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.


(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.


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.


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).


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:

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.

James Petras’ critique of “progressive regimes”

Radical Notes

James Petras has been criticised for his “ultra-leftism”. Petras doesn’t need my defence, if any at all. But since some comrades have raised concerns about ultra-leftism of the leftist critique of the sarkari left in India, I thought it pertinent to use my defence of Petras as a personal exercise in understanding this ultraleftophobia gripping these genuine comrades.

In criticising Petras, what is generally put forward is a list of few statements that he made while critiquing some of the progressive regimes in Latin America, which were ‘apparently’ proven wrong. His oft-quoted statement is about Chavez in his post-2004 referendum note, where he indicated at “the internal contradictions of the political process in Venezuela”, while simultaneously asserting that Chavez’s support “was based on class/race divisions”. Petras showed the flipside of the contradictions – while considering Chavez’s referendum win as a defeat of imperialism, he asserted,

“But a defeat of imperialism does not necessarily mean or lead to a revolutionary transformation, as post-Chavez post-election appeals to Washington and big business demonstrate…The euphoria of the left prevents them from observing the pendulum shifts in Chavez discourse and the heterodox social welfare–neo-liberal economic politics he has consistently practiced.”

He also stated that referendum results showed “that elections can be won despite mass media opposition if previous mass struggle and organization created mass social consciousness.” Differentiating Chavez from other national-populist leaders in Latin America, Petras said,

“In effect there is a bloc of neo-liberal regimes arrayed against Chavez’s anti-imperialist policies and mass social movements. To the extent that Chavez continues his independent foreign policy his principle allies are the mass social movements and Cuba.”

In his apparently pessimistic assessments about Lula, post-referendum Venezuela and now about Morales, Petras’ main focus has always been to critique the euphoric assessment of these regimes and put forward a political economic perspective of the developments. Retrospectively, one might assert that his pessimism with regard to Venezuela was not well-founded, but the fact that something did not happen is not a sufficient critique of the prognostication of what could have happened.

Petras’ pessimistic judgement and his optimistic ground engagement with various revolutionary movements in Latin America and throughout the world are two sides of the same “radical” coin – “pessimism of the intellect, optimism of the will”. His optimism allows him to see revolutionary potential within a particular situation, while his pessimism forces him to deconstruct the situation into various tendencies, class forces, class balance etc that may enhance or scuttle the realisation of that potential. For him as for other Marxists, history is not linear – at any given moment of time, there are various tendencies, countertendencies and social variables operating that synthetically determine the future – there is no single cause, and there is no single effect. Isn’t it a normal Marxist exercise – to identify this synthetic dynamics, while indicating possible “futures”? Isn’t it better to see the danger, which eventually may or may not realise into any mishap, and guard oneself against it, rather than not seeing any, and lead oneself willingly and with all enthusiasm to a dead-end? Another scholar-activist involved in Latin American transformation who never tires to talk about ‘contradictions along the path’ is Michael Lebowitz, when others are rolling drunkenly in optimist euphoria:

“The problem of the Venezuelan revolution is from within. It’s whether it will be deformed by people around Chavez.”

Lebowitz and Petras differ in their discursive tenor because of the differences in the loci of their political engagement, but they come from the great tradition of Marxists who have utilised Marxism to understand the day-to-day developments in global class struggle, without slipping into journalistic tinkering with appearances.

It would have been a different matter, if Petras had stopped short of presenting the revolutionary direction and started talking like radical fatalists and sectists. For them it is enough whether a leader or organisation has decried Stalin or not, whether s/he reads Trotsky or not, how many times s/he utters the word “imperialism” etc. For some of these people, allegiances to a particular sect, ideology is enough – a bible in one hand, and cross in another, drive away all counter-revolutionary devils around. What else are these convictions, if not “cabinets of fossils”! On the other hand, “metropolitan” leftists – Western (including many Non-Resident Third Worldists (NRTs)), Eastern, Southern…- who suffer from the guilt of unable to do anything concrete at the place of their being, celebrate every tokenism that fits into their utopia of progress, justice, democracy… In good faith (with a tinge of self-hatred and superiority complex), they think it’s their duty to “patronise” the Other, in most of their forms, of course only if these fit into their educated (non)sense.

Petras’ understanding of the Bolivian and Brazilian developments is from the point of view of the self-organisation and assertion of the working classes – urban and rural. The issue for Petras, even in his past assessment of Chavez, has been whether the political-parliamentary impact of the movements (accommodation of sections of their leadership in state formation) is enhancing and channelling the class capacity of the working class or it is simply institutionalising these movements and transforming them into representative lobbies, reducing class struggle to clashes of interest groups. The peculiarity of the new situations in Latin America, which also underlines their contradictions, to some extent derives from the statist component. The fact that the progressive governments are being constituted within the frame of bourgeois democracy poses new challenges for the popular movements and their relationship with the State. This situation makes it all the more urgent to recognise that, “We now have a state [which is not even formally workers-peasants state, like the Soviet] under which it is the business of the massively organised proletariat to protect itself, while we, for our part, must use these workers’ organisations to protect the workers from their state, and to get them to protect our state” (Lenin), while simultaneously heading towards a fundamental transformation of the state’s character. In this scenario, it becomes a primary task of the intellectuals organically linked to the working class to be extra vigilant and identify the various contradictions and tendencies affecting its movements, while delineating the possible directions that these movements can take in a perpetual ideological class struggle within. Petras in his critiques does exactly this.

Reading Petras in West Bengal

Petras in his recent article on Morales enumerates the implications of development strategies that “progressive” governments follow to “stabilize the economy, overcome the ‘crisis’, reconstruct the productive structure”, instead of recognising the fact that they are empowered “because of the crisis of the economic system” and their task should be “to change the economic structures in order to consolidate power while the capitalist class is still discredited, disorganized and in crisis.” Interestingly what is happening in West Bengal today is precisely this, where the Left Front government is indulging in reconstruction of the productive structure the way the Indian ruling class wants. However, definitely the internalisation of the hegemonic bourgeois needs within the Left Front (LF) is completer because of its 30 years rule in comparison to the newly elected governments in Latin America. Further, the Indian LF’s political cost for not following the neoliberal policies could have been far less, as it could have lost power in a fragment of the Indian state, where it does not have any sovereignty, while gaining political leverage throughout the country.

According to Petras, the stabilization strategy “allows the capitalist class time to regroup and recover from their political defeat, discredit and disarray”, while the working class is left on the receiving end to suffer the “costs of reconstruction and crisis management”. Also, “[b]y holding back on social spending and imposing restraints on labor demands and mobilization, the regime allows the capitalists to recover their rates of profit and to consolidate their class hegemony” Clearly, the left front’s repression of the trade union and peasant self-organisation especially since the 1990s have consolidated the capitalist class hegemony – material and ideological, while demobilising the exploited classes.

The industrialisation policies of the West Bengal government have weakened its popular social base”, strengthening “the recovery of its class opponents”, and thus are creating “major obstacles to any subsequent effort at structural change”. Its “policy revives a powerful economic power configuration within the political institutional structure which precludes any future changes. It is impossible to engage in serious structural changes once the popular classes have been demobilized, the capitalist class has overcome its crisis and the new political class is integrated into consolidated economic system. Stabilization strategy does not temporarily postpone change; it structurally precludes it for the future”.

Further, to think that if a progressive “regime ‘adapts’ to the regrouped capitalist class” it can be stabilised is just an illusion, “because the capitalist class prefers its own political leaders and instruments and rejects any party or movement whose mass base can still exercise pressure.” Aren’t these some basic lessons that we must learn – in Bolivia, West Bengal and everywhere?

"Neoliberal" Leninism in India and its Class Character

Pratyush Chandra

“Criticism – the most keen, ruthless and uncompromising criticism – should be directed, not against parliamentarianism or parliamentary activities, but against those leaders who are unable – and still more against those who are unwilling – to utilise parliamentary elections and the parliamentary rostrum in a revolutionary and communist manner. Only such criticism-combined, of course, with the dismissal of incapable leaders and their replacement by capable ones-will constitute useful and fruitful revolutionary work that will simultaneously train the “leaders” to be worthy of the working class and of all working people, and train the masses to be able properly to understand the political situation and the often very complicated and intricate tasks that spring from that situation.”
(V.I. Lenin, Left-Wing Communism: an Infantile Disorder, Chapter 7)

1. Lenin and the CPIM’s Leninism

The Communist Party of India-Marxist (CPIM)-led Left Front government in its endeavour to industrialise West Bengal, admittedly within the larger neoliberal framework of the Indian state’s economic policies, is ready to scuttle every act of popular vigilance in the manner which Lenin would have called “bureaucratic harassment” of workers-peasants’ self-organisation. India’s official left position on neoliberal industrialisation and its potentiality to generate employment is very akin to what Lenin characterised “Narodism melted into Liberalism”, as the official left “gloss[es] over [the] contradictions [of industrialisation] and try to damp down the class struggle inherent in it.”(1)

In fact, the mass organisations of the official left in West Bengal have for a long time been the main bulwarks of the state government to pre-empt any systematic upsurge of the workers and peasants. They have become increasingly what can be called the ideological state apparatuses to drug the masses and keep them in line. And in this, Leninism has been reduced to an ideology, an apologia for the Left Front’s convergence with other mainstream forces on the neoliberal path, giving its “steps backwards” a scriptural validity and promoting an image that in fact this is the path towards revolution – all in the name of consolidation and creating objective conditions for revolution. For justifying their compromises locally in West Bengal, CPIM leaders have found handy innumerable quotations from Lenin, and sometimes from Marx too. Contradictory principles and doctrines can easily be derived from their statements, if read as scriptures and taken out of contexts. Hence, as a popular saying in India confirms, baabaa vaakyam pramaanam, which loosely means, you can prove anything on the basis of scriptures.

Of course, this can be a variety of Leninism, as there are varieties mushrooming like religious sects, but such was not Lenin. Lenin himself never treated Marx’s writings as scriptural for justifying his every tactical move. Furthermore, especially after the defeat of other European revolutions, on many occasions he was ready to acknowledge Russia’s “steps backwards”, even during the formulation and implementation of the New Economic Policy. His defence of the independence of working class organisation and power beyond state formation in his attack on Trotsky’s advocacy of the regimentation of trade unions was especially for countering the counter-revolutionary potential in the Russian state’s “steps backwards” by ever-stronger working class vigilance. Lenin had the guts to say, “We now have a state under which it is the business of the massively organised proletariat to protect itself, while we, for our part, must use these workers’ organisations to protect the workers from their state, and to get them to protect our state. Both forms of protection are achieved through the peculiar interweaving of our state measures and our agreeing or “coalescing” with our trade unions.”(2; emphasis mine)

Such was Lenin even as the leader of the Soviet State, unlike the CPIM-led Left Front’s leadership, which seeks to stabilise its rule in a tiny part of India, where, it admits, its government can have no sovereignty.

The CPIM’s energetic peasant leader Benoy Konar (who rails against Naxal conspiracy in every disturbance in West Bengal), a major stalwart in the present debate on repression and agitation in the state, says, “West Bengal is a federal state in a capitalist feudal country. What its government has done is just a miniscule step compared to what Lenin was forced to do, even after the revolution. If this is what upsets these “true” Marxists so much, we request them to stop living in their imaginations and step into the real world.”(3) This logic is very instructive, indeed. It is precisely the case – Lenin could afford to do what he was forced to do because the revolution had taken place. Also, the “steps backwards” were essentially for the sustainability of the state, without changing its basic character – workers-peasants state, taking the risk of further bureaucratisation and distortion, which he thought the independent assertion of the working class would weed out eventually. If Konar and his gurus are forcing themselves to do the same in a “capitalist feudal country”, then it is for whose sustainability – of the “capitalist feudal” state?

2. CPIM and its Self-Criticisms

Throughout its thirty years of continuous rule, the West Bengal government’s main concern has been to stabilise its local rule within the parameters set by India’s state formation, and the hegemonic political economic set-up in the country. It boasts of its successes, but at what cost? The exigencies of the parliamentarist integration reinforced the accommodation and consolidation of a “supra-class” ideology within the communist political habits imbibed during its appendage to the nationalist movement, throughout India in general, and West Bengal in particular. This explains a less radical approach towards land reforms in the region.(4) The CPI-CPIM’s role became limited to controlling and policing the radicalisation of its own mass base, as in the 1960s-70s, especially with regard to the Naxal movement. It is interesting to note today how every attempt to form an organisation of the rural proletarians and small peasantry, independent of the rich and middle peasant (who benefited from the movements on tenancy rights and against the Bargadari system) dominated Kisan Sabhas, is systematically repressed by Bengal’s state machinery and party.

When the CPIM capitulated to electoral politics resorting to tactical measures and strategic sloganeering, because of the so-called popular mandate in its parliamentarist pursuit, militancy became a thing to be repeated only in speeches and slogans as its practice can alienate few votes, precious votes. This is not to say that it was only a subjective transition or a matter of conscious choice, rather, it represented the latent politics of the party leadership’s class character. In fact, the only thing lacking was a conscious and consistent opposition within, despite the fact that the party was aware of this from the very beginning. In one of its early documents, it noted:

“The struggle against revisionism inside the Indian Communist movement will neither be fruitful nor effective unless the alien class orientation and work among the peasantry are completely discarded. No doubt, this is not an easy task, since it is deep-rooted and long-accumulated and also because the bulk of our leading kisan activists come from rich and middle peasant origin, rather than from agricultural labourers and poor peasants. Their class origin, social links and the long training given to them give a reformist ideological-political orientation which is alien to proletarian class point and prevent them from actively working among the agricultural labourers, poor and middle peasants with the zeal and crusading spirit demanded of Communists. Hence the need and urgency to rectify and remould the entire outlook and work of our Party in the kisan movement.”(5)

To this P. Sundarayya adds in 1973 (when he was the party’s general secretary), “the same old reformist deviation is still persisting in our understanding and practice”, which frequently leads to “the repudiation of the Party Programme formulations.” (6)

This was all before the concern for stabilising its rule and building social corporatism – “peace”, “harmony”, etc., in West Bengal became the party’s prime agenda. Today, the state government’s industrialisation and urbanisation policies express the needs of the neo-rich gentry, a considerable section of which is the class of absentee landowners, dominating the bureaucratic apparatuses and service sector, who legitimately want a share in India’s corporate development. When the Kolkata session of the All India Kisan Council held on January 5-6, 2007 asks “the state government to forge ahead on the path of industrialisation based on the success of land reforms and impressive agricultural growth” (7), it is simply expressing the interests of all those who have benefited the most from the success of limited agrarian reforms.

The party is aware that if they alienate these class forces, it will not be possible to remain in power in “a constitutional set-up that is not federal in nature” and which reproduces their ideological hegemony through various identitarian and legal relations influencing the voting pattern of the electorate. As the present party general secretary Prakash Karat, notes:

“It was clear then as now that the policies implemented by Left-led governments would always be circumscribed by the fact that State power vests with the centre while state governments have very limited powers and resources. This is the reality of a constitutional set-up that is not federal in nature. This understanding was further clarified when Left-led governments began to rule in the three states of West Bengal, Kerala and Tripura for longer periods of time. Within all the constraints and limitations of office, these governments have to take steps to fulfil their commitments to the people and offer relief to the working people. While there are urgent issues before Left-led governments, including those of protecting livelihoods in agriculture, creating jobs by means of industrial development, and improving the quality of people’s lives, alternative policies in certain spheres can be implemented only within the constraints imposed by the system.”(8)

If this is not the Third Way, the there-is-no-alternative (TINA) syndrome, then one wonders what it can be. Zizek defines the Third Way as “simply global capitalism with a human face, that is, an attempt to minimize the human costs of the global capitalist machinery, whose functioning is left undisturbed.”(9) It is an old disease that inflicts all social democratic parties, once they start talking about consolidation within the bourgeois framework. Compare:

“Let no one misunderstand us”; we don’t want “to relinquish our party and our programme but in our opinion we shall have enough to do for years to come if we concentrate our whole strength, our entire energies, on the attainment of certain immediate objectives which must in any case be won before there can be any thought of realising more ambitious aspirations.”

To this Marx and Engels answered back in 1879:

“The programme is not to be relinquished, but merely postponed – for some unspecified period. They accept it – not for themselves in their own lifetime but posthumously, as an heirloom for their children and their children’s children. Meanwhile they devote their “whole strength and energies” to all sorts of trifles, tinkering away at the capitalist social order so that at least something should appear to be done without at the same time alarming the bourgeoisie.”(10; emphasis original)

This is the state of a self-acclaimed “revolutionary” party caught up in an existential struggle – “tinkering away at the capitalist social order”! Why not, “the journey towards socialism would begin only after the accomplishment of the task of the bourgeoisie democratic revolution. If the bourgeois did not join the democratic revolution, it would be easier for the working class to establish its leadership in it which would help in the next stage of socialist revolution.”(11) So friends, nothing to worry about, on behalf of the working class, the CPIM is actually taking a time out for accomplishing the ‘democratic revolutionary’ tasks. If the working classes – rural and urban – are being forced to shut up, it is all for ensuring their leadership! So, “the programme is not to be relinquished, but merely postponed – for some unspecified period…”

The CPI(M)’s capitulation to an alien class-ideological orientation is stark in its continuous effort to de-radicalise the left trade union politics. Parallel to Sundarayya’s self-criticism, Chief Minister Buddhadeb Bhattacharya too has been time and again indulging in his own variety of self-criticism. His statements are very straight-forward, as he seldom minces words in his pandering to corporate interests. In one of his interviews to The Hindu (November 16, 2005), he says: “We did commit certain wrong things in the past. There were investors really afraid of trade unions here. But things have changed… I am in constant touch with our senior trade union leaders and keep telling them that it is now a different situation. …I tell [trade union leaders] they must behave. If you do not behave companies will close, you will lose your jobs.”(12)

The combination of subjective and objective factors determines the tenor of the official left politics everywhere in India today. So the repression of strikers at the Kanoria jute mill in 1993-94 and Singur/Nandigram incidents are not something unexpected. They are expressions of the Left Front’s stable rule in West Bengal for thirty years. These are the imperatives rising from the limitations, about which the Front and CPIM never tire to talk, and in which their existential politics is embedded. They do so, as there-is-no-alternative.

3. No “Doublespeak”, but the “Narodnik-like Bourgeois” speaks

Unsurprisingly, the CPIM’s present general secretary Prakash Karat whom some of us used to admire for his strong positions uncomfortable for the parliamentarian lobbies within the party has come out strongly in defence of the same parliamentarianism. His general secretaryship demands that. In India, the days are gone when within these communist parties, a general secretary used to be the voice of a particular programmatic tendency. The designation has been increasingly reduced to a ‘post’ in the permanent hierarchy, where the post-holder like a civil servant voices whichever tendency dominates in the party.

Prakash Karat accuses the ‘left opposition’ to the Left Front’s industrialisation policies of Narodism, which too is not very surprising. It is one of our standard abuses, along with ‘infantile disorder’, ‘revisionism’, etc… However, Karat in his defence really means it, when he says: “The CPIM will continue to refute the modern-day Narodniks who claim to champion the cause of the peasantry”, as he appends this with a note on the Narodniks.(13)

It seems Karat is ignorant – either he feigns it, or it is real – about Lenin’s analysis of Narodism. Lenin’s criticism of the Narodnik revolutionaries was mainly centred on their faulty understanding of Russian reality; unlike the Narodniks he saw a slow, but definite evolution of capitalism and capitalist market. He stressed strategising on the basis of this new reality. On the other hand, the Narodniks saw capitalism still simply as a possibility, and thus like true petty bourgeois revolutionaries dreamt of evading the ruthlessness of capitalist accumulation, while often lauding bourgeois freedom and democracy. Lenin in his diatribes obviously underlined the utopianism of this programme, but only on the basis of a critique of the political economy of capitalism in Russia. His fundamental stress was to describe the processes of capitalist accumulation, the ruthlessness of which was compounded by its impurity, its ‘incompleteness’. Definitely, an important component of Lenin’s programme was embedding the democratic struggle against feudal remnants in the unfolding of the socialist revolution:

“Thus the red banner of the class-conscious workers means, first, that we support with all our might the peasants’ struggle for full freedom and all the land; secondly, it means that we do not stop at this, but go on further. We are waging, besides the struggle for freedom and land, a fight for socialism. The fight for socialism is a fight against the rule of capital. It is being carried on first and foremost by the wage-workers, who are directly and wholly dependent on capital. As for the small farmers, some of them own capital themselves, and often themselves exploit workers. Hence not all small peasants join the ranks of fighters for socialism; only those do so who resolutely and consciously side with the workers against capital, with public property against private property.”(14; emphasis mine)

Lenin’s analysis of capitalism in agriculture showed a growing peasant differentiation. This led him to stress on the heterogeneity of proletarian attitude towards diverse peasant classes. He criticised the populism of the Narodniks and also the liberals who put forward a homogenised notion of “narod” (people). The same notion is found in the Indian official left’s attitude towards the peasantry and its assessment of the land reform efforts in the left-ruled states. When it calls upon consolidating the gains from land reforms achieved in a “capitalist feudal” society and pursuing industrialisation on their basis, it consistently evades the question of peasant differentiation. Such evasion is a reflection of the consolidation, within the left leadership, of the hegemonic interests that necessarily rose after the limited land reforms measures. As Sundarayya indicated, this lobby had already congealed within the CPIM and been affecting its work in the rural areas, much before it enjoyed the cosiness of the state power. Its consistent success in undermining the rise of the rural proletarians and their organisation in West Bengal is indicative of the strength of this lobby. When Benoy Konar and the All India Kisan Sabha speak for industrialisation based on the gains in agriculture, they speak on the behalf of the rising kulaks and upper middle class in West Bengal who would like to invest and profit on the peripheries and as local agencies of the neoliberal industrialisation – in real estate, in outsourcing and other businesses which are concomitant appendages to the neoliberal expansion.

While differentiating the agrarian programme of the Social Democrats (when the revolutionary Marxists still identified themselves with this name) from that of the liberals, Lenin criticised the latter’s “distraught Narodism” – “Narodism melting into Liberalism”, which represented the Narodnik-like bourgeoisie, and explained:

“Firstly, the Social-Democrats want to effect the abolition of the remnants of feudalism (which both programmes directly advance as the aim) by revolutionary means and with revolutionary determination, the liberals – by reformist means and half-heartedly. Secondly, the Social-Democrats stress that the system to be purged of the remnants of feudalism is a bourgeois system; they already now, in advance, expose all its contradictions, and strive immediately to extend and render more conscious the class struggle that is inherent in this new system and is already coming to the surface. The liberals ignore the bourgeois character of the system purged of feudalism, gloss over its contradictions and try to damp down the class struggle inherent in it.”(15; emphasis mine)

Here Lenin clearly states that “distraught Narodism” lies, firstly, in its reformist means, and secondly, in not recognising that the system is already a bourgeois system, hence the basic struggle is against the rule of capital. As Lenin indicated and as it is clear in the case of the CPIM in West Bengal, the ideology of “distraught Narodism” is an ideology of the class of Narodnik-like local bourgeoisie, which is necessarily Janus-headed. On the one hand, it feels insecure before its established competitors and their ‘bigness’, thus consistently calls upon the state to protect its interests. On the other, it is mortified when it feels the presence of its impoverished twin – the growing number of proletarians – as a result of capitalism in agriculture and also due to neoliberal “primitive accumulation”. Most dangerous is the faithlessness and weariness that this class of rural and urban proletarians displays towards the neoliberal euphoria – since it has already experienced more than 150 years of ups and downs of capitalist industrialisation, and its increasingly moribund nature. The Bengali political elites’ “doublespeak” vocalised by the CPIM is actually the reflection of the “Narodnik-like” character of the local bourgeoisie and petty bourgeoisie, torn between the ecstatic possibility of their neoliberal integration, on the one hand, and the rising competition and class struggle, on the other. However, the ideology of homogeneous Bengali interests, along with the “communist” organisations and pretensions come handy in controlling these volatile segments, at least temporarily. It is interesting to note, how the CPIM leadership evades recognising the class character of “land reforms”, “impressive agricultural growth” and industrialisation as far as possible in its discourse, while overstressing their virtues. It is similar to the discursive habits of the Russian liberals – “distraught Narodniks”, which Lenin thus noted, while criticising “Mr L.”:

“Depicting the beneficent effect of the French Revolution on the French peasantry, Mr. L. speaks glowingly of the disappearance of famines and the improvement and progress of agriculture; but about the fact that this was bourgeois progress, based on the formation of a “stable” class of agricultural wage-labourers and on chronic pauperism of the mass of the lower strata of the peasantry, this Narodnik-like bourgeois, of course, says never a word.”(16)

4. Conclusion

When enthusiasm for neoliberal industrialisation is not well received, as a last resort in defence of the neoliberal policies in West Bengal, ‘vanguards’ like Prakash Karat and his associates have a ready apologia that “in a constitutional set-up that is not federal in nature”, the left government policies “would always be circumscribed by the fact that State power vests with the centre while state governments have very limited powers and resources.” (It does not matter that the CPIM’s other leader, Benoy Konar, talks of the same constraints by admitting West Bengal as “a federal state in a capitalist feudal country.”)

It is tempting to interpret this demand for more federalism in India as representative of “the demand made in certain circles that local self-governing institutions should also be given the autonomy to borrow and to negotiate investment projects with capitalists, including multinational banks and corporations”, as Prabhat Patnaik, a foremost Indian political economist, known for his allegiance to the CPIM and who has been lately appointed as Kerala’s State Planning Board Vice-Chairman, puts it. He continues, “this will further increase the mismatch in bargaining strength between the capitalists and the state organ engaged in negotiating with them, and will further intensify the competitive struggle among the aspirants for investment… This can have only one possible result which is to raise the scale of social ‘bribes’ for capitalists’ investment. This increase in the scale of social “bribes” is an important feature of neo-liberalism.”(17)

Particularly relevant in this regard are the CPIM leadership’s and the West Bengal government’s statements on Singur, in which they consistently fetishise the Left Front’s ability to win away the Tata project from a poorer state of Uttarakhand – an example of its competency in ‘social bribery’! Chief Minister Buddhadeb Bhattacharya again and again with all his frankness defended his Singur sale to Tata – “We showed them various sites, but they settled for Singur. We could not say no to such a project, otherwise it would have gone to Uttarakhand.”(18)

This is symptomatic of the extent to which the official Indian left has re-trained itself in the competitive culture of neoliberal industrialisation. Of course, it does not have any parliamentary stake in Uttarakhand. Or does the party leadership want to entice the Uttarakhand people to choose CPIM, for its efficiency in negotiating or ‘bribing’ for neoliberal projects? It is obvious that in order to remain the sole contender of the nationalising and globalising interests of the West Bengal hegemonic classes, the CPIM leadership has been giving vent to Bengali parochialism of the local “Narodnik-like bourgeoisie”.


(1) V.I. Lenin, The Narodnik-Like Bourgeoisie and Distraught Narodism, 1903.

(2) V.I. Lenin, The Trade Unions. The Present Situation and Trotsky’s Mistakes, 1920.

(3) Benoy Konar, Left Front Govt And Bengal’s Industrialisation, People’s Democracy, October 08, 2006.

(4) See Dipankar Basu, Political Economy of ‘Middleness’: Behind Violence in Rural Bengal, Economic & Political Weekly, April 21, 2001.

(5) P Sundarayya, Central Committee Resolution on Certain Agrarian Issues and An Explanatory Note, CPIM Publications, 1973.

(6) Ibid.

(7) All India Kisan Council, Resolution: Unite To Fight And Defeat All Moves To Stop The Industrialisation Of West Bengal, People’s Democracy, January 14 2007.

(8) Prakash Karat, “Double-Speak” Charge: Maligning The CPI(M), People’s Democracy, January 28 2007.

(9) Slavoj Zizek, The Fragile Absolute, Verso, 2000, p.63.

(10) Karl Marx and Friedrich Engels, Circular Letter to August Bebel, Wilhelm Liebknecht, Wilhelm Bracke and Others, 1879.

(11) Benoy Konar, West Bengal: Rationale For Industrialisation, People’s Democracy, November 06, 2005.

(12) The Hindu November 16, 2005.

(13) See (8)

(14) V.I. Lenin, The Proletariat and the Peasantry, 1905.

(15) See (1)

(16) Ibid.

(17) Prabhat Patnaik, An Aspect of Neoliberalism, People’s Democracy, December 24, 2006.

(18) Frontline, Jan. 27-Feb. 09, 2007.