Two leading US publications known for championing free market economics published damning editorials on Thursday criticising the Narendra Modi government’s decision to demonetise more than 85% of India’s cash. Calling the move “sickening and immoral”, Steve Forbes, editor-in-chief of Forbes magazine, wrote, “…there’s no misunderstanding what this is truly about: attacking your privacy and inflicting more government control over your life.” The Wall Street Journal, in a piece titled “India’s bizarre war on cash” , referred to the decision as “officials exercising arbitrary power” over citizens’ money.
Supporters of demonetisation have largely vilified its critics as being left-wing populists or liberal academics, but the two editorials suggest that negative evaluations of the move are coming in from across the ideological spectrum.
In his piece, Forbes compared the decision to India’s forced sterilisation programme in the 1970s, adding that India’s economy is based mostly on cash mainly because of “excessive rules and taxes”. “What India has done is commit a massive theft of people’s property without even the pretence of due process – a shocking move for a democratically elected government.”
He also dismissed the government’s claims that the move will lead to a cashless economy, saying this can only happen “in its own own good time if free markets are permitted”, taxes are lowered and it becomes easier to do business. The move, he wrote, has set a “dreadful example for the world,” by “further impoverishing the least fortunate among its population and undermining social trust, thereby poisoning politics and hurting future investment”.
The Wall Street Journal editorial claimed the November 8 announcement “continues to wreak economic havoc” and questioned whether the promoting a digital economy was necessarily wholly beneficial to Indians. “In a cashless society the state has far greater means to harm the public, both through inept policies and abuses of power,” it wrote. “India already has a too-powerful bureaucracy that imposes punishing licensing, labor, tax and other regulations, stifling entrepreneurship and innovation.” The piece concludes that while digital finance has its benefits, “imposing a ‘cashless society’ is antithetical to economic liberty”.