Republicans could learn a lot from the election of Narendra Modi. Narendra Modi won an overwhelming victory in the Indian election. He avoided or minimized contentious issues, like Hindu nationalism. The Republicans can learn a lot by following a similar strategy on religion. Modi’s campaign emphasized growth, a better future, and a program for achieving improved living standards for everyone. He charged the current government with “tax terrorism” because it repeatedly changed India's tax rates and tax law. That created uncertainty, an enemy of business investment and economic growth.

The Indian election was a classic confrontation between the proponents of growth and the advocates of redistribution and the welfare state. Growth won across the board in all classes and regions. The young especially voted for growth. The same message brought Ronald Reagan to the presidency for two terms. Like Reagan, Modi urged voters to choose growth and opportunity instead of redistribution, higher tax rates, and envy.


narendra modi
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This message worked for President Reagan. And it worked for Prime Minister Margaret Thatcher. It offers opportunity to the many willing to work for a better life.

Republicans should make this message their main themes in the 2014 and 2016 elections. We know that President Obama’s party, like the Indian Congress party, is committed to more redistribution, a larger welfare state, and more regulation of the internet, the environment, investment, consumption, business, and labor. That policy can be called “regulatory terrorism” because like tax terrorism it discourages investment and growth. President Obama, like the incumbent party in India, never tires of urging higher tax rates to finance more redistribution.

The media in India and the west attacked Modi’s character by reviving a 12 year-old episode of Hindu-Muslim confrontation in which he was not directly involved. Instead of letting that become the central issue of the campaign, Modi stayed with his program of growth and opportunity. He opposed the counter-productive uncertainty and increased redistribution generated by the incumbent government. The main opposition, the Congress party, gathered fewer votes than in any previous election.

Indian voters responded to Modi’s message. They rejected slow growth and increased redistribution. They voted for a better future. The Republican Party should likewise encourage Americans to vote for a better future. The party should adopt as its campaign slogan: “We will make your life and your children’s lives better. We offer opportunity not envy.” It should articulate a program to encourage investment, reduce regulation, lower tax rates, extend personal freedom, approve the pipeline, and improve education by expanding school choice.

The Obama administration’s regulatory policy not only deters investment by increasing uncertainty, but it also encourages crony capitalism and corruption by permitting some to circumvent the regulations that burden others. Much regulation of firms circumvents the promise of equal justice for all in the U.S. Constitution by replacing the rule of law—equal treatment under the law—with special rights and privileges for those who finance the governing party in elections.

Just as Modi did not ignore the mistakes made by the Congress party, the Republicans should not ignore the Obama administration’s many blunders and its failure after more than five years to get a recovery that generates jobs and higher incomes. The unemployment rate has fallen mainly because workers have stopped looking for work. Investment remains sluggish. Instead of investing in our future, many firms buy back their stock. That’s a message that says their outlook is for slow growth and sluggish demand. No wonder. The administration’s program calls for more taxes on the highest incomes and more regulation. They offer envy not opportunity by appealing to women, environmental extremists, and other disaffected groups.

The main message of the Indian campaign is that if voters are offered a clear choice, they will choose opportunity. They want a candidate who will fight for a positive program that promises to make life better for them and everyone who wants to work by returning to the kinds of policies that made us the wealthy country that we are. It’s the choice of opportunity instead of envy and redistribution. It’s the choice the Republicans should make as their centerpiece. They should declare that they are the party of opportunity and that they have a plan to make life better for everyone.

The details of that plan are as old as the republic: Reduce tax rates, eliminate much regulation, shift regulation to a system that gives the regulated incentives to reduce external costs, and start on a long-term program to reduce the unsustainable funded and unfunded federal debt. That’s a lengthy list, but it is only the beginning. We must add to it improvements in the education system to increase competition by chartering more independent schools and reform in the immigration system to bring more educated, skilled workers into the economy.

We are swamped with evidence of pessimism about our future. For example, young workers, aged 18-34, are leaving the labor force and corporations are repurchasing shares instead of investing in new plants and services. That should be a wake up call telling us that many do not see a future that returns to the higher growth we had in past decades.

The response should be that democratic capitalism is the only system the world has known that provides economic growth, opportunity, and freedom. That system produces new ideas, new products, and new opportunities better and more abundantly than any system mankind has found. Democratic capitalism is not perfect; it is a human system so it has human faults. But it does better at producing opportunity, growth, and freedom than any of the utopian offerings that planners and bureaucrats would put in its place

Modi showed as the chief minister of the Indian state of Gujarat that the future need not be bleak. He offered the voters opportunity instead of envy and more redistribution. The voters responded enthusiastically. That’s the lesson the Republican Party should take from the Indian election and use to win an overwhelming victory at home. The message is: “Here’s how we will make your life and your children’s lives better.”




Allan Meltzer is a distinguished visiting fellow at the Hoover Institution and the Allan H. Meltzer University Professor of Political Economy at the Tepper School of Business at Carnegie Mellon University