Archive for the ‘Discussion’ Category

Poland is Europe’s growth champion. What explains its success and can it continue?

February 20, 2019

Marcin Piatkowski has recently written a book on Poland growth story.

In this column he writes on the Poland growth story and gives a preview of his book.

Amidst all the current political hoopla, the key story concerning Poland’s path over the past 30 years is not receiving the attention it deserves. The country has been recording high levels of growth since 1989 and is making strides in catching up with Western Europe.

The Polish economy has become a key European success story. Since 1995, Poland has also become the fastest-growing large economy in the world among large countries at a similar level of development. It is beating even the Asian tigers such as South Korea, Singapore and Taiwan.

Historically, Poland has always done badly:

To get a sense of the historic achievement, it is worth recalling that, for most of more than a thousand years of its history, Poland (along with the rest of Central and Eastern Europe) was a perennial economic underachiever.

The country was essentially stranded on the periphery of the European economy. Internally as well, Poles never managed to pull together enough social consensus to create a dynamic economy.

Adam Smith, the venerable voice of market thinking, had derided 18th century Poland for not being able to produce “any manufactures of any kind, a few of those coarser household manufactures excepted, without which no country can well subsist.”

It is no surprise under those circumstances that Poland’s per capita GDP, measured on a purchasing power parity basis, from the start of the 17th century until very recently, almost never exceeded half of the average level of Western Europe.

And as recently as 1991, at the bottom of the post-communist recession, the average income of Poles plummeted to less than one-third of the real income of an average German (and to less than one-tenth in nominal terms).

At the time, Poles even earned less than the citizens of Gabon, Ukraine or Suriname. In 1989, there were hardly any experts who would bet any money on Poland’s future economic success.

And yet, almost 30 years later, Poland has become by far the most successful economy in Europe. Since 1989, it has increased its GDP per capita by almost 150%, more than any other country on the continent.

By comparison, per capita incomes in the Czech Republic increased by only three-quarters, in Hungary by barely half, while the Eurozone’s performance improved by less than 40%. In purchasing power terms, Poland’s GDP per capita grew even faster from $10,300 in 1990 to more than $28,000 in 2018 (in 2011 constant dollars).

In 2018, the average level of income in Poland exceeded two-thirds of the average level of the Eurozone. That is an impressive achievement for a country that only entered the EU in 2004 and had to shed the painful legacy of decades of Communist rule (See Figure 1 below).

What explains Poland’s success? Good economic policies!

In a new book, I argue that after 1989 Poland was successful for the first time ever because it adopted good economic policies, including a deep economic reform in 1990-91, fast institution building, foreign debt restructuring, a boom in education as well as an open and transparent privatization process.

Crucial as well has been the fact that Poland, unlike most other Central and East European economies, did not produce oligarchs. At the beginning of the post-communist transition, it did not matter what last name one had, where he or she was from or what parents someone had. All of today’s billionaires in Poland are market-based and self-made.

What drove good economic policies? Good economists as policymakers.

Of course, the key question is this: If good economic policies drove good economic outcomes, then what drove good economic policies?

For most of its history, Poland was a perfect illustration of an extractive society. It was the Second World War and – above all – the shock of communism that demolished the old, feudal, pre-modern and harmful social structures, opening up society.

This newly emerged, socially inclusive society was not visible until 1989. It was buried under the distortions, dysfunctions and absurdities of a planned economy. But when real socialism collapsed, it established the foundations for the subsequent economic miracle.

And yet, this element should not make Poland’s performance so different to that of similar countries like the Czech Republic and Hungary, where people had been better off than Poland in Communist times.

Needless to say that all these countries, as well as the other ex-Warsaw Pact countries, shared a strong social consensus that their respective country should become like Western Europe and meet all the conditions to accede to the European Union as quickly as possible.

This is where the second – and perhaps decisive – element explaining Poland’s success comes in. Almost the entire transition period, including those 17 different governments, was based on the high quality of policymaking elites, especially finance ministers and central bankers.

Unlike their Eastern peers in Ukraine or Russia, for instance, Polish officials, even while representing quite different parties, knew exactly where they needed to be going.

It helped that almost every single economic policymaker in Poland after 1989 had studied in the West, learning modern economics. In contrast, until 2002, no Bulgarian minister of finance even spoke English, to give but one example.

Hmm…This reads too simple.

Will it continue?

In many ways, key elements of the Polish success story resemble that of the German post-war economic story, especially if one thinks of social and economic inclusiveness as a key driver of economic success.

Thankfully, the dynamics of economic history do not just move in one direction. For that reason, it is relevant to ask what lessons Poland’s recent experience and current performance now holds for the German and the Western European economy.

One key lesson is the importance of education: Today’s 15-year old high-school students in Poland are as well educated as their German peers, even though Germany spends more than 60% more on each student (in PPP terms, see Figure below).

Over the last 20 years, more young Poles have also studied at the university level than in Germany (see Figure 3 below).

The other lesson is the importance of investment in modern infrastructure: The level of Poland’s mobile broadband penetration, for instance, is higher than in Germany (Figure below) and the speed and the costs are lower, too.

The third lesson is the importance of open markets: Poland’s economic success is a blueprint for the win-win benefits of the EU single market. German exports to Poland are now more than twice as high as exports to Russia.

The benefits of open markets, supported by good economic policies, are also larger than the benefits of public subsidies: Eastern Germany, despite having received more than one trillion euro since the unification, has caught up on Western Germany less than Poland did with much less money (since its EU accession, Poland has received slightly more than 100 billion euro from the EU funds).

Hmm.. Impressive.

Risk? EU

But the key risk to Poland’s future is the weakening of the European Union. Without the EU, Poland would revert back to the dark periods of its history and be relegated again to the periphery of the European continent, where it has languished for long centuries in the past.



Capitalism with Scandinavian Characteristics

February 20, 2019

Nice piece by Prof Timothy Taylor on Scandinavian economies:

It is a truth universally acknowledged that arguing about the definitions of terms like “capitalism” and “socialism” is a waste of time. So I will simply assert that the world has many flavors of capitalism — U.S./British, Japanese, Scandinavian, German, French/Italian/Southern European and others.

I’ve known some genuine socialists who favor outright government ownership and control of the means of production, which necessarily means government making all the decisions about what is produced, where it is produced, how it is priced, who gets hired and how much workers get paid.

But most people who talk a socialist game, when asked for real-world examples, tend to sidestep the more extreme (and less attractive) possibilities and point to European countries — in particular, to Northern European countries like Sweden, Denmark, Norway and sometimes Finland. The genuine socialists I know view these countries as sellouts to capitalism. The Scandinavians themselves are quick to deny that they are socialists, too. 

There are higher taxes and more equality in lower income percentiles compared to US:


Euro at 20: Ensuring legitimacy is an ongoing process

February 20, 2019

Interesting speech by ECB Vice-President Luis de Guindos. It gets to core of any institution in a democracy – legitimacy. What makes an institution like central bank legitimate for citizens? Or how does it earn its legitimacy?


Breaking Germany’s coal addiction….

February 19, 2019

Nice bit by Johan Rockström and Owen Gaffney.

It is scientifically well established that if the world is to keep the average increase in global temperature “well below” 2°C relative to pre-industrial levels – the “safe” limit enshrined in the 2015 Paris climate agreement – no more than another 500-800 billion tons of carbon dioxide can be emitted. On current trends, this would take just 12-20 years.

Instead, the world needs to follow a trajectory called the “carbon law,” which requires reducing CO2 emissions by half each decade until, 30-40 years from now, we have achieved a carbon-free global economy. Growing evidence shows that adhering to the carbon law is technologically feasible and economically attractive. In this process, coal – the most polluting energy source – must be the first to go, exiting the global energy mix entirely by 2030-2035.

This will be particularly challenging for Germany, which, despite its reputation as a climate leader, has long had a dirty secret: the most polluting type of coal – lignite – remains the country’s single biggest source of electricity. Although renewables have penetrated 40% of the electricity market, coal still accounts for 38%.

A decision to phase out nuclear power, spurred by the 2011 Fukushima disaster, left Germany with a significant energy gap, filled partly by coal. Germany has built ten new coal-fired power plants since 2011, bringing its total to about 120. As a result, it is set to miss its 2020 emissions goal (a 40% reduction, compared to 1990), and, barring decisive action, it could miss its 2030 target (a 55% reduction) as well.

One always thinks Germany to be efficient in whatever they do. Didn’t know this bit on its coal reliance.

Leadership as a driving force of history: Evidence from the Forty-Eighters in the American Civil War

February 19, 2019

Profs Christian Dippel and Stephan Heblich in this research:


The Political Economy of the Jat Agitation for Other Backward Class Status

February 18, 2019
Christophe Jaffrelot and Kalaiyarasan A in this paper analyse the demand for OBC status by Jat community:

The Market, led by the initiation of economic liberalisation in 1991, has partly disenfranchised Jats from their earlier robust economic power and stable social status. Unlike other dominant castes, Jats could not diversify their economic activities. In other words, they could not invest the surplus generated by agriculture in industries, nor could be absorbed in industries as skilled labourers. Besides their own cultural inability, or refusal, to move out of agriculture, they also have not acquired the required skills and access to business networks that would allow them to overcome the strong barriers to entry built up by traditional business communities. Even upwardly mobile Jats have only been able to become either rentiers in real estate or have entered agro-related businesses such as trading in grains and vegetables. They could not diversify into business activities or exploit opportunities opened up by economic liberalisation. The real estate booms which benefited considerable sections within the Jat community have also led many members of that community to believe that while they had gained short-term wealth, they have still have lost out to others who are benefiting in the long run from economic liberalisation.

If Market has disturbed the economic equilibrium, Mandal has significantly changed the political and social equilibrium, particularly in rural Haryana. The lower castes, including Dalits and OBCs, have seen relative mobility, particularly in jobs and education. In addition, Jats have seen the sharpest internal differentiation along class lines, as evidenced by the aforementioned Gini coefficients. Jats who are at the bottom perform very poorly in both jobs and education as compared to the average performance of these caste groups. While studies tend to dismiss Jats’ demands for reservations by considering their socio-economic conditions vis-à-vis OBCs and Dalits as an average, they need to be disaggregated from this purely socio-economic point of view given their large population size. If some have benefited from the double-digit growth rate of the 2000s, others—mostly those who have stayed behind in the village—have not gained much, and therefore have become anxious about the rise of OBCs and Dalits. As a result, their discourse has gone from one of domination to one of deprivation. They identify themselves as deprived now, which is partly perceived and partly real.


Impact of Brexit on Ireland and Germany’s banks having UK branches

February 18, 2019

Two interesting speeches as Europe tries to look at hard Brexit.

Lane as Ireland faces the deepest concerns due to Brexit. He looks at both macro risks and financial stability risks:


40 years of Iran’s Revolution

February 14, 2019

As Iran is marking 40 years of its revolution, lots to be discussed and figured.

Prof Djavad Salehi-Isfahani (Virginia Tech) in this piece looks at whether Iran is worse-off in the last 40 years. It does not look as bad as imagined.


Central bank independence in a democracy: narrower the mandate easier to defend it..

February 14, 2019

Jens Weidmann of Bundesbank is one of those central bankers whose speeches are quite interesting to read. The last one was connecting beatles to central banking.

In a new speech, he looks at several things but this one caught my eye:

Central bank independence in a democracy


How Estonia appoints its central bank Governor?

February 13, 2019

Central banks appoint their Governors and Deputy Governors in multiple ways. There is no one standard way.

Came across this Press release by Estonia Central Bank (called Eesti Pank) where secret ballot is used to select the Governor:


Once there was an IDBI..

February 13, 2019

My new piece in Bloomberg Quint.

It documents the glorious days of IDBI where the financial institution was set up by RBI. It is one of those few entities which led to changes in RBI as an organisation. Now we know IDBI as a bank has been sold off to LIC and it could even lose its name  to becoming LIC Bank.

How India’s financial institutions and banks are exiting one after the other. But we have barely cared for documenting and preserving their history.. And soon we will be creating new institutions which will be just like the old ones under a new name.

It is not so much about history alone but also understanding the present and possibilities for future..

Some governments attacking central bank liabilities and other assets: Case of Italy wanting central bank gold..

February 13, 2019

Firstly, Italy’s politicians have begin attacking the central bank for failing to clean banks in the country.

Further, an Italian newspaper has reported that government wants to sell part of country’s gold to cover its expenses. The gold is not just managed but owned by the central bank. This will obviously lead to all kinds of frictions. From the bullionstar blog by Ronan Manly:

Italy’s unpredictable political situation continues to throw up surprises with a controversial claim in national newspaper La Stampa this week that the country’s coalition government wants to sell part of Italy’s gold reserves to cover spending plans and to prevent the need to increase VAT in a forthcoming Italian budget.

While the claims by La Stampa are not really based on anything new, they still managed to cause an international media frenzy as they came a few days after Italy’s governing coalition launched verbal attacks on Italy’s central bankers and financial regulators.

Note that Italy claims to be the world’s third largest sovereign gold holder behind the US and Germany, with claimed monetary gold holdings of 2451.8 tonnes. Interestingly, unlike most countries where sovereign gold is owned by the State but managed by the country’s central bank, the Italian gold is officially owned by Italy’s central bank, Banca d’Italia (Bank of Italy), and not owned by the Italian State.

The Banca d’Italia furthermore claims that 1199.4 tonnes of the gold (or roughly half), is stored in the Bank’s gold vaults under it’s Palazzo Koch headquarters building in Rome, with most of the other half stored in the vaults of the Federal Reserve Bank of New York (FRBNY), and a small balance kept the Bank of England in London, and in an account of the Bank for International Settlements (BIS) in the vaults of the Swiss National Bank (SNB) in Berne, Switzerland. But without any documentary evidence or independent auditing or verification of any of its gold, especially the foreign held gold, these claims are impossible to verify.

Note also that the current Italian government is made up of a coalition of the right-wing League party (Lega), a party headed by Matteo Salvini, and the populist Five Star Movement (M5S), a party headed by Luigi Di Maio, but with the appointed Giuseppe Conte as prime minister (backed by Lega and M5S), and with Salvini and Di Maio as vice prime ministers.

Lots more in the piece on Italian politics and its economics…

Finland’s basic income experiment: self-perceived wellbeing improved but no effects on employment

February 13, 2019

Universal Basic Income is a much talked about idea these days.

Finland did an experimental study in 2017 to find the effect of basic income:

The basic income experiment was launched on 1 January 2017. During the experiment, a total of 2,000 unemployed persons between 25 and 58 years of age received a monthly payment of €560, unconditionally and without means testing. The experiment run for two years until 31.12.2018. 

The purpose of the basic income experiment was to find ways to reshape the social security system in response to changes in the labour market. The experiment also explored how to make the system more empowering and more effective in terms of providing incentives for work. Further objectives included the reduction of bureaucracy and the streamlining the complicated system for providing welfare benefits.

The preliminary results of the experiment have been released:

The effects of the basic income experiment on wellbeing was studied through a survey which was done by phone just before the experiment ended.

According to the survey, the recipients of a basic income perceived their wellbeing as being better than did the control group. 55% of the recipients of a basic income and 46% of the control group perceived their state of health as good or very good. 17% of the recipients of a basic income and 25% of the control group experienced quite a high degree or a very high degree of stress.

‘The recipients of a basic income had less stress symptoms as well as less difficulties to concentrate and less health problems than the control group. They were also more confident in their future and in their ability to influence societal issues’, says Minna Ylikännö, Lead Researcher at Kela.

The recipients of a basic income were also more confident in their possibilities of finding employment. In addition, they felt that there is less bureaucracy involved when claiming social security benefits and they were more often than the control group of the opinion that a basic income makes it easier to accept a job offer or set up a business.

‘The results of the register analysis and the survey are not contradictory. The basic income may have a positive effect on the wellbeing of the recipient even though it does not in the short term improve the person’s employment prospects’, says Ylikännö.

The response rate for the survey was 23% (31% for the recipients of a basic income and 20% for the control group).


The recipients of a basic income had on average 0.5 days more in employment than the control group. The average number of days in employment during the year was 49.64 days for the recipients of a basic income and 49.25 for the control group.

The proportion that had had earnings or income from self-employment was approximately one percentage point higher for the recipients of a basic income than for the control group (43.70% and 42.85%). Then again, the amount of earnings and income from self-employment was on average 21 euros lower for the recipients of a basic income than for the control group (€4,230 and €4,251).


Expect fair amount of discussion on this going forward…

Paul A. Volcker’s “Keeping at It:” Messages for Country and World

February 12, 2019

Edwin Truman of PIIE distills the main messages from Volcker’s memorial:

Why would Paul Volcker, who tamed inflation as chairman of the Fed in the 1980s, write a memoir in his 91st year rather than go fishing? Because he is deeply concerned and has a message about the direction of the country and the world. The message proclaims three verities drawn from his career of service in the public and private sectors: stable prices, sound finance, and good government.

How will we transition to a LIBOR free world?

February 12, 2019

Nice speech by Edwin Schooling Latter, Director of Markets and Wholesale Policy at the FCA of UK.

There is now wide recognition that LIBOR will come to an end. Thanks to the agreement reached with 20 panel banks to continue submitting until end 2021, LIBOR is not expected to cease before that point. But, when I spoke at the International Swaps and Derivatives Association’s (ISDA’s) annual Europe conference in September last year, on this same stage, an audience poll found just over 50% thought LIBOR would stop before end-2022. Today, I would like to explore in a bit more detail not whether LIBOR will end, but how it will end.

This has important implications for contractual design. It is relevant in particular to how ’fallback‘ language in outstanding contracts that continue to reference LIBOR will and should work. Understanding the way in which the end of LIBOR will play out is key to choosing the right trigger point for moving to a new or replacement ‘fallback‘ rate.  

It will be quite something to forget LIBOR in our minds as well…

Why India needs an independent fiscal council?

February 11, 2019

Pramit Bhattacharya of MInt argues for an independent fiscal council in India.

More interestingly, he points to this study which shows how interim budgets since 1991 (barring 2014 one) underestimate deficits and overestimate revenues:

Historically, interim budgets in India have consistently overestimated revenue growth and underestimated expenditure growth. An analysis of the projected, revised, and actual budget figures since 1991 by Deepa Vaidya and K. Kangasabapathy of the EPW Research Foundation showed that deviations from budget estimates tend to be extraordinarily high for budget estimates presented in interim budgets .

With the exception of the 2014 interim budget presented by P. Chidambaram, these estimates undergo sharp revisions in the next budget (when revised estimates are presented) and the deviation from budget estimates persists in the actual (and final) figures.

Hmm..This time is never really different when it comes to interim budgets…


Interview of PC Mohanan member National Statistics Commission: On Controversies around India’s unemployment data..

February 11, 2019

PC Mohanan gives a no holds barred interview on Indian unemployment report and many other things:

India’s statistics minister Sadananda Gowda told Parliament last week that reports of the unemployment rate touching 6.1% in the NSSO survey is fake. Having headed the survey, how do you react?

I personally cannot agree. The NITI Aayog (a government think tank) was the first to say that it’s a draft report. Once I approve it, how is it a draft report? The NITI Aayog CEO (Amitabh Kant) gave some reason why this is not comparable, which is also misleading. When we approve a report, I am not going to give a figure which is not comparable with the other ones. Second, the concept of employment and unemployment are universally accepted. International Labour Organization prescribes the standards, we all follow it.

The government also keeps talking about collecting and processing the quarterly data from July to December 2018. Do you expect this to be much different from the annual survey’s findings?

I don’t expect much variation between the annual data and the quarterly data. All Western countries produce quarterly employment data. We have quarterly data on GDP, but no employment data. So, under a new system, we thought we will make an attempt to produce quarterly employment data. But in rural areas, quarter-to-quarter changes will hardly be any. So we thought, let’s try for the urban area at first. It is kind of a trial, for one or two years we will see. The annual reports are based on a first visit, the quarterly will depend on the second or third visit. They are two different surveys—in the sense that the quarterly reports you are readying are only for urban areas, whereas this 2017-18 NSSO survey is rural plus urban. In India, you don’t expect too many changes in annual employment from the quarter. Here we don’t give people unemployment allowance or security. And many of the people employed are in the government sector. So, quarter to quarter changes may not be that much and the annual data will have no relation with the quarterly.

He shares some wisdom on unemployment numbers. It is not as bad as we think:


Distributed ledger technology and large value payments: a global game approach

February 8, 2019

Interesting lecture by Hyun Song Shin of BIS. Fairly technical as well.

Payment systems built around distributed ledger technology (DLT) operate by maintaining identical copies of the history of payments among the participant nodes in the payment system. Cryptocurrencies are perhaps the best-known example of the application of DLT, but the applicability of the technology is much broader. Payment systems based on DLT are compatible with oversight by the central bank, and several central banks have conducted successful trials of interbank payments. In these trials, payment system participants transfer digital tokens that are redeemable at the central bank and use DLT to transfer them to other system participants. Decentralised consensus is achieved through agreement of a supermajority of the participants (typically 75-80%) who collectively validate payments. 

Nevertheless, the technology by itself does not overcome the credit needs of the payment system to maintain settlement liquidity. In conventional real-time gross settlement (RTGS) payment systems, the value of daily payments can be over 100 times the deposit balance maintained by the system participant at the central bank. As such, incoming payments are recycled into outgoing payments, and credit provided by the central bank supplements private credit from outside the payment system for the smooth functioning of the system as a whole. 

We examine the liquidity properties of decentralised payment systems in an economic model of payments, in which the cost of credit to finance payments enters explicitly. 

First, in a two-bank example, we illustrate the conceptual distinction between consensus as distributed knowledge and consensus strong enough to sustain a cooperative outcome. In this example, when the cost of credit exceeds a modest threshold, no amount of exchange of messages can elicit the coordination of payments between the two banks. The example focuses attention on the coordination motives of system participants. The cost of credit turns out to be a key determinant of the equilibrium outcome of the game. 

We then proceed to examine a general N-bank game and cast the payment problem as a public good contribution game between N banks in a large-value payment system. The public good has two aspects. The first aspect of the public good is the availability of a clean, reconciled ledger that commands agreement from system participants. This part is where the technological innovation can contribute most. 

The second aspect of the public good is the provision of credit to clients which allows high volume of outgoing payments that sustains the coordination outcome with high flows. We solve for the unique, dominance-solvable equilibrium using global game techniques and provide an exact characterisation of the states of the world at which the coordination outcome is feasible. 

The solution shows that successful coordination is possible in a decentralised setting, but only within a narrow range of fundamentals. The solution is highly sensitive to the cost of credit, and the decentralised equilibrium outcome often fails to reproduce the high-volume payment outcomes that are more normal with central bank balance sheet backing.


India’s Business leaders need to speak out on political issues

February 8, 2019

Sundeep Khanna of Mint in this piece rebukes India’s business leaders for cheering everything the government says: (more…)

Inconvenient truth: How Gujarat forgot Gandhi

February 8, 2019

Mint will be running a series of articles on the 150th birth anniversary of Gandhi.

Tridip Suhrud, a Gandhian scholar in this piece writes how Gujarat and city of Ahmedabad forgot Gandhi:

One of the great gifts of Gandhi to the city was the imagination of the public sphere. The primary imperative for such a space is that it has to be a space of equality. The public sphere, by its very nature, has to be an equal space, an ethical space, a just space. And Gandhi would add two more imperatives—it has to be a virtuous space and a non-violent space.

But the public sphere is not just a well-defined, bounded space, with or without structures. Public sphere is also an imagination, a possibility, and an aspiration. Thus any space, literally any space, including a prison, could become a public sphere. Public sphere is composed of individuals as political subjects, and it is this human subjectivity that informs the nature of the public sphere. Hence, cultivation of a public sphere is, in essence, a cultivation of our subjectivities. Gandhi’s Ashrams were founded in the belief and hope that it is possible to create and foster human subjectivity that recognizes the fundamental equality of all human beings and, possibly, all life forms. The public sphere, if it wishes to be equal, has to be non-rapacious, non-injurious, and opposed to the vivisection of humans and other life forms.

What we hold dear in the city, the institutions that we are proud of, are all creations of an idea of trusteeship that is fundamental to the creation of the public sphere, as public institutions are fundamental to any idea of citizenship. The CEPT, the NID, the Ahmedabad Education Society, the L D Institute of Indology, the IIM, ATIRA and even Sabarmati Ashram and the Gujarat Vidyapith are creations of an idea and practice of trusteeship that is unique to this city, as no other city in modern India has created such a diverse range of institutions based on the simple commitment of public institutions.

In a year which marks the 150th year of Gandhi’s birth, many of the institutions that he established are also celebrating—or will do soon—their centenaries. Between ritualized remembrance and memorialization, these institutions search—not vigorously—for a new purpose. They perhaps know that khadi—the livery of freedom—has also become an instrument of exclusion and insult; that self-volition is subject to subsidy. Ahmedabad remains a city which has a great capacity to laugh and forget, perhaps best illustrated by autorickshaw drivers who faithfully take a young legal scholar, wanting to visit Bapu’s ashram, to Asaram Bapu’s ashram.

The concept of an ashram, with all its limitations and quirks (do not forget that Gandhi’s personal secretary Mahadev Desai called it a menagerie), was one of modern India’s greatest experiments in fostering equality. In principle and in practice, it excluded no one; recognized no boundaries of caste, religion, and gender; all residents eschewed private wealth and personal inheritance; and each person performed bodily labour. Gandhi’s ashram was a microcosm of the public sphere he desired. Yet, the ashram and related institutions had a calling that was different from that of the city, and this autonomy was crucial to fulfilling its purpose without being mired in the everydayness of the industrial city.


Lot more will be written on several aspects of Gandhi…

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