The mere title of the book is intriguing enough to pick it up. And the name of the author only goads you to open and read it. If you are expecting Surjit S. Bhalla's latest release The New Wealth of Nations to take the arguments in Adam Smith's 1776 magnum opus An Inquiry into the Nature and Causes of the Wealth of Nations - shortened as The Wealth of Nations - further, you'd be making a mistake. The former has adorned bookshelves of economics students across the world for a long time. Comparing the two would mean injustice to this book and to Bhalla.
The primary argument Bhalla makes in the book revolves around education. He says that it is a vital fulcrum to increase income, create wealth, reduce inequality, empower women, create middle class and democratise the elite. This is actually a very complex assertion to make, because growth is a byproduct of the combination of all these.
Bhalla offers a contrarian take on French economist Thomas Piketty's inferences that despite globalisation and industrialisation, the gap between the rich and poor is increasing. He builds his argument over 13 chapters by emphasising that education creates the middle class, promotes democracy and makes the society more robust. In his opinion, education is the only variable to push growth. His arguments were valid a decade ago; today, developing countries like India are moving out of this jargon play.
It is true that the new wealth of nations is not gold or capital. But it is not merely education either; it is knowledge. Bhalla missed this point. Education doesn't work in silos; there are other factors as well to achieve the desired response such as the importance of skills and the quality of education to achieve growth. It is disappointing that the author didn't dedicate even a single page to this thought. India has a band of young engineers - well educated - who line up to be recruited at ISRO's camp offices as well as of Naxals in the jungles of central India.
Smith's version was the first recipe book for nations eager to create wealth - especially in the newer economies with the onset of industrial revolution. The book had concepts of division of labour, productivity and free markets. Bhalla stayed aligned to Smith's principal argument that structuring of labour brought in productivity and subsequently growth. Industrialisation and subsequent imperialism pushed nations to make full use of technology and learn ways to accumulate capital. Those who succeeded raced ahead. Bhalla sees the distribution of education, and not accumulation like in case of capital, as the new wealth of nations.
Despite the disagreements a reader may have with Bhalla, the book is immensely readable. He has generously used quotes by Bob Dylan, Pink Floyd, U2 and Simon and Garfunkel and peppered chapters with MIT-Harvard jokes. Though, often, his digressions drag for far too long and are irrelevant. Bhalla has tried to keep his econometric tendencies at a distance. Although he uses diagrams, line graphs and data points, they help make his case a bit stronger without intimidating the reader.
The book is a one-time read for economy aficionados. But it is better to dig deeper into the reference materials quoted by the author and make your own assertions. This time, Bhalla is off the mark.