If you see a Brahmin and a snake, kill the Brahmin first.
One generation plants the trees, and another gets the shade.
This book is mainly concerned about the so-called advanced democratic countries, which are verging on sovereign default but really should not be.
But this chapter will deal with India and China, both of which now are so important for the world economy and present some interesting contrasts and similarities with the advanced countries.
Although as a group they have made amazing progress in achieving fiscal discipline in recent years, historically emerging-market countries have had to contend with poorly developed institutions and sometimes violent “birth histories” due to revolutions leading to their creation, which left debt and destruction in their wake. Default on sovereign debt and currencies that deteriorated to worthlessness have been common events with emerging-market countries. In historical analyses of the gold standard, economists have tended to classify emerging countries as “periphery” countries, unable to adhere to gold standard discipline. The implicit assumption more or less has been that emerging-market countries, because of their institutional weaknesses, violent histories, and low levels of per capita incomes, cannot be expected to act responsibly in matters of fiscal and monetary policy.
But India requires some discussion. Indian democracy has ...