Hit by the coronavirus storm, economies are clueless and running for cover. Champions of free market economy often quote Adam Smith’s Invisible Hand doctrine as the panacea for all economic ills. No different this time. They suggested that an economy can work in a free market where every one strives for personal interest. That was Laissez Faire, advocated over two centuries ago. There were many takers and with collapse of Marxism the world became a global village for free market votaries leading to new models of disruption and growth. Social Darwinism was the new mantra. But, man proposes, God disposes. So one huge disruption by the nature upset the apple cart. Economies fell like nine pins as the pandemic brought the globe to a screeching halt. Taken unawares, the free market theorists were at their wit’s end as the IMF believed that global economy was in distress. With global forecasts projecting gloom, answers to the loss of livelihoods are hard to find. The big question for humanity is where to find solace. The obvious answer seems to lie now in the visible hand, with the invisible one vanishing completely. The control and command structure of Governments that were thought superfluous appear to be the only silver lining. As the big government returns, strategies are being worked out for coping with the current global economic crisis. What to do and how to do are the questions to be addressed. Indian History has some clues. The 1784 famine of Lucknow (then Awadh) had thrown a similar challenge to the then Nawab, Asaf-ud Daula. The famine persisted for long, affecting both the rich and the poor. There was a great pressure on the Nawab to keep the economy going and protect lives and livelihoods. He decided to go for a huge construction project. But there was a unique angle to the project. While the poor labourers would carry on the construction work in the day time, the noblemen and the rich were asked to demolish the constructed structure at night. This continued and the Nawab could sail through the crisis. For those who are interested in history, it was this economic strategy that was behind the construction of the now famous monument of Lucknow in India, the Bada Imambara. Interestingly, this economic prudence of the Nawab to stimulate the economy worked much before Keynes propounded his theory. What the Nawab visualised, and Keynes realised 150 years later, was that government spending has a catalysing effect on reviving an economy under distress. Economic stimulation is a process that must be initiated by government spending, and once the revival starts, the private capitalists start putting in money. It is this fiscal multiplier effect that pulls out an economy from a recession. It is thus the visible hand that does the trick in times of a crisis when the invisible hand has failed. Unconventional times call for unconventional approaches. As democracies like US, European Union and India struggle to revitalise their economies, the approach of the Indian Nawab adopted over two centuries and a quarter ago makes sense. But it is important to understand that big governments do not always have to use the heavy hand. At times it is the big heart that makes the important difference. The invisible hand theory, then, works in fair weather.

Pathak is a professor of management, writer, and an acclaimed public speaker. He can be reached at ppathak.ism@gmail.com