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Selling the Wrong Idea

Authors: Jagdish N. Bhagwati, Senior Fellow for International Economics, and Rajeev Kohli
December 12, 2011
The Times of India

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Adam Smith, writing in The Wealth of Nations, was probably the first to call England a nation of shopkeepers. But few remember that Smith used the phrase to argue that England was a "nation whose government is influenced by shopkeepers". And that influence was malign. Thus, he blamed the founding of the British Empire on the desire of shopkeepers to secure monopoly of trade in colonial commodities.

India's shopkeepers today invite a similar, if different, opprobrium. By opposing retail sector reform, they and their political supporters in the BJP, Trianmool Congress and the communists, are not merely sabotaging this important reform. They are also throwing up roadblocks to the deepening and broadening of the post-1991 reforms that is so badly needed today.

But if the UPA government is to overcome the shopkeepers' opposition, the different issues which have brought diverse groups together against the proposed reform must be distinguished and refuted vigorously by the UPA government's leaders. What are they?

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