An ill wind blows across the world that does nobody any good; humanity holds its collective breath (and nose) today hoping that America chooses the less odoriferous of the two candidates it is confronted with. All across the globe, battle lines, literal as well as figurative, are being fortified, between and within nations, between and within economies, between and within communities. Fearing immigrants, Britons went through a triple talaq separation (to borrow a phrase from this paper’s editorial) from Europe. Most European nations and Australia are arming themselves with legal firewalls against unwanted refugees. If elected, Donald Trump will erect a real wall to prevent bad Mexican hombrés from entering the US of A. But keeping foreigners out does nothing to overcome divisions within a country. Nowhere are they as deep as in the United States. Nate Silver, the master poll analyst, gives Hillary Clinton 97-plus per cent probability of carrying Washington state. That dramatically reduces to virtually zero in the next door Idaho! On November 9, Americans will face the mortification of a president-elect suspected of either major conflicts of interest or financial tax-dodging and turpitude. Regardless of who wins the presidency, the composition of the House of Representatives and the Senate will make the legislative logjam Barack Obama faced for most of his term seem like a walk in the park. America will neither be “stronger together” for Ms Clinton nor “great again” for Mr Trump.
At home, despite having a prime minister who is justifiably hailed as a great communicator, political dialogue between parties, and between leaders and the led stands reduced to bitter twitter diatribes. The age-old communal, caste and linguistic fault lines in polyphonic India are now deeper than ever before. The beleaguered media and judiciary are the most recent manifestations of the continuing conflict among the estates of the republic. And a yawning divide now appears in individual families and bodies corporate, as evidenced by the wars within the Yadav clan of Uttar Pradesh and the Tata business empire.
These winner-takes-all binary combats cause much consequential damage to entities besides the immediate rivals as well. The vicious American campaign diminishes not just the two major parties but also the entire governing system and the reputation of that country as the world’s premier democracy that finds consensus for effective administration elusive. This also happens to be the case in India even after the decisive victory of the present dispensation in 2014. The fracas in the Samajwadi Party has most likely put paid to its hopes of remaining in power, in the process exposing the benighted state to debilitating political and economic uncertainties.
That is not all. The damage is often tangible and immediate. An insular America will deal a body blow to globalisation, the source of much growth and optimism not too long ago. A post-Brexit Europe would compound the process further. Delays in enacting legislation for economic liberalisation in India have real costs of forgone opportunities. For example, the goods and services tax is widely expected to add over two per cent to the national income. Even if that is an optimistic figure, a decade long hiatus in its enactment could have had a likely cumulative cost of at least 2.5 per cent of the gross domestic product ($50 billion at current reckoning) as lost government revenue. That would have financed the entire outlay of the one-rank-one-pension and a part of the much-needed modernisation of the armed forces, or provided enhanced budgetary allocations for education and health. No rocket science is needed to gauge the impact of such would-have-beens on social harmony.
The Tata palace coup has also immediately affected the very parties that engineered it. In the 10 days since October 24, the BSE Sensex fell by 3.2 per cent. Three major Tata scrips contributed to this in no small way. They also registered even larger drops: Tata Consultancy Services (TCS) lost four per cent, Tata Motors eight per cent and Tata Steel 5.4 per cent. Over Rs 35,000 crore (five per cent) of the combined market capitalisation of these three largest Tata Group companies was wiped out in this short period. Since most group companies except TCS have small or no dividend payouts, this loss would probably amount to the entire annual return for the group. The major sufferers would be the largest shareholders, none other than the Tata Trusts, in whose supposed interest Cyrus Mistry was ousted as the chairman of Tata Sons. Evan Bayh was a highly popular and respected Democratic senator from the normally Republican state of Indiana between 1999 and 2011. Although he had won both his terms with more than 60 per cent of the vote, he declined to run a third time, because he felt that “There is too much partisanship and not enough progress — too much narrow ideology and not enough practical problem-solving. Even at a time of enormous challenge, the peoples’ business is not being done.” That would be an apt summation of the situation that prevails in these days of nation-states, political parties, interest groups, and even corporations following beggar-thy-neighbour policies.
Military strategists of the post-nuclear world have a pithy phrase to describe this: MAD or mutual assured destruction.
The writer is an economist who comments on current developments