Two-nation theory

Pankaj Mishra's very interesting article here

'There is much about this shadow-boxing that makes one wonder if Bhagwati, moving like many intellectual elites between the bubble of universities and think tanks and the private hothouse of professional rivalry, has lost touch with how the other half—or the 99 percent—lives.'

This isn't about Bhagwati per se. It's really about two visions and, stemming from that, two ways in which we look at inequality. 

the bigger picture is that worldwide we're seeing the growth of inequalities (see the 2012 UNCTAD report for the latest figures). Given that this has been an era of globalization and free markets it is not surprising that some think there is a clear line of causality between market reforms and inequality. 

But the really interesting question-one raised by Mishra-is whether what we're seeing is really less about the emergence of genuine markets and more about the capture of the state by big business. And not just in India. Monbiot's recent article in the Guardian spells it out

At a more personal level you're beginning to wonder how people survive here. Tomatoes have hit 140 Rs/kilo (just last year they were 40Rs). Forty per cent of Pakistani children are malnourished (a slightly higher figure for India, I think). Education and housing are barely affordable. The lives of the poor, as Banerjee and Dufflo state, are characterized by severely limited options (up to 70% of income goes towards nutrition). The poor have few assets, little access to credit on reasonable terms and are engaged in numerous, low-skilled (and often temporary) jobs. Weak markets (insurance, say), ineffective governments (low spending in the public sector, corrupt officials), monopolies and mafias, the prevalence of feudal mindsets and practices (structures of domination), tribal mentalities, and a growing religious conservatism and fanaticism are a heady mix, a recipe for disaster, actually.

The little you know of India makes you think that it is an incredibly superficial place. The "mystical East"? Do me a favour, bro'. Filth and squalor and unbelievable poverty and injustice. 

The real two-nation theory is this: the haves and the have-nots.