Beyond anti-capitalism

The following statement from an ML leader is obviously in right direction – trying to deconstruct the Singur movement, identifying various forces in it. However, in my view, a further ideologico-practical move has to be made – mobilising the ‘new’ working class evolving around these neoliberal projects – an unorganised multitude which neoliberalism is bound to proliferate. Only this will stop us from being trapped in the mire of ‘nostalgic’ anti-capitalism, and encourage us to move ahead in the direction of beyond-capitalism.

Kolkata, September 4 At a time when Naxal groups are demonstrating along with Trinamool Congress chief Mamata Banerjee against the Tata Motors’ small car factory in Singur, CPI-ML (Liberation) — the largest Naxal party — vociferously criticised the Mamata brigade on Thursday.

The party criticised Mamata and her followers for siding with land owners, without sparing a thought for the landless labourers and unrecorded bargadars (those with no-eviction rights).

“She is only speaking about land owners in Singur. Why are they silent about the landless labourers and others? Those who are demonstrating in Singur and claim to be Naxals should fight for landless labourers,” said Kartik Pal, Politburo member of CPI-ML (Liberation).

According to a survey conducted by the party, there are 300 people who are either landless labourers or unrecorded bargadars in Singur.

“A number of them are absentee landowners who have already received payment for their land. But the agricultural labourers have got nothing. Neither Mamata Banerjee nor the state government is thinking about them,” Pal added.

At present, small Naxal groups are sharing the dias with Mamata in Singur. They include CPI-ML (SOC) led by Purnendu Bose and Dola Sen, CPI-ML (ND) led by Paltu Sen.

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India is among “big brothers” of WTO: Pascal Lamy

The WTO Chief seems to know perfectly well what phrases would attract his audience in India today. This way they feel themselves to be in the company of global abusers.

He said the three countries, along with key players like Australia, EU and the US constitute the world of today.

Krugman’s “great illusion”

Economist Paul Krugman in his latest column in NY Times (Aug 15, 2008) entitled “The Great Illusion” expresses his concern at the possibility that “the second great age of globalization may share the fate of the first”. And it is the recent Russia-Georgia conflict that makes him say so. To be more explicit he goes on to explain that “our grandfathers lived in a world of largely self-sufficient, inward-looking national economies — but our great-great grandfathers lived, as we do, in a world of large-scale international trade and investment, a world destroyed by nationalism.”

Krugman’s above statement clearly shows his lack of any historical sense. When was that “world of large-scale international trade and investment” free of (militarist) nationalism – a mechanism to protect that “large-scaleness”? And much of the “nationalism” which destroyed that world was in fact a revolt against that “large-scale” militarism. Yes, it destroyed the Pax Britannica – it was a war against the war monopoly.

On the one hand, Krugman seems to tell that national self-sufficiency at least with regard to “the current food crisis” is at last clearly shown to be not “an outmoded concept”. But he is in fact accusing nationalism of “many governments” for “leaving food-importing countries in dire straits”. He further finds that there is a rise of “militarism and imperialism” as “it does mark the end of the Pax Americana — the era in which the United States more or less maintained a monopoly on the use of military force. And that raises some real questions about the future of globalization”. Obviously, for him, “Russian energy” and Chinese big economy are the real threats as they have the capacity to manipulate world polities and economies to submission.

Then what is the Pax Americana? Is it not militarism, imperialism and manipulation, that we witnessed throughout the 1990s and afterwards? When did war-mongering and militarist build-up end during the “Pax Americana”? Increasing manipulative capacities of other countries and their political economy at the most demonstrate a globalization of “militarism and imperialism”.

Krugman rightly questions those analysts who “tell us not to worry: global economic integration itself protects us against war, they argue, because successful trading economies won’t risk their prosperity by engaging in military adventurism”. He thinks “the foundations of the second global economy” are solid than those of the first only “in some ways”, “[f]or example, war among the nations of Western Europe really does seem inconceivable now, not so much because of economic ties as because of shared democratic values”. So euro-centric Krugman, like Stiglitz, ultimately thinks the West not to be adventurist because of its democracy, but ah! “much of the world, however, including nations that play a key role in the global economy, doesn’t share those values”. So does he think the Pax Americana to which the West has submitted is about peace and democracy, which is now being threatened by the despotic Orient?

Krugman rightly concludes that “the belief that economic rationality always prevents war is an equally great illusion”. But like any other ordinary bourgeois he thinks economic rationality can prevent war when coupled with “democratic” values of the West. Obviously he can’t see the fact that economic rationality is about competition, representative democracy is about competition, and a war is competition par excellence. They are all ultimately the same – diverse moments in the life of “social capital”(1). Krugman refuses to recognize that capital whether protected by democratic regimes or not is at constant war against labour – which needs to be divided and controlled if it is to be exploited – and Western xenophobic megalomaniac nationalisms have always been nurtured for this reason. Where is the country in the West free from state-sponsored Ku-klux-klanesque policies and activism against migrants and “the other”? The neo-capitalist regimes have learned their lessons properly – obviously at the cost of threatening the established monopolies. It is not an end of globalization, as Krugman prognosticates, but a new stage – and a more barbaric stage – of capitalist globalization.

Note:

(1) “Here social capital is not just the total capital of society: it is not the simple sum of individual capitals. It is the whole process of socialization of capitalist production: it is capital itself that becomes uncovered, at a certain level of its development, as social power”. (Mario Tronti (1971), Social Capital)

Has “the ghost of an incipient Indian imperialism” grown up?

Writing in 1949 N.V. Sovani in his ECONOMIC RELATIONS OF INDIA WITH SOUTH-EAST ASIA AND THE FAR EAST (OUP and Indian Council of World Affairs) talked about the “ghost of an incipient Indian imperialism”:

Indian migration to Ceylon, Burma and Malaya, as explained above, was largely under the aegis of the British. It could take the form it did only under the circumstances that British imperialism created. The withdrawal of British imperialism from these areas – though only half way through in Malaya – has changed the entire background. Indians abroad are likely to encounter increasing opposition. The Indian trading and commercial interests in these countries have evoked stronger and more bitter resentment, and it is likely that more and more restrictions will be placed on their activities. This is not an isolated phenomenon. Foreign elements all over South-East Asia are experiencing a similar fate. The reaction against the Chinese in Siam and lately in the Philippines are cases in point. Such a development is but natural during the transition from a colonial to a national economy. Realizing the new set-up of things the problem of Indians will have to be continuously handled in such a manner as to lay the ghost of an incipient Indian imperialism./page 68/

Now sixty years after, the Indian neoliberalisers and their western promoters are unabashedly boasting about “reverse imperialism”.

Gainers gain, losers lose

Today (Aug 06) Mint carried an article written by one of its columnists which shows how neoliberalism in India has made the rich richer and the poor poorer at the geo-structural level.

The article concludes on the basis of recently released data on “outstanding loans sanctioned in a particular state/region and utilized in that place” – much has changed since India officially took steps towards liberalisation (according to the author, the economy has overall gained), however, “there are winners and losers…, there are some regions that have gained more than others”. What is most significant in the data (which the author does not explicitly recognise) is that it remarkably demonstrates that the geographical hierarchy that prevailed prior to the 1991 counter-revolution persists with hardly any reshuffling, while the vertical gap has tremendously increased. The data is significant since neoliberalism is mainly about financialisation and capital investment through the instruments of usury, debt and the credit system, which seemingly are, what the data perhaps substantiates, “radical means of accumulation by dispossession”, as David Harvey would put.

Excerpts:

1. “Comparing the data for end-March 1991 with the recently released numbers for end-March 2007, the northern and western regions have been the biggest gainers in terms of credit growth. In March 1991, the northern region accounted for 18.3% of the total credit outstanding—that percentage rose to 21.9% in March 2007. The western region, which accounted for 27.5% of total credit outstanding in the country in 1991, saw its share rising to 31.5%. The southern region’s share increased modestly from 28.1% to 28.5%. The losers were: the east, with the region’s share down from 12.3% to 8.9%, the central region (which includes Uttar Pradesh), whose share fell from 12% in 1991 to 8.1% in 2007, and the North-East, for which it declined from 1.7% to 1%”.

2. However, the gain in the northern region is virtually sham as “it’s Delhi that gained the most, with its share of credit going up from 7.1% in 1991 to 12% in 2007. The shares of Haryana, Punjab, Himachal Pradesh and Jammu and Kashmir all declined over the period, while that of Rajasthan was flat”.

3. “In the east, West Bengal’s share fell from 7.7% in 1991 to 5.3% in 2007, Bihar’s share (including Jharkhand) decreased from 3% to 2% while Orissa’s share remained flat at 1.6%. In the central region, the share of Uttar Pradesh, or UP (including Uttarakhand) fell from 7.9% to 5.2%, while that of Madhya Pradesh, or MP (including Chhattisgarh) declined from 4.2% to 2.9%”.

4. “In the south, the big beneficiary has been Karnataka—its share went up from 6.4% to 8.8%. Kerala’s share went down from 3.7% to 3.1%, Andhra Pradesh’s from 7.2% to 6.6% and Tamil Nadu’s from 10.6% to 9.9%.

5. “The data also corresponds to the increasing metropolitan focus of credit delivery. The numbers show that 66.1% of credit was utilized in the metropolitan centres in 2007, compared with 46% in 1991. Naturally, this will mean more credit growth in places such as Delhi and Mumbai. That’s probably the result both of the decay of rural India as well as the more rapid growth of these centres”.

6. Comparing the recent data with the distribution of national credit pie during 1981-91, Delhi’s share actually fell “from 10.2% in December 1981 to 7.2% in March 1991. Growth in that period was more uniform, with all the southern states except Kerala gaining modestly during the decade, as did MP, UP, Orissa and Assam”.

7. As for the political conclusion of the above economic phenomenon, the author shivers at the prospect of increasing “demands for redistribution” along with migration. “These will create immense political strains between Indian states and the potential for serious differences.”

…………………………

“They have exemplified the saying: To him that hath, more shall be given; and from him that hath not the little that he hath shall be taken away — The rich have become richer, and the poor have become poorer; and the vessel of the state is driven between the Scylla and Charybdis of anarchy and despotism. Such are the effects which must ever flow from an unmitigated exercise of the calculating faculty”. (Shelley, ‘The Defence of Poetry’)

Indian Outsourcing Business Outsourced?

Growing pains dim India’s outsourcing edge

Tue Sep 18, 2007 11:45am IST

By Sumeet Chatterjee

BANGALORE (Reuters) – Indian outsourcing companies are shifting some of their operations to China, the Philippines, Vietnam and Kenya in a bid to stay competitive as higher wages, expensive property prices and a rising rupee eat into profits.

Back-office services companies thrive on doing jobs such as taking customer calls, payroll management and accounting at a fraction of the cost for big multinational firms or governments.

But costs in India are climbing on the back of a robust economy that has lured skilled workers to other sectors, forcing companies to look elsewhere to stay in business.

“If I was only in India, probably I would have been worried to death,” said Partha Sarkar, chief executive of HTMT Global Solutions Ltd.

The Bangalore-based back-office services provider used to generate all its revenue from India by providing services to its clients in the United States. But India now accounts for little over half the total, and rapid expansion in the Philippines and Mauritius has helped it offset the impact of a stronger rupee. It plans to enter China and Vietnam soon.

The company sees its 2008 revenue jumping to $150 million from $97 million in the last fiscal year.

“Three years back, I was completely exposed to rupee-dollar,” Sarkar said. “Now it doesn’t worry me. I have diversified my currency and country risk.”

In July, Infosys Technologies, India’s second-largest software services exporter, said it would buy three of Royal Philips Electronics’ back-office services units in Thailand, Poland and India to expand market presence.

The back-office services unit of the third-largest software exporter Wipro Ltd plans to set up two facilities in China to tap growing business opportunities there, its chief executive T.K. Kurien said.

India’s English-speaking workforce, a big factor in winning call-centre jobs, faces competition from countries like Kenya.

“When compared to India, we are better off in terms of salary and cost per seat, and we have a large pool of Kenyans with clear accents,” said Bitange Ndemo, permanent secretary in Kenya’s Information Ministry.

India’s share in the global back-office services pie will drop to 50 percent in the next 3-5 years from about 60 percent now, according to U.S.-based Tholons Inc, which offers management consultancy for offshoring.

SKILLS SHORTAGE

India produces about 2.5 million graduates every year, versus 400,000 in the Philippines, but only about 15 percent are suitable for employment in the outsourcing sector.

U.S.-based outsourcer 24/7 Customer, which has multiple facilities in Asia’s third-largest economy, interviews 5,000 candidates a month in India, but is able to recruit only about 250, Chief Marketing Officer V. Bharathwaj said.

This is pushing up wages rapidly as financial firms from Citigroup and HSBC to Standard Chartered Bank employ thousands at their back-office hubs in India.

Starting wages at 15,000 rupees ($366) a month are still about one-fifth of what their U.S. counterparts earn, but they are rising 10-15 percent a year.

Cost per employee for a back-office firm in Bangalore is almost similar to Manila, but is 20 percent lower in Guangzhou in China and 35 percent cheaper in Ho Chi Minh in Vietnam, said Avinash Vashistha, chief executive of Tholons.

Analysts say that while Vietnam does not have a vast pool of English-speaking manpower, it is a prime destination for non-voice back-office services such as legal and medical transcription, claims processing, and finance and accounting.

Adding to the squeeze is the rupee, Asia’s best performing currency this year, which climbed to a nine-year high of 40.20 against the dollar, up 10 percent since end-2006, while the Philippine peso has gained more than 5 percent.

First Global Securities last month downgraded India’s IT services sector to “underperform”, citing the rupee and wage inflation. Every 1 percent rise in the rupee impacts the services firms’ margins by 30-50 basis points, analysts say.

“Everything is hitting us adversely,” said Kiran Karnik, president of the National Association of Software and Service Companies. “Wages are going up, real estate costs are escalating and on top of that you have the dollar exchange rate going bad.”

India’s back-office services industry, which earned $8.4 billion in exports in the year to March, is also being lured by tax breaks, infrastructure improvements and investment perks offered by China and the Philippines, he said.

The industry is also anxiously watching for any ripple effect from the U.S. subprime mortgage crisis, with some smaller firms feeling the pinch as U.S. companies trim spending on services.

However, Infosys’ outsourcing unit sees an opportunity here, reckoning that the need to cut costs would be even more prevalent in an economic downturn, potentially boosting business.

(Additional reporting by Helen Nyambura-Mwaura in NAIROBI and Rosemarie Francisco in MANILA)

© Reuters 2006.

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.

A Note on Party 2

Pratyush Chandra

In West Bengal (in fact, everywhere in India) the working class and the poor peasantry have outgrown the traditional left. This is not something new and to be lamented upon. It always happens that organisations develop according to the contemporary needs of the class struggle, and are bound to be institutionalised, and even coopted, becoming hurdles for further battles, not able to channel their forces for the new exigencies of the class dynamics and struggle. This happens so because in the process of a struggle, a major segment devoted to the needs of this struggle is caught-up in the networks it has established for their fulfillment. It is unable to detach itself from the fruits of the struggle, therefore losing its vitality and is overwhelmed by the existential needs.

In the name of consolidation of movemental gains, what is developed is a kind of ideologisation, a fetish – organisation for organisation’s sake. This leads to the organisation’s and its leadership’s cooption in the hegemonic setup (obviously not just in the formal apparatuses) which due to struggles had to concede some space to new needs. In fact, this is how capitalism reproduces itself politically. And this is how the societal hegemonies gain agencies within the radical organisations, and they are organisationally internalised – developing aristocracies and bureaucracies.

Two important points regarding the agitations in West Bengal can be fruitful for us in understanding the above mentioned dynamics:

1) As prominent Marxist historian Tanika Sarkar says, “an amazing measure of peasant self-confidence and self-esteem that we saw at Singur and at Nandigram” is a result of whatever limited land reforms the Left Front (LF) initiated and is in the “very long and rich tradition of the Left politics and culture”.

2) The price of state power that helped sustain this was the cooption of the LF in the hegemonic policy regime, which is neoliberal for now. So the vested interests that developed during these struggles and cooption led to the situation where “[b]eyond registration of sharecroppers and some land redistribution, no other forms of agrarian restructuring were imagined.” Also, “industries were allowed to die away, leaving about 50,000 dead factories and the virtual collapse of the jute industry,” as competition and the flight of capital were not challenged (which probably in the federal setup of India could not be challenged) by questioning the nature of production relations.

However, there is no fatalism in the above view – the radical vitality of an organisation/party is contingent upon the sharpening of struggle between the hegemonic and counter-hegemonic tendencies within an organisation, which in turn is embedded within the overall class struggle. I.e. it all depends on the class balance and struggle within an organisation.