the fuel issue. The colonies, especially in the New World, were major suppliers of calories --sugar, potatoes, and later, wheat and beef, cotton, tobacco and, most importantly, silver for which there was a huge demand in China, which had started re-monetization in silver from earlier on. In addition, they -- the New World colonies -- also absorbed surplus labour.

It is emphasized that European financial innovation, the so-called joint stock companies, were useful in the international trade space and these succeeded in the New World and the Old through the use of coercive force and, in the case of the Americas, the ruthless use of disease vectors to which the indigenous populations had no immunity. In one-on-one competition with local merchants in Asia the Companies did not demonstrate any particular edge.

 The slave trade contributed to the profitability of the New World colonies -- indigenous populations having been more than decimated and the use of European labour in quite the same low-cost fashion not being politically feasible. Profits from coercive international trade did help, of course, but were not as significant as the land- based products that the colonies provided.

The insights into trade patterns offered by the narrative are fascinating in themselves. Silver, through conquest, from the Americas to Europe and then to Asia, cotton textiles--amongst many other things -- to Europe and onward, in part, to Africa to be exchanged for slaves for the Americas, and sugar and cotton and other stuff back to Europe. And this is just one dimension of a very much more complex set of trade flows.

So, the bounties of nature, conveniently located coal and virulent disease vectors to which the New World had no immunity, combined with a willingness to use coercive force and human trafficking to promote their economic interests, appear to have been the principal European advantages in the race for economic development.

Emotive exaggeration? Not really, but you have to read the book to find out!

As always, this blog can provide only a glimpse of some of the important ideas that the author raises. The book needs to be worked through for the full flavors of the creation to be savored.

Happy reading.

The Tyranny of Merit: What Became of the Common Good?---- Michael J Sandel

 

Every society evolves ideologies to justify extant inequalities contends Thomas Piketty in his book Capital and Ideology.

Michel Sandel, American political philosopher and Harvard Professor, argues in the book under discussion here, that the wholly unwarranted justification for the huge increase in inequality in the USA over the last four decades is provided by the notions that conflate market value, material success and ‘merit’, with moral value. The argument, even of the so-called centre-left, from Clinton to Obama, is that success -- in the market driven, unregulated, globalized world in general and the US in particular -- is based on individual merit and is, therefore, a ‘good’ thing and occupies the moral high ground.

Professor Sandel in this disturbing book -- disturbing because it questions some ‘ basic and obvious truths’-- examines the emergence of a “meritocracy” in the US since the 1980s as a consequence of globalization: free(er) trade and capital flows, outsourcing et al. Globalization  has been accompanied by rapidly growing inequality in income and wealth and a growing divide between the white collar college-degree-holding rich and the blue collar, not so well ‘credentialled’, working classes. The justification for the emergence of such a meritocracy is that given equality of opportunity the rise of the talented -- the meritorious -- is both natural and just. Individual effort and ability is being rewarded and that is all to the good -- morally good.

Sandel’s demolition of the merits of ‘meritocracy’ proceeds in two stages. To begin with, even in the land of the free and despite all the hype about the American Dream, there is, in fact, no equality of opportunity in the US. A college degree, especially from a high-profile college, is the modern key to high salaries and wealth accumulation and SAT scores are most closely corelated to family income as are admissions to good colleges! Well-to-do families ensure their children get admissions counselling, attend test prep classes, participate in CV building exercises like high profile sports and highly regarded social work. The kids work hard, but work is not the only criterion here; natural ability, if indeed there is such a thing unrelated to ‘nurture‘ and environment, is helped by what props their parents’ concern and most importantly, income can provide. Two-thirds of Ivy League students come from the top 20% of the income distribution and at Princeton and Yale more come from the top 1% than from the bottom 60%! And when the front door doesn’t open there is a back door -- alumni are favoured with admissions for their wards and donations help a great deal too.

Before proceeding to the second and more powerful argument against meritocracy, we need to step back and look at some of its more distressing consequences. If I merit success due to my personal ability and hard work, then it follows that she who does not succeed also merits her failure. Thus, you have unwarranted hubris on one end and humiliation and resentment on the other and society faces a growing, emotionally charged divide powered by arrogance on the one hand and anger and a lack of self-worth on the other. A recipe for social disharmony and for the empowerment of savvy political operators who can manipulate the simmering anger, create ‘enemies’, and rise to power on a wave of violent negative emotion. The Democrats, argues the author, by their extended support of the logic of globalization and meritocracy without effectively tackling the economic and social consequences thereof, stoked the fires of resentment and paved the way for Donald Trump’s victory!

And this brings us to the principal argument against the tyranny of merit. Natural ability and talent --which in most cases is impossible to define and measure, and exceptions only prove the rule here, is about more than nature alone. Nurture is critically important for the development of talents and abilities and this, in turn, depends a great deal on good fortune! The contingent nature of good fortune is self-evident and destroys any argument that there is any moral value attached to individual ability. Besides, an individual talent to be materially rewarded in a market economy needs to be located where there is market demand for it and a high monetary value placed on that talent by the available market. A matter of good fortune again. Luck does not necessarily favour the good, so the successful cannot seriously claim a moral right to their success.

From the above it follows that even if true equality of opportunity could somehow be ensured in any society, meritocracy would even then not lead to a just society. Opportunity may somehow be made equal but ability is still a matter of luck and rewarding the lucky does not ensure justice or make for a healthy society!

Professor Sandel’s focus is almost entirely on the USA and developments there since the 1980s. However, the arguments presented have widespread relevance. The valorization -- even sacralization -- of market outcomes is widespread in most modern societies and the consequences of globalization, free and inadequately unregulated markets and growing financialization of developed and developing economies pose a major threat to social cohesion, justice and stability everywhere.

The Tyranny of Merit is disturbing because it makes one think and question. A book worth reading and absorbing with care and attention.

Happy reading.