Guess the country and the time period from the following passage: “T­he year saw the success of our arms, and the advancement of our naval and military prestige; its successor (year) has witnessed an equal and more pleasing triumph in the art of peaceful industry. With rapid strides, we have moved up to third rank as a gr­eat exporting nation, and not only have we easily held our own and strengthened our position in those lines of manufacture in which we had already made a good beginning, but we have gained a strong foothold for our products in foreign territory, which was supposed to belong exclusively to our foreign competitors”.

One could be excused for thinking it to be about China of today, or Germany of mid-1950s, or Japan of 1970s. But this is USA at the end of 19th century. The extract is from an editorial published in Scientific American — a respected journal — on Jan 06, 1900.

The passage gives us important insights about nations becoming great economic and military powers in a relatively short span of time. Politicians in the US realised early on th­at capitalism’s success depe­nded upon real competition; and that competitiveness was possible only through innovations and rapidly ramping up capabilities at global scales. Our research on the historical evolution of US firms in last 150 years shows that the entire nation during the 1850s was swinging to the possibilities offered by patented innovations — Edison, Marconi and the Wright brothers are just a few well-known names of the time. Another important insight is that US lawmakers created and then str­ived to preserve the requisite business eco-system as a platform for US firms’ entrepreneurial success. Even during the 1850s, US courts were aggressively protecting patents and copyrights of inventors and auth­o­rs, which allowed the latter to become entrepreneurs and co­mmercially exploit their id­eas through stock exch­a­n­ges. No wonder by 1910, New York had successfully challenged and become the wo­r­ld’s commercial center, deth­roning London — then capital of a global colonial and military power where the sun never set.

Today, China and Germany have become the world’s lar­gest exporters, each exporting in excess of $1 trillion. The latter’s achievement is all the more remarkable, being a nation of just 82 million people, and with hardly any natural resources. In our country we are witnessing not just policy paralysis, but a strange mix of capitalism and socialism, combined with a heady potion of casteism and regionalism, ultimately leading us nowhere. For the elite and more privileged in India, we must realise that ambitions ought to be made of sterner stuff, and for achieving greatness people sh­ould be willing to make sacrifices.

Unfortunately in India, cr­e­ating an innovation-linked in­dustrial-military techno-structure has never been a national priority or considered a firm necessity. Had we got our priorities right, we would not have been dependent on We­stern powers and Russia for hi-technology armaments and weaponry, spending billions of dollars (with no eyebrows ra­i­sed, compared to the huge din heard for allowing greater FDI in retail).

Capitalism necessarily attracts crime, especially the white-collar ones, since the lu­re for making quick and large amounts of money is great. So often we see Ponzi schemes, insider trading and crimes where politics and mo­ney get mixed up. But in great societies, the law catches up quickly with even the most powerful — in South Korea, Japan, and Germany, even the heads of state have been punished for crimes committed as politicians. Recently, the federal justice James Zagel, while sentencing Rod Blagojevich, the dethroned Illinois governor to 14 years in prison on a host of corruption charges, said in his judgment, “The harm here is not measured in the value of money or property... the harm is the erosion of public trust in government”.

We round off this essay with another quote from the Scientific American about A­m­erica’s business competiti­veness in the year 1900: “Our industrial methods enable us to build so cheaply, so expeditiously and so cheap, that we can lay down a manufactured article in Great Britain or her possessions in less time, at less cost, and often equally se­r­viceable quality as the British firms themselves. In Burma, our firm has offered to build a bridge for $300,000 in one year’s time, for which the most favourable English tender asked $590,000 and three years’ time to complete.”

Shall we ever see such passages about Indian firms beating US firms at the latter’s backyard by a 6:1 performan­ce ratio (other than BPOs)?

To quote Shakespeare, ‘Men at some time are masters of their fates: The fault is not in our stars, but in ourselves, that we are underli­ngs’. The leadership positions of nations are an outco­me of great visions, foresights, and collective determination carried through conscious building of national character.

(The writer is a professor of strategy and corporate governance, IIM-Lucknow)