The Economist magazine sticks its nose into Indian politics, comes away with egg on its face

After 30 years of reading The Economist, you know what to expect.

The correct answers to most questions are found by letting markets operate freely, as far as The Economist is concerned and politically, that rules out any system that pretends to be able to manage control the economy. The magazine is socially liberal. There's not a hint of racism in it, or sexism – "meritocracy" is the name of the game. Arguments are conducted logically, preferably they're quantitative, the emphasis is on rational management techniques and evidence-based public administration. The magazine is the opposite of insular, open to new ideas wherever they come from, and always up to speed with new technology.

Given which, what on earth happened in the 14 January 2012 edition? It was out of character. Its Scottish Enlightenment body was snatched by aliens. Did The Economist suffer some sort of editorial stroke?

Take a look at The magic number, a leader on Aadhaar, one of India's many identity management schemes, this one operated by the Unique Identification Authority of India, chaired by Nandan Nilekani:

Armed with the system [Aadhaar], India will be able to rethink the nature of its welfare state, cutting back on benefits in kind and market-distorting subsidies, and turning to cash transfers paid directly into the bank accounts of the neediest. Hundreds of millions of the poor must open bank accounts, which is all to the good, because it will bind them into the modern economy. Care must be taken so mothers rather than feckless fathers control funds for their children ... Mr Nilekani harnessed the genius of Indians abroad, including a man who helped the New York Stock Exchange crunch its numbers and one of the brains behind WebMD, an American health IT firm ... India plainly needs better data-protection laws, but even if the existing rules remained unchanged, the threat to liberty would be dwarfed by the gains to welfare: to people who live ten to a room, concerns about privacy sound outlandish. Some of the resistance is principled, but much comes from the people who do well out of today’s filthy system. Indian politics hinge on patronage—the doling out of opportunities to rob one’s countrymen. [Aadhaar] would make this harder. That is why it faces such fierce opposition, and why it could transform India.

According to The Economist then, Indian fathers are feckless but Indian mothers aren't, the Indians who have left the country are brighter than the ones who have stayed at home, poor people don't need privacy the way western journalists do and UIDAI are clean whereas the other gangs dispensing opportunities to rob their own countrymen are "filthy", a most unEconomist word.

And this, too, is most unEconomist – normally the magazine would instantly spot the problem with the following claims:

The state spends a fortune on subsidised grain for the hungry, but an estimated two-thirds of it is stolen or adulterated by middlemen. The government pays for an $8 billion-a-year make-work scheme for the rural poor, but much of the cash ends up in the capacious pockets of officials who invent imaginary “ghost workers”. Suppose those thieving middlemen were obliged to deliver grain, not to poor people in general but to named individuals who could confirm receipt by scanning their fingerprints? And suppose those ghost workers had to undergo an iris scan before being paid?

UIDAI computerisation may make it harder to steal public money from PDS, the food security programme, and from NREGA, the temporary employment scheme, as The Economist suggest. But equally, it may make it much easier.

Aadhaar could make corruption a much more modern, clean, white collar, highly automated pursuit. It's a lot quicker to use a computer to claim wages for thousands of ghost employees than it is to complete manual requests. If Aadhaar wants biometrics, then a computer will provide them. And if Aadhaar has helped to provide everyone with bank accounts and electronic transfer facilities then, thank you very much UIDAI, the "thieving middlemen" may say, now there's no need to handle any cash and it's easier to launder our ill-gotten gains.

This leader of The Economist's barely rises above the level of sales literature. It is obvious why UIDAI would want it published. But why did The Economist allow it? That is a question for Adam Roberts, the South Asia bureau chief based in Delhi, and for Dominic Ziegler, the London-based Asia editor, and for Patrick Foulis, the India business and finance editor in Mumbai, and maybe for Alpesh Kandoi, to whom all media enquiries should be addressed.

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