Time-traveling Larry Summers envisions “Mumbai Consensus”

June 2, 2010

larry2White House economic adviser Larry Summers took a break from his busy schedule on Wednesday to engage in a bit of time travel — visiting the year 2040 when much of the world is run according to a new “Mumbai Consensus”.

Speaking at the U.S.-India Business Council, Summers envisioned a world in which India’s experience in promoting rapidly rising living standards, coupled with its strong democratic traditions, make it a new example for how countries should run their affairs.

“In the economic history of the last millennium, this is an event that ranks only with the Renaissance and with the Industrial Revolution,” Summers said, describing the fantastic gains in living standards across the globe.

“And I would suggest to you (it) is far more important, and represents far more change for far more people taking place far more rapidly.”

Summers’ futuristic vision encompassed a world where the “Washington Consensus” — a term many use to cover the market-based, neo-liberal policies advocated by the Washington-based World Bank and International Monetary Fund in the 1990s — and the “Beijing Consensus”, which posits a more authoritarian, Chinese-style approach to economic development, are seen as  little more than “interesting historical ideas.”

“But a majority of the world’s people (will be)  following a Mumbai Consensus,” Summers said.

Summers words doubtless went down well with his audience, a group of U.S. business leaders engaged with India who were meeting on the eve of a the first “strategic dialogue” between the two countries, which will be chaired by Secretary of State Hillary Clinton and her Indian counterpart S.M. Krishna on Thursday.

Back in the year 2010, many analysts say the two countries still have a lot of work to do to begin fleshing out what both sides concede has been a relationship stronger on symbolism than substance.

Summers, however, was in the business of prognostication — and in 2040 he liked what he saw.

India and the United States — “two large, independent, vibrant democratic nations committed to international cooperation” — share a plan for the future, he said, a plan that implicitly shoves Beijing’s market-oriented Communists to the side.

“The world that the United States wants to see,  the world that India wants to see,  is a world of increasing integration, is a world of increasing prosperity, is a world of tolerance,  is a world at peace, is a world where prosperity comes from the bottom up,  is a world where respect for individuals is the paramount value,” Summers said.

PHOTO CREDIT:  REUTERS/Jim Young  File photo of  White House economic adviser Larry Summers in the White House Oval Office, August 18, 2009.

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Well…so far, India is doing well, but China is doing way better.

Also, for a world that is going to forget the “Washington Consensus,” it seems pretty convenient that we end up with “[t]he world that the United States wants to see.”

This vision sounds more like what Mr. Summers is hoping will happen – or at least, what he wants folks to think is going to happen – for than a reasonable extrapolation of what we see now.

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