New Maharajas in India

With the change of era, the old people and classes occupying the positions of power and influence give way to new ones. This happened in England in the 17th century and in France after 1789 when capitalism began pushing out feudalism. During the feudal era it was the various strata of lords, ranging from kings and princes to lowly landlords that occupied the positions of power at various levels. Their importance was directly proportional to the amount and the nature of rights in land. What happened in England after the execution of Charles I and temporarily consigning the monarchy into the garbage of history was described by Jonathan Swift in an article in The Examiner (November 2, 1710) in the following words: “Let any man observe the equipages in this town [London], he shall find the greater number of those who make a figure, to be a species of men quite different from any that were ever known before the Revolution; consisting either of generals and colonels, or of those, whose whole fortunes lie in funds and stocks; so that power, which, according to the old maxim was used to follow land, is now gone over to money; and the country gentleman is in the condition of a young heir, out of whose estate a scrivener receives half of the rents for interest, and has a mortgage on the whole; and therefore always ready to feed his vices and extravagances, while there is anything left.” He went on to sum up: “The wealth of a nation that used to be reckoned by the value of land, is now computed by the rise and fall of stocks.”

Many decades later, T. B. Macaulay, in his History of England (Vol. I, Chapter III), pointed out that another way to prosperity and influence was corruption owing to the position occupied in the echelons of administration. To quote: “From the noblemen who held the white staff and the great seal, down to the humblest tide waiter and gauger, what would now be called gross corruption was practised without disguise and without reproach. Titles, places, commissions, pardons, were daily sold in market overt by the great dignitaries of the realm; and every clerk in every department imitated, to the best of his power, the evil example.”

If one looks at the six decades of independent India, one finds that effective power has passed into the hands of the capitalist class and its allies. Soon after Independence, 500 and odd princely states were merged into the Indian Union and land reforms ended the dominance of pre-capitalist relations of production in the agrarian sector. For about two decades the ex-rulers of princely states and big landlords did try their best to grab political power fully or partially by joining political parties like the Congress, Swatantra Party and Jan Sangh (the previous incarnation of the BJP) or forming their own outfits in Orissa and Bihar, but they could not survive very long and faded out of real reckoning. At present, in political and socio-economic life of the country, they do not count much. The new power elite consists of industrialists, traders, builders, speculators, financiers, smugglers, the captains of the world of organised crimes, the go-between the foreign MNCs and the government, contractors and corrupt bureaucrats and politicians.

Some of these have entered the list of the richest in the world. They are in the grip of what Harvey Liebenstein termed as ‘snob effect’ in The Quarterly Journal of Economics as far back as in May 1950. They are eager to show to the rest of the populace that they are the new Rajas and Maharajas, thus, the power to reckon with. Only recently a big publisher of Hindi books devoted one full page of his Prakashan Samachar (publication news) to the lavish marriage of his son and listing the influential persons attending the reception with the sole purpose of underlining his own social status.

IT was in the year 1899 that American economist Thorstein Veblen came out with the term ‘conspicuous consumption’ in his The Theory of the Leisure Class. For this class “Unproductive consumption of goods is honorable, primarily as a mark of prowess and a prerequisite of human dignity; secondarily it becomes substantially honorable in itself, especially the consumption of the more desirable things.” Further, “The basis on which good repute in any highly organised industrial community ultimately rests is pecuniary strength, and so of gaining or retaining a good name, are leisure and a conspicuous consumption of goods.”

Keeping in view this, the Prime Minister of India, on May 24, advised the annual meeting of the Confederation of Indian Industries to reduce conspicuous consumption because it was not only socially undesirable in the context of India’s present stage of economic development but was also harmful from the environmental point of view.

Affluenza, however, has so tightly and widely gripped the new Indian Rajas and Maharajas that they have contemptuously ignored the Prime Minister’s sermon. To give just a representative example, let us refer to a report appearing in the Financial Times (June 6). It says that Mukesh Ambani, India’s richest tycoon is building his new home in Mumbai, named Antillia, after a mythical island in Spain. This heat-absorbing tower will rise 570 ft high. and this 60 storey residential building will enjoy an unbroken view of the Arabian Sea. Its estimated cost will come to $ 500 million. Another report says that it will have three helipads, six parking floors to accommodate 168 luxury cars and residential quarters for 600 servants. Guardian (June 1) reports that its total floor area will be larger than Versailles and all this is to serve just six members (besides himself, his mother, wife and three children) of his family. “Draped in hanging gardens, the building will have a floor for a home theatre, a glass-fronted apartment for guests, and a two-storey health club.”

It is said that, to some extent, it indicates the ‘bandwagon effect’. As Lakshmi Mittal, the steel magnate, had acquired the most expensive house in London’s Kensington Palace Gardens, for £600 million, perhaps Ambani was feeling an intense urge of catching up with him.

Gone are the old days when even the wealthiest tycoons of India hesitated from showing off their wealth and ostensibly lived an austere life. Hafeez Contractor, a Mumbai-based architect, told the Guardian: “They could not drive their Mercedes, they lived in small apartments. Even Mr. Ambani’s father lived in a small block of flats. They were afraid of the taxman. But that attitude has gone. Mukesh has made his money, and good for him if he wants to flaunt it.”

In addition to far-reaching social, economic and cultural implications, this palace of the new Maharaja will guzzle energy and will contribute to global warming. But who cares? In the years to come, the ‘bandwagon effect’ will assert itself and what will be witnessed is that other new Rajas and Maharajas will erect such buildings and, soon, Ambani will try to run ahead a la he ‘snob effect’.

This phenomenon has enthused foreign manufacturers of luxury goods. What The Economist (June 2) has reported in this context is worth taking note of: “At the end of the 19th century, India’s maharajahs discovered a Parisian designer called Louis Vuitton and flooded his small factory with orders for custom-made Rolls-Royce interiors, leather picnic hampers and modish polo-club bags. But after independence, when India’s princes lost much of their wealth, the orders dried up. Then in 2002 LVMH, the world’s largest luxury-goods group, made a triumphant return to India, opening a boutique in Delhi and another in Mumbai in 2004. Its target was the new breed of maharajahs produced by India’s liberalised economy: flush, flash, and growing in number.”

The vendors of all kinds of fashion and goods of conspicuous consumption have begun rushing to India. They include Chanel, Bulgari, Dolce & Gabbana, Hermès, Jimmy Choo and Gucci. Emporio, a mall dealing exclusively in luxury wares, is going to open by the end of this year in South Delhi, the most prosperous area of India’s capital. By the same time, Vogue will start its Indian edition from Delhi. It will keep the new Indian Rajas and Maharajas informed of the latest trends in the fashion world. An Italian firm, La Perla, is very soon going to place bras of the latest designs costing over $100 per piece.

All kinds of consultancy firms have come out with studies, projecting the expansion of the tribe of the new Indian Rajas and Maharajas in the years to come in view of the rising rate of economic growth and the larger and larger portions of the GDP going to them. It is interesting to note that McKinsey Global Institute’s study, running into 194 pages, is entitled The ‘Bird of Gold’: The Rise of India’s Consumer Market. In the last quarter of 2006, the Luxury Marketing Council, a well-known international outfit of 675 luxury goods producers, opened its Indian chapter. According to Devyani Raman, the chief of the Indian chapter, its member firms will not only market goods but also teach how to use them so that the Indian customers look no less smart than their international counterparts.

The author, a well-known economist, used to teach Economics in Kirorimal College, University of Delhi before his retirement a few years ago.