Akeel Bilgrami writes in the New Indian Express-
Nothing utopian about it: Rethinking poverty in India
India@79
Poverty has always been about low general purpose productivity- i.e. low 'transfer earnings' or 'opportunity cost'. True, a particular bunch of people may have high productivity specific to a particular field, but if their alternative occupation is low productivity then it is likely that general purpose productivity in the country is low. There is no need to rethink this because this is the truth.
Capitalism is dispossessing the peasantry from their land
No it isn't. Look what happened at Singur. Peasants are well organized and can give any Government the order of the boot if they feel they are being exploited or 'dispossessed'.
but not absorbing them in industrial labour in adequate numbers.
It is not absorbing urban youth in adequate numbers. Why? Because workers have substantial 'property rights in jobs'. Consider Public Sector undertakings which have not produced anything for decades but which still have to pay their workers. This is the reason that the organized sector is loath to expand its work-force. Instead it has recourse to labor contractors or temporary workers.
The State has responded with disaggregated welfare handouts.
It seeks to provide a welfare safety-net. This can increase mobility and female participation by reducing risk or volatility in earnings.
But there are other ways to ensure the fundamental rights of the poorest
No. Other methods have been tried. They failed.
To read the pervasive commentary in the economic sections of the world’s newspapers on what the globalising neoliberal turn in political economy has wrought in the last four decades or so in the Global South, one would think it has all been for the good—their economies have been uniformly growing, as has their middle class, and their poverty has been reduced.
That is true enough. India could have reformed land and labor laws, streamlined the judiciary, and thus had higher growth. Sadly, mass-mobilization against such reforms have vitiated such incentives though, at the State level, some Districts have industrialized and urbanized.
In the case of India, there is constant talk of it as poised to become a great economic power in the near future,
it would have done so if reforms of the sort Manmohan and other economists championed had been implemented. Sadly, 'andolanjivis' prevailed- in the opinion of Edwin Lim of the World Bank who, after helping the Chinese economy to get off the ground, was posted to India.
to say nothing of its prestige on the international canvas as a nuclear power.
like Pakistan or North Korea.
Yet, serious economic analysis
as opposed to the frivolous kind which get drunk at the office party and takes off all its clothes
has fundamentally challenged this as, in one crucial respect, downright false.
Which respect? It is simply a fact that India has a larger GNP than the UK and will overtake Germany by 2027.
Measurement of poverty in India,
is irrelevant.
by criteria that are sound rather than skewed, points to increased immiseration of the worst-off in numbers as large as ever, despite a swelling middle class.
Nonsense! The poor in India could not have become poorer without starving to death. For Malthusian reasons, there are more poor people. But, because rising Income correlates with smaller family size, that Malthusian check on per capita income no longer operates in some States or certain strata of Society even in poor States.
A puzzle arises then as to why, given this growing immiseration, there has been no explosion of social unrest.
The answer is that specific grievances are tackled by State and National governments in a manner which placates the masses. Examples are- conceding the demand for 'Lok Pal' ombudsmen or Modi withdrawing a Farm Law.
A familiar answer points to how populations are deflected from their suffering by the politics of identity,
Sadly, when the Muslims killed policemen in Delhi, they were deflected by Hindus responding in kind. Majorities prevail when it comes to a fight with a minority.
Hindutva politics in India being a conspicuous example. There is, no doubt, some truth in this. But deflections of that sort cannot for long prevent the intolerability of the suffering—especially if it is as extreme as studies have shown it to be—from prompting popular anger and agency. So, the puzzle remains.
Bilgrami is a Leftist. He is puzzled as to why a party he doesn't like holds power at the Centre. The answer is that India is a Hindu majority country. It prefers to be ruled by Hindus. Similarly, America- where Bilgrami lives- prefers White, Christian, cis-gender males, like Donald Trump or Charlie Kirk, to Leftwing, transgender, politicians of color.
In recent years, the influential work of economist Kalyan Sanyal
a student of Ron Jones who turned to the Left on his return. He died in 2012, some months after Mamta came to power thanks to the Singur agitation. Since then, the Left has been wiped out in West Bengal.
implies a different explanation. Its argument in summary form is this. Capitalism in recent decades in countries like India dispossesses the peasantry
like in Singur? The Left Front had done the 'dispossessing'. But the peasants fought back and thus Mamta gained power. Her goons beat the shit out of the Left Front goons. The peasants got back their land in Singur. But it had become useless so they are now worse off than if the Nano factory had gone ahead.
from their land but cannot absorb them in industrial labour,
But it can pay them enough to invest in urban property and small scale service industries.
as was done in Europe in earlier centuries (nor even in what Karl Marx called the ‘reserve army’).
He was a nutter. The Iron Law of Wages was simply false.
It thus creates a very large population that is outside of the corporate capitalist political economy, hence unable to morph into a unified class formation with the familiar potential for forging the agencies of resistance attributed to the ‘proletariat’ in an earlier phase of capitalism.
Perhaps the Left Front had some such idea. They thought the peasant would be happy to get good money for their land. Moreover, they could be employed in the new factory. It would be a 'win win'. Sadly, the peasants turned against the deal. Tata pulled out. An arbitration panel has ordered West Bengal to pay compensation to Tata. This is the reality of India. What Bilgrami is writing is dogmatic fantasy.
But, Sanyal argues, at least in democratic societies, the State cannot ignore their condition to the point that they simply will perish in large numbers.
Bangladesh did before Mujib imposed a one-party dictatorship. Sanyal was from Bengal. The '74 famine occurred while he was getting his PhD in Rochester.
In his 2007 book, 'Rethinking Capitalist Development', Kalyan Sanyal wrote-
This is a description which fits incarcerated populations or displaced people living in refugee camps on territory where they are denied the right to work. It does not fit those who can migrate to places where jobs are to be found.
Primitive accumulation of Capital means theft or forcible acquisition of valuable resources. In Singur, West Bengal, the allegation was that the ruling 'Left Front' administration had forcibly acquired land for the Tatas who wished to build a cheap 'Nano' car for the masses. Mamta Bannerjee, who had valiantly fought the Communists for decades, was able to mobilize public opinion and thus win elections from 2011 onward. She returned the land to the peasants and gave some compensation to affected people. Sadly, a Tribunal decided the State Government of Bengal owed a large sum of money to the Tatas. Whether it will be actually paid is a different matter. Cultivation has resumed in Singur though some of the land which was built upon is now a useless 'wasteland'.
The irony here is that Kalyan Sanyal, who had moved to the Left and given up on Ron Jones style international trade theory, published a book featuring 'primitive accumulation' just at a time when it was a Communist Chief Minister who was grabbing land from the peasantry. Capitalism had to run away when 'petit bourgeois' Mamta launched a campaign against the land acquisition pushed through by 'Comrade Buddha'- the Marxist Chief Minister.
Bilgrami is not an economist and thus may not understand the comic mis-timing of Sanyal's book.
Invoking ideas from philosopher Michel Foucault, Sanyal suggests that in our neoliberal times various ‘governmental technologies’ respond to the demands made in a very disaggregated form (there being no unified proletariat with the cement of internal solidarities)
there never has been any such thing. Foucault, in his colloquy with Deleuze admitted as much at the beginning of the Seventies. It is a fact that working class heads of the French Communist Party had no truck with the Maoist students. Also, they were spooked by 'coloured immigration'. That's why there is concern that La Pen's party might win the Presidency in 2027.
by different sections of this immiserated population—some seeking shelter as squatters, as it might be, others seeking loans till they are able to find some work, yet others seeking cash transfers or direct delivery of food to meet the most elemental needs.
This is unfair. The poor are willing to migrate and work in factories and work-shops. Can the low-wage States create an investment friendly environment such that people don't need to migrate to find work? In some Districts, sure. In others, maybe not.
These are, essentially, ameliorative accommodations that various state institutions—national or regional—make when the demands for them from one or another section of the population seem unignorable and, qua accommodations, they are not always subsumable under the framework of what the law permits. It may often be that the State’s motivations for these arrangements are to gain electoral favour from that particular demographic.
In a Democracy, the State's motivation is always to gain electoral favour. However, it is welcome to persuade the voters that its Defence or Foreign or Industrial policy is in the interests of the country as a whole.
Such claims for ‘governmentality’, thus, can be seen as directly addressing the puzzle I have raised. But it is important to find the right description of the model it posits,
Applied Economists are paid to weigh up the evidence and provide the description. Philosophers neither have the training nor the analytical ability to do the job.
and not to see it as claiming more than it does. If these ameliorations end up being too big a strain on capitalist accumulation, they may well be withheld by the State and the capitalist economies that States by and large serve in democratic societies. (Indeed, we might view Donald Trump’s deportations of immigrants today as seeking to reverse the previous governments’ accommodations of undocumented immigrants—a case of finessing the law, which the model recognises—claiming that they are a drain on capital accumulation, removing which would accrue more benefits for citizens ‘proper’.)
Trump is appealing to xenophobic elements worried about 'demographic replacement'. He is backed by his Party because they believe that immigrants tend to vote Democrat. No one thinks that the Indians or South Koreans who have been deported were criminals or a drag upon the economy.
The model is thus delicately poised, a sort of equilibrium fulfilling opposing demands—of capital and those that capital renders most abjectly immiserated.
Nonsense! Capital does not render anyone abject. Lack of it may explain extreme poverty. But so can taking drugs and knifing people.
What would be wrong are the descriptions often given of the model as representing a critique of neoliberal capitalism. A highly deprived population group can resist the worst effects of neoliberalism by demanding and getting such accommodations;
No. Look at Haiti. It has a very poor population. But, nobody cares what they demand.
but that resistance does not amount to a critique of neoliberalism. There can be no notion of a critique of x that does not propose some method that can at least constrain—and perhaps, if the constraints are recursively developed, go on to undermine—x. But Sanyal describes accommodations within a neoliberal political economy. Constraining or undermining is not so much as sought.
Okay, the guy was a cretin. No need to rub it in.
No doubt, this modesty in what is sought owes to the fact that capital in our time is able to constantly destabilise more ambitious efforts of States to constrain capital so as to provide the most basic necessities to their citizens. It is not in the nature of capitalism to tolerate such constraints for very long.
Capital, like Labour, can exit shitholes and go elsewhere. What it can't do is change the nature of the regime. However, lack of capital and entrepreneurship may cripple an economy which in turn may mean that there is regime change.
Yet, we might ask, is it so unredeemably utopian to aspire to a regime of fundamental economic rights—to food, housing, health, and extending to work and education—to tackle the immiseration?
Yes. It also utopian to aspire to a regime where nobody grows old and death has been abolished.
say fundamental rights—and mean it. I don’t mean policies devised by a cabinet and their routine ratification in legislatures. I mean rights inserted in the core of the Constitution that cannot be overturned by anything less than a re-formation of a constituent assembly. Rights in this fundamental sense possess a feature that speaks directly to the tendencies of capital to destabilise the constraints on it.
The Supreme Court can order the Government to supply everybody with lots of goodies. The Government refuses to do so because goodies are in short supply. The Supreme Court may note its sorrow at this outcome and move on. The plain fact is that rights are meaningless unless there is an incentive compatible remedy. Otherwise those rights are not enforceable.
They are commitments in a very special sense, they are Ulysses-like. Recall that Ulysses’s commitment to Penelope was such that he tied himself to the mast so that even when he was seduced by the sirens’ song, he was compelled to keep his faith.
Fuck off! The guy didn't want to die a horrible death. He lashed himself to the mast for the same reason we fasten our seat-belts.
If economic rights were commitments in that stable sense and, if in order to implement them, one has to put certain constraints on capital, then those constraints would, eo ipso, have a transitive stability.
No. Capital would fuck off to a place where those constraints do not exist. Otherwise it might get itself some countervailing power- e.g. utilizing funds from Public Sector Banks- so that, if it runs away, the loss falls on the Government.
I can almost hear the protest: “These are outdated ideas, the Indian economy cannot afford the expenditures required to meet such commitments.” But sober and careful estimates of the financial resources needed have suggested that it can be raised by imposing only two taxes on only the top 1 percent of the population: a 2 percent wealth tax, and an inheritance tax of one-third on whatever annual sums are involved in the transfers specified in wills.
This will hit the middle class, not the truly rich who have already offshored their assets. 'Pyramiding' using money from Nationalized Banks, the LIC, and even equity and debenture issues, means that the Capitalist is bullet proof. Raising taxes just means less tax revenue because the supply curve is elastic.
To call this a utopian proposal is, quite literally, to perceive a molehill as a mountain.
The Government is always looking around for ways to boost revenue. But they can't raise taxes on elastic factors of production because then the revenue falls.
Bilgrami should be saying 'there is proof that supply is inelastic'. If this truly were the case, Nirmala would have already implemented that policy.
What it needs is the political will to propose it and to construct an appropriate public discourse by which the electorate can be persuaded to adopt it.
The public would be happy to hear that taxes on the rich had gone up. But they will get angry when this leads to lower revenue, higher inflation, and rationing of entitlements.
There is nothing intrinsically heroic—neither Herculean, nor Promethean—about the tasks themselves. But in the current ideological climate, it does take common humanity to summon the will to pursue them and then to stay the course in their pursuit when the hegemon of globalised finance puts obstacles in their path. Is the INDIA bloc listening?
No. It had listened to the siren song of the Left and caused India to fall further further behind the 'Tiger economies'. Moreover, they need to increase revenue so as to fund welfare schemes- just like the BJP. This means you have to tax only inelastic factors. Soak the truly rich and they fuck off to Dubai or Singapore- unless they have already done so. What are you left with? Sick or 'weak' enterprises which the Government has to take over. But they will be loss making. The Government will have to fund their ever increasing losses. Nothing will be left over for Welfare payments.
Sanyal, being Bengali, took a pessimistic view of Indian labour. Indians, in his view, want Employment but not work because they are lazy. The 'Capitalist sector' must pay so some type of pretend work is generated for the large mass of unemployable shirkers. Sadly, this isn't the case. You can have some redistribution from the hard-working and enterprising to the lazy and stupid. But there can be sudden 'entitlement collapse'. People with a good work-ethic can survive provided they are mobile. The lazy and shiftless can't.
Incidentally, Sanyal says 'all developmental activity done by the postcolonial State in the name of planning is in fact primitive accumulation.'- i.e grabbing land from peasants, tribals, etc. Sadly, you can't extort money from those who have already run away. True, you could go after this big factory or that big Shopping Mall. But then you discover that the equity is in the hands of Nationalized Banks or LIC etc. You haven't robbed Peter, you have robbed yourself.
I suppose, since Sanyal was based in Calcutta, he took a dim view of 'the postcolonial State'. But West Bengal is not representative of India. Also Sikh economists- like Minhas, Montek or Manmohan- aren't utterly shit. Add in Gujjus, Tamils, Andhrapreneurs and so forth and we begin to understand why India has risen and will continue to rise.
Meanwhile it is Bilgrami's country of domicile which is turning into a Fascist shit-show.
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