Will India’s anti-corruption movement spawn ‘new Progressives’?

Demonstrators participate in a candlelight vigil in support of anti-corruption crusader Anna Hazare at a fountain near Vastrapur Lake in Ahmedabad on April 8, 2011. (SAM PANTHAKY – AFP/Getty Images).

Activists gathered in Delhi to support lawyer Prashant Bhushan — who has been targeted by an alleged 'smear campaign' to hamstring his work on the upcoming Lokpal (ombudsman) bill. But the Indian Express points out wisely that the sloganeering against corruption is starting to sound a lot like an attack on the economic policies of reform that India has followed since 1991, when it began to dismantle the planned economy.

Bhushan himself led the charge, the paper said, quoting him as describing India's post-reform policies as “precisely the reason” why corruption had become so pervasive in the country — a direct contradiction to the conventional wisdom that reform reduced corruption by reducing government control over the market (so officials had less to sell corporations).

“Liberalisation gave rise to the industry of privatisation. In the name of privatisation, and disinvestment, the government is now in a position to transfer thousands of crores of public money in the public sector undertakings to private hands. A similar thing happens when the government gives away natural resources, like oil or gas, to private companies. This has led to the creation of a corporate mafia,” Bhushan said, according to the paper.

Most economists — even Lefties — have told me that the reason corruption seems so much more pervasive now is that he stakes are so much higher. In other words, the 2G telecom spectrum scam was hundreds of times larger than the Bofors howitzer scam of the 1980s because now India's economy is enormous and growing lickety split, not because the officials are any dirtier. 

But what interests me about the new thrust in the anti-corruption movement — which dovetails nicely with the slew of pro-people legislation that has been enacted over the past few years — is the way the new socialism/populism in the midst of India's breakneck sprint seems to suggest that India's Progressive Era has begun before its Gilded Age has finished.

As I wrote earlier this year, the corruption scandals and vast increases in wealth involving India's billionaires strike some disturbing parallels with the so-called "robber barons" of America's Gilded Age (Carnegie, Rockefeller & Co). But Anna Hazare and friends are also starting to sound a lot like the Progressives, who came after the Gilded Age in America, crusading to break the backs of political bosses (corruption). Among other things, the Progressives pushed through the Interstate Commerce Commission and Federal Trade Commission and broke the monopoly of Rockefeller's Standard Oil, as well as more or less launched America's labor unions.

Of course, they also brought in Prohibition, so we'll have to keep our eye on Hazare and his clan.