The TOI interview of Abhijit Banerjee and Esther Duflo was more about their views of the Indian government and less about their body of work

The following article was written for MyInd Makers. Pasting it here for reference.

When it was announced that Abhijit Banerjee is one of the three recipients of 2019 Nobel Prize for Economics, there were a spurt of tweets and opinions on how the designer of NYAY had won the Nobel Prize for economics. I was a little put off by this commentary because the man had just won the Nobel Prize and to reduce his body of work to just one program that was poorly designed (and communicated) seemed unfair.

And then on Saturday, October 19th, there was a full page interview published in the Times of India. The interview was of the couple, Abhijit Banerjee and Esther Duflo, who had jointly won the Nobel along with Michael Kremer. The very second question of the interview was spell-bounding – “Do you think the Indian government will take you more seriously now?”. Spell-bounding because there is no evidence that they have either been taken or not taken seriously till now!

As the interview progressed, Abhijit’s view on Jan Dhan Yojana – “we don’t know how much initiatives like Jan Dhan will actually enrich people” – was totally underwhelming. Underwhelming because one wouldn’t expect to read such a naïve statement from a Nobel prize winner! That too, after the Jan Dhan accounts have deposits greater than INR 1,00,000/- crores! That too, after the Jan Dhan had proved that the menace of the middleman corruption has been tackled most effectively. Elsewhere in the interview, Abhijit mentions that “the best thing to do is to put money in the hands of the poor”. Jan Dhan had precisely done that, and here we have a Nobel Prize winner telling us “we don’t know” the impact? What should the reader therefore infer from this?

Furthering such surreal thoughts, we also come to know that he thinks that even a 43% tax is low and this can increase much higher! He tells us that historically taxes for the rich have been as high as 70% and 90% too and “Somehow we have forgotten about all that and are conned into believing that there is no possibility of having tax rates over 40% without a massive disaster happening.” Imagine a 70% tax or even a 90% tax just because you have high intellectual capabilities to provide livelihood to thousands of people! Is this the kind of “equality” we want to achieve in today’s world? Imagine paying 43% tax and getting to drive on horrible roads, pathetic health care and no social security net. Instead of economists proposing ways around this, we now have Nobel Prize winners spewing hatred against the very same people who provide for the livelihood of crores of citizens.

The disdain towards “corporates” is something that I have never understood. Why are they often portrayed as villains of the society when they actually ought to be hailed as heroes? Sure, there are bad apples, but which profession doesn’t have them? How can a corporate tax cut during times of slowdown not be viewed as a positive measure? And what is the alternative proposed by the Nobel Prize winner – “the best thing to do is to put money in the hands of the poor, the economy will revive and the corporate sector will start investing once they see that.” Now, come on! This is rhetoric that you would expect ordinary people to talk about, not Nobel Prize winners! What does “put money in the hands of the poor” mean? Give it to them for free, or provide them employment? Many subsidies and programs are already run by various governments to provide for the poor. In addition to this, various avenues for employment opportunities have been created, especially in the last 5 years – why couldn’t they speak more about this?

 “We missed that bus, and Bangladesh picked it up”. This comment was in response to a question on whether China is more pro-poor than India (Indian media’s fascination with China is another thing of course!). The Nobel winner’s argument was that China invested in the “labor-intensive” manufacturing sector and Bangladesh picked it up. I totally get the missing the manufacturing bus part of the argument, but Bangladesh picking it up is what confused me! In addition, shouldn’t due credit then be given to the Modi government for identifying this problem early in its tenure and focusing on “Make in India” (which by the way is showing significant results?).

Indian media’s obsession with politics while talking to economists is also very fascinating. The Nobel Prize winners are asked “What worries you more - the economic slowdown or the move to majoritarianism.” First of all, neither is this the first time there has been a slower than expected growth nor will it be the last time. And secondly, what does “the move to majoritarianism” even mean?!

While Abhijit’s answer is yet again underwhelming (because it insults the voter) – “the danger is that since the government can't sell the economic message, there are other messages to sell to win elections”, I’d urge you to read Esther Duflo’s answer in full (snippet here) – “It is not an India-specific problem. The slowdown is not just in India, it's also in China. There are also fears of recession in the US and Europe.”

Infact, a lot of Esther’s answers made for better reading than Abhijit’s answers. At various places, we are constantly reminded that economics is a very fluid field and it is very difficult to make any correlations based on the extensive data available too! And yet within those limitations many economists work to suggest the best possible ways for a better society.

Many answers were focused on the present; many answers also indicated that many pro-poor programs are actually working (“We have so many less poor, and that's a positive”), even if they don’t like some things like the “real estate boom”. The views on income and taxation were really underwhelming. There are many positive aspects mentioned in the interview that are headline worthy than NYAY.

The interview would have been really good if more focus was on their entire body of work with more examples of successes these people have encountered in implementing their ideas, instead of commenting on ideas of governments! Afterall, they won the Nobel Prize – surely we will be enriched by knowing more about how their ideas have helped the society.