Just before entering Houston by road from Los Angeles on I-10, there is Wildcatter Saloon. Its Texas-sized grounds house a bar, an open air music venue and enough parking space to make biker gangs happy. Reformatted to a neighborhood spot around 2012, Wildcatter Saloon has seen several reincarnations. Wildcatter Saloon symbolizes grit and resilience of people used to seeing ups and downs, and carrying on nevertheless.
Indian Prime Minister Narendra Modi would not see the Saloon on his way to Sunday’s diaspora meet, also slated to feature U.S. President Donald Trump. He will carry back memories of a Wildcatters’ Welcome – rousing and boisterous. He should feel at home as the same wildcatters’ spirit has carried him through in his political journey. As importantly, he should try to instill the same risk-taking mindset in the next generation when back home.
“Wildcat” comes from a Wildcat Hollow in Pennsylvania, site of an oil drill away from then-proven fields. In the Texas wilds, wildcatters are a venerable brotherhood, members of which are not loathe to dig into their last penny to try out unproven sites. All of them lost their shirts more than once, only to move on to a next spot each time; making and losing fortunes is a routine cost of doing business.
There is a very important difference between wildcatters and market speculators. In the olden days, geological assessments were more error-prone, making wildcatting necessary. They provide most of at-risk capital. Wildcatters are known to make sizeable investments in productive capacity and support infrastructure. They do try to limit value destruction. As oil flats became more understood, and as production moved offshore, the next Avatars carried on the same with the new known unknowns. In short, Wildcatters were not arbitrageurs but creators of potential long-term economic assets. They are not passive to taking a beating lying down but active risk-takers who refuse to take the mat even if bloodied all over.
Modi is a wildcatter par excellence in Indian politics. He played the long game, kept his chin up and head down when needed, created a vaunted party machinery, commanded new technologies to get his message across and cultivated a presence on the pulpit that complements his superior oratory in a commoner’s parlance. Among many things, he identified a virgin space for market-oriented mindset, anathema to elites in Lutyen’s. Modi made it a badge of honor and a defining trait. Now in his second coming, Modi is courted by two successive U.S. presidents who otherwise are exact opposites of the other on everything. Like it or hate it, his mark on Indian politics is indelible.
As his government looks to find the next boost for the economy, Modi needs to look inside. India has the biggest fortune of having the youngest population, in relative terms, among all large economies – nearly one-third of the people are young adults, nearly 100 million people are within 15-19 years of age. At the very minimum, the country needs to find productive use of 20-25 million new face, each year. Failure has dire consequences.
Not long ago, the Indian economy was slave to political whims; energy surely has moved down the chain — still not enough. Micro-businesses fail to move up the scale, productivity is awfully low for most micro enterprises, studies find, raising worries of “welfare losses.” Cohort studies find transition to entrepreneurial avatar drops precipitously after a decade in the workforce, a testimony to being “too comfortable.” It is a new Avatar of the same story we have seen through generations.
People need significantly better access to capital and tehsil level, and pooling of risk to make it feasible. One approach might be creating a new generation of “Grameen Banks” with government capital backstop. There could be hundreds of these micro lenders, each with their own proposition, but each feeding the pulse. These could be financed with private and institutional capital, and will be chartered to provide loans within guidelines, GOI providing first-loss capital and necessary regulatory relief.
Growing up in Kolkata, I trace lack of economic euphoria to lack of celebration of pursuit of success at individual level – a problem not unknown elsewhere. And that is where new political ideologies taking roots are encouraging. Having a political philosophy that eulogizes self-help and private commercial enterprise definitely is a good shift away from “development” – or worse, a “mai baap” approach – that defined previous political theology. Not long ago talk of opening up a tea-stall while one awaits word from a recruitment center was verboten. Having a prime minister who defines himself as a former tea-seller surely helps. India needs much more of it.
India needs an organized platform that celebrates Wildcatters, risk-takers who took changed their world, including, and especially, through commercial activities. India needs raucous, rah-rah even, cheer for economic elites who begged, borrowed and scrimped their way to prosperity. Prosperity is a virtue India must accept, and pursuit of prosperity is a noble activity, especially if it is through creation of productive resources or disrupting existing business models mostly through sheer force of willpower. No, we do not need to find saints in all, but we will find that most of them are no sinners either.
Modi’s mission of muscular presence and cultivating friends on world stage is mostly complete, as Trump’s presence in his event will aver. His second term should focus on domestic agenda, economic resilience of India as a nation, especially in finding gainful engagement for millions every year. He will do well to orient them to become masters of their own universe and provide access to capital so they can help themselves.
Houston has a Texas cheer ready for him, and all of India will join when Modi is successful in this.
[Partha Chakraborty, Ph.D., CFA is an entrepreneur in Blockchain and Wealth Management in US and India. Dr. Chakraborty spent two decades in all parts of the Investment Management value chain globally; he lives in Southern California with his family. All opinions are of the Author alone, and do not necessarily represent that of any organization he may be part of. The author alone is responsible for any error or omission.]