Corporate Philanthropy?

Why are corporate lords big philanthropists? Just now I read an article on “corporate responsibility in India”, where the author says:

The notion of corporate responsibility in India has traditionally been tied up with philanthropy and community development…“Philanthropy has been important in India since the middle of the 19th century, largely due to a strong heritage of community influence and paternalism among traders-turned-entrepreneurs,” say authors Atul Sood and Bimal Arora in “Political Economy of Corporate Responsibility in India”, a 2006 paper for the UN Research Institute for Social Development.

Philanthropy has now taken the form of foundations within companies that follow the Gandhian ideology of “giving back to society”. Such giving is the sole manifestation of corporate responsibility for many firms.

Why this desperation to “giving back to society”? Definitely, “Philanthropy” is a pre-capitalist element that capitalism has inherited – it transforms class division based on exploitation into an ideologico-ethical hierarchy. However, it additionally helps in suppressing the starkness of the fallacy that characterises capitalist ethics, which Duncan Foley calls Adam’s Fallacy –

The specific fallacy is Smith’s claim that the pursuit of self-interest, which has to be balanced against regard for others in other human interactions, can be trusted to lead to good outcomes both for oneself and others in the context of competitive market interactions.

Of course, the political economy of Aid is also there which is literally buying off the oppressed (meaning their ‘representative’) to normalise/naturalise capitalism and its exploitative nature – politically, economically, culturally, morally… Normalising Corporate Misanthropy is the Responsibility of Philanthropy. Distrust is inbuilt in philanthropic action – “give back” something or they will “take away” everything.

How true was Blake:

Pity would be no more,
If we did not make somebody poor;
And Mercy no more could be,
If all were as happy as we.

On the logic of imperialism – US & India

To say that the US invasion of Iraq “was not all about oil” is nothing novel. The triviality of “all about oil” argument is perhaps most clearly shown in the works of Marxists like Cyrus Bina. When neoliberal economic journalists like Swaminathan S Anklesaria Aiyar criticise this argument, they ultimately circularly reiterate the same argument – not all about oil, but still all about oil. So he in one of his recent gems published on 10 March 2007 starts with saying:

“Many Indians, including respected foreign policy analysts, believe that the US invaded Iraq and ousted Saddam Hussein in 2003 simply to grab his oilfields. “Its all about oil,” they said. Well, it’s now four years since the invasion. Yet, we see no sign of the US grabbing Iraq’s oilfields”.

And ends by:

“The US still has a strong interest… in seeing that oil production in the Persian Gulf is not disrupted or monopolised by any military power. This was one reason why the US forced Saddam out of Kuwait, which he had invaded and occupied in 1990. The US Navy has for decades patrolled the sea lanes to ensure security for oil tankers. So, oil matters. But it is somewhat ridiculous to think that oil alone matters. The US invasion of Iraq was a terrible mistake, but it was not “all about oil.”

That’s just “one reason”, but in Aiyar’s write-up it is the only “one reason”.

Definitely, we cannot ask him to comprehend the dialectics of abstract and concrete, essence and appearance etc – the complex relationship between economy and polity, where we cannot reduce any to the other. Also, we cannot expect him to avoid the circularity of bourgeois economics.

However the interesting aspect of his article is the details which he offers to prove his “not all about oil” argument – when he draws parallel between Indian and the US oil interests:

“Those familiar with India’s oil policy will find the Iraqi controversy over production sharing [contracts to foreign companies] mystifying, even comic. India has long signed production-sharing deals with private and foreign oil companies, and nobody regards this as a sellout.

The latest bidding round this year drew 32 domestic and 36 foreign bidders. In production-sharing deals, the foreign or private sector partner bears all exploration costs, but shares with the government any oil or gas that is found. The terms of production-sharing have varied in different rounds of bidding in India.

But typically the winning bidder whether Indian or foreign first gets enough oil to recover costs of production and exploration (called cost oil); then gets two to three times as much as profit oil; and then hands over most or all of the residual production to the government.

For instance, the government’s share in gas at Reliance’s Krishna-Godavari field starts at roughly 15% at the beginning and goes to 85% in later stages.

The most successful foreign explorer in India has been Cairn Energy, which hopes to produce 7.5 million tonnes a year from its fields in Rajasthan. British Gas has also experienced some success.

ONGC itself has entered into production-sharing contracts in no less than 15 countries, including Russia, Vietnam, Sudan, Venezuela, Canada, Brazil, Nigeria and Cuba.

Reliance Industries has also signed production-sharing deals in Yemen, Oman, East Timor and Colombia. Indeed, ONGC and Reliance have jointly signed a production-sharing deal in guess where? Northern Iraq. This is not Indian imperialism. Nor have these Indian oil companies encountered US resistance.

So, Indian foreign policy analysts who think the Iraq invasion was all about oil, need to brush up their knowledge of the oil business. They are living in the past.

There was indeed a time when the US used military power to back US oil companies. When Mossadegh in Iran nationalised oil companies, he was overthrown in a 1953 coup masterminded by Britain and the US. However, that was the last act in the history of oil imperialism.

This was shown when OPEC countries in 1974 nationalised all oilfields, converting oil multinationals from owners to just buyers of oil. Some US diplomats and politicians wanted military action to regain the fields. But the US Administration ruled that the days of oil imperialism were over, and it was time to deal with sovereign governents.

The US still has a strong interest as does India in seeing that oil production in the Persian Gulf is not disrupted or monopolised by any military power. This was one reason why the US forced Saddam out of Kuwait, which he had invaded and occupied in 1990. The US Navy has for decades patrolled the sea lanes to ensure security for oil tankers.

So, oil matters. But it is somewhat ridiculous to think that oil alone matters. The US invasion of Iraq was a terrible mistake, but it was not “all about oil.”

Here Aiyar has given some facts, ignored even by leftists suffering from third worldism. They are relevant for understanding the material base of India’s expansionist, even imperialist ambitions. Private (foreign and domestic) and State capitalist production sharing is nothing new. In recent years, India’s state oil companies like ONGC have been proactively involved in satisfying the energy requirements of India’s capitalist development by their overseas exploration and operation. Aiyar also tells us that now private capitalists like Reliance are increasingly being given space in this industry, where the State had been the pioneer.

However, for Aiyar, if “this is not Indian imperialism” then there is no US “oil imperialism”. But why do we presume that there is no Indian imperialism? In fact, let’s reverse the order of the argument – if all such facts have grounded US imperialist interests in the Middle East and elsewhere (even if not just for oil, but “oil matters”), then the parallel that Aiyar draws between India and the US must tempt us to probe India’s ambitions too, without precluding their possible imperialist nature. Definitely, the export of capital is not sufficient to make a state imperialist, but what makes it so is the state’s capacity and interest in defending that export through international political intervention, of which war is just a part, as Clausewitz taught us. Maybe if “Indian oil companies [in their outward expansion in the Middle East have not] encountered US resistance”, this is just another proof that India is a part of the imperialist coalition led by the US, or the US sees it as as an ally. This would give us a key to interpret the tremendous growth in the US-India-Israel relationship too.

Of course, in capitalism collaboration does not preclude competition – there will be moments when collaborating interests would clash too. But we should not presume that if collaboration between US and India is occurring, it is a patron-client relationship. Likewise, competition too is not liberation, India’s frequent amorous passes to Russia, China and others are not necessarily anti-imperialist or anti-US.

Economic Astrology

The Economic Times has a news today – IMF warns India of US economic slowdown. Something to be panicked about! However there is nothing in the report that is specifically directed to India. The IMF Deputy Director Charles Collyn has warned that

“emerging economies, including India, face the risk of protectionist pressures arising from a slowdown in the US economy. IMF deputy director Charles Collyns said capital flows to emerging markets have been strong even as corrections in these markets are getting smaller.”

However,

“In its short-term outlook, the IMF has said notwithstanding recent volatility and the US slowdown, continued robust global growth still looks the most likely outcome. However, global policy makers and financial markets need to be ready for surprises.

This is the way astrologers cheat their clients – say things which are so general and obvious, even commonsensical idiocies and contradictory, that whatever happens, you are proven right and your business thrives. If some spices are still lacking then get mainstream newspapers to write the headings…

Uganda and global media propaganda

All over the world, the media projected the recent Ugandan agitation against the multinational acquisition of the country’s forest resources as racist. Indian media tout court led the wave by raising the ghost of Idi Amin. It seemed something like the Nazis’ holocaust. This is not for the first time that South Asians have raised similar metaphors. Post-1990 Hindu rightists have time and again used them to stress on the parallels between the Jews and Hindus, the uniqueness of Israel and India. Also, Indian governments have been proactively self-imposing themselves as protectors of People of Indian-origin (PIO) all over the world. World imperialism and its watchdogs which are ever ready to club Anti-globalisation movements, terrorism, fundamentalists – all their ‘evil’ enemies, “bad guys” together have found this Indian expansionism and its rising crossborder interests and concerns handy for their mission. This allows them to corner the ‘third world’ movements and regimes who pose threat to world capitalist interests.

One PIO MP in Uganda, Sanjay Tanna has clearly rebutted such propaganda. He “said it was unfortunate that the media had focused on the death of one Asian and portrayed Uganda as a racist country. He said two Ugandans lost their lives and many others were injured or lost property. He explained that Rawal’s death came from a sequence of events, which included an attempt by some Asians to drive through the demonstrators.” (New Vision, April 17 2007)

Regarding, the global imperialist usage of Indian expansionism, I wrote the following almost a year back during Bush’s India visit in February 2006 (Counterpunch), which might be relevant here too:

On the other hand, India’s mastery of ‘unreliable’, and ‘rogue’ polities, and its ability to forge indigenous clients in those polities make it a worthy partner for other global powers whose recent hyper-interventionism has reduced their own ability in this regard. Conflicts in Afghanistan and Iraq have further attested this inability of the US hegemony, at least–political forces against which wars were waged in these countries were erstwhile US allies. These conflicts are symptomatic of the crisis of the US hegemony more than the unipolarity of the post-Cold War era. Unlike the ideology of the “Soviet threat”, the post-Cold War ideologies of human rights and non-proliferation could not form the legitimate basis for forging international alliances, since the duplicity of the “global powers” on those same accounts are too apparent. In fact, the orientalist bases of these ideologies have further curtailed the First World’s ability to directly manipulate political forces in the “third world”. At this juncture, ‘mediocre’ powers like India could become relevant interfaces between the two worlds, for perpetuating and sustaining global capitalism and its political structure.

Ugandan Indians against Mabira sale

Mehta blackmails

In the aftermath of the popular protest against the Ugandan government’s sale of Mabira to the Mehta Group, it seems Mehtas are using the classic business blackmailing of a monopolist – if Ugandans don’t buy their sugar they will sell it to Congo and Sudan. Apparently, Uganda suffers a domestic sugar demand deficit of about 40000 tons annually”. Mehtas seems to have convinced the President Museveni “that if Scoul gets the 7100 hectares of Mabira it will immediately sort out the domestic demand deficit.” (The Monitor, March 28 2007)

Ugandan Indians’ position

It is interesting to see Uganda’s Indian Community coming out against Mehta:

“During a five-hour meeting on Friday at their association headquarters in Nakasero, Kampala, on Friday, the Indians were bitter that Mr J. S. Mehta’s demand for the forest and his subsequent statements had inflamed the locals against all Indians. “Our community is saying that if he wants to export the sugar, then what is he doing in Uganda? Why does he want the Ugandan forest?” said some Indians. The coordinator of the Indian Association, Singh Parminder, confirmed that most Indians were unhappy with Mr Mehta’s utterances. “As an association, we disassociated ourselves from individual comments. He (Mehta) cannot talk like that,” Mr Singh told Sunday Monitor yesterday.

…The Indians said that most of them were unaware of Mehta’s dealings and that the Indian community should therefore not be punished for his sins. “Why should Ugandans punish us because of Mehta? When he (Mehta) gets his money, he eats it alone,” one of the Indians at the meeting recounted to Sunday Monitor.

Tororo MP Sanjay Tanna said yesterday that: “all the Indian associations in Uganda disassociated themselves from Mehta.” At the closed meeting, several Indians agreed that cutting Mabira Forest to pave way for Mehta to grow sugarcane was an absurd idea.” (The Monitor, April 15, 2007)

Referendum on the Mabira issue
A demand to hold referendum on the Mabira sellout has been raised, by the Tororo unit of Uganda People’s Congress.

Uganda – a case of ‘new’ imperialism

It is sad that a young Indian worker died in the recent popular protests against the sale of Mabira forest in Uganda to an Indian multinational, Mehta Group. The Indian government has also reacted and contacted the Ugandan government for ensuring the safety of the Indian community. However, it has nothing to say about the Mehta deal, as the Ugandan government and business themselves are fully behind it and are ready to secure Indian capitalist interests. The mainstream media in India and elsewhere is trying to equate the scenario with Idi Amin’s anti-Asian drive, which is a clear attempt to sideline the issue of Indian imperialism, how Indian businesses have usurped Ugandan resources. The Mehta deal is not only an environmental disaster, but would also destroy local farmers, by its monopoly. Obviously, the local resentment and growing competition within a saturated local labour market in the absence of an effective counter-hegemonic solidarity make immigrant workers an easy target, providing a pretext to defocus and delegitimise the genuine grievances and legitimise repression.

A report rightly captures some issues behind the Ugandan protests:

It is time Indian businesses stop exploiting native Ugandan people, imported workers from India and, Ugandan national resources

Arun Sen
Apr. 14, 2007

It is shame what the Indian businesses have done in Kenya and Uganda. They exploited native Ugandan people, imported workers from India and Ugandan national resources. The atrocities go beyond imagination. Two Indians were killed and a temple attacked by a mob in Kampala. The mob was protesting against the alleged cutting down of a protected rain forest by an Indian firm.

Business communities in India run these Indian firms. They bribe local Ugandan authorities to do anything they like. They care little about human rights and Ugandan national interests.

According to media reports, Indians in the Ugandan capital Kampala are still frightened and shaken after Thursday’s mob attack in which at least two Indians were killed and a Hindu temple attacked by a mob protesting the proposed expansion plan of an Indian sugar firm by cutting down a protected rainforest.

The mob attack was an act of terror. But what the Indian business community did in Uganda is equally deplorable. The Ugandan Government is responsible. They take bribes from the rich business community from India and let them exploit Ugandans and imported workers from India. If some one tries to protest the atrocities, the Indian businesses bribe the local authorities and put the whistle blower in jail. Many imported Indian workers from India were put in jail because they demanded humane treatment. At the end these imported workers go back to India losing all they had accumulated from savings in Uganda. They can get out of jail but lose their all savings. The mob was protesting at the move by the Sugar Corporation of Uganda Limited (Scoul), part of the Indian-owned Mehta group, to expand its sugar estates by cutting the Mabira rain forest- one of Uganda’s last remaining patches of natural forest. It has been a nature reserve since 1932.

…The controversy began last year when the Ugandan government ordered a study into whether to cut down nearly a third of Mabira- one of Uganda’s last remaining patches of natural forest.

The government’s proposal had angered many in the country who alleged that the environmental costs of slashing the forest would far exceed the economic benefits of the plantation.

Until 1972, Asians constituted the largest non-indigenous ethnic group in Uganda. In that year, the Idi Amin regime expelled 50,000 Asians, who had been engaged in trade, industry, and various professions. In the years since Amin’s overthrow in 1979, Asians have slowly returned. They continued their atrocities against civilized norm of society after returning back to Uganda. The mob outbreak is sad and deplorable. It is time for Ugandans to take control over their own country.

Development Discourse – income vs class

A fundamental problem of development discourse in India, even among the so-called Marxists, is its income approach to development, rather than a class-struggle approach. Even when class is recognised, it is the level of income or poverty etc that is used as the criterion. So the basic attention goes to whether capitalist development will be ‘beneficial’ or not. Obviously in the name of objectively defining these benefits, the ‘Marxists’ trained in economics would like to use some ways of quantifying them. Whatever this be, it is not a class-struggle approach to development – it does not seek to grasp class contradictions in every moment of development. Thus what they tend to find out additionally is whether technological change, growth (in figures) etc have occurred or not, along with obviously as leftists they have to talk about whether these benefits are ‘equitably’ distributed or not. But the question that is obscured in this process is the class cleavage which does not depend on income/poverty etc at least at the level of its constitution – income levels etc can of course further structure the labour market increasing the level of competition among proletarians, which might dampen class unity and consciousness.

On the other hand, the class-struggle approach starts off with the process of class formation, i.e., the process of formation of the working class and the capitalist class. Under this process the trajectory of proletarianisation is important – not whether this or that individual is proletariat. This makes the poor peasant, landless struggles, factory workers’ strikes, the various issues of self-determination etc as different levels (not vertical) of manifestation of class struggle against the hegemony of the capitalist class over human capacity and activity. This is what is sometimes called the needs of capital vs. the needs of human beings. This approach allows us to see ‘class within and beyond identities and their struggles’.

The income approach is politically non-class, too, as for it it is sufficient if poverty is decreasing, people have income, nutrition etc; the issue of control over production process and other channels of human fulfillment is secondary and peripheral. For this approach solution for every problem is always statist and vanguardist, i.e., at the level of policy-making, whether we have right people at right places deciding over and overseeing the ‘trickling down’ and redistribution channels. This way the issue of “popular protagonism” is reduced to populist protagonism of the leadership.

India as a neoliberal state

The relationship between multinationals and national states is not so simple today. A multinational draws its strength from its “multiple” identities and states compete with one another to ‘home’ it. With financialisation this competition among the states have considerably increased with ‘capitals’ seeking to regiment the ‘arbitrary’ state behaviour with the everlooming threat of flight of capital. However it would be wrong to consider this relationship as totally one-sided, as the proponents of ‘footloose capital’ make us believe. With increasing monopolisation (but never monopoly) the competition among capitals has intensified too, they struggle to establish their production and circulation bases to surpass competitors. This forces them to rely on particular states for protection and representation in negotiations for the acquisition of these ‘bases’. Of course, financialisation has increasingly instrumentalised the state, but this has made capitals increasingly dependent on this instrument too.

A neo-neoliberal state like India in recent years has remarkably shown its efficacy as an ‘instrument’. If something has made the Indian state emerge as clearly neoliberal, it is its proactive reclaiming of Indian diasporic “non-resident” capitals. Unlike the Chinese, which tried to attract the Chinese diaspora to increase the production capacity within its territory, the Indian state has increasingly instrumentalised itself by facilitating Indian capital (NR and domestic) expansion beyond its territory. In fact, the Indian government was proactive in international acquisitions like Arcelor and Corus, and for its many pharmaceutical multinational companies. Many of these companies are not at all dependent on Indian earnings or don’t have any plans to re/patriate their NR earnings. However, they have found in the Indian state a tremendous agency for their bargainings, increasing their ‘political’ leverage in the competitive world market. A dual citizenship to Non-resident Indians (NRIs) and People of Indian Origins (PIOs) was not to attract working class remittances or the grandchildren of indentured labourers, but to provide ‘Indian’ capital all over the world an ‘identity’. It is interesting to note that the initial proposal was to restrict “dual citizenship to PIOs from a select group of countries”, excluding especially the Third World PIOs. But this could have excluded a very fat lot that dominate wealth in many third world countries especially in Africa and Asia.

It would be interesting to see the Indian state’s response (taking into consideration that it has not shown any mercy to such resentment within its own territory) to recent Ugandan uprising against “a government proposal to allow the Mehta Group to clear a quarter of the Mabira forest reserve to grow sugar. The 30,000-hectare (7,400-acre) reserve, east of Kampala, contains some of the last patches of virgin forest in Uganda and serves as an important water catchment area.” (Guardian, April 13, 2007)

Proposed changes in labour laws – Disorganising the organised

This is another old article published in Liberation, April 2001

The Budget speech has reaffirmed the Finance Minister’s, or rather, the government’s, excellent domestication and grooming by the corporate sector. The minister has demonstrated his ability to be His Masters’ Voice. The concluding notes of his budgetary speech threw the gathering at CII’s headquarters into ecstasy, which “pronounced it an unqualified triumph of the liberalisation process.” (Frontline, March 30, 2001). Bulls and bears went wild in the markets.

The budget came up with interesting proposals to boost industrial growth in the country. In the series of proposals given in Part A of the Budget 2001-2002, three paragraphs (52-54) included under the subhead “Labour Market” are striking. They tend to completely alter the industrial structure evolved during the post-independent era.

Economic Survey

In the Economic Survey presented before the Budget the Government had already made it evident that it would eliminate every hurdle before global and national capital. It called for attention to the “critical gaps” in the reform process in order to replicate “the high industrial and GDP growth rates seen during 1994-95 to 1996-97.” Among these “gaps” figured those “relating to labour laws and procedures, bankruptcy, land ceiling and rent control and small scale industry reservation”, which “inhibit industrial restructuring, raise costs and reduce international competitiveness.” The Survey propounds that “labour mobility is hampered by the existing labour laws and land utilisations by the Urban Land Ceiling Act and rent control laws. Consequently, resources in the industrial sector have not been able to move to more productive uses, in particular towards labour-using employment-generating industries, that could lead to higher industrial growth on a sustained basis.”

The trickery of preserving small-scale entrepreneurs’ interests, flexibility and competitiveness are utilised to legitimise the labour law changes. It is ironical that the same logic of competition is raised in these documents to de-reserve items, which protected the local small entrepreneurs till now. The budget has “proposed to de-reserve another 14 items related to leather goods, shoes and toys.” If we visit this notion of “small-scale” holistically and in a wider perspective of socio-economic processes, it becomes quite evident that it is simply one of the vague terminologies used and abused to mesmerise the public and legitimise the hidden agenda followed through the process of liberalisation. ‘Deregulation’ of factor markets and industries will not favour ‘small’ as against of ‘big’ but would obviously lead to monopolisation, which is a natural culmination of open competition. Deregulation is, in fact, regulation in favour of capital in general, which tendentiously moves towards concentration. Further, small-scale production units are generally ‘decentralised’ units of bigger industries, as they undertake the jobs put out by the latter.

It is in this perspective that the Economic Survey 2000-01’s ruling on the contract labour law should be understood. It says that, “the contract labour law, as it exists today, makes it impossible for genuine small-scale entrepreneurs to provide services to industry.” In the Survey, the broad framework for framing a “modern contract labour act” has been established, i.e., it “should encourage outsourcing of services so that new employment is generated.” It further provides the rationale to alter the labour laws and procedures. It states that they “have reduced the incentive for organised labour to work efficiently and have made it unprofitable for the organised industry to generate new jobs.” It even strikes a chauvinistic note even while talking of the virtues of competition and free markets: “Greater flexibility is essential if Indian industry is to compete with the Chinese industry and generate as many new jobs as the latter has.” And, only labour law changes can ensure it, since there-is-no-alternative (TINA) to ‘disorganising-the-organised’ strategy.

Budget proposals

The Budget has simply concretised the above-mentioned recommendations in the Economic Survey, though the Union Budget is an unusual place to propose changes in the labour laws. Of course, anti-labour legislations are packaged as growth measures. The Budget boldly states the need “to address the contentious issue of rigidities in our labour legislations.” It directly hits at the very basic core of the labour laws, but has followed the tradition in packaging the attack.

Changes in the Industrial Disputes Act 1947

The budget has provided an effective mechanism with which the Industrial Disputes Act 1947 would be completely emasculated. The Finance Minister conveys the distress of his corporate mentors by stating that “some existing provisions in the Industrial Disputes Act have made it almost impossible for industrial firms to exercise any labour flexibility. The Government is now convinced that some change is necessary in this legislation.”

The existing ID Act 1947 provided a segmented three-level protection machinery against layoffs, retrenchment and closure on the basis of the firms’ size –

a. No protection to those working in a firm employing less than 50 workers;

b. Some protection to those employed in the firms with 50-100 workers; and,

c. More protection to those employed in larger firms.

Generally speaking, the object of contention is chapter VB of the ID Act, which “stipulates that employers in specified industrial establishments must obtain prior approval of the appropriate government authority for effecting lay-off, retrenchment and closure, after following the prescribed procedure.” The proposal made in the Budget has a very simple solution in hand, which along with the replacement of the ‘three-level protection machinery’ by a single-level, will eventually do away with the protection itself. It is proposed, “that these provisions may now apply to industrial establishments employing not less than 1000 workers instead of 100.” It uses the classic tool of segmenting the labour market, i.e., the Number Test or Filter, for its complete deregulation. All filters segment the labour market, by protecting a small minority and informalisation of the majority. But, since about 85-90 per cent of the units in the organised sector operate with less than 1,000 workers, besides the already existing boundless informal sector, the provision will effectively eliminate the partially ‘protected’ sections of the working class.

The subsequent provisions on relief to the workers (which “would act as a deterrent on employers to take recourse to lay-off, retrenchment and closure in a routine manner”) are mere statements and empty talk. They provide for an increase in the separation compensation from 15 days to 45 days for every completed year of service. But the “number test” would filter the employer’s fear of being monitored, and industrial relations would be fully informalised. Then, the role of ID Act as the basic labour law will be diminished fully.

Contract Labour (Abolition & Regulation) Act 1970

Casualisation and contractualisation of the work-process are the modes through which the so-called “flexibility” in the labour market is established and maintained. They provide a complete control of the employers over the work conditions and assigning any work to the workers becomes their prerogative. While they can continually minimise their obligations in the “contract of employment”, the growing workforce and ensuing competition thereof bind the “free” worker to accept every work condition – they can reject the offer only to obtain in return, unemployment, deprivation and hunger.

Hence, the Budget complies with the directives of the Economic Survey for creating a “modern contract labour act”. It says, “rigidities [or, in other words, obligations for the employers] inherent in the existing legislation regarding contract labour inhibit growth in employment in many service activities.” The logic is interesting since it envisages a “growth in employment” to be the product of insecurity of the employed. The Keynesian logic of “full employment”, which at least gave some respite and social security to the population, is simply sidelined in favour of “growing employment” which assumes a “natural rate of unemployment” taking the existence of a pool of voluntarily unemployed to be granted and permissible.

Contract labour in India has another dimension, which makes its employment an efficient mechanism to ensure a supply of unprotected labour, for whose exploitation, compliance of legal obligations does not arise. It evolves layers of agencies amidst which the principal employer is almost untraceable, and he becomes free from any duty to deal with the workers. On the other hand, it becomes difficult for the workers to wage any sectionalist struggle, unless the whole system itself is questioned, since they are unable to trace an adversary to fight.

Like in the case of the Industrial Disputes Act 1947, the Contract Labour (Abolition & Regulation) Act 1970 too is rendered barren, if the budgetary provisions really inspire legislations. The Budget singles out section 10 of the Act for deletion since from it is derived the vitality of the Act. While summarizing the section itself, the cat leaps out of the bag – “Section 10 of the existing Act envisages prohibition of contract labour in work/process/operation if the conditions set therein — like perennial nature of job etc. are fulfilled.” Hence, firstly, the differentiation, between perennial and incidental, core and peripheral ought to be eliminated, obviously only for their exploitation by capital. It could have been a marvellous proposal if it were good intentioned, in the sense that the protection provided in the labour laws were made universally applicable. At a time when all legal protection provided to the workers are being taken away, this expectation is untenable. Further, the contractualisation of the work process would, in fact, create greater differentials and segmentation in the labour market, as completion of a job would entail layers of contractual relations to be executed under various work conditions. The recommended amendment would simply give an opportunity to capitalists to equally exploit all the “strata” of labour.

The budget ultimately comes out with its clear agenda. “Section 10 enables the contract labour engaged in prohibited jobs to become direct employees of the principal employer. To overcome this difficulty, and at the same time, ensure the protection of labour, it is proposed to bring an amendment to facilitate outsourcing of activities without any restrictions as well as to offer contract appointments.”

The verbosity of pro-labour statements is evident for the reasons stated above. They need to be filtered away to have access to the hidden agenda. Their only purpose is to legitimise the “reforms” in the eyes of voters. Hence, the statements – “It would not differentiate between core and non-core activities, and provide protection to labour engaged in outsourced activities in terms of their health, safety, welfare, social security, etc. It would also provide for larger compensation based on last drawn wages as retrenchment compensation for every year of service.”

Changes in Context

The finance minister is sure that these changes “will promote industrial investment in labour-intensive, and export-oriented activities providing for renewed industrial growth.” Whatever the figures say, it would definitely increase competition in the labour market and ensure a growth, if any, with low wage and high profits. Further, it would help increase concentration of wealth, and eventually, free play for monopolies for which “SSIs” (employing less than 1000 workers) would serve as subsidiaries.

The changes recommended by the Budget along with divestment, etc., complete the basic institutional transformation needed for the new Post-Fordist regime of accumulation professed by the international agencies of capital – WTO, IMF and World Bank. This regime overcomes the crisis of the earlier regime by transforming the labour process in accordance with the flexibility given by automation. More fundamentally, a capitalist crisis developed globally as real wages continued to rise, while fixed capital cost, too, tremendously increased in relation to the total work force, resulting in a fall in the general rate of profit. To fight this trend, an expansion of market was necessary. The technologically less advanced third world would have to be made to compete with the advanced economies, thus transferring surplus value produced in the former as realised profit for the latter. To coerce the underdeveloped world to open up their economy, the prices of primary products, for which these countries were the exporters, were made to crash in 1980s leading to balance of payments crisis in the 1990s.

India accepted the IMF-WB designs for liberalisation and restructuring in the wake of its foreign exchange reserve depletion. It was during the latter half of the eighties that the switchover from an inward looking, closed or import-substituting development strategy to an outward-looking, open or trade-linked strategy started, the orientation for which is evident throughout the economic policy documents of the present government. An export-oriented outlook essentially signifies that the profit would be realised on surplus production, exploiting the national labour on the basis of the effective demand in a foreign country. Hence, to increase the

competitiveness of the exports, it needs to be continuously cheapened which would entail dismantling labour protection and envisaging a labour market free of all regulations. It was at this juncture, that all the labour laws, which impeded the exit of labour or capital, were considered to be evil, and the logic of flexibility versus rigidity evoked.

If we go through the statistics provided by the Economic Survey, it would be evident that the labour law changes are simply for legalisation of the process of disorganising the organised, already evident in the statistics (See table).

Table

Estimates of employment in organised sectors (Millions)

Years Public sector Private Sector Total
1990 187.72 75.82 263.53
1991 190.57 76.76 267.33
1992 192.10 78.46 270.56
1993 193.26 78.51 271.77
1994 194.45 79.30 273.75
1995 194.66 80.59 275.25
1996 194.29 85.12 279.41
1997 195.59 86.86 282.45
1998 194.18 87.48 281.66
1999 194.15 86.98 281.13

Note: (i) Includes all establishments in the Public Sector irrespective of size of employment and non-agricultural establishments in the Private Sector employing 10 or more persons.

(ii) Excludes Sikkim, Arunachal Pradesh, Dadra & Nagar Haveli and Lakshwadeep as these are not yet covered under the programme.

Source: Ministry of Labour, (DGE&T); Economic Survey 2000-01; Website document: http://indiabudget.nic.in/es2000-01/app3.3.pdf

In this regard it is quite interesting to note that the growth of employment in the organised sector was 2.6 per cent in 1981, which came down to –0.3 per cent in 1998. It further diminished in 1999. With disinvestment occurring on a larger scale, the figure in the years to come can well be imagined. Between 1983 and 1998, the number of employees in the organised sector just inched up from 24 million to 28 million, while the total size of the work force leaped from 289 million to 397 million.

What else can one make out from the data and intentions evident in the Economic Survey and the Budget, except that the rulers are ready for a complete fragmentation of the organised sector? It would allow the capitalists to regiment the workforce, decrease the necessary labour time required for its reproduction (i.e., doing away with wage-rigidities) and an increase in surplus labour time, realised in greater profits.

Equilibrium after information

This is an old article which I found just now. It was published on March 22, 2002 in The Pioneer, one of the national newspapers in India, known for its open right reactionary allegiance. I remember sending a letter to the editors, after its publication, asking why it was titled “Equilibrium after information”. And I am still wondering why. – Pratyush

Pick up any elementary book on Economics; the first thing one comes to know is that a good becomes a commodity (to be sold and purchased) only when it is scarce. “Scarcity is central to the logic of market.” Further, property rights are supposed to induce people to economise on scarce resources. Scarcity makes a thing ‘rivalrous’-If I drink more from your bottle of wine, you will get less.

But the supposed dawning of an information age has sent the academia into turbulence. It has brought a good in the market which is essentially not scarce and the whole global politics is in perspiration to make it scarce artificially. Information is such a ‘commodity’. As Kenneth Arrow, a neo-classical economist of repute noted while trying to construct an “economics of information”: “Patents and copyrights are social innovations designed to create artificial scarcities where none exist naturally”. We do not consume information or it does not depreciate in the same way as any other durable or non-durable goods. As another American economist, Michael Perelman, who has come out with his recent testament baptised as The End of Economics, notes, “With information, you can have your cake and eat it too.” If I sell information to you, it still remains in my possession. It is essentially, in economic terms, non-rivalrous.

Exclusion of people from access to information would not increase our information, but it would definitely spread ignorance. In fact sharing would have given you an opportunity to further enrich it, by gaining from my experience.

Further, in economics we read that goods are priced at their marginal cost (MC)-the cost of producing one more unit of production. In the case of information, despite the substantiality of the initial cost of producing or gathering information, the cost of its further transmission is minimal-MC is effectively zero. “A scientist could simply post it (his discovery) on the internet for all to read”. Hence, the pricing of information, which is characteristically heavily priced, clearly violates economic laws. Its patenting or making it a private property is immoral by the logic of market itself. Perelman states the modern paradox in economics very succinctly in his Class Warfare in the Information Age, “when information becomes the dominant resource, the laws of economics tell us that the laws of economics themselves are invalid”.

Another basic economic principle, as noted by Arrow, is flouted in the process of marketing information. Markets require a rational consumer who is perfectly informed. Information can be gathered by browsing through a store, or going through a brochure, etc. But, information about information is information itself. In the information market, there is a complete identity between the information about the product and the product itself. Hence in order to market an informational product, the secrecy maintained by the owner prevents a prospective consumer to do shopping for information in an informed manner. Hence, ethically, information should be freely accessible to all. Further, even if we allow its marketisation it cannot work well since the value of information could not be assessed by the consumers without first bringing it under their possession. In the scenario of generalised commodity production, where production is essentially targeted for sale and that too to gain profit, if one wishes away the markets for information, no one would invest their time and energy into it, unless some kind of subsidy is granted from somewhere. (Or else a different kind of social order is required, the symptoms of whose plausibility and preparedness could be witnessed in various kinds of initiatives as free software movements, etc). As a response to this market failure, various kinds of legal regulation like patenting and intellectual property rights are construed to create artificial scarcities. One could not imagine an unregulated markets for information as all economics fail to justify its existence in principle. Liberalisation loses all charm for its ideologues when we demand a free flow of information like other goods.