Charles Munger had nasty words for India, it is True

(2023-12-05 00:17:15) 下一个

American investor Charles Munger had some really nasty words for India, sadly most of it is True


by Ankur 26 February 2017

In February 2017, Charlie Munger (the 93-year young partner of Warren Buffet, and if you don’t know who Charlie Munger or Warren Buffet is, god bless you) spoke to Investors and stated this about India.

‘Now you turn to India. And I would say, I’d rather work with a bunch of Chinese than I would the Indian civilization mired down, caste system, over-population, assimilated the worst stupidities of the democratic system, which by the way Lee Kuan Yew avoided, it’s hard to get anything done in India. And the bribes are just awful. So, all I can say is, it’s not going to be easy for India to follow the example of Lee Kuan Yew. I think that India will move ahead. But it is so defective as a get-ahead…the Indians I know are fabulous people. They’re just as talented as the Chinese, I’m speaking about the Indian populace. But the system and the poverty and the corruption and the crazy democratic thing where you let anybody who screams stop all progress? It mires India with problems that Lee Kuan Yew didn’t have. And I don’t think those Indian problems are always easy to fix. Let me give you an example.

The Korean steel company, POSCO, invented a new way of creating steel out of lousy iron ore and lousy coal. And there’s some province in India that has lots of lousy iron ore and lot of lousy coal. Which is there’s not much use for. And this one process would take their lousy iron ore and the coal and make a lot of steel. And they got a lot of cheap labor. So POSCO and India were made for each other. And they made a deal with the province to get together and use the POSCO know how and the India lousy iron ore and lousy coal. And 8 or 9 or 10 years later with everybody screaming and objecting and farmers lying down in the road, or whatever’s going on, they canceled the whole thing. In China they would have just done it.

Lee Kuan Yew would have done it in (Singapore). India is grossly defective because they’ve taken the worst aspects of our culture, allowing a whole bunch of idiots to scream and stop everything. And they copied it! And so they have taken the worst aspects of democracy and they forged their own chains and put them on themselves. And so no I do not like the prospects of India compared to the prospects of…and I don’t think India’s going to do as well as Lee Kuan Yew.

Charlie Munger made these remarks when asked about Indian scenario (Berkshire Hathaway exited India in 2013 and haven’t returned since):-

“India is grossly defective because they took the worst aspects of our culture, allowing a bunch of idiots to scream and stop everything. And they copied it … They’ve taken the worst aspects of democracy,”

On China he said:-

“The Chinese government really tries to help its companies … What I like about China is they have some companies that are very strong and still selling at low prices. And the Chinese are formidable workers and they make wonderful employees,” Munger said.

All hell broke loose because Charlie Munger was deemed as everything from an ugly old man who has lost it, to a racist and many other epithets. The renowned trader Rakesh Jhunjhunwala’s blog has both the full length video, as well as his criticisms and that of many others:-

I did not find it worth my time to hunt for slurs thrown at him by various twitter warriors , and the readers are free to do so if they wish. This is about what he spoke about, which unfortunately happens to be true.

A lot of educated Indians lap up everything the left media sells to them, because they have been weaned on a largely left dominated English education system , that teaches them self hatred and makes them a deracinated lot who are tourists in their own country. They go and blindly copy everything that the west does (interestingly, the good they copy pales in comparison to the bad they copy), even take pride in learning their own identity from the west and agree with the clichéd narratives the west has about us, but somehow become very aggressive when someone in the west makes a genuine criticism because it is beneath our dignity to take it well, but at the same time we want the white man’s validation all the time and pride ourselves for speaking his language. How very convenient.

Haven’t we adopted the worst aspects of western culture? Crass consumerism, extreme individualism, hedonism, drugs, screwed up marital life, selfishness in interpersonal relationships, promiscuity. But we have never adopted their discipline, their work culture, largely corruption free state of affairs in public and private life, their passion for research and innovation, punctuality, traffic sense etc. Because inculcating positives into yourself requires effort, negative does not. No one has to be taught how to smoke a cigarette, but one has to spend years for becoming a great painter. We Indians are awesome when it comes to taking the easy way out.

Haven’t we taken the worst aspects of democracy? We have reduced democracy to be something for the sole purpose of conducting elections, and buying of MLAs, MPs and Corporators post elections, stalling parliaments, useless protests, ‘’off the people, far the people, buy the people’’ remains our motto.

The bunch of idiots who Charlie Munger refers to are the vote bank managers who get elected by promising the impossible to their voters, and then bankrupting the state treasury to give freebies to them in order to be reelected and stay in power.

Or the civil servants, who have put the entire country in the straightjacket of regulations and permits and red tape, and bleed the country dry with their inefficiency and corruption. Or the paid activists, who will try to scuttle any development project, be it a dam or an industry or nuclear plant , under the garb of environmental norms. Or a huge part of the general public whose recommendation of everything is ‘’government should do this, government should do that’’.

Socialism is the state’s control on the means of production via licensing, regulation, permits and inspection. It is a vampire that has slowly drained India’s blood and has left it an emaciated and rotten country for much of its seventy years of post independence existence. This cancer gives rise to starvation, unemployment, corruption and poverty. After independence, India adopted a license and inspection controlled socialist economy, where production was tightly controlled, crony capitalism was the norm and shortages and long queues for everything was a part of daily life. Till 1991, Pakistan had a higher standard of living than India, a fact that is not mentioned very much. That’s what socialism does, makes you poorer than even your incompetent neighbour whose main income was and even today is, foreign aid.

It will not be an exaggeration to say that the time of 1947-91 was India’s wasted decades. Due to license permit raj and controlled production, no businesses worth its name could come up. India prided itself for creating IIMs and IITs, but it had no resources to employ its educated, the best of whom emigrated to foreign shores at the first opportunity. Countries like Malaysia, Singapore and South Korea, which were much poorer in 1950s than India, started their reforms earlier and today have the kind of infrastructure which India will struggle to catch up for two decades atleast. No one wanted to touch China with a ten foot pole in Maoist times, but after it began its reforms in 1980, the rest they say, is history. It was only after India opened up its economy in 1991 under PV Narasimha Rao (India’s greatest Prime Minister till date, who deserved a second term), that India shrugged of years of misery and set forth to the journey of becoming the fifth largest economy in the world.

Educated economic illiterates endorsing the Nehruvian mindset failed to comprehend a few simple facts:- 

*Its the businesses that create employment, and not degrees. Scores of colleges can’t make any change unless there are businesses to employ the graduates coming out of them, failing which they will be forced to work for a pittance. Too much government regulations and controls kills the economy and makes the country barren for any sort of real business activity. Mere job creation without any business activity is a sham designed to fool everyone, and will end up bleeding the economy as the remuneration will be paid from the exchequers pocket.

* A country becomes economically strong by its manufacturing power, may it be USA, Germany or China. In absence of industrialisation, the educated working age population is reduced to a horde of unemployed degree holders, who have to beg, borrow, steal their way to finding greener pastures. China is a giant because it is the  manufacturing hub of every major corporation in the world, Indian companies too benefiting from the same. India’s economy is largely driven by its service sector, and till it improves its manufacturing potential, it cannot join the ranks of the greats. And if we naively think that we become great by exporting software engineers, construction workers and nurses to other countries, we need a lesson in reality. But then, we are a country of educated fools who thinks that a child’s success in life is determined by his board exam score.

* You cannot tax a country to prosperity. You cannot make the poor rich by making the rich poor. Wealth cannot be distributed without creating it first, because the biggest problem of socialism is that you soon run out of other people’s money.

* Service sector cannot accommodate every graduate churned out by the numerous colleges and institutes. Degrees matter, but skills matter more.

* Government cannot create money/wealth, it can only allocate it. We indeed have converted democracy into mobocracy where 51% quash the rights of the remaining 49%, where their elected candidate appropriates all the state’s benefits to them, keeping the others miserable. In India, democracy has become secondary to elections and vote banks. If this is not the worst aspect of democracy that we have adopted, what is?

* Means of production in the hands of the state leads to inefficiency, unemployment, stagnation and corruption. India even today is a power deficient country because power generation is solely in the hands of the state. In energy sector too, India has got no counterpart of Exxon or BP. In license permit raj, production control resulted in shortages, shoddy consumer goods being available, and waiting periods of five to seven years for a simple scooter. The buying power of the middle class remained limited and that of the lower middle class and that of the poor, non existent.

* Government intervention in the market should be to promote businesses, not curtail them. Japan and China have kept their currency values low in the international market, this makes their exports cheaper than what the west will pay for domestically manufactured goods. In India, local wines can never dream of competing abroad because they are taxed heavily, making them exorbitant even in the eyes of the domestic consumers.

* The huge percentage of doctors, engineers etc in US of Indian origin that a lot of Indians quote with pride, is not a matter of pride, its a matter of shame. If our best and brightest cannot reach their highest potential and have to migrate to start all over again, something is wrong with our society and not the people who migrate. They have burnt their blood becoming what they are and they deserve the full right to go where they want to achieve the highest for themselves. Referring to this as ‘’brain drain’’ is stupidity. The real drain is our polity and public administration, which does not even have the competency of building decent schools or public toilets. Sundar Pichai, Vinod Dham, Sabeer Bhatia etc are a slap on our face, because they could never have been what they are had they stayed back, because not even in dreams can India have its own create a domestic counterpart of Google, Microsoft, Yahoo, Walmart, because the civil servant and the political masters have perfected the art of aborting dreamchildren, via reservations, quotas and regulations.

The leftists and the neta babu kleptocracy has kept India poor by preventing its industrialisation, which has ensured that rural India remains on the brink, employment opportunities remain minimum, a farmer can be destroyed by just one bad harvest, and then has to migrate with thousands like him to a city which can be halfway across the country, to spend the rest of his life in a slum working menial jobs. This is the progress brought to this country by ‘’pro poor’’ leaders and their voters who sell their country’s future for the next five years for a few thousand rupees and some booze and biriyani.

Ofcourse, there is a difference between the scenarios in USA and India, but what we should be ashamed of is the fact that a 93 year world famous renowned investor who has never visited the country can state a simple truth in simple words, but none of our overrated corporates dare to mention. India will continue to languish as long as our policymakers are filled with leftist thugs and vote bank managers and our voting public is full of daru chicken crowd. No amount of ‘’make in India’’ or ‘’digital India’’ will change the scenario as long as India doesn’t abandon socialism and promotes meritocracy.

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