The Nobel-winner on how his discipline can communicate better, the secret of Trump’s appeal — and what gifts really mean
I arrive a few minutes late to my lunch with Abhijit Banerjee, carrying a bottle of chilled Indian rosé and feeling a bit exposed.
Banerjee, an avid home cook and keen observer of human behaviour, will be sitting with me for that rare beast: a Lunch with the FT in which the interviewee cooks. One of the ironclad rules of the column, I explain before we meet, is that the FT pays. So throughout the morning, my phone has been pinging with invoices for ingredients: fresh coconut milk, green grapes, radish, coriander, tahini, which I promptly settle.
It feels wrong to be served home-cooked food by an interview subject: an upending of the power dynamic of what Janet Malcolm called my “morally indefensible” profession, where any self-respecting journalist pays his own way, but always prevails by getting the last word. So to level the playing field — and in hope that some booze might loosen my subject’s tongue — I grab wine from my fridge on the way out.
“There’s plenty of food — dig in,” says Banerjee, professorial behind glasses. The 63-year-old MIT economist flew in the previous evening from Kolkata, where he was working on a series of economic-themed films for children, called Water Wars. I had hoped to watch him cook, but our meal is laid out on a sideboard when I arrive at a house he has borrowed in Nizamuddin East, a south Delhi suburb favoured by journalists and writers.
Banerjee, a native of Mumbai who grew up in Kolkata but now lives in Boston and teaches at MIT, is one of the world’s leading development economists, nearly always mentioned in the same breath as his colleague, wife and former student Esther Duflo. The pair transformed their field by using randomised controlled trials to measure the impact of small interventions on policy outcomes for poor people, finding for example in one 2004-07 study in Rajasthan that providing a bag of lentils to parents boosted childhood immunisation rates. They won the 2019 Nobel Prize in economics with Harvard’s Michael Kremer.
Banerjee invites me to serve myself from a plate of roasted figs and roasted spiced potatoes with sesame seeds. “Do you mind if I eat with my fingers?” he asks. I invite him to, but too clumsy for Indian table etiquette myself, I stick to a knife and fork. Disappointingly, he declines a glass of wine, so I abstain too.
Banerjee and Duflo, self-critical to a fault about their field, have between them authored several books meant to popularise it. The first joint effort on this front was Poor Economics, which won the FT and Goldman Sachs Business Book of the Year in 2011.
“I think we have always thought that economic ideas were too important to be left out of the public discourse,” Banerjee says about the book. “There is a sense in which we think economics does a disservice to ourselves and the world by wrapping ourselves in this omniscient jargon.”
As we snack on our starters — which are delicious — Banerjee deplores the “bad analysis and unnecessary certitude” of the economics profession. “We could have more humility and be more effective.”
“People don’t trust us,” he says, citing surveys showing that doctors, weather forecasters, even journalists outdo economists in the public’s trust to do their jobs right.
Banerjee and I are plating slices of an intriguing dish, which looks like a stack of crepes. These, he explains, are poppadoms layered with baingan bharta (grilled aubergine mash) and thickened with tahini.
Banerjee’s latest book is Chhaunk (a Hindi word for spices flash-fried in oil and stirred into a dish at the last minute), a compendium of essays on issues ranging from cultural capital to gift-giving, shot through with memories of his Kolkata childhood. The recipes in Chhaunk, though largely Indian in origin, have fusion elements that reflect Banerjee’s own cosmopolitanism (he is a US citizen and Indian “overseas citizen” cardholder) and this might best be described as global comfort food.
Isn’t the aubergine millefeuille a bit like a tortilla casserole, I ask? “Yes, exactly,” he agrees. “This is a new dish, but it’s totally familiar,” he says, and brings the conversation back to his new book. “The idea is never to be deeply radical.”
The whole point of the essays “was that they should have something useful to tell you”, he says. “I do like the idea that economics should eventually infuse people’s lives and make them think better about policies and things like that, but without the heaviness.”
One piece that doesn’t have much economics in it, Banerjee says — although it namechecks economist Joel Waldfogel’s famous essay “The Deadweight Loss of Christmas” — is the chapter about gift-giving. I ask him to explain the economics of my having brought a bottle of wine that is now sitting unopened in the fridge — a glaring deadweight loss.
“Forgive me for being presumptuous for saying it,” he says. “I think you brought it because it’s the norm” — though not in India, where a lunch or dinner guest would bring along sweets.
“You could have brought some sweets or flowers and that would have been more normal,” he says. I feel a bit deflated.
We pivot to the economics of this autumn’s big political story — the re-election of Donald Trump. “People who are good storytellers are very powerful,” he says. “Trump, in the end, is a very good storyteller, and that’s power.”
And what is Trump’s story that swayed a majority of American voters? I ask. “The physiocratic story of, ‘I have something and others are taking it away, and we should just keep it to ourselves’,” he says. “It’s a very natural story.”
The word, which sends me to the dictionary later, is a reference to an 18th-century school of economic thought. The philosophy predated Adam Smith’s work on the benefits of free trade or David Ricardo’s theory of comparative advantage — the notion that nations can prosper by producing what they can most efficiently — and, like Trump, makes no allowance for them.
“He just strips it out — it’s almost physical,” Banerjee says of the president-elect’s rhetoric on trade. “Your body, they’re taking your blood out.’”
Economists need to counter claims like these by telling their own, better stories. “To make a world where good ideas win, we have to tell them in ways that are intelligible.”
I ask whether he thinks Trump voters are economically illiterate, but Banerjee resists the label. “At some deep level it’s rational,” he says, speaking about the stagnation of real wages for many workers since the early 1970s, despite a more than doubling in GDP. He lays much of the blame on the Reagan revolution.
“Where your workers used to be paid one-60th of the boss and now they’re paid one-60,000th of the boss,” he says. “There were norms in society about what’s reasonable and what is not . . . I think there was a shift in norms.”
I ask Banerjee whether he considers himself a leftist. Given the political tensions in both Narendra Modi’s India and on US campuses recently, I am expecting an equivocal reply, and so am surprised when he replies with a blunt affirmative: “Yes.”
We are now spooning out the main course, a biryani with boiled eggs and a topping of sweet caramelised onions. There are two chutneys, one made from daikon and flaxseeds, the other from roasted grapes and walnuts.
Banerjee grew up in Kolkata, the son of London School of Economics graduates. His mother Nirmala Banerjee was a prominent feminist whose research included work on women’s labour-force participation, and who he says was “very blunt about male Indian feelings”.
“Depressed and interesting”, Banerjee recalls when I ask him to evoke West Bengal in the 1970s: “The economy was shaking and failing.”
Bengal has been home to some of India’s finest thinkers, from the polymath bard Rabindranath Tagore to Nobel-winning economist Amartya Sen. It is also ground zero for some of India’s worst economic policymaking, stunted by decades of Communist governments and today run by a Congress party offshoot headed by leftist populist chief minister Mamata Banerjee (no relation), India’s most powerful female politician.
Menu
Private house,
Jaipur estate, Nizamuddin
East, New Delhi
Grover Reserve collection rosé
Rs785
Roasted figs
Roasted potatoes
Aubergine
Roasted figs
Roasted potatoes
Aubergine
millefeuille with
papad
Daikon and
Daikon and
flaxseed chutney
Roasted grape
Roasted grape
chutney
Egg biryani
Panna cotta with
Egg biryani
Panna cotta with
fruit compote
Cost of ingredients Rs2,159.70
Total Rs2,944.70 ($35.65)
Cost of ingredients Rs2,159.70
Total Rs2,944.70 ($35.65)
But Kolkata’s plight at the time was typical of “old industrial cities” worldwide, Banerjee insists. “I think it’s easy to blame the left for it, and I have no particular reason to defend the Communist party in West Bengal,” he says. “But if you think about what was happening in Manchester or Milan at the same time, it’s not that different.”
Conversation around the Banerjees’ dinner table was “about everything under the sun”, he says. “And food, we would talk a lot about food.”
I remark on the biryani, which is delicious. Banerjee politely planned a menu for me around the fact that I avoid meat. But Bengalis are famous omnivores and, unlike most northern Indians, widely eat beef. Was his Hindu family veg or non-veg? “Totally non-veg,” Banerjee replies. “We ate beef; we ate everything.”
Turning to diet is my oblique way of asking Banerjee for an opinion on the state of India under Narendra Modi — himself a strict vegetarian — where food can be a source of conflict, even death.
In the decade since Modi took power, there have been frequent lynchings by Hindu extremists of lower-caste Dalits and Muslims discovered transporting, or even suspected of transporting, beef. Meat eating flares up as a frequent source of ugly, caste-tinged conflict in places such as housing estates and elite university dining halls.
I have never lived in another country, I remark, where vegetarianism — often seen as a virtuous choice by liberal westerners — can be oppressive, even militantly rightwing. What does he think about the notion of using food to put people down?
“I find it very disturbing, and everybody should find it disturbing, but particularly it’s so much about caste,” he says.
Most Indians, he correctly notes, are not vegetarian. However, “lots of people don’t eat meat at home, partly because their neighbours complain, and go out to eat it”.
The idea that if you stop eating meat “we will elevate you a little”, he says. “There’s something really manipulative about it.”
Banerjee arrived at Harvard to begin his PhD in 1983, at the height of Reaganism. Economic fashion then was focused on the importance of incentives in the form of policies such as tax breaks, and the conservative trope of the disincentivised “welfare queen”. “It was a real obsession,” Banerjee says.
He thought back to his childhood home neighbouring a slum, and felt a disconnect. “I knew a lot of kids I could play with, who were from very poor families,” he says. “I didn’t think that they were poor because they were lazy and stupid — none of that added up for me.”
Development economics at the time was, he recalls, stuck in the doldrums and “there wasn’t much excitement about it”.
Banerjee quickly made his mark with two papers: “A Simple Model of Herd Behaviour” in 1992, then the following year “Occupational Choice and the Process of Development” with Andrew F Newman. He secured jobs teaching development economics at the PhD level, first at Harvard, then at MIT in the 1990s, where he met Duflo. In 2003 the pair founded — alongside Sendhil Mullainathan — the Abdul Latif Jameel Poverty Action Lab (J-Pal).
Duflo was a student in Banerjee’s development economics PhD class at MIT in the 1990s, but he puts the start of their relationship “much later, after 2010” — when she was already a tenured professor. In a Lunch with the FT in 2012, Duflo made one of the couple’s first public avowals of her relationship when she described him as the “father of the child” (they now have two).
The maid has brought in our dessert, the one dish Banerjee himself did not cook: panna cotta with fruit compote, ordered in from a local patissier. Shanti, the dog of the house, is hovering greedily, her muzzle dangerously near my dessert plate.
Our conversation is drifting back towards India. I ask him whether he thinks Modi is doing poverty alleviation right; his ministers boast of having resisted the urge to spend lavishly on stimulus during the pandemic, although the government did extend a free foodgrains giveaway programme to more than 800mn people.
“I would say one thing that is striking about Modi’s economic policy, and I’ve said this before, is how much continuity there is with the previous governments since the 1990s: a combination of macroeconomic stability combined with some welfarism.”
However, I point out, the rice and wheat that go into the free food bags are propped up by government price subsidies and are grown using unsustainable, water-intensive methods — observations Banerjee accepts.
“I think it’s the tail wagging the dog,” he says. “Meaning that the whole price infrastructure gets maintained because of the food.”
I decide to press Banerjee on one of his public interventions in India that stirred controversy: a 2012 column in which he defended Mamata Banerjee for suggesting that a series of rape cases had something to do with public displays of affection. The West Bengal chief minister had observed that “boys and girls interact more freely now”, and likened the freer contact between the sexes to an “open market with open options”.
Abhijit Banerjee began the piece in the Hindustan Times with a recollection of having first “felt the full force of sexual jealousy” at age 14, when he watched a girl he had a crush on lean over to take a bite of her boyfriend’s ice-lolly. He then linked male desire to inequality: “Having that inequality being thrown at your face, day in and day out, by a language of the body that leaves little to the imagination, cannot possibly be pleasant if you happen to be on the wrong side of that divide.” He did add the caveat that “none of this should be read as a defence of rape”.
Banerjee now acknowledges he “wrote it badly”, but stands by his point. “We need to understand the connection between young unemployed men and sexual violence,” he says. He notes that one of Trump’s sources of support is “men who are frustrated with their lives, and with their sex lives”.
With our meal drawing to a close, I decide to ask Banerjee a question that recurs in almost every conversation about India: is the nation on an upward trajectory, as the Modi government insists, or weighed down by legacy issues such as poverty and inequality?
Banerjee remarks that there is “a lot of energy, optimism and enterprise” around, but adds that the past few years “have not been great for the non-rich”.
“If we become an economy where, unless one is very rich, one is not able to succeed, then I think it’s going to be a huge problem. I think mobility is at the heart of any market-driven development project.
“This kind of growth is partly driven by hope, and that’s only possible when there is some actual mobility. If it doesn’t happen, we’ll have a crisis.”
John Reed is the FT’s South Asia bureau chief
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