Lee Kuan Yew, the former Prime Minister of Singapore, was fond of contrasting the essentially Western ideas of liberty and democracy with the more characteristically Asian attributes of discipline and order. The supposed incompatibility of “Asian values” with democracy was often used to defend the authoritarian path to prosperity.
The rapid growth of India since the economic liberalisation of 1990 is a reproof to the Lee Kuan Yew thesis. India did not need to abandon democracy to grow quickly. It just needed to abandon Nehruvian socialism and its elaborately selfdefeating series of restrictions and regulations.
None of which is to say that India does not have its problems. The latest Indian household census reveals that two decades of growth have done little for those millions of Indians who live in illegal colonies on the perimeter of the great cities. Mobile phones may be all but ubiquitous but good sanitation is rare. Only a third of all homes have treated drinking water and two thirds of all households have to cook with smoky firewood, cow dung, crop waste or coal.
India will also be held back economically as long as a third of its people cannot read properly. One of the accidentally beneficial legacies of Mao’s edicts in China was that a whole generation was taught to read. Quite without intending it, Mao left behind one of the conditions of capitalist development — an educated population.
China has now grown at almost 10 per cent a year for two decades. It is the second-largest economy in the world and holds the largest fund of foreign exchange reserves. It is also the second-largest military power. Freedom, Chinese politicians have always argued, is a luxury that poor countries cannot afford.
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Or at least they did until yesterday when Wen Jiabao began the last year of his decade as premier of China with a warning that, if his successors did not embrace political reform, they risked the chaos of a second Cultural Revolution (see page 31). Merely by referring to the Cultural Revolution, Mr Wen was breaking a taboo and, at a time when the Chinese Government is cracking down on dissent for fear of it flowering in the wake of the Arab Spring, raising a fundamental question about the future course of the Chinese nation.
The deep problems of India — add its terrible road network to the long list of deficiencies — mean it is tempting to yield to the idea that authoritarian capitalism is more efficient than its democratic counterpart, even if it denies some basic freedoms to its citizens.
Yet there is reason to suppose that Mr Wen may, rather belatedly prove to be right.
In India the rule of law ensures that fair contracts are enforced and property rights are widespread. Monetary and fiscal policy are transparent. An argumentative society and a free press hold public figures and public companies to account. They do so, too, in English, the global language of business.
Ever since India acquired independence in 1947 the demise of its democracy has been predicted. That it still thrives is already a rejoinder to the Lee Kuan Yew thesis of development. But there may be economic wisdom buried in the messy system of democracy too. In the good times governments can seek legitimacy by telling their citizens to count the money. But when diminishing returns set in, a government needs more than that.