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
RADICAL NOTES

“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”.

Notes:

(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.

Neoliberalism and Primitive Accumulation in India

The need to go beyond capital

Pratyush Chandra & Dipankar Basu
Radical Notes

Recent events in Singur – a town which is less than 40 kms away from Kolkata (Calcutta), where the West Bengal government is struggling to acquire and sell 1000 acres of agricultural land to Tata Motors – indicate the extent to which capitalist-parliamentarianism can regiment a counter-hegemonic force once it agrees to play by the rules. At the least, it clearly shows that the Communist government, which boasts of being the longest-running democratically elected Marxist government in the world, is hopelessly caught in the neoliberal project. And Singur is not an isolated event. In the state of West Bengal alone, the process of state-led land grab and the resultant opposition is already gaining momentum in at least three different locations: (a) in Kharagpur, West Medinipur district, where vast tracts of multi-crop farmland is being taken over for yet another Tata vehicle factory; (b) in Nandigram, East Medinipur district, where a chemical industries hub is proposed to be set up by the Salim group on a 10,000-acre area; and (c) in North Bengal where a Videocon Special Economic Zone (SEZ) is proposed to come up in the near future.

Nor is this story limited to West Bengal. Throughout India, resources are being acquired for Special Economic Zones and numerous other industrial schemes meant to facilitate corporate capital expansion. Since laws permitting this acquisitions were passed an year ago, state governments have notified 267 SEZs, which will require more than a half million hectares of land. Of this, the state has already acquired 137,000 hectares for 67 SEZs while another 80 have `in principle’ been approved.(1) The Government has converted the erstwhile Export Processing Zones located at Kandla and Surat (Gujarat), Cochin (Kerala), Santa Cruz (Mumbai-Maharashtra), Falta (West Bengal), Madras (Tamil Nadu), Visakhapatnam (Andhra Pradesh) and Noida (Uttar Pradesh) into SEZs. In addition, 3 new Special Economic Zones that had been approved for establishment at Indore (Madhya Pradesh), Manikanchan (Salt Lake, Kolkata) and Jaipur have since commenced operations.

In this backdrop, the West Bengal government’s adamant attitude towards land acquisition, despite the popular unrest, shows that the Indian State and its agencies, irrespective of their ideological masks, are working relentlessly to provide the private sector with “an internationally competitive and hassle free environment”. In this note, we wish to conceptualise this political economic process, identifying its different facets and understanding their interlinkages. It is our contention that using the recently re-interpreted Marxist concept of “primitive accumulation” can provide crucial insights in this regard. We wish to demonstrate that current developments in India can be fruitfully understood by employing the notion of primitive accumulation, understood as a constitutive primitive of capitalism, the process which continuously creates and consolidates the capital-relation. Adopting this new perspective might also help in redefining the agenda of struggles and counter-hegemonic politics in the neoliberal context.

Primitive Accumulation: Two Interpretations

As is well known, Marx had brought up the concept of primitive accumulation to try to understand the historical origins of capitalism. It is generally accepted by economic historians that in pre-capitalist modes of production the primary producers (majority of whom were peasants) had ownership of the means of production, most crucial among them being land. If we agree that capitalism is distinguished from these other modes of production by the relationship of a class of propertyless labourers (who have nothing to sell but their labour power) and a class of propertied capitalists (the owners of the means of production) mediated through the market (2), then the following question naturally arises: how did we arrive at the class of propertyless labourers from a class of producers who had the ownership (or at least the right of usage) of the means of production? It is this historical question that Marx sought to answer with the concept of “primitive accumulation”.

In a sense, the answer is already contained in the question. Primitive accumulation is the process by which the producer is divorced from her/his means of production. Since, moreover, land is the primary means of production in pre-capitalist societies, the main focus of primitive accumulation was to separate peasants from the land. While the gradual penetration of market relations had a role to play in this, outright use of force was far more important, and in a sense the key. Only by evicting peasants from their lands and disrupting their livelihood could the development of markets in free labour and land be ensured; and only this could provide the firm basis for the emergence and consolidation of the capital-relation:

“The capital-relation presupposes a complete separation between the workers and the ownership of the conditions for the realization of their labor. As soon as capitalist production stands on its own feet, it not only maintains this separation, but reproduces it on a constantly extending scale. The process, therefore, which creates the capital-relation, can be nothing other than the process which divorces the worker from the ownership of the conditions of his own labor; it is a process which operates two transformations, whereby the social means of subsistence and production are turned into capital, and the immediate producers are turned into wage-laborers. So-called primitive accumulation, therefore, is nothing else than the historical process of divorcing the producer from the means of production. It appears as ‘primitive’ because it forms the pre-history of capital, and of the mode of production corresponding to capital.”(3)

It is worth recalling that Marx studied the “enclosure movement” in Britain within this overall perspective. One crucial aspect of primitive accumulation should be noted immediately: it effects a redistribution and transfer of claims to already existing assets and resources, rather than creating any new assets. In this sense, it is an accumulation of intangible rights and not the accumulation of tangible assets or goods. This aspect of primitive accumulation is important for our purposes because the current frenzy of state-assisted acquisition of land and other resources in India is precisely a process whereby rights of access and usage of already existing resources are being redistributed and transferred.

The last decade has witnessed a resurgence of debate around attempts to re-interpret the concept of primitive accumulation.(4) This debate has indicated that there are two distinct but related interpretations of primitive accumulation, one which stresses the temporal aspect and the other which stresses the constitutive or originary aspect. For the first, more traditional, interpretation the primitiveness of primitive accumulation is understood in a purely temporal sense. Primitive accumulation is seen as the historical phase which created the preconditions for the development of capitalism by forcing the separation of workers and means of production. The second interpretation notes that there is both a temporal and a continuity argument in Marx’s account of primitive accumulation. For this interpretation, therefore, the primitiveness of “primitive accumulation” does not arise simply from its location in historical time, relevant only as the initial stage of capitalism; rather, it is the constitutive primitive of the capitalist system, a process that is essential for perpetuating its fundamental class structure – the separation between producers and means of production.

If primitive accumulation is constitutive, then it must arise as a continuous process within capitalism viewed as a global system. Expanded reproduction of the system requires reproduction of the capital-relation at every moment; separation of workers and means of production must be maintained continuously. In its day-to-day functioning, a mature capitalist economy enforces this separation through the market, i.e., by economic means; but at the boundaries (both internal and external), where capitalism encounters other modes of production, property and social relations attuned to those modes and also to the earlier stages of capitalism, other ways of subsistence, primitive accumulation comes into play. More often than not, direct use of force is necessary to effect the separation at the boundaries. And since capitalism, as a global system, continuously encounters other modes of production along with the simultaneity of diverse stages of capitalism in various localities, the constitutive role of primitive accumulation is always in demand. One can probably go so far as to assert that capital accumulation is the extension of primitive accumulation, enforced through the market. In fact, in Volume 3 of Capital, Marx himself calls the concentration and centralisation of capital, which occur during the course of market-induced capital accumulation, as “simply the divorce of the conditions of labour from the producers [which occurs through primitive accumulation] raised to a higher power”(5).

But this does not mean that the two are identical. In fact two differences are especially important to grasp for the development of our overall argument:

(a) “[W]hile accumulation relies primarily on “the silent compulsion of economic relations [which] sets the seal on the domination of the capitalist over the worker,” in the case of primitive accumulation the separation is imposed primarily through “[d]irect extra-economic force” (Marx 1867: 899-900), such as the state (Marx 1867: 900), particular sections of social classes (Marx 1867: 879), etc. We can say therefore that primitive accumulation for Marx is a social process instigated by some social actor (the state, particular social classes, etc.) aimed at the people who have some form of direct access to the means of production. This social process often takes the form of a strategy that aims to separate them from the means of production.”(6)

(b) “As opposed to accumulation proper, what may be called primitive accumulation… is the historical basis, instead of the historical result, of specifically capitalist production’ (Marx 1867: 775). While sharing the same principle – separation – the two concepts point at two different conditions of existence. The latter implies the ex novo production of the separation, while the former implies the reproduction – on a greater scale – of the same separation.”(7)

Keeping these differences are important because one comes to the rescue of the other when market processes falter. Since capital accumulation operates through the market, the services of primitive accumulation are required almost by definition when the market is in crisis. During crucial phases of capitalist crisis, primitive accumulation emerges to help transcend barriers to accumulation in two ways: (a) by facilitating the transition from the critically fated regime to a new regime of accumulation, and (b) by continuously negotiating the spatial expansion (both internal and external) of capitalism. During periods of transition and expansion, “new enclosures” are required for putting the normal course of capitalist reproduction back on track. Securing these enclosures through force and other “direct extra-economic means” is the function of primitive accumulation. This re-definition allows us to grasp the function of the State and its continuous politico-legal activism in every stage of capitalism.

The present neoliberal phase can probably be understood fruitfully from this perspective. Despite the talk of separating the political from the economic, which is a staple rhetoric of the current phase, it is the state as the instrument of politico-legal repression that facilitates neoliberal expansion. Firstly, the state intervenes with all its might to secure control over resources – both natural and human (“new enclosures”) – and secondly, to ensure the non-transgression of the political into the economic, which essentially signifies discounting the politics of labour and the dispossessed from affecting the political economy. David Harvey notes that, “The main substantive achievement of neoliberalization… has been to redistribute, rather than to generate, wealth and income”; the main mechanisms for achieving this is referred to by Harvey as “accumulation by dispossession”, by which he means,

“… the continuation and proliferation of accumulation practices which Marx had treated of as ‘primitive’ or ‘original’ during the rise of capitalism. These include the commodification and privatisation of land and the forceful expulsion of peasant populations…; conversion of various forms of property rights (common, collective, state, etc.) into exclusive private property rights…; suppression of rights to the commons; commodification of labour power and the suppression of alternative (indigenous) forms of production and consumption; colonial, neo-colonial, and imperial processes of appropriation of assets (including natural resources); monetization of exchange and taxation, particularly of land; the slave trade (which continues particularly in the sex industry); and usury, the national debt and, most devastating of all, the use of the credit system as a radical means of accumulation by dispossession. The state, with its monopoly of violence and definitions of legality, plays a crucial role in both backing and promoting these processes.”(8)

Harvey identifies four main features of “accumulation by dispossession”: privatisation, commodification, financialization and the management-manipulation of assets, each feeding on the other, supported by the other and gaining strength from the other. The neoliberal resurgence since the mid-1970s can be understood as capital’s counter-revolutionary response to the crisis that enwrapped “embedded liberalism” internationally in the late-1960s, with “signs of a serious crisis of capital accumulation…everywhere apparent. Unemployment and inflation were both surging everywhere, ushering in a global phase of ‘stagflation’ that lasted throughout much of the 1970s.”(9)

The Politics of Primitive Accumulation in India

What is going on in India today can be understood by employing the concept of primitive accumulation (as understood in the second interpretation) in almost all of the above senses: separating primary producers from land; privatisation of the “public”, conversion of common property resources into marketable commodities, destroying non-market ways of living, etc. To our mind, each of the instances of “displacement” or state-led “land grab” are willy-nilly feeding into the overall process of primitive accumulation in India by divorcing primary producers from the land or restricting direct access to other common property resources like forest, lakes, river, etc. A question crops up immediately. Being a labour-surplus economy, does India need to generate additional labourers, which is an obvious result of primitive accumulation, before absorbing what is already available? Certainly not, if we think from the perspective of labour. But the answer changes if we see the whole process from the perspective of capital. Fresh entrants into the already burgeoning ranks of the proletariat will increase the relative surplus population – floating, latent and stagnant – depressing real wages and thereby increasing the rates of profits on each unit of invested capital. Moreover, one of the major features of the neoliberal regime of accumulation has been the incessant `informalisation’ of the labour process, and further growth of the relative surplus population makes late-capitalist countries like India finely attuned to this. As Jan Breman notes:

“Mobilization of casual labour, hired and fired according to the needs of the moment, and transported for the duration of the job to destinations far distant from the home village, is characteristic of the capitalist regime presently dominating in South Asia.”(10)

Separation of producers from their means of production and subsistence, especially land and other natural resources, also creates markets for these resources; and thus comes into being the various agencies that thrive through hucksterage in these markets. These intermediaries play the crucial role of facilitating and normalising the process of primitive accumulation. Examples abound: Trinamool Congress goons, grassroots-level CPI(M) leadership, local middle classes like school teachers, lawyers, and other similar forces in the Singur case; state-traders, local elites-supported Salwa Judum in Chhatisgarh.

The major target of land acquisition in India today is in areas where either peasant movements have achieved some partial success in dealing with capitalist exploitation and expropriation or areas largely inhabited by the indigenous population whose expropriation could not be increasingly intensified because of the welfarist tenor of the pre-liberalisation regime. West Bengal is the prime example of the former, where Left Front rule congealed due to its constituents’ involvement in the popular movements. Now, the movements’ institutionalisation and incorporation of the leadership into the state apparatus is facilitating the present-day resurgence of primitive accumulation. Examples of the second kind of area could be parts of Chhatisgrah, Orissa, Andhra Pradesh or Madhya Pradesh, which the corporate sector is eyeing for mining activities and for setting up steel plants.

As an instructive example, if nothing else, let us see how displacement in Singur will affect the various class forces on the ground. While the state apparatuses are trying to secure resources for corporate capital, sections of the local elite, including the well-off farmers led by the mainstream non-left political parties – like the Congress and Trinamool (TMC) – have joined the movement against land acquisition essentially to obtain various kinds of concessions, a higher price for giving up the land to the State and perhaps also for increasing the land price for their future real estate speculation around the upcoming industrial belt. For example, “a TMC leader and ex-pradhan of one of the gram panchayats was initially with the movement, but finally gave away his land. Many of the landed gentry, some of them absentee, who own bigger portions of land, depend on ‘kishans’ (i e, hired labours, bargadars, etc) for cultivation of their lands. They principally depend on business or service and have come forward to part with their land in lieu of cash.”(11) In case the government talks to the protesters and gives larger concessions, it is these sections that will benefit the most.

The people who are really the backbone of the movement in Singur are the landless working class and poor peasantry. According to a recent report, “many agricultural workers and marginal peasants will lose their land and livelihoods. Though the State Government has decided to compensate the landowners, no policy has been taken for the landless agricultural workers, unrecorded bargadars and other rural households who are indirectly dependent for their livelihood on land and agricultural activities.”(12) The region is also inhabited by the poor who “frequent the nearby town, being employed in factories, shops and small businesses. Some of the youth have migrated to cities like Mumbai, Delhi and Bangalore, working there principally as goldsmiths or construction workers. There were several cases of reverse migration when people came back to their village after the closing down of the industries where they were working or finding it more profitable to work on the land than to work in petty industries or businesses, drawing a paltry sum in lieu of hard labour.”(13) For this population as also for the landless workers and marginal peasants, the Singur struggles are existential ones.

As an example of the second kind of land acquisition, we can turn our attention to Chhatisgarh. A report on recent developments in Chhatisgarh notes that, in India,

“[t]ribal lands are the most sought after resources now. Whether it is in Orissa or Chhattisgarh or Andhra Pradesh, if there is a patch of tribal land there is an attempt to acquire it. It is no geographical coincidence that tribal lands are forested, rich with mineral resources (80 per cent of India’s minerals and 70 per cent of forests are within tribal areas) and also the site of a sizeable slice of industrial growth. The tribal districts of Chhattisgarh, Orissa, Jharkhand, Karnataka and Maharashtra are the destination of us $85 billion of promised investments, mostly in steel and iron plants, and mining projects. Ironically, these lucrative resources are of no benefit to the local people: an estimate of 10 Naxal-affected states shows that they contribute 51.6 per cent of India’s GDP and have 58 per cent of the population. As with Chhatisgarh, all these states have a strong Naxal presence and are witness to movements against land acquisition. The state governments say these protests are Naxal-inspired. Local people say, however, that all they are trying to do is protect their land, forests and livelihood.”(14)

Here the State’s mode of facilitating primitive accumulation is by raising mercenaries, the Salwa Judum. This extra-legal use of force is supported by the traditional exploiters of the indigenous population – traders, usurers, civil servants and tribal neo-elites, who have functioned as intermediaries in the regime of commerce-based surplus extraction. On the one hand, absence of any recognised land rights of tribal communities, has allowed the State to use principles of terra nullius and eminent domain to expropriate them. On the other, these communities have continued to exist in defiance of all these legalities. However, with the recent intensification of efforts to secure resources for corporate profiteering, along with the continued presence of primitive extractive modes of exploitation, these communities have been left with no real choices but to arm themselves for securing their unrecognised rights. Hence,

“Most tribal people living in forests are officially ‘encroachers’. They live under the constant threat of being alienated from their land and livelihood. While the government completely failed to reach out to them, the Naxals succeeded in connecting to sections of the people. They spread to the state’s 11 districts (200 districts in the country). Unable to contain them, government supported the creation of a civilian militia – Salwa Judum”.(15)

Besides these widely discussed cases of recent land acquisition and displacement, there have been numerous conflicts around the rights over water resources over the years. In almost all such cases, the state has come forth as being hell bent upon the construction of big dams and other hydroelectric projects despite all evidence of the net negative marginal costs of these projects. During the past two decades, Narmada Bachao Andolan has been a prominent force constantly exposing the anti-people, anti-environment character of these projects. Even in the Himalayan region of Uttaranchal (site of the legendary Chipko Andolan), riverbeds and surrounding lands have been ‘enclosed’ for private capital to be used for power generation and lucrative tourism projects. In fact, recent politics in this region cannot be fully understood without understanding the conflicts around these enclosures. Closer to urban India has been the neoliberal systematisation of commercial and financial centres, the `clearing’ of slums, in cities like Delhi and Mumbai, which have naturally been the hotbed of the politics of and against “new enclosures”.

Understanding all these diverse processes in the framework of primitive accumulation has several strategic implications. Perhaps, most urgently, this can provide a unified framework to locate the numerous struggles going on in the country right from the `new’ social movements, like landless workers movements, Narmada Bachao Andolan and other local mobilisations of ‘development-victims’, to anti-privatisation movements of public sector workers, all the way to the revolutionary movements led by the Maoists. This unified framework can then possibly facilitate dialogue among these movements, something that is more than essential at this juncture if the movement of labour against capital is to be strengthened.

A Future Beyond Capital

Using this framework will also mean re-evaluating many of the theoretical positions that are currently in use. For example, it will be necessary to rethink the classical communist position that characterises the Indian state as semi-feudal and semi-colonial, and thereby sees the struggle of the peasantry as being directed primarily against feudal oppression. It is possible that the inherent limitations of this ideological framework disallow revolutionaries and other radicals to formulate effective strategies against the whole system, a system that preserves various vestigial forms to facilitate accumulation but is not defined by them. Thus, movements struggling against different forms of these vestiges are easily localised, regionalised, marginalized, dispersed, and even utilised in the intra-ruling class competition and conflicts. The state of the official Indian left is illustrative in this regard. It, too, stresses on the presence of “vestiges” and the insufficiency of development, but then turns around and justifies its accommodation in the neoliberal capitalist project as a fight against these vestiges!

Despite the apparent popularity of the new movements of Latin America among the official Left in India, their attachment to a schematic notion of national capitalist development retains all its strength. The devastating consequence, of course, is the deferral of the revolutionary moment till that development is attained; in reality, this amounts to postponing the revolutionary moment beyond the horizon of all concrete possibilities. Surely, this is not simply an ideological problem coming from a faulty understanding of the dynamics of capitalism or socialism. It is a consequence of the official left leadership’s accommodation in the capitalist-parliamentary framework, an accommodation moreover that forces them to participate in the competitive race for representation. In the pursuit of presenting itself as the legitimate representative of the “plurality of opinions”, which parliamentary politics poses against the notion of class struggle, the left reproduces this plurality within itself, along with its built-in hierarchy. With partial successes in this exercise, representatives of the opinions that count, i.e., the hegemonic class interests, solidify themselves within the party structures. And it is this congealment within the Left Front in West Bengal that leads the “communists” to vocalise neoliberal myths of neutral industrial development, dubbing every protest against its policies as anti-developmental, backward and manipulative. Parallels with the neoliberal demonisation of the transgression of the political into the economic can hardly be missed. Echoing well-heeled mandarins in Delhi, the Left Front government regularly uses the classic threat of capital flight to regiment all protesting voices.

Without comprehending the function of vestiges of earlier modes of production within capitalism or the role of earlier stages of the capitalist mode of production in sustaining capital accumulation, any fundamental challenge to the hegemonic forces in a late capitalist society like India cannot be formulated. It can hardly be denied that, “we suffer not only from the development of capitalist production, but also the incompleteness of that development. Alongside the modern evils, we are oppressed by a whole series of inherited evils, arising from the passive survival of archaic and outmoded modes of production, with their accompanying train of anachronistic social and political relations. We suffer not only from the living, but from the dead. Le mort saisit le vif [The dead man clutches onto the living]!”(16)

We will have to recognise the fact that during the stage of imperialism, and more so in the present postcolonial situation, “a high level of capitalist development no longer require[s] the elimination of the traditional class of ‘small producers'” and other pre-capitalist ‘remnants’.(17) Even in a country like Japan, “in which capitalist society developed only at the so-called finance-capitalist stage of world capitalism, a high level of capitalist development has not been incompatible… with the survival of the traditional class of ‘small producers’.”(18)

Indian capitalism, like Japanese, came into being in the stage of imperialism, when finance capital and inter-imperialist rivalries were already subjugating the whole world. Moreover, development under direct colonialism foisted some unique features on to the general characteristics of “late capitalism”. During the colonial period, “self”-expansion of Indian capital beyond the physical horizons of India was implausible because this would have required an Indian State committed to these interests. Colonialism ruled this out almost axiomatically. However, there were other channels available. The simultaneous existence of various socio-economic formations at diverse levels of Indian society allowed some possibility of ‘internal’ colonialism and “enclosures”, thus, providing the basis for capitalist expansion. Even after Independence, Indian capital relies heavily on the ‘diversity’ (or unevenness) of Indian economy and society for primitive accumulation and expansion. Additionally, ‘semi-feudal’ conditions at various locations within the country provide a vast reserve army of labour. The important characteristic of this insecure and docile population is that they can be pulled out of their original locations and thrown into the growing labour market without disturbing the essential fabric of society. In other words, pre-capitalist forms of exploitation provide vast and near permanent pools of cheap labour, which competes with the urban proletariat, thereby bringing the latter under political and economic control. Moreover, this seems (19) to resolve the “agrarian problem” of Indian capitalism, by ‘externalising’ rural and underdeveloped India from the “core” industrial islands. Concentrating capitalist agricultural development in particular locations of India (for example in West and North-west India), Indian capitalism could afford to under-develop other locations so that they could serve as “external markets” and as reserves of “footloose labour”.

Because unevenness is the essential feature of capitalist development, any mode of regulation, including neoliberal globalisation, has to negotiate with diverse stages of societal development. Hence local reactions against this new wave of capitalist consolidation and accumulation are bound to be diverse. The revolutionary vision consists in coordinating these diverse forces for building a formidable challenge to capitalism. Even the struggles against vestigial forms, if they have to be decisive, need to be recognised as contesting capitalist relations that sustain them and are articulated through them. In the Indian context, they are all struggles against a stuttering capitalism, against the inherent brutalities of primitive accumulation. We will have to realize that the movements are not about “saving” tribals/indigenous populations or their way of lives; the movement is a movement of labour against capital. Tribals, poor peasants, marginal peasants, landless labourers, informal sector workers, all these sub-classes are fighting against the tyranny of capital, against being fed – with their labour and resources – into the capitalist machinery. Obviously, in this fight against capital, we cannot cling on to any nostalgia for a pristine past, rather our vision must be directed towards the future, a future built on the transcendence of capital, a socialist future rooted in a participatory economy and polity. Only then can the vast majority suffering in the margins of capitalism and toiling under vestigial relations, can make a concerted, decisive effort to end the tyranny of capital.

Notes & References

(1) Prem Shankar Jha, Compensation not enough, Daily News & Analysis (October 2, 2006)

(2) Marx refers to this as the capital-relation.

(3) Karl Marx, Capital Vol. 1, Penguin Books (1976 [1867]), pp. 874-75

(4) See the contributions in The Commoner No 2. (September, 2001)

(5) Karl Marx, Capital Vol. 3, Penguin Books (1981 [1894]), pp. 354

(6) Massimo De Angelis, “Marx and primitive accumulation: The continuous character of capital’s “enclosures”, The Commoner No 2 (September, 2001)

(7) Ibid. (Note: ex novo is used in the sense of `original’ or `from the scratch’).

(8) David Harvey, A Brief History of Neoliberalism, Oxford (2005), pp. 159

(9) Ibid, pp. 12

(10) Jan Breman, Footloose Labour: Working in India’s Informal Economy, Cambridge University Press (1996), pp. 23

(11) Parthasarthi Banerjee, “Land Acquisition and Peasant Resistance at Singur”, Economic & Political Weekly (November 18, 2006)

(12) Paschim Banga Khet Majoor Samity, “Terror Cannot Suppress Them: People’s Resistance to Forced Land Acquisition In Singur”, (December 6, 2006)

(13) Parthasarthi Banerjee, op cit

(14) “Anti-Naxal operations a cover for exploiting tribal people”, Down to Earth Vol 15 No 11 (October 18, 2006)

(15) Ibid.

(16) Karl Marx, “Preface to the First Edition”, Capital Vol 1, Penguin (1976 [1867]), pp.91

(17) Kozo Uno, Principles of Political Economy, Harvester Press (1980 [1964]), p.xxvii.

(18) Ibid, pp. 125

(19) Japanese Marxist Kozo Uno stressed that capitalism is incapable of solving the agrarian question. “We can say that it became clear on a world scale that the ability to solve the agrarian question would entail the ability to construct a new society to replace capitalism, and we may regard the League of Nations as having been one such attempt. The solution to this problem, of course, means no more than the external expression of the internal contradictions of capitalism, and cannot occur unless the issue of class relations is solved. In this sense, the failure of the League of Nations was only to be expected.” (Quoted in Andrew E Barshay, The Social Sciences in Modern Japan: The Marxian and Modernist Traditions, University of California Press (2004), pp.128)

The Lost Left

The Times of India (December 28, 2006)
Considerably modified version of the article can be found in RADICAL NOTES & ZNET

The events in Singur are signs of a crisis borne out of a disjuncture between the Left Front’s pragmatic policies and the legacy of the movement and class interests that empowered it.For a long time, the open eruption of this crisis was evaded by the West Bengal government’s success in convincing its mass base of its ability to manoeuvre state apparatuses for small, yet continuous, gains. It justified all its limitations and inefficacy by condemning the faulty Centre-state relationship and a larger conspiracy to destabilise limited reformist gains, for instance, those from reforms in the Bargadari system.

The allegation of conspiracy seemed tangible only to the extent that parliamentary politics drives every opposition party to encash the difficulties incumbent governments face — by peddling popular grievances for electoral gain. For illustration, one needs to just review the history of the exit-entry of governments and their economic policies over the past 20 years. There were economic grievances that contributed to the Opposition’s success in destabilising governments and forming alternative ones, yet there was a remarkable continuity in economic and financial policies. Because of the Indian state’s ability to contain popular opposition within the precincts of electoral democracy — the ritual of elections — it could evade any fundamental political economic crisis and did not have to deter from its neo-liberal commitments.

Once the Left in West Bengal chose to play by the rules of parliamentary democracy, it faced the constant threat of defeat in electoral competition. The internalisation of the need to evade this threat transformed its character, thus leading it to aspire beyond being a class party of workers and peasants. It had to become an all people’s party — a party that could negotiate between diverse, dynamic and antagonistic interests.

A cosmetic radicalism though is advantageous in the states where it is the incumbent power. It can mobilise its traditional class base, by playing on victimhood, and rituals of national strikes. Alongside, it has been increasingly using the threat of capital flight to justify its concurrence with the national economic policies. Behind these usual mechanics of stabilising its position in the representative democratic set-up resides an essential dilemma for the official Left.

The historical legacy of the peasants and workers’ movements has been both a boon and a bane. This has gravely severed its ability to use traditional means of state coercion for containing its mass base, forcing an informal accommodation or para-legalisation of the Left’s traditional mass organisations — their transformation into ideological state apparatuses. Herein lies the danger.

Once these organisations are identified with officialdom, the grass roots are alienated and the scope for their independent assertion amplifies. In the history of Bengal’s Left, this has happened many times — the most formidable one was the Naxalbari movement. Singur is the latest case.

One must question the motives of mainstream non-Left political parties like the Congress and Trinamul, which represent the interests of the landed gentry that use ‘kishans’ — hired labours and bargadars — for cultivation. This class, who the West Bengal government claims have consented to land alienation in Singur, join such movements essentially to obtain various kinds of concessions — a higher price for giving up land to the state and perhaps also for increasing the price for future real estate speculation around the upcoming industrial belt.

But there is a larger section of the landless peasantry and those frequenting nearby towns for work; for them, the struggles like that of Singur are existential ones. They do not possess any faith in neo-liberal industrialisation based on flexible, informal and mechanised labour processes. Recently, in many parts of the country, these sections of rural poor have been the object and subject of radical mobilisations.

It is the fear of their politicisation in the wake of its drive for competitive industrialisation, which is the real worry for the accommodated Left in West Bengal, especially CPM, which has traditionally resisted the mobilisation of the landless in the state, even by its own outfit.

Protest Letter against the West Bengal Government action in Singur

FORUM OF INQUILABI LEFTISTS (FOIL)

To: Members of the Political Bureau of the Communist Party of India (Marxist)

December 6, 2006

Dear Comrades,

We, members of the Forum of Inquilabi Leftists, a broad network of US based South Asian Leftist scholars and activists write this to register our protest at the manner in which the CPI(M) led Left Front Government of West Bengal dealt with the land acquisition process in Singur for the Tata automobile plant.

The protests by the oustees of Singur whether by landowners or by the thousands of landless poor drawing sustenance from the local economies are emblematic of a new political force that is arising in both rural and urban areas of India. The challenge of this force cannot be met with by brutal repression. By resorting to such highhandedness, the Government of West Bengal leaves the CPI(M) with little credibility while protesting similar actions by other state governments in India.

We acknowledge the incontrovertible fact of opportunist politics by centrist and rightist political parties in Singur. But opportunist politics arise in the first place because there are opportunities to exploit. Those opportunities in the case of Singur, we believe, were created by the Government of West Bengal by prioritizing private investments with little promise of equity over large local economies that sustain numerous social groups that are marginal to the formal economy.

That such an approach has been adopted by the only leftist political party in India to hold elected state power is disappointing at the very least. It makes us wonder whether: the leadership of the CPI(M) in its capitalist-parliamentarist pursuit has dangerously internalised the dominant class/caste structures of the Indian society at the expense of unwavering loyalty of the poor peasantry and the working class that handed the control of the state machinery to CPI(M) in West Bengal.

As a group of people committed to the advancement of socialist democracy, we urge you to:

1) Immediately take steps to encourage democratic political activity in Singur, especially the five affected villages by:

a) dropping charges against the protesters and releasing them from custody

b) lifting Section 144 of the CrPC and withdrawing police camps, and

c) desisting from imposing formal and informal barriers to people visiting Singur.

2) Initiate a process to rethink your strategy for economic development in the context of globalization by keeping in mind the dangers of largescale dispossession of people everywhere. Such a rethinking is the imperative for a party like the CPI(M) especially because outside of Bengal – where the party is not in power, the CPI(M) has a responsibility to oppose similar projects.

In short, we are writing this to you to remind you of a historic responsibility that any leftist party has to confront. It cannot be sidestepped through circulating platitudes about the ‘reality of globalization’ as the spokespersons of the CPI(M) have been wont to in the wake of the incidents at Singur.

In solidarity,

Forum of Inquilabi Leftists (FOIL)

[signed on behalf of FOIL by:]

Anantakrishna Maringanti, Anivar Aravind, Anu Mandavalli, Ashish Chaddha, Ashwini Rao, Aurnab Ghose, Biju Mathew, Girish Agarwal, Kaushik Ghosh, Nandita Ghosh, Partho Ray, Pinaki, Pratyush Chandra, Raja Swamy, Ra Ravishankar, Ravindran Sriramachandran, Satish Kolluri, Sayan Bhattacharyya, Shalini Gera, Shourin Roy, Sushovan Dhar, I.K. Shukla, Sukla Sen, C.K. Vishwanath

Progressive Regression in Nepal

Pratyush Chandra

Only one aspect of Nepal’s Finance Minister Ram Sharan Mahat’s budgetary speech delivered on July 12, 2006 is stunningly consistent: its ceremonial mentioning of people’s movement, their aspirations and their martyrdom. Along with references to “rural empowerment”, “peace” and “sharp cuts in royal palace allocations”, these incantations are intended to provide new discursive “instruments of legitimation” for the Nepali state, or as the World Bank Country Director for Nepal, Ken Ohashi, says, all these are necessary for “establishing the credibility of the state” (“Seizing the open moment”, Nepali Times, 7-13 July 2006). Only time will tell if radical forces are able to expose the new regime’s opportunism under cute baubles: the progression of regression in Nepal.

Let us first ponder briefly over the present state of Nepal’s economy to understand the full meaning and implications of the budget. In 2004, Nepal’s population was around 25.2 millions, of which around 85% resided in the rural areas, suggesting their dependence on agriculture. The per capita income in 2004 was US$260, which is far below the average per capita income in low-income countries ($510) and in South Asia ($590). Particularly revealing is the structure of the economy according to the sectoral shares in the Gross Domestic Product (GDP):

Source: World Bank (2006), “Nepal at a glance”.

As Table 1 shows, there has been a continuous decline in the share of agriculture in the GDP. The industrial sector’s share definitely did expand from 1984 to 1994. However, since 1994, at least, its share has been stagnant, while the manufacturing industries’ share is on the decline. It seems that the non-manufacturing industries and services sector have been compensating the decreasing share of agriculture in the GDP, but as evident from Table 2, none of these sectors have been promising in their self-expansion. In fact, the average annual growth rate in the industrial sector has drastically reduced in the period 1994-2004.

Even though the increasing share of non-agricultural sectors in the GDP is a universal trend, in Nepal, like in other South Asian countries, this has not been accompanied by a proportionate shift in the labour force from agriculture to the other two sectors. According to the estimates of the Food and Agriculture Organisation (FAO) of the UN, the percentage of agricultural labour force in total labour force in Nepal remains almost unchanged since 1979 – it was 94% during 1979-91, while for several years now it is stuck to 93%.

All these indicate a huge rural/urban divide – an immense sea of rural poverty encircling a few islands of urban affluence. Taking into consideration the inequitable distribution of land holdings (Table 3) and semi-feudal forms of exploitation in an increasingly monetised rural setting, one can only imagine the state of the poor peasantry, semi-proletarians and the landless.

Source: Devendra Chhetry, “Understanding Rural Poverty in Nepal”, in Christopher Edmonds and Sara Medina (ed.), Defining an Agenda for Poverty Reduction (Vol. 1), Asian Development Bank (Manila, 2002). The figures are drawn from National Sample Census of Agriculture Nepal, 1991/92, Analysis of Results, Central Bureau of Statistics (Kathmandu, 1994). Ha= hectares

Even the World Bank admits (Economic Update 2002) that poverty could not be reduced in Nepal since “growth has been concentrated primarily in the urban areas and particularly in Kathmandu valley, largely excluding 86 percent of the population who live in rural areas, where per capita agricultural production has grown minimally and the overall level of economic activity has been sluggish”.

The disproportion between the share of the non-agricultural sectors in the GDP and the amount of employment generated in these sectors indicates that whatever growth we find in these sectors are either in capital-intensive industries controlled by foreign capital collaborating with a handful of Nepali mercantilist corporates, or in the informal economy where the circulatory migrants from rural Nepal toil with no job security and very low wages.

Moreover, impoverishment in rural (also in urban areas) has resulted in sluggishness in domestic demand for industrial goods, which has further eroded the possibility of an increased industrial growth in Nepal. This fact coupled with the backlash of liberalisation (export-oriented production) has made the industries in Nepal increasingly dependent on external markets – depleting internal resources to feed external demand. This further perpetuates the need for capital-intensity and an import of technologies to compete globally, thus making the dependency total, and the goal of employment-generating industrialisation a chimera.

In this situation, it is expected from any post-April 2006 government, which draws its power from popular radicalism that has enwrapped Nepal today, that it will represent the aspirations of the masses and address their basic problems – rural poverty, inequitable land distribution, unbridled commercialisation, profit-motivated industrialisation, lack of economic activities induced by popular needs, etc. The figures in Tables 1-2 testify the reality of neoliberalism as practiced in the Nepali setting.

It was in 1984 when the Nepali State accepted the IMF/WB liberalisation package, and never deterred from the neoliberal course despite the so-called 1990 democratic achievements. The Maoist revolt was a challenge to this path, and it was obviously expected that a post-April 2006 government would rethink the model of economic management that the Nepali State has been pursuing till now. But this was not to be, at least if we go by Mahat’s budgetary exercise.

In the introductory paragraphs of the speech, the Finance Minister talks about the need to “form a common vision of socio-economic development through dialogue among political and social forces active in the country” and asserts that “the dialogue between Government of Nepal and Nepal Communist Party (Maoist)” is most certainly a formidable step in this regard. In his zeal to make this point, he goes to the extent of visualising the fantastic possibility “to end all forms of conflict prevalent in the country”. However, the revolutionaries would never claim to negotiate for such a utopia, not with the democrats who are still uncomfortable with the possibility of sweeping away the most blatant point of contention: the burden of royalty.

But the Finance Minister himself betrays his and his colleagues’ conscious design of which all this wordiness is an important characteristic. This blueprint becomes clear in the following sentences: “The national debate today has surely centered on determining the future political system and process to achieve sustainable peace. This does not mean that the issue of economic development should be pushed to back burner. Democracy cannot flourish on the foundation of a weak economy. The economy is in crisis for over half a decade. It is looking for a new momentum.”

This statement contains all the essential ideological elements that characterise global neoliberalism, the weaning diet of the leadership of developing countries. First and foremost, the will to separate the economic from the political, that is, to ensure the complete depoliticisation of the former, is expressed in clear terms. To present that the “national debate” is only about politics is not only a gross misrepresentation of Nepali politics, but more importantly, it is a ploy to ensure that “the issue of economic development” does not become part of this “national debate”. Of course, economic development should not “be pushed to back burner”; rather with Mahat it must compete with political development more vigorously. But what will be the course of this economic development? The immediate answer that we seem to get is: No politics, please.

Economic development, for Mahat and his ilk, is unilinear along a neoliberal trajectory, or whichever one set by the global and regional masters. And the fundamental duty of any “national” leadership under the global neoliberal regime today is to police this unilinearity so that politics does not contaminate economics. This is the redefinition of the cherished “rule of law” today. If all conflicts in the politics of economic development are systematically ruled out, then, of course, the fantastic vision that Mahat has about ending “all forms of conflict prevalent in the country” will become real and there will be everlasting “sustainable peace”.

Consider provisions of the budget. As usual, there is an overabundance of promises, allocations and words as proof of the government’s commitment to the people in Mahat’s budgetary speech. All these are duly balanced by its fidelity to “investment-friendly atmosphere” for agro-businesses and “commercial farming”, “to encourage private investment” in every sector and, of course, faithfulness to its donors.

In the name of the pro-poor programme, the government will formulate an agriculture business promotion policy for “enhancing private sector participation in agriculture, market infrastructure development and agro-industries”. “As per the concept of public-private partnership, a policy will be adopted to encourage private sector in the expansion of technology and seeds under agriculture extension programme”. Then, there will be interest subsidy in tea farming, floriculture and milk chilling centres. The “One-Village-One-Product” programme “under public-private partnership will be initiated to increase production of commodities, which have adequate export potentials in foreign countries”. “Assistance will be provided for improved seeds, fertilisers and technology to jute producing farmers”. And the clincher – “concessional credit facility will be provided to the landless people for the purchase of land”.

Thus, the government will alleviate rural poverty, to ensure food security and implement land reforms. Market is the magic wand. What if there is no food, no land? Market will resolve everything.

Is it too demanding to realise the implications of these budgetary provisions? Where do they locate rural Nepal and its toiling masses in the global agro-industrial complex by excessive commodification of their lives? They are milled into “a new division of labour in agriculture”, where “the centre has specialised in capital-intensive production of grains and dumped them in the periphery, while peripheral states have battled for saturated markets for traditional exports, or have discovered ‘comparative advantage’ in various ‘non-traditional’ goods and land uses, namely ‘exotic’ fruits, cut flowers and vegetable, as well as ostrich husbandry and ‘wildlife’ management (ecotourism). In turn, all of these have been biased towards large-scale landholding, controlled by corporate capital, and destined for luxury peripheral and metropolitan consumption.”(Sam Moyo and Paris Yeros (ed), Reclaiming the Land: The Resurgence of Rural Movements in Africa, Asia and Latin America, Zed Books, London, 2005, p.18)

In the industrial sector too, Mahat has all his recipes ready for resolving industrial difficulties. He dips straight into undergrad textbooks on Economics to derive his recipes. For private sector there is a development and rehabilitation programme. “An Industrial Rehabilitation Fund will be established with the participation of the government, central bank, financial institutions and interested industrialists and entrepreneurs in order to rehabilitate the conflict-affected sick industries”. There will be a new labour law too, amenable to the needs of new industries, special economic zones and export processing zones.

This means the institutionalisation of the already informal labour market with no security for the workers. And, if these workers organise themselves and agitate, they will be accused of serving “the narrow interests of a small group”, as World Bank Country Director Ken Ohashi (“Seizing the open moment”, Nepali Times, 7-13 July 2006, p. 4) puts in an article published on the eve of the budget submission, since “peace, social and political inclusiveness, and economic growth” can be attained only if energy is directed “away from self interests to a collective purpose”. Strikingly, it seems either Mahat has literally lifted phrases from this article, or else the budget was drafted in the WB’s office. He too pleads for “a balance between the collective wishes and collective means”.

It is not very hard to identify the nature of this collectivity. In a class-divided society, the hegemonic collectivity is that of the ruling class, and the State is a definite instrument to serve its purpose. Hence, to meet this ‘collective purpose’, the Koirala government has everything to offer to their rich protégé-protectors, even a complete tax holiday for the newly-established industries in 22 remote districts for ten years. But for the same ‘collective purpose’, the workers and poor peasantry must understand that all “goals cannot possibly be met by this budget” (Ohashi) and that “the state does not have adequate resources to immediately fulfill unlimited needs of the people” (Mahat).

All this should definitely encourage foreign investors and their local agencies, but Mahat draws something more from the free market of ideas. This time around he desires to satiate the swadeshi and patriotic spirit. For this, he has a Swadeshi Jutta (national shoe) formula: “In order to promote the domestic production, the existing legal provision to purchase the domestic products by the government agencies even in cases where such goods are costlier by 10 percent than the foreign products will be implemented strictly. It is believed that the use of indigenous shoes and clothes by agencies like Nepal Army, Armed Police and Nepal Police under this program will encourage the domestic industries to a great extent.”

While all these development and rehabilitation programmes will be implemented to boost the private sector, the classical medicine is in store for “public enterprises”: Liquidation. It is not very difficult for even a newspaper-reading or TV-watching layperson to decipher the neoliberal ideological character of these budgetary measures, squeezed between the wordy paragraphs on “inclusive society and economy” and poverty-alleviation rhetoric.

The Nepali leadership, which has been historically compliant to the needs of the global masters, literally as their security guards, has never found neoliberal lessons very difficult to learn. Like in other countries, Nepal’s balance of payments crisis in 1982-85 gave the country’s leadership the classical rationale to ride the IMF/WB led neoliberal wave. Thus, they negotiated “a standby credit arrangement with the IMF. Accordingly, Nepal implemented an economic stabilisation programme in 1984/85. This was followed by the Structural Adjustment programme of IMF and the World Bank in 1986/87”. (“Understanding Reforms in Nepal”, Institute for Policy Research and Development, 2005). The political economy of Nepal, which had been a guinea pig in the hands of international finance capital for testing strategic panaceas, was once again brought to the operating table for yet another surgery. When the side effects started showing up in the shape of the democratic uprising, a patchwork was arranged in 1990.

The 1990 political arrangement broadened the experience and reach of this leadership in renting out the local natural and human resources for the benefits of the global machinery of capitalism. The localised elements of the ruling class that were nurtured by the aid regime and extensive commercialisation of the economy were brought into the fold of the State power. The limited democratic “political competition” established in 1990 provided a mechanism to attune the composition of the State to the changes in the ruling class composition. It was visualised that formal democracy would reduce all inter- and intra-class conflicts to competition between lobbies and dissipate any fundamental challenge to the economic structure, while the process of neoliberalism intensified.

The standard remedy in neo-classical bourgeois economics for any crisis due to marketisation is more marketisation with peripheral superstructural arrangements. Thus in Nepal too, “Economic liberalisation and privatisation policies were intensified from 1992 onward with the implementation of the Enhanced Structural Adjustment Facility (ESAF) programme. Given the open border and special trade relations with the southern neighbour, the speed and direction of reforms were also affected by the reform drive pursued in India. Since then reforms have either been continued or deepened in the modern economic sphere of trade, industry, finance, exchange rate, and monetary and fiscal policies. As a result, Nepal now stands as one of the most liberalised and open economies in the South Asian region” (ibid). A least developed country has been blessed by the most liberalised economy in the region; such is the endowment of neoliberalism.

This reckless and continuous compliance to the needs of global capitalist accumulation and its political regime nurtured radicalism in the consciousness of the Nepali downtrodden. Before 1984, this was spontaneous and sporadic. Under neoliberalism, it became general and organised, reaching its zenith in the form of Nepali Maoism. In 1990, it was thought that electoral games and formal democracy will keep this radicalism at bay and the Nepali downtrodden playful. On the contrary, it helped in rooting out the local elements of the Nepali ruling classes and neo-rich, revelling in their newfound proximity to Kathmandu and royal institutions. Thus the prism of caste, ethnic and local consciousness that inverted the reality and united the downtrodden with their oppressors was shattered.

As wealth and growth concentrated in few urban areas in a few hands close to power, close to local political linkages of international investment and finance, the rural-urban divide sharpened. There was an unprecedented intensification in vertical and horizontal inequalities leading to the unity of class war and autonomous identity movements under People’s War. The rural poor and migrant workers united with all the other marginalised forces to challenge the basic structure.

The alternative that emerged in the Maoist practice sought for “land to the tillers”, endogenous development geared towards the popular need and political institutions best suited to facilitate such development. The energy that this practice unleashed rocked the fragile 1990 arrangement despite the consistent neoliberal pursuit by all the governments that were formed thereafter. However, there could never be a clear unity within the political elite due to increased competition for commissions in administering the aid regime and proximity to global and regional players. At the wake of the parallel governments under the Maoists, this competition was further accentuated as the formal structure’s reach of influence narrowed spatially. This overcrowding wrecked the political arrangement that was inaugurated with so much fanfare with the blessings of the global powers. This led to the royal regression, while the democrats for the first time had the time to listen to the radical voices outside the parliament, and thereby allied with the Maoists.

The Koirala government formed after the reinstatement of Parliament in Nepal was, however, quick to realise the significance of the depoliticisation of the economic in order to sustain the Nepali State’s role as the local agency for global and regional capital. Negotiations with the Maoists are making the international forces, especially India and the US, increasingly nervous. The rushed visit to India and Mahat’s presentation before Indian capitalists was to assure Indian and other ‘donors’ that they have not deviated from the neoliberal path. The act of presenting the budget without consulting the Maoists is part of this design. What else could be the reason to overload any future regime with so many prior obligations, but to reassure the supremacy of global capitalist interests after the post-April fluidity?

This brings us to another neoliberal ideological element, which is subtly evident in Mahat’s statement quoted in the first section, where he seeks to pose democracy as the end not the means to attain economic development. This is intrinsically part of the same project of depoliticisation of the economic. If democracy is the end, you do not need to practise democracy in deciding and pursuing the course of economic development. On the contrary, the elite push for liberalisation will itself engender democracy. So wait and suffer!

Of course, this is the ideal of bourgeois democracy: a system of elite decision and public ratification, as Chomsky defines it. But did Nepali people really come on the streets and suffer bullets for this brand of democracy? Royal regression can go, but the Nepali leadership continues to serve the neo-liberal counter-revolution, that leaves the lives of the labouring majority at the mercy of the ups and downs of the globalising market.

Under the neoliberal regime, capital effectively dodges every regulation and controls politics by threatening to fly away in the wake of any uncomfortable circumstances, while the political elite rationalises its anti-labour policies in the name of making the environment investment-friendly. In the name of removing market imperfections caused by “extra-economic” factors, a new authoritarianism is perpetuated, which Venezuelan Vice-President Jose Vicente Rangel calls, “economic authoritarianism”. This renders the democratic control over human and natural resources impossible, while it instrumentalises the state in favour of the hegemonic market interests. As Rangel further says in his address to the 13th Meeting of the Latin American Economic System (SELA) Council in 2003, “Authoritarianism that is dressed in democratic forms is difficult to fight. The neoliberal model and economic decisions, which sustain and reproduce it, need a democratic façade to feign legitimacy.” Hence, the fetish of elections, as “the beginning and the end of democracy”, while economic authoritarianism continues.

(This is a slightly modified version of the article originally published in Combat Law, September-October, 2006)

Bush’s Passage to India: Why Does India Carry His Water?

COUNTERPUNCH

A few days from now, Bush will go to India and reaffirm his newfound love, becoming the only Republican President to visit India after Nixon. Bush and his ‘mouthpieces’ are quite vocal about their need of India – to compete with the EU, to check China, to control unpredictable regimes and to expand the war on terrorism etc. But it is quite interesting to note how India’s consistent positive response to these advances is generally taken as paradoxical, or else simply as succumbing to ‘external’ pressures. However if we take notice of the transformation of Indian capitalism and of the aspirations of the Indian ruling class, we can easily find the reason behind this mutuality.

India has already expanded its interests beyond South Asia and other neighboring economies. It has business assets and interests to secure both in developed and underdeveloped worlds. In fact, Indian capital has been ‘flying’ through legal and illegal routes since 1956 when the Birla group of companies made a large-scale investment establishing a textile mill in Ethiopia. In the late 1970s-early 1980s, the phrase “third world multinationals” was popularized to differentiate them from the first world multinationals. It was generally perceived that unlike the latter, which were motivated by the firms’ internal growth process, third world multinationals were products of demand-side bottlenecks, the statist restrictions on monopolistic and trade practices, other imperfections and distortions created by the state and political forces. This argument is negated by the fact that the companies going abroad where mostly those who had profiteered in the phase of ‘interventionism’. They were firms having “a diverse and established presence at home”. As one scholar from that period, Rajiv Lall noted in his study “Multinationals from the Third World: Indian Firms Investing Abroad” (Oxford University Press, 1986): “These firms tend to be part of large industrial houses with a conglomeration of holdings that give them an imposing rule in the Indian market.”

However, until 1978, majority equity participation in firms abroad was generally prohibited. Despite this, the Indian firms investing abroad managed to retain management control. After that, the pace of capital export has been unceasingly maintained, with its tremendous unimpeded nature in the post 1991 phase. The post-1991 scenario has rendered new directions to the Indian “export of capital”. The State itself has emerged as a leading segment in this trade, concentrating on sectors that allow a smooth process of capital accumulation domestically and internationally–energy and finance, being true to its role of expressing the general conditions of accumulation and devising overall economic strategy.

The energy requirements of India’s economy have been constantly increasing and as a result indigenous corporate oil interests have evolved, which initially were restricted to brokerage in export and import. But as the regulation for the outflow of Indian capital for investment and acquisitions abroad has been eased out, there has been heavy investment to ‘proactively’ secure energy supplies from abroad. Indian oil companies, especially, Oil & Natural Gas CorporationVidesh Ltd (OVL), are acquiring assets in oilfields in Russia, Latin America, the Middle East and ex-Soviet Central Asian republics. India is particularly using its erstwhile non-aligned image to gain access to the African oil and gas fields – Chad, Niger, Ghana, and Congo in particular. In Sudan, it has already made its largest investment acquiring the assets from a Canadian company, which left Sudan after human rights organizations charged it of committing genocide in Darfur region. On this front, once again, China is India’s main competitor and collaborator, as both have been trying to ‘secure their energy supplies’ in the context of bigger players.

One may point out that these are still public sector endeavors. However, on the contrary, there have been increasing efforts to open up India’s energy market for private investment, and domestically it is already in place now with Reliance Industries Ltd (RIL) and other private corporates expanding themselves in petroleum and power sectors. Further, at the present fluid state of India’s capitalist expansion, the public sector leadership provides a systematic character to the expanding tentacles of Indian capitalism. Because of the specific character of property relations and rent system involved in it, the oil sector is totally different from other industries and requires state-to-state relation for any negotiation to succeed. In the present state of uncertainty in the energy sector internationally, even if India further liberalizes this sector, its international expansion will remain largely a government affair. Further, especially after 1991, state companies in India have been increasingly corporatized, independently competing for the access to finance and capital markets, and strategizing on their own expansion. The corporatist character of the state-owned enterprise brings together several individuals, having interests and aims distinct from the State, who make contributions during the course of development of the enterprise in the capacity of managers and investors. The State is only the initial investor of the enterprise, while its subsequent expansion is dependent on factors internal to it and its presence in the market. Eventually the state’s ‘share’ is effectively reduced, and the enterprise acquires an independent character similar to the private sector. This leads to crises–on the one hand, the state and the managers are frequently in conflict, and on the other, the state control is de-legitimized.

In fact, the crisis is already evident in India. The Indian government and the managers of its Public Sector Undertakings (PSU) are increasingly at loggerheads over risk assessment etc. For example, OVL’s commitment to corporatism and market is coming increasingly in conflict with its political directors. Recently, OVL had successfully bid a 45 percent stake in a Nigerian oil and gas field. It was the only case where it could beat the Chinese. But in the end it had to face, as some OVL officials put, “a huge embarrassment” and “a loss of credibility” because the government turned down its proposal at the very last moment on the ground of it being “risky”. This must be understood in the context of the political debate over divestment in the profit making PSUs. It remains a very contentious issue. Moreover, the left support to the present Indian government has moderated the Indian state’s intensive neo-liberalism, scuttling its recent vigor. Therefore, it needs to put stop to the statist expansion in the energy sector by other means, by playing the political game of calling the investments risky, and motivating the private corporate sector to come up. Besides this, a private-public partnership in the energy sector is already in place, domestically with private oil companies like RIL, while internationally with “diasporic” capital like Mittals.

Recently, some analysts have argued that India’s expansionary involvement with oil-producing countries for securing energy supplies itself is risky as these countries are in conflict with the United States over human rights or non-proliferation issues. And the latter will tolerate India’s alliances only to the extent they are trade-focused. A “diasporic” apologist of the Indian submission to the “American Imperium”, Economist Deepak Lal (Business Standard, November 15 2005) argued that this risk “could involve not merely putting the “Gurkhas” on the oil field, but in essentially taking over the country”. Quite unabashedly, he argues, “If these foreign investments are to be made on a commercial basis by an Indian oil company, it would be best to privatize the state-owned companies and let them then decide whether such investments are in their commercial interest.” However, he concedes, “The Indian government could justifiably use its diplomatic clout to help [a private investment project] fructify”. Does not this diplomacy include an employment of “gunboats and Gurkhas”?

Besides energy, another sector where the “public” is supposed to be in command in India is the banking sector. Indian banks too have been buying assets in Africa and Asia. Significantly, this expansion is a typical case of what was classically conceptualized as “finance capital”–a merger of banking and industrial interests. These state-run banks have been providing financial resources to overseas Indian projects, both private and public. More importantly, they are involved in giving loans, credit lines and other financial helps to fragile economies for infrastructure building and other industrial projects on the condition that they will employ Indian firms. In other words, the banking sector expansion has been an important vehicle in exporting Indian capitalist interests overseas, and also reclaiming the Indian “diasporic” interests, as they are increasingly using these financial institutions to their advantage. The “public” nature of this expansion gives it a ‘systematicity’, which otherwise would have been lost in the global market. Further, it creates a direct linkage between the Indian state and capital.

However, “most outward FDI goes to the manufacturing sector, especially, pharmaceuticals”, and non-financial services that account for as much as 36% (UNCTAD, “India’s outward FDI: a giant awakening?”), and here it is the private sector that reigns. Definitely, whether “public” or “private”, they involve imminent “risks”. However, these risks can be India’s asset too. On the one hand, the unstable polities in countries hosting these investments legitimize India’s political intervention to secure its economic assets and interests. In the post-9/11 political parlance, this is what is termed as overseas “security interest” of a powerful country. The recognition of this ‘interest’, the ability to legitimize it by manipulating ‘global opinion’ and forming favorable international alliances constitute the criteria for becoming a power.

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

Answering some objections

There are two points that can be raised regarding the “export of capital” from India–that it is quantitatively insignificant, and that the biggest host of the Indian export is the United States and other First World countries.

Regarding the first point, the export is not so insignificant, as the ratio of outward to inward Foreign Direct Investment (OFDI/IFDI) is significantly high and increasing, amounting to around 20% in 2005, while in 1997 it was less than 6%. However, even if we concede this point what matters more is the ability and will of a State to defend the rising interests from this insignificant amount–how does this OFDI shape up the character of Indian capital and state, irrespective of its amount? How much it has affected India’s relationship with the Nepalese, Sri Lankan and other neighbouring economies and polities? How much it has defined India’s intrusion in the African economies (like Sudan, Libya, Nigeria)? How much it has helped in evolving India’s aggressive oil interest, especially since OVL has invested in many African and ex-Soviet Central Asian republics’, Vietnamese, even Cuban oilfields? How much it has defined the active Indian interest in the oil price war, in lowering the “differential oil rent” accrued by the oil economies, and hence how much it has shaped the Indian hobnobbing in the Middle Eastern politics, its vote on the IAEA resolution on Iran?

As far as India’s investment in the US, which hosts the largest chunk, is concerned, it makes the Indian economy (like many other economies) dependent on the ups and downs in the American market. Since Indian capital is just one of the many players here, the Indian state’s task as the protector of its capitalist class (Non resident Indian (NRI) or non-NRI) is to provide it an edge in the competition. This makes the Indian state, furthermore, subservient to global coalitions. On the whole, the OFDI brings Indian capital and state in the consortium of global imperialism, which is presently under the police administration of the US (this status of the US is defined economically, politically and historically.

The India-China relationship – What we need to know

Pratyush Chandra

Every ‘bold’ and ‘independent’ step by a ‘third world’ government is seen as congenitally progressive and even anti-imperialist. Any ‘third world’ alliance is welcomed on the ground that it will develop multi-polarity in the ‘unipolarising’ world. Today, in India at least the middle class “progressives” have the tendency to visualise every dinner party between Delhi, Peking and Moscow to be progressive and a step against imperialism. While trivialising the very notion of imperialism as a world system, this nostalgia for an “anti-imperialist” statist cooperation has made our “progressives” remarkably moody – the Indian state’s apparently contradictory, adulterous relationship with the US hegemony seems to negate the promise revived by Manmohan’s courting of Putin or the Chinese leadership. The simultaneity and intensity of all these relations put our “progressives” totally out of mind, making them giddy.

They must be really sick, if they come to feel the potentiality of anti-imperialism in business ties, as recently in the partnership between ONGC Videsh Ltd (OVL) and the China National Petroleum Corporation (CNPC) for jointly bidding for promising projects. This particular partnership is definitely significant not only for the energy supplies to India and China, but also perhaps for global energy politics. But to consider it as challenging the global hegemonies is undoubtedly a maddening extrapolation.

It is true that India and China both are major players in the world market, and the global polity cannot be understood by ignoring their activities. But it must be admitted that their position is largely, if not solely, dependent on the cheap labour-force and its vast reserve army (regimented by the informalisation of labour markets along with the statist integration of ‘labour aristocracy’). Their underdevelopment has been a boon in this global rise of these economies. It has carried the segmentation of labour market to an unprecedented level, along with a multiple diversification of the demand structure. These are the gifts of the “differential of contemporaneousness”, as Sidney Pollard would call it. (1) Do we want to term this rise as “progressive”?

Further, the Indo-Chinese “collaboration to compete” is already in place in various international and regional trade, business and political forums, both struggling against the protectionist west and claiming low labour and environment standards as their comparative advantages. Even though global capital on the whole – western and indigenous capital and multi-nationals – is effectively using these advantages for its expansion, its identitarian heterogeneous configuration forces a competition that requires cornering of each other through shifting coalitions.

With regard to the Sino-India cooperation, three points are very important. Firstly, its political manifestation need not exactly pattern with the economic. In fact, all international alliances and cooperation in the phase of neoliberalism tendentially seek to ‘depoliticise’ the economic management. Are we not used to frequent statements from businessmen and politicians that call for not mixing ‘national’, ‘pragmatic’ economic interests with politics? However, “depoliticization is highly political” – it puts the economic management beyond the effects of political uncertainties that mar political systems today, especially democracy. In effect, this means putting economic instruments beyond the possibility of democratic control, beyond any reciprocal effects of the social fallouts of capitalist competition and collaboration. (2) There is a high probability that we will see political and border conflicts between India and China intensifying with the increasing economic cooperation. In fact, the reformist China has been very efficient in depoliticising its international relations and also its labour market, by carving a near-ideal panopticon (Bentham’s “confinement house”) out of the Chinese society, as “mechanism of discipline, secure management of a multitude and extraction of labour”. (3). Only a rampant depoliticization of all economic relations – i.e., by forcing labour to surrender – China could achieve its “global rise”. The said Indo-China cooperation is developing in this context.

Secondly, any global intervention on the basis of this cooperation will be more of a competitive-collaborative character designed to redistribute the booties gained in the areas where they compete, or more exactly for the “division of the rest of the world”, left by the “great powers”. They collaborate to compete, and their collaboration in the energy sector, where cartelisation is an inherent tendency, is exactly of this nature.

If we see counter-hegemony in India-China partnership, can we call the formation of OPEC as progressive, or anti-imperialist? OPEC was constituted by five oil-producing countries in 1960 to stabilise their own income against the earlier system of royalty arbitrarily fixed by the oil concessions. “The royalty rates …were exclusively geared to the extent of political domination of international oil companies and their governments with respect to this particular oil region.” (4) OPEC was formed as a collective body of rentiers to negotiate with Occidental companies, linking the oil rent system to oil price. However, at the time some did call it anti-imperialist, but considering its relationship with the non-OPEC ‘third world’ it hardly seems so. The collaboration of the OPEC countries individually and collectively with the global hegemony has been quite pronounced except over division of oil income, which is more like a conflict between landlords and capitalists, or an intra-capitalist class conflict, as there are local oil companies too. Further, there is hardly any political unanimity within OPEC except on oil dealings.

Similarly, the Sino-Indian collaboration internationally will be geared towards regions and sectors where they are unable to compete individually, and this collaboration does not require any mutual ‘political’ understanding, except a level of trust required for any business relationship. And, of course, a ‘political’ collaboration is required to the extent that it facilitates their collaborative business to fructify.

It is here that the last and most important aspect or implication of the ‘outward-oriented’ Sino-Indian relationship resides. The fruitfulness of this relationship as a rule will be determined by and will lead to an intensified intervention in the regions of this collaborative landing. It is nothing but chimera to imagine a peaceful Asia under the unlikely leadership of China and India. Particularly in the energy sector, the conflict between the ‘Indo-China nexus’ and OPEC will become more direct and intensive, which will be similar to the conflict between the West and OPEC, that of between ‘oil rentiers’ and oil companies. Nothing can prevent India and China, not even the ideology of “Asian Continentalism”, from collaborating with the West on the basis of this commonality of business interests, which does not take much time in getting politically translated into either active collaborationism or neutrality, or even armed conflicts (when intra-class conflicts intensify).

In some regions, the interventionist collaboration between India and China is already politically visible. In Sudan and other African oilfields, Chinese and Indian businesses have been remarkably coordinating with highly conflicting local hegemonies to stabilise their own interests, tempering and tampering the global aid and ‘humanitarian’ regime for these ravaged economies to their advantage. Further, these interventions are not totally devoid of militaristic component, as India (and China, too) has been involved in training local military personnel and supplying arms. In sharply fragmented and divided societies such interventions cannot have any other purpose but “neo-colonial”.

In South Asia, where India knows that any slackening on its part in any field can give the Chinese a tremendous advantage, and China is aware of the near impossibility of shaking off the Indian hegemonic influence on the region, the collaboration between them acquires a different level of intensity. Both require stabilising local polities and curbing any ‘nationalist’ hostilities for safe intrusion and spreading. More important in the region is to facilitate market integration and capital flow, for which infrastructure too should be provided for. China and India are aware of the futility of trying to negate each other in the region. Any attempt to shutting off each other is bound to fail and result into greater instability, as both have groomed their political agencies in all the regional societies for many years now.

Moreover, the nature of capitalist regulation from the firm level to the industry level, further up to the economy and to the global level has changed. It has transformed the character of “the division of the world between capitalist associations and great powers”. The corporate structure has intensified competition within a firm among diverse stakeholders and shareholders for greater share in profit. The same struggle is every moment transformed into greater collaboration that constitutes the firm. Similarly the “division of the world” is increasingly fluidised. Particular (national) capitals compete for attracting more and more profit, but they need to collaborate to compete with others or even to go on competing among themselves. The presence of India and China in South Asia and elsewhere too has acquired this dimension. They compete with one another, collaborate to compete with others, and collaborate with others to compete with one another. We cannot take one of these moments to be all defining as most analysts do when they analyse the rise of these two “Asian Powers”. Their analysis on the basis of one set of events is always negated by another, and they find India’s alliances with competitive powers contradictory.

Notes:

(1) Sidney Pollard (1992), Peaceful Conquest: The Industrialization of Europe, 1760-1970, Oxford University Press, Oxford.

(2) Peter Burnham (2000), “Globalization, Depoliticization and ‘Modern’ Economic Management”, in Werner Bonefeld & Kosmos Psychopedis (ed.), The Politics of Change: Globalization, Ideology and Critique, Palgrave, New York.

(3) Massimo de Angelis (2002), “Hayek, Bentham and the Global Work Machine”, in Ana C Dinerstein & Michael Neary (ed.), The Labour Debate: An Investigation into the Theory and Reality of Capitalist Work, Ashgate, Hampshire.

(4) Cyrus Bina (1985), The Economics of the Oil Crisis: Theories of Oil Crisis, Oil Rent and Internationalization of Capital in the Oil Industry, Merlin Press, London.

India’s “Persian Puzzle” – A Possible Solution

Pratyush Chandra

[The recent Indian vote on the IAEA resolution is being generally interpreted as a sign of the Indian state’s subservience to the US. However, the reality belies this simplistic analysis. At the risk of being labelled economic determinist, this article brings out some facts that indicate towards the growing expansionist interest of the Indian capital. It is this expansionism that drives the Indian state to defy its ‘non-alignment’ past and design its own game-plan, which at least for now coheres with the US global strategies.]

India has finally voted in favor of the International Atomic Energy Agency (IAEA) resolution on Iran. Everybody was speculating that at last an issue has come up that will break the pace and uniformity of the growing Indo-US relations. But India has made its choice clear in the world market of strategies and alignments. There are various lines of explanation that dominate the discussion on the rationale of India’s choice on the issue. The most prevalent one is of course based on the belief that the “third world” states are congenitally incapable of taking such decisions except under the pressure from the West. This view generally presumes these states to be ‘soft’ and their ‘national’ hegemonic interests to be weak, which can easily be swayed by the external pressures. Further, any gesture of confrontation between these states and the Western states especially the US is generally taken as potentially anti-imperialist. However, this view cannot explain the Indian case as it does not capture the basic political economic processes that are increasingly integrating the Indian hegemonic interests within the global strategic alignments and realignments.

The Official Justification

Even before voting for the resolution, the Indian government had been categorically stressing that there was “no difference in objectives between India and the United States vis-à-vis Iran even if the two sides differ on tactics”.(1) Further, even when India stressed on “diplomatic consultations to evolve an international consensus on how to deal with Teheran’s decision to continue its uranium enrichment programme”, it never wanted “another nuclear weapon state in its neighbourhood”.(2) Under these circumstances India’s vote must not be taken as a surprise.

The Indian foreign ministry is not wrong when it says that India’s vote on the resolution was actually in line with whatever had already been happening. This continuity is what constitutes the “evolutionary” foreign policy of India, as envisaged by its present Foreign Minister. The Indian leadership has consistently expressed all its international dealings in terms of “national interests”, “security interests”, etc. Once again, with regard to its vote on the IAEA resolution, the justification given by the Indian state is based on an ideological depoliticization of the so-called “national interests”. In the words of the Indian Foreign Secretary Shyam Saran:

“I do not think that you should interpret India’s position as being aligned on the Left or on the Right or aligned with this group of countries or that group of countries. I think India has all along taken decisions on issues of concern to itself on the basis of its own assessment, and on the basis of its own national interest. So, the question of this representing a shift in India’s policy does not arise.” (3)

However, it all depends on the way you define the “national interest” which under neoliberalism (the professed ideology of the Indian state at least since 1991) means nothing but what provides leverage to the Indian businessmen and their businesses.

The Context

While analyzing India’s strategic maneuverings internationally, the analysts very rarely note their economic dimensions. It is scarcely admitted that India’s relationship with other developing countries after 1991 has been increasingly based on the export of capital and the Indian investment abroad. And in most of the cases, such economic relationship has been simultaneously equipped with militaristic aid to those states. India has been offering credit lines to many Afro-Asian countries that they can utilize for infrastructure building and other business purposes with a condition that they will employ Indian companies. India’s ‘non-aligned’ past has allowed it to have a major share in the capitalist subordination of the backward economies in Africa and Asia. In fact, the rhetoric of non-alignment (“South-South cooperation”) plays an efficient ideological role in rationalizing the expansionist drive of the Indian capital. Recently after India refused the foreign aid for its own Tsunami victims, the Indian External Affairs Minister, Natwar Singh, while offering Indonesians “concessional credit for reconstructing roads, buildings, harbours, ten units of fully equipped hospitals”, rattled proudly that “they were lumping us with the others but now we are seen separate offering our help and assistance”. (4)

Definitely, since 1991 India has been consistently endeavoring to be recognized as a faithful ally of the US. Its nuclear graduation and global politico-economic interests have shown the US leadership that it is a force to be reckoned with, and its subordination provides one of the most reliable allies to oversee the Indian Ocean and meet up with China. In recent years the growing energy needs of the Indian capital has forced the Indian State to invest in the oilfields abroad – India has operating assets in Sudan, Vietnam, Iraq, Iran, Myanmar, Libya, Syria, Sakhalin Islands, etc. It has been acquiring competitive amounts of shares in foreign oil companies. All these make India a player in the global oil politics too both as an investor and a consumer.

The Indo-US relationship is thriving in this context, and has a clear-cut ‘material’ semantics. India requires not having a confrontation with the “global police” state when its capital is struggling to stabilize its share in the global pool of surplus value, of which a major portion comes from the American market and the Indian investment in the US. Further, by providing dual citizenship to the Non-Resident Indians (NRIs) recently, the Indian state has further increased its own responsibility of protecting NRI capital in exchange of ‘rent’ and the assurance of repatriation of profit.

In this scenario, apparently one may interpret the Indian vote on the IAEA resolution as an appeasement of the US-led ‘coalition’. But here too there is a vital interest of the Indian capital that is playing an important role. The recent pipline diplomacy between Iran, India and Pakistan is quite well known. It is impossible to interpret the Indian vote, which is unequivocally affirmative (not even abstention!) on a resolution that is meant to isolate Iran, without connecting it to the facts of the Indian ‘oil politics’ in general and its pipeline diplomacy with Iran in particular.

The Nature of India’s Oil Interests and the Global Coalition

Recently, while rationalizing the Indian nuclearization, the Indian Defense Minister noted:

“India is a heavily energy deficient country. Of all the variables that could hinder India’s economic progress, energy scarcity and dependence are probably the most serious. Seventy percent of our crude oil is imported. Per capita energy consumption presently is only 1/5th of the world average. Considering a high growth rate of around 8 percent of GDP per year in the coming years, growth of oil demand is projected to be 6 percent per annum. If so, dependence on oil imports could rise from 70 percent to 80 (percent), to 85 percent over the next two decades. It is therefore imperative for us to look for cost-effective and long-term alternatives to meet our energy requirements. Indian oil companies are currently actively involved in a search for energy in the form of oil and gas fields, pipelines, LNG, and other new and non-conventional sources. But most hydrocarbon resources underline our dependence on limited reserves and others for this critical requirement. They also carry scope for avoidable strategic energy rivalries.” (5)

The clue to India’s alignment with the US hegemony in the Middle East lies here. Its energy deficiency, yet the desire and ability to proactively make up for it, makes the Indian rulers a player in the Middle East conflicts. Major, yet low productive oil producing industrialized countries, including the United States (6) and oil deficient industrialized economies can influence the global oil price only by appeasing or isolating OPEC countries. Since a major determinant of the oil price today is the differential oil rent appropriated by the highly productive oil economies like those of the Middle East, “cost effective” energy appropriation requires reducing this rent. The bully tactics (“either with us or against us”) of the US and other Western powers in the Middle East has been mainly geared towards this purpose.

The increasing Indian investment in the oilfields abroad was definitely triggered by the need to satisfy the domestic energy requirements, but ultimately as it happens with all capitalist ventures, these investments eventually develop their own logic of earning profit. With increasing divestment in the state owned oil companies of India and intrusion of private capital, this becomes furthermore true. Hence, the need to minimize the differential oil rent, which the oil companies have to pay to the oil producing countries, becomes an important aspect of India’s international political intervention, too. So this unity of ‘economic’ interest serves as the background for the increasing Indian intervention in the Gulf politics and that too in consonance with the US hegemony and other non-OPEC powers. India’s readiness to refuel the American warships during the First Gulf War and later during the Afghan War all point out that there exists an Indian consciousness of possible material gains from its subservience to the US led coalition. However, because of a formidable domestic anti-imperialist opposition, until now the capitalist preference in India could not come out as openly as it has in the vote on the IAEA resolution.

It is worthwhile to note that that a major hitch in the Indo-Iranian negotiations on the proposed pipeline was also related to pricing. “India has taken the position that any price above the US$3 per million British thermal units (BTUs) currently being paid by its power and fertilizer sectors for gas on the international market is unacceptable. Iran, in contrast, appears to be seeking more than US$4 per million BTUs, a rate that will only go higher if Pakistani transit fees are added.” (7) This might have been one of the major reasons in persuading the Indian state to go with the scheme of the West, since the isolation of the Iranian regime and its consequent desperation to earn revenues in the midst of enveloping sanctions can make the Iranians more compliant to the Indian demands and increase the weight on the side of the Indians in the negotiations for the pipeline.

References

(1) The Times of India, September 16, 2005
(2) The Hindu, September 21, 2005
(3) “Press Briefing by the Foreign Secretary on the events in UN and IAEA”, September 26, 2005
(4) Indian Express, January 8, 2005
(5) Defense Minister Pranab Mukherjee’s Talk on “India’s Strategic Perspective”, Carnegie Endowment for International Peace, Washington DC, June 27, 2005
(6) Cyrus Bina, “The Economics of the Oil Crisis: Theories of Oil Crisis, Oil Rent & Internationalization of Capital in the Oil Industry”, Merlin Press, London, 1985.
(7) A.J. Tellis, “India As a New Global Power: An Action Agenda for the United States”, Carnegie Endowment for International Peace, Washington DC, 2005

State, Economy & Class Struggle in Nepal

Pratyush Chandra

ML INTERNATIONAL NEWSLETTER (JULY-AUGUST, 2005)

1. Monarchy & Democracy in Nepal – Myth & Reality

The foremost reason that is cited in support of monarchy in Nepal is to ensure politico-economic stability. Inherent in this thesis is a criticism of the Nepali society that democracy by itself cannot sustain stability there. Parliamentary democracy that enlivens various local interest groups has to be tempered and controlled by an overseeing authority that can police them. Both the monarchists and ‘legal’ democrats in the country uphold this bias against the Nepali ‘demos’. The latter perhaps will counter this assessment by saying that they support constitutional monarchy, as in Britain, where monarchy is simply allegoric. But, this is not what was established in Nepal with their agreement in the 1990s – the arrangement to which they agreed keeps monarchy as the final authority. Given the internal class dynamics in Nepal and international scenario, is their any reason to hope for a successful reformist road to Nepali democracy, even in the pattern of constitutional monarchies in some European countries?

The comparison of Britain and Nepal is not only hilarious but mischievous too. A sense of being equal to the royal whites placates many hearts in Nepal. After all, many times in the 19th and 20th Centuries the Nepali royalty struggled to be treated equally. In the world of big powers, where Nepal is evidently powerless and on the receiving end, it gives some Nepalis an easy sense of national pride, history and identity. Understandably, it gives them a heart in this heartless world of competition and race. A handful of Nepali middle class immigrants and children of Nepali high and low nobility in Europe and the US may get a source of emotional and even material sustenance through the exotic image of a Hindu Nepal.

Britain in the 16th-19th centuries as the pioneer of world capitalism was going through tremendous internal transformations as a result of fierce struggle for hegemony between the rentier interests and profiteers – between landlords, merchants and industrialists. It was this struggle that determined the fate of monarchy in Britain. The situation in Nepal is obviously nowhere near Britain. Definitely like in Britain, in Nepal too the rentier interests are the most consistent support bases for monarchy. But the comparison has to stop here. These rentier interests are not complemented and countered by the forces rising from trade and industry within the country as in Britain. The formidable presence of foreign economic interests in the case of Nepal destroys any scope of such internal ‘class’ struggles among the exploiting classes for hegemony. These foreign forces find Nepali rentiers, at least till now, better equipped to regulate the superstructure to sustain their interests on the Nepali soil.

The class base sustaining monarchy in Nepal is that of the financial ‘capital’/moneylenders/landlords, ‘corporate’ interests in many joint ventures with Indian and other foreign capitalists, the mercantile establishments and the upper crust of civil servants and armed forces. The mass base for monarchy is constituted by sections of rich and middle peasantry, petty bourgeoisie and urban intellectuals who waver according to the strength of the working class struggles and their own class-conscious elements. Most of the ‘legal democratic’ forces at grassroots’ level represent this mass base. However, the post-1990s political economic development has developed a ‘democratic’ elite who has consistently interacted with the new institutions and has formidable interest in sustaining them. It is this section that today constitutes the leadership of all the mainstream ‘democratic’ forces in the country. The post-February development this year characteristically attests this fact. Even when the younger generation of democrats occasionally displayed republican sentiment, the leadership almost consistently refrained from attacking the institution of monarchy in their criticism of the monarch. In fact, many of them called for the preservation of the ‘heritage’ of monarchy.

2. Nepali Economy – Problems & Prospects

In order to understand the Nepali situation we must look at its economic contours. In 2003, Nepal’s population was around 24.7 millions, of which around 86% resided in the rural areas, suggesting their dependence on agriculture. The per capita income (PCA) is US $240, which is far below the average PCA in low-income countries ($430) and in South Asia ($460). The share of agriculture in the total Gross Domestic Product has come down from 60.3% in 1983 to 40.6% in 2003. On the other hand, the services sector has increased its share from 26.9% in 1983 to 37.8% in 2003, while the industrial sector too has increased its share in GDP from 12.8% to 21.6%. Even though the increasing share of services and industrial sectors in GDP in comparison to the agriculture sector is a universal trend, it is a peculiar South Asian phenomenon that this is not accompanied with a proportionate shift of the working force from the agriculture sector to the other two sectors. As mentioned above, 86% of the population is directly dependent on agriculture and allied activities, while 80.2% of the labour force is employed in this sector. The services absorb 17% of the labour force, while the industrial sector employs just 2.8%. This situation is aggravated by a tremendous sluggishness in average annual growth (AAG) in the overall productive sectors (agriculture and industrial) and stagnation in services sector. The AAG in agriculture decreased from 3.4 in 1983-93 to 3.3 in 1993-2003 (2.2/2.5 in 2002/03) and in the industrial sector for the same periods it decreased from 9.2 to 4.9 (-2.8/2.3 in 2002/03). In the manufacturing sector, specifically, the AAG declined from 10.1 in 1983-93 to 4.3 in 1993-2003, while it was –10.0 in 2002. On the other hand, in the services sector it remained constant during both decades at 4.9 (-1.7/3.2 in 2002/03).

These facts have several grave implications for the Nepali society. We can enumerate some of them here. Firstly, there is a tremendous rural/urban divide, which provides the topological glimpse of poverty in Nepal – an immense sea of rural poor encircling a few islands of urban affluence. Officially, people living below poverty line amount to 42%. The lowest 20% of population gets 11.5 % of national income whereas the highest 20% gets 44.8%. Taking into consideration the extent of rural inequality and the persistence of semi-feudal forms of exploitation in an increasingly monetised rural setting one can only imagine the state of the poor peasantry, the semi-proletarians and the landless. In 1994, 43.1% of rural household were marginal farmers (less than 0.5 hectares) occupying just 11.3% of the total land, 45.9% were small farmers (0.5-2.0 hectares) owning 46.8% of the total land, and 11% were large farmers (more than 2.0 hectares) owning 41.9% of the total land. Even the World Bank admits that the poverty cannot be reduced in Nepal since “growth has been concentrated primarily in the urban areas and particularly in Kathmandu valley, largely excluding 86 percent of the population who live in rural areas, where per capita agricultural production has grown minimally and the overall level of economic activity has been sluggish”.

Secondly, the disproportion between the share of industrial sector in the GDP and the amount of employment generated there demonstrates that whatever growth we find in this sector is in capital-intensive industries controlled by foreign capital collaborating with a handful of Nepali mercantilist corporates. (A major section of this Nepali big capital is in fact from the Indian business community of Marwaris who migrated a hundred years ago. Since Marwaris are largely endogamous, they have strong familial ties with their Indian counterparts.) In the post-liberalisation phase in the Indian subcontinent, where the Indian big capital overwhelmingly dominates, the employment-generation potentiality of the profit-driven industrial growth is very limited. Whatever employment is generated in the peripheral small scale industries fall in the informal sector, with rampant casualisation, no job security and very low wage. The extent of informalisation in the overall Nepali economy can be gathered from the fact that, even if the “market agricultural workforce” employed in commercialised farming activities is excluded, the informal sector employment, officially, comes to 90.7% of the total labour force. Further, in Nepal unemployment is at 4.89%, which by the head count methodology goes up to 15%, and underemployment is 45% of the total man-days.

Thirdly, the stress on the services sector, especially on tourism, has led to critical consequences. On the one hand, it too has been unable to absorb workforce proportional to its share in GDP, and the labour market in this sector is rampantly informal. Further, the Shangri-la image of Nepal that is sold in this sector, especially in tourism, has degenerating fallouts with a tremendous increase in drug abusage and prostitution. There are people in command who seek to sustain Nepal’s image as South Asia’s Las Vegas or even Bangkok.

Fourthly, the impoverishment in rural and urban areas has resulted in sluggishness in domestic demand for industrial goods, which has further eroded the possibility of an increased industrial growth in Nepal. This fact coupled with the backlash of liberalisation (export-oriented production) has made the industries in Nepal increasingly dependent on external markets – depleting internal resources to feed external demand. This further perpetuates the need for capital-intensity and an import of technologies to compete globally. The World Bank, in 2002, itself provided the glimpse of Nepali dependence while prognosticating slower growth in non-agricultural sectors and a contraction in manufacturing. It speculated that this sluggishness would be due to “(i) drop in domestic demand due to falling agriculture growth that especially affects small industries and services; (ii) decline in export demand as growth in both OECD countries and India has decelerated; (iii) cancellation of export orders caused by trade disruptions and higher insurance costs after the events of September 11th; and (iv) rising costs and uncertainty due to power disruptions, bandhs (general strikes) and direct terrorist attacks by Maoists and other groups on carpet and garment factories and on the liquor business” (these industries are most exploitative, and are heavily dependent on casualised workforce). Hence, there is not much in store for the Nepali industrial sector due to service sector-based (rent-oriented) development strategy and turbulent external market. Moreover, the Indian Multinationals in Nepal have added another dimension to the Nepali economy, they prefer employing Indian labour instead of Nepalis to avoid any investment in human resource development and, of course, class-conscious native proletarians.

3. Finance, Foreign Aid & Politics in Nepal

Interestingly, the fastest growing sub-sectors among services are financial/real estate and community/social services. Moreover, these are the areas that concern the rentier interests (in and out of the State apparatuses) the most. They have been trying everything to make these sub-sectors stable and rewarding. It is the financial sector that is the force behind the neoliberal revolution throughout the world, which motivates the commercialisation of economies and breaks every boundary even if it is meant to attain a degree of self-reliance to be able to compete in the market. While, on the one hand, it helps in the capitalist control over local resources by funding economic activities, on the other hand, it rewards the peripheral agencies who facilitate such acquisitions.

The financial sector in these efforts is complemented by foreign aid driven ‘social sector’, the other sub-sector that has never slackened in Nepal since the initial American efforts under the Truman Doctrine to buy off the Nepali rulers to counter the ‘second world’ influence in South Asia. A foremost radical political economist from Nepal, Nanda R. Shrestha rightly concludes in his “The Political Economy of Land, Landlessness and Migration in Nepal” (Delhi, 2001), “This is what so-called development or foreign aid had achieved: mesmerization of the restless Nepali intellectuals into submission to the reality of consumerism and family sustenance.” It has created a slavish middle class fully trained in protecting and serving the imperialist interests on the Nepali soil. It has created a vast population of “development victims”, too. While enticing the rural producers into commercial ventures without providing them training and peripheral infrastructure, and motivating them to a reckless utilisation of fertilisers, chemicals and genetically transformed seeds for immediate profits regardless of their ecological repercussions, they have made their survival dependent on the ups and downs of the market and on creditors, thus enforcing a form of archaic primitive accumulation and mercantilist exploitation. Once again quoting Shrestha from “In the Name of Development: A Reflection on Nepal” (University Press of America, 1997):

“Development funds have proved to be not only a fantastic boon for the elites, but also a powerful tool of control in their class (power) relations with the poor, an instrument that helps to keep the poor in check while issuing themselves fat checks…To wit, some of the development money has certainly trickled down to a few poor, mainly in the urban-commercial contexts. Consequently, one can find a few poor who have become rich, thus providing good anecdotes of development (capitalist) success. And development advocates are quick to hail such anecdotal rags-to-riches stories to stress their message that the development works. For instance, a poor butcher in Kathmandu has become the owner of a relatively large supermarket-like grocery store which is quite popular among Kathmandu’s elites and Westerners. But what they fail to announce openly is that, for the poor, development is a lottery game and that buried under every success story are scores of tragic stories of development victims. Simply put, poverty remains the stepchild of development, with foreign aid now acting as its sponsor.”

4. Political Changes in Nepal

We provided an overview of the Nepali economy above, and briefly touched upon the various processes in its formation. But underneath these processes one must recognise the semi-conscious designs of hegemonic forces to stabilise their hegemony – their struggle to sustain the roots that gave birth to them. Hence, the people who talk about stability and peace at this juncture must clarify whose stability and peace they want. If they say the forces that came to power in the 1990s must be stabilised to be able to deliver goods, then one must identify who came to power during that time. Did they do anything to curb the continuity and ‘stability’ of the above-mentioned economic processes, which have sustained the rule of the people thriving on foreign aid and squeezing the indigenous productive sectors? The liberal inflow of imperialist capital has been further smoothened. The overstress on attracting aid has become another government enterprise. A finance minister in 1993 while enumerating the Nepali Congress government’s successes added – “there has been a noteworthy increase in the volume of foreign assistance after the formation of the elected government”, even when most of this assistance were in the form of loans, increasing Nepal’s indebtedness. Further, data presented above clearly shows the deepening of dependency of the Nepali economy during 1990s after the ‘democratic takover’, rather than any move to counter it. The contribution of the 1990 ‘revolution’ was simply that it served to bring the neo-rich rural and urban gentry close to the state power, which was earlier monopolised by the royalty and armed forces directly representing the Nepali rentier-corporate class and negotiating with the global capital. In fact, the 1990 ‘revolution’ was a culmination of the Panchayat system and commercialisation of the economy undertaken during that time, which created numerous local facilitating agencies and elites. In their urge to find a sustainable political accommodation, they utilised the general unrest and eventually compromised its revolutionary potential by agreeing to the arrangement that kept the monarch at the helm. It was this intermediate ‘class’ representing neo-rich and petty bourgeois interests in the society that entered the parliament. So, effectively the Panchayat System was repainted as parliamentary democracy, leaving the institution of monarchy to play the same gimmicks of diminishing the vitality of the forces of change by accommodation and repression.

However, this 1990 incident can be called a revolution only in this respect that it was only after it that for the first time in the history of Nepal that the labouring classes – proletarians, landless and poor peasantry – could nationally and independently organise themselves, independent of the wavering petty-bourgeois leadership. The successes of Maoist revolutionaries, despite the news about their recent errors and ‘sectist’ infightings, show that the exploited masses of Nepal can be organised above localism and beyond reformist concessionary movements. What the spontaneous Sukumbasi (landless) movement of 1979 in Tarai lacked, and thus was suppressed brutally and quickly, the Maoists have provided – an organisation with a clear political vision.

When we talk of the working class’ struggle against exploitation in societies like Nepal, which is predominantly an agrarian society with a few enclaves of industrialisation, we need to avoid the schematic ‘pigeon hole’ framework of class analysis. In fact, class boundaries in sociological sense are always fuzzy and their solidification (in a sense, of ‘class solidarity’) depends on the level of class struggle. The level of class struggle in turn depends not only on local production relations, but also on the locus of these production relations in the overall national, regional and global political economy. An agrarian society in South Asia, where agriculture is heavily dependent on seasonal variations, where low technological development and population pressure characterise the whole economy, there is always an organic linkage between the proletarian and rural poor (poor peasants and the landless). This linkage if, on the one hand, depreciates the overall wage-levels and perpetuates casualisation of workforce, on the other hand, it allows a self-organisation of the labouring masses across the rural-urban divide. If on the one hand, villages act as depositories of cheap labour, to be pulled out and pushed forth, whenever capital needs it, on the other hand, these same villages act as the zones of political and economic solidarity among labouring masses. The experience of the Chinese Revolution, the glorious history of Latin American workers and peasant movements and the ongoing struggles in Nepal attest the presence of such potentiality in agrarian societies.

(Note: The data utilised here are taken from various World Bank reports on Nepal and from the studies published by a Nepalese trade union, GEFONT, available on its website, http://www.gefont.org)

For an analysis of the February “Coup”: The Royal Coup in Nepal