Some thought Marxism would die after the collapse of the USSR. But they were wrong. Every year, close to a billion youngsters reach the age of 20. Like the young Murthy, they will be attracted to socialism and its emphasis on equality. Like him, they will have to learn of its unexpected consequences.
Earlier this month, there were write-ups on a new biography of N R Narayana and Sudha Murthy. This highlighted Murthy’s youthful attachment to Marxism and the Soviet Union. The young in today’s India seem to have the opposite attraction, for the saffron brigade rather than the old red one.
Perhaps the two are not all that different – both are strong faiths with passionate followers. Marx said religion was opium of the masses. His critics responded that Marxism was opium of the intellectuals.
Murthy’s generation venerated Jawaharlal Nehru, and shared his belief that Soviet-style planning was the ideal way forward for a country. He once apparently told Sudha that Russian was the language of the future and, hence, started studying Russian and collecting Russian books. He loved the ‘equality and social justice’ of the USSR.
Communists believed that capitalism was just an intermediate stage in history that would give way to the paradise of communism. Some of the greatest intellectuals of Murthy’s youth believed that communism provided a remarkable economic system that would overtake the market system because of its superiority.
That may sound barmy today, but capitalism seemed a terrible system in the Great Depression of the 1930s. Economies collapsed, unemployment soared, and all attempts to fix the problem failed. Even Roosevelt’s New Deal, which revived the economy in 1932-36, was followed by a second major recession in 1938 that did not end until World War 2 created an insatiable demand for labour.
Historians A J P Taylor and Arnold Toynbee declared that capitalism was a failure and would give way to something like Soviet planning. John Kenneth Galbraith in his 1967 book, The New Industrial State, claimed that Western multinationals succeeded through Soviet-style planning for themselves. Fabians and social democrats thought public ownership was better than private ownership. Even as the West sank into the Great Depression, the Soviet Union, which in 1918 was arguably the most backward state in Europe, modernised its economy so rapidly that it was able to crush Hitler.
In the 1950s, the USSR became the first country to send up a satellite and then a man in space. Nikita Khrushchev declared in a famous 1958 speech that in just 40 years, Soviet communism had caught up with and overtaken capitalism. ‘We will crush you,’ he said, not by force but because communism was a superior economic system.
Many top economists agreed. Nobel Laureate Paul Samuelson, no communist, had a chart in his standard textbook, ‘Economics’, showing the Soviet Union starting with a low GDP, but growing much faster than the US and overtaking it. Roy Harrod, W Arthur Lewis and others felt the same way. Today, it is easy to say Nehru was wrong, but he was in good company.
In the market system we broadly have today, people are free to consume what they like, or start any enterprise they want. But in the planning days, resources of the country were considered too precious to be left to individual whims. Instead, the benevolent state would take charge of all the country’s resources, allot them to different sectors in line with the correct priorities, and ensure the best outcomes.
In sum, people were deemed best off when they had no freedom whatsoever to choose what to consume, produce, innovate, export or import. Instead, the benevolent state would decide. An important socialist aim, hailed by a public that traditionally viewed the bania as the enemy, was to cut down greasy businessmen. Alas, they were replaced by greasy politicians.
George Bernard Shaw once declared that if you were not a communist at the age of 20, you had no heart. But if you were still a communist at 30, you had no head. Narayana Murthy’s love affair with Marxism seems to have lasted a bit beyond 30, but not much more. When he tried to set up Infosys in 1981, he learnt first-hand the horrors of the licence-permit raj.
Murthy found himself hamstrung at every step. He once told me how it took almost two years to get a telephone, because the benevolent government decreed that even retiring bureaucrats had a higher priority than entrepreneurs. It took him a year to get a licence to import a computer. All in the public interest.
People below 40 will scarce believe that a system such as this was for so long considered the best path to progress by so many top economists. Some thought Marxism would die after the collapse of the USSR. But they were wrong. Every year, close to a billion youngsters reach the age of 20. Like the young Murthy, they will be attracted to socialism and its emphasis on equality. Like him, they will have to learn of its unexpected consequences.
This article was originally published by The Economic Times on January 31, 2024.