Arindam Mandal
Duncan Foley, Adam’s Fallacy: A Guide to Economic Theology, The Belknap Press of Harvard University Press, Cambridge, Massachusetts, 2006. Hardcover, 265+xviii pp. Amazon /HUP
In the era of staunch support for neoclassical economic strategies or neoliberalism, it is heartening to see the publication of a book like Adam’s Fallacy. A ‘postmodern’ characteristic of this era is its announcements regarding many end-s – the end of history, the end of ideology, etc. Anything that cannot feed into the mainstream euphoria of global marketization is discounted altogether. This does not mean relative identities in the universal market are disallowed; rather they are celebrated as itemized competitive exotics. Everything exists for and in hucksterage. But, histories behind those commodities are no more. So what goes in the making of the items on sale does not count. Anything that exposes the universality/particularity of capitalist expropriation and exploitation behind relative commodities or commodified relativities, even if they differ only in labels and packaging, is forced out of fashion. That is why discussions on economic thought per se or its history do not constitute a concentration of the most saleable academic discipline of economics. These discussions would have exposed all pretensions of the newness of market fundamentalist ideas. Adam’s Fallacy attempts to do exactly that, by exposing the essential “fallacy” that underlies the theory and practice of economics throughout its history.
Economic thought remained an interesting area of study till the third quarter of the twentieth century. Especially after the fall of Communism in Soviet Russia, the study of economic philosophy almost has become a foster child of mainstream economics, as the fall seemed to dawn an end to ideological clashes that gripped the world throughout the twentieth century. Duncan Foley’s effort to bring the subject back to the forefront is formidable. He seeks to revive an interest in economic thought that motivates economic management and policies. The book also ascertains that this revival is possible only as a critique of economics and political economy – i.e., of economic theology.
As the title suggests, Adam Smith and his The Wealth of Nations is the main stage around which the author develops a coherent story of the journey of economics from the heyday of classical economics to the current neoclassical economics and further. However in the beginning itself it has been made clear that “This is not, however, a book on the history of economic thought proper. It uses a historical perspective as a happy way to organize a complex set of ideas into a coherent and understandable story… [Rather this book is more about] my own imaginative reconstruction of debates behind the debates”.(xii)
According to the author, Adam’s fallacy “lies in the idea that it is possible to separate an economic sphere of life, in which the pursuit of self-interest is guided by objective laws to a socially beneficent outcome, from the rest of social life, in which the pursuit of self-interest is morally problematic and has to be weighed against other ends.”(xiii) No doubt the assumption of selfish pursuits aggregating to social good is a basic foundation on which modern day economics stands. The separation of the economic sphere from other spheres seems essential to ideologically justify a society based on competition and profit-making. This separation is the basis for the constitution of modern academia with its disciplinary divisions and hierarchy. For example, modern ‘positive’ economics, in its insistence for positivist ‘objectivity’ banishes the issue of fairness and ethics from the overall economic framework, delegating them to other obscure branches of social sciences. Foley’s patient account of the reality of this design is a formidable assault on the scientific pretensions of this separation, exposing its “theological” nature.
The book is organized into six broad chapters. The first chapter explicitly deals with the philosophy of Adam Smith as propounded in his acclaimed The Wealth of Nations. Adam Smith’s conceptualization of the ascendance of capitalism is carried forward by two subsequent political economists – Thomas Malthus and David Ricardo, whose ideas are discussed in the second chapter. The third chapter is concerned with Karl Marx and his critique of capitalism. Marx’s critique played a major role in shaking up the economic thought as propounded by Smith to Ricardo, revealing capitalism’s subtle anatomy and its barriers, thus informing Marx’s anti-capitalist revolutionary politics. The rise of “pure economics”, i.e., “marginalist” or neoclassical economics, in a sense can be understood as an attempt to transcend these political possibilities in Smith and Ricardo’s political economic thoughts. The fourth chapter gives an account of this sanitized economics, i.e., the growth of neoclassical economics. It shows how the neoclassical framework embraced Adam’s fallacy in its purest form through mathematization.
But theories cannot preempt the real possibilities. With the turn of the twentieth century, the world witnessed a long-drawn crisis of the capitalist system through two World Wars and the Great Depression. A revolution in Russia and other nationalist upheavals against colonial/neo-colonial capitalism, with a stress on a non-capitalist path, throughout the globe constituted a grave political crisis for the expansion of capitalist economy. To inform the rescue of capitalism came three most prominent thinkers of the twentieth century economics – John Maynard Keynes, Joseph Schumpeter and Friedrich von Hayek. Chapter 5 of the book deals with these three thinkers and their efforts to bring the capitalist regime of accumulation on track. The final chapter gives an overall summary and the author’s conclusions.
While discussing Adam Smith’s work, the author gives a concise description of his contributions. It is made very clear in the beginning that Adam Smith’s book was not famous because of technical discoveries, as there were political economists who already talked about these things. What made Smith’s book unique was its ability to “put forward a clear vision of how capitalist society might develop” and to address “more directly than anyone else the central anxiety that besets capitalism – the question of how to be a good person and live a good and moral life within the antagonistic, impersonal, and self-regarding social relations that capitalism imposes…[B]y being selfish within the rules of capitalist property relations, Smith promises, we are actually being good to our fellow human beings”(2). This is the crux of Adam’s fallacy and “neither Smith nor any of his successors has been able to demonstrate rigorously and robustly how private selfishness turns into public altruism.”(3).
The author goes onto discuss the different facets of Smith’s work starting with the division of labor followed by the Theory of Value. He exposes the inconsistencies in these theories, which were a result of Smith’s concern for presenting “key ideas and insights of political economy” more than “with constructing a consistent framework for these ideas”.(42) However, these “inconsistencies betray a tension between his economic theology and his good sense. As a theologian of capitalist social relations, he is willing to remove traditional moral constraints on the pursuit of self-interest through the accumulation of capital… But another side of his character recognizes the damage that this license to pursue self-interest can do to society as well.”(44)
Then Foley moves on to explain in his second chapter how Malthus and Ricardo carried the flagship of Smith but with many qualifications in order to remove Smith’s inconsistencies – turning “Adam’s vision” into the basis of their “gloomy science”. Also, Malthus and Ricardo diverged in conflicting directions due to their different positions in the intra-hegemonic class conflicts in Britain between the landed aristocracy and industrial bourgeoisie. While expounding his theory of geometric population growth and its consequent effects on agricultural production and prices, Malthus doubted the viability of laissez-faire capitalist development. Foley, in his exposition of Malthusian theses, explains their politico-ethical consequences in the context of Malthus’ confrontations with Godwin’s perfectibilism, which envisioned a possibility of eliminating all human misery in social transformations occurring at the wake of the nineteenth century.
On the other hand, Ricardo, a representative of the rising industrial and financial bourgeoisie, was much more hopeful about the prospects of capitalism. He was an enthusiast of the laissez faire capitalism and defended free trade against welfare programs and during the historic debates on rent laws. Ricardo eliminated the inconsistencies in Smith’s value theory in favor of a labor theory of value, which became a precursor to Marx’s conceptualizations. He propounded the theory of comparative advantage on which is founded much of international economics today. He gave definiteness to theories of wages, rent and profit. Foley ends the chapter with a note on how Malthus and Ricardo opposed the idea of providing charity to the poor. According to him, their attitudes on this point “show the extremes that Adam’s fallacy can reach”.(84) Their argument about charity being self-defeating, as it allows the poor to reproduce without producing employment, involves a method that contrasts “the immediate effects of action (charity relieving the sufferings of the poor) with indirect, systemic effects (charity expanding the population and lowering the standard of living of the poor). Its burden is the necessity of resisting beneficent and moral impulses – do not give to the poor lest you actually create poverty.”(85).
One thing that really sets this book apart is its simplicity. Perhaps this feature becomes more glaring in the third chapter where Foley takes up the Marxist criticism of capitalism. His explanation of Marx’s historical materialism along with explanation of other Marxist concepts like surplus value, modes of production, base and superstructure, circuit of capital and accumulation cannot be simpler. Further in his brief discussion on the theory of commodity fetishism, Foley notes that Marx “takes on Adam’s Fallacy directly in elaborating” this theory. “The pursuit of self-interest, even in the context of private property relations regulated by law, is no path to the good life. On the contrary, it blinds the individual to the true conditions of his own existence (ironically, precisely the division of labor that Adam Smith so clearly describes), and prevents humanity as a whole from confronting both its real conditions and the real possibilities for social change that technology and the division of labor make possible.”(112)
Though a major emphasis of the chapter is to provide a thorough feel of the severity and sharpness of Marx’s critique of capitalism, this does not prevent Foley from criticizing Marx and also in pointing out where Marx has fallen short in his explanations. While succinctly presenting the elegance of Marx’s vision of socialism, especially as found in his critique of the Gotha program, Foley finds “devastating gaps in Marx’s argument, gaps that grew into some of the worst features of the revolutionary socialist project in the twentieth century. Marx seems completely unaware of the problems of institutional power that are inherent in his brief phrases describing the social control of the surplus product.”(134-35) The problem of institutional specificities for deciding and regulating the production and distribution of the surplus product remains unresolved in Marx. “Either Marx had no answers to these questions, or he thought they were trivial and secondary administrative problems that would be solved in the actual evolution of socialism. The experience of twentieth-century socialism, however, underlines the critical importance of these questions for the socialist project, and the terrible inadequacy of Marx’s analysis to suggest viable answers to them.”(135) Further, “[d]espite his vigorous critique of the commodity form of production, Marx’s concrete vision of socialism carries with it a lot of capitalist baggage”, which sometimes seems to relegate the socialist regime to “a kind of collective capitalism”.(151)
Foley provides a very holistic view about what Marxist practice has contributed in terms of social change in the twentieth century. “In the twentieth century Marx’s ideas of class, exploitation, and revolutionary social change played an important historical and ideological role, but not one centered on actual proletarian revolution…. [In many countries,] Marxism, on the other hand, provided an alternative which promised a route to modernization, that is, the destruction of traditional cultures and social relations, without surrender to the hegemonic claims of world capitalism.” (145). Revolutions that did happen especially in Russia and China, according to Foley played an important role in transforming these societies from an “unsystematic, traditional political and economic system into some version of modern capitalism, as a stage of social development which was necessary preliminary to socialism.” (146).
Chapter 4 is concerned with the development of marginalist economics and the attempt of the economic thinkers to make economics a hard science. It evolved to serve the ideological needs of capitalism in the 1860s, when Adam’s Fallacy needed new shoes. Under the new circumstances characterized by a formidable intensification of class struggle between capital and labor, which was consciously organizing itself, the historical and inductive method of classical political economy was becoming counterproductive. “Ricardo’s language and conceptual framework when applied to these issues [of class struggle] look uncomfortably like – well, like Marx”. William Stanley Jevons, Carl Menger, Vilfredo Pareto, John Bates Clark, Irving Fisher and Leon Walras came as rescuers. They “labored to create an axiomatized, mathematical political economy that could endow the social relations of capitalism with the aura of “natural laws” that guaranteed the stability and rationality of economic life”.(157)
He complements this with his short survey of Thorstein Veblen’s ideas, which heavily relied on evolutionary biology. Veblen, who is frequently counted within the “heterodoxy” for his unconventional ideas, “is the Ecclesiastes of Adam’s Fallacy, conveying the human distortion and cost of capitalist social relations in a mordant and stylish prose.”(175) Further, “[w]hile the evolutionary approach does much to dispel the mathematical aridity of marginalist economics, it does not do a great deal to return human beings and their moral concerns to the center of economic thinking”.(177)
The turn of the twentieth century brought many crises for the capitalist development especially in the form of two World Wars and the Great Depression. According to Foley, three visions that contended for supremacy in political economy in this period, centered on the thinking of John Maynard Keynes, Joseph Schumpeter and Friedrich von Hayek. All of them attempted to resolve in their own way the “crisis of confidence in capitalist political and economic leadership”, with the imperialist rivalry leading to world wars and economic depression. Keynesianism succeeded in establishing its supremacy, as it justified state interventionism required for refurbishing the machinery of capitalist accumulation after the Great Depression and provided a credible framework for policy formulations. It provided an antidote to the popularity of central-planning socialism, while stressing on “reforming capitalism to make it function better through a great expansion of the economic role of national governments and central banks”.(183)
Hayek on the other hand, being a representative of the Austrian school of economic theory was trained in a vigorous defense of the laissez fair capitalism against every sign of collectivism. Much of the first half of the last century was not conducive for such ideas. Hayekian misadventure of attacking Keynesian support for activist government is indicative of the age. Also, simultaneously there was a rise in the concept of market socialism (which is “just another statement of Adam’s Fallacy”), which found “no difference between a socialist and a capitalist organization of the division of labor except for the formal legal mechanism that support the market, and perhaps the distribution of income”.(205) Much of Hayek’s theses which became the foundation of neoliberalism were formulated in his attempt to thwart the socialist appropriation of market. Thus he reproduces Adam’s Fallacy in a pure and unadulterated form – “It is not, according to Hayek, the market form that is critical to organizing the division of labor; it is the content of the market as a clash of personal interest that actually drives things forward”.(206) But only during the 1970s, when capitalism needed a new regime of accumulation in the aftermath of slowing down of the ‘welfarist’ economies, Hayek could emerge “from his bruising theoretical defeats at Keynes’s hands in the dark days of the Depression to fight again and climb back to occupy the ideological high ground of capitalist society.”(209)
While Schumpeter sympathized much with Marx’s critique of capitalism, he devoted “his considerable rhetorical and analytical powers to injecting Marx’s theory of technical change into the marginalist framework as a corrective to the equilibrium-fetish of neoclassical economics”.(210)
The final chapter recapitulates the various incarnations that Adam’s Fallacy has made throughout the development of capitalism. Further, Foley summarizes some of the lessons that can be drawn from the economic debates. He notes, “All sides in these debates have important lessons to teach about the logic and limited functionality of the social world that capitalism has created.”(213) The conclusion that Foley draws “from surveying the high peaks of political economy” is that dualisms in political economy – normative vs. positive, value-free scientific analysis vs. policy analysis – are futile. “The attitudes promulgated by the great political economists toward capitalism and its social logic cannot plausibly be separated from their analysis of its workings.”(215)
The rejection of dualisms along with their perpetuator, Adam’s Fallacy, clears away “grand illusions” about capitalism. It allows us to historicize our existence – eliminating the most fundamental distortion that this fallacy perpetuates by representing “capital accumulation, with its accompanying technical and social revolutions, as an autonomous and spontaneous process that is somehow inherent in the expression of “human nature”.”(224)
Foley draws two lessons “from the history of political economy for our globalizing era”. Firstly, “moral and social conflicts are part and parcel of capitalist economic development”. The societies that have recently come into the fold of capitalism “do not benefit from vague sermons on the power of capitalist development to raise masses of people from traditional poverty – sermons which at best tell only half the story.”(227) Secondly, with the unevenness of capitalist processes, it is dubious to talk about any unique path to capitalist development. These lessons are particularly important in today’s context when the neoliberal path is being imposed through international negotiations between transnational institutions supported by the hegemonic powers and local agencies in the underdeveloped countries.
An important aspect of Foley’s work that distinguishes it from other works on economic thought is the identification of a single central theme. The whole narrative revolves around the phenomenon of Adam’s Fallacy, analyzing its reproduction or reincarnation throughout the development of political economy and economics. This allows the reader to grasp the foundation of the discipline, instead of being awestruck by its apparent edification with esoteric conceptualizations. Further, the book forces the reader to question the neutrality of the economic theory and practice, of their being above all political and ideological conflicts that mark every society. In fact, it shows how the very foundation of economics is not only ideological, but theological too.
Arindam Mandal is a PhD student in Economics at the State University of New York (SUNY) at Albany. He is a labor union activist with the Graduate Students Employees Union (GSEU)/CWA-1104.
Radical Notes 
The Flexibilities of TRIPS and the Indian Left
Rajesh Ramakrishnan
The Technical Expert Group on Patent Law Issues, headed by the Council of Scientific and Industrial Research (CSIR)’s ex-Director General Dr. R.A. Mashelkar, has opined to the Government of India that restricting patenting of pharmaceuticals to New Chemical Entities (NCE) and prohibiting the patenting of microorganisms per se, would be violative of the TRIPS agreement. The Group claims that its approach to the issue was guided by “…the need for access of affordable medicines to Indian people at large, encouraging innovation by Indian industry, its current capabilities in R&D, and balancing of India’s obligations under international agreements with the wider public interest”. The main implication of the Mashelkar Group’s report is that product patents can be issued even on older off-patent drugs which have been marginally altered by pharmaceutical firms, thereby giving a monopoly over these drugs to the patent holder. While the Mashelkar Group’s report expresses itself against ‘evergreening’ of patents, its recommendations permit exactly that.
Reactions have been swift and damning. D.G. Shah, secretary-general, Indian Pharmaceutical Alliance (IPA): “As the title suggests, the reference to the group was on ‘patent law,’ but there is hardly any evidence in the report to support its interpretation. Most parts of the report are devoted to narrating the positions of various interest groups, but very little is devoted to what made the Technical Group take the view that to limit patentability to NCEs is not compatible with the TRIPS Agreement.” The Centre for Trade and Development (CENTAD), an NGO working on international trade: “The terms of reference clearly mention that the task was to find whether it would be TRIPS compatible to limit the grant of patent for a pharmaceutical substance to a new chemical entity or to a new medical entity involving one or more inventive steps. However, the committee does not answer this question and also cites so-called national interest to make its recommendation. The national interest argument is based on certain assumptions which are either irrational or highly contestable…The so-called national interest perspective considers only the interests of a few big Indian pharmaceutical companies. There is no reference to public health concerns in the report”. (Business Standard, January 16, 2007)
The Mashelkar Report brings the curtain down on a chapter in the history of intellectual property rights in the country, one that heralded the chicanery of the ‘New’ Left – the old Left reincarnated – in India. If Singur and Nandigram have laid bare the sordid nexus of the Communist Party of India (Marxist) with the neo-liberal forces of corporate India, the CPI(M)’s role in the passage of the Patents (Amendment) Act, 2005 was a curtain-raiser.
Inflexible Flexibilities of TRIPS
The precursor to the Act was the Patents (Amendment) Ordinance issued by the UPA Government on December 26 2004, when everyone’s attention was focused on the devastation wrought by the tsunami. The Ordinance introduced product patents in pharmaceuticals and also in software, chemicals and food, in accordance with the TRIPS Agreement. The new patent regime threatened the very development of science and technology, and also public health by conferring a monopoly over pharmaceuticals on MNCs and other large corporates. The earlier process patent regime in India had resulted in large-scale production of cheap generic medicines by Indian companies which were also widely sold in Least Developed Countries worldwide and particularly in African countries which do not have pharmaceutical manufacturing capacity of their own. The introduction of the Patents (Amendment) Ordinance was therefore widely opposed not only in India, but all over the world. Long before the Ordinance was issued, the head of the World Health Organisation had written to the Union Health Minister advising against a product patent regime that would throttle the availability of cheap generic drugs and thereby adversely affect public health worldwide. Similar views were also expressed even by conservative newspapers like the New York Times in an editorial on the subject of India’s patent laws. Even a thoroughly conservative economist like Jagdish Bhagwati, wrote against the Ordinance in The Hindu. International NGOs and humanitarian groups like Oxfam and Medecines Sans Frontieres (MSF) also opposed the Ordinance. February 26 2005 was observed as a Global Day of Protest against the Patents (Amendment) Ordinance and the design of the WTO behind it. A large number of NGOs, health and legal activists, political parties and their frontal organisations also participated in this protest. The frontal organisations of India’s parliamentary Left – the CPI(M)-CPI-RSP-Forward Bloc held protests under the aegis of the Sponsoring Committee of Trade Unions.
For the Left, the main point of opposition was the ‘TRIPS-plus’ measures in the Ordinance i.e. the clauses in the Ordinance that went much beyond even the requirement of TRIPS, especially the clauses that allow for ‘evergreening’ of patents. The Left argued that the Indian Government was not making use of ‘flexibilities’ available in TRIPS and was unnecessarily allowing TRIPS-plus measures. They had no basic opposition to TRIPS or the product patent regime that it mandated. On the contrary, the Left actively promoted the illusion that the written rules of WTO and TRIPS would provide the maneuvering space for ‘our’ companies to compete on par with global pharmaceutical giants. The Left’s position was one of protecting a vaguely defined ‘national interest’ and protecting the Indian pharmaceutical industry, which has the “ability to service the health needs of the country”. Its position was that while being a member of WTO, the Indian Government must demand review of TRIPS, as mandated in the TRIPS Agreement and must not concede more than what TRIPS requires. (‘Left Parties Note on Third Patents (Amendment) Bill’, People’s Democracy, Vol. 28 No. 47, November 21, 2004)
In reality, interpreting the text of the TRIPS agreement and its ‘flexibilities’ is a mug’s game. Whenever countries have tried to take advantage of such ‘flexibility’, they have been targeted by MNCs and governments of imperialist countries acting on their behalf, led by the US. The much-acclaimed Declaration on TRIPS and Public Health in the Doha Ministerial Meeting of WTO in 2000 was a short-lived victory and was rendered hollow by the bilateral bullying tactics of the US government and the MNCs. This bullying forces developing countries to adopt ‘TRIPS-plus’ measures – measures that are not required even by the TRIPS Agreement – which will further favour MNCs. (‘US Bullying on Drug Patents: One Year After Doha’, Oxfam Briefing Paper 33, 2002) The response of the aspirant capitalist classes of the Third World has been two-pronged, involving both conflict and collaboration with global pharmaceutical majors, and the governments and multilateral bodies that further their interests. Thus, on the one hand, the strategies adopted by the top Indian pharmaceutical companies in recent years have included export-led growth through subsidiaries or acquisitions in high-margin markets, partnering with MNCs through licensing, collaborative R&D or co-marketing arrangements, and contract research and manufacturing. On the other hand, Indian generic drug makers who have successfully developed alternative processes for the manufacture of patented drugs have been aggressively challenging patent claims and trying to have longer exclusivity periods. MNCs in turn see major cost advantages in outsourcing manufacturing and clinical research to Indian companies. Studies indicate that a handful of large domestic pharmaceutical firms have the capacity to use their aptitude for reverse engineering for new drug discovery. They are in turn selling these new molecules to MNCs for further development and sale. The Indian Government is in turn providing a range of tax concessions to encourage such R&D. (Ernst & Young Global Pharma Report 2004; IMS Pharma 16 June 2000; ‘Pharmaceuticals: Uneasy Alliance’, Economic and Political Weekly Editorial, October 19, 2002). Commerce Minister Kamal Nath put it thus, “…the transformed Indian pharma industry is itself looking for patent protection – particularly the bio-tech sector, in which India has aggressive prospects”. With an Intellectual Property protection framework in place, he said that the pharma industry could take advantage of the huge scope for outsourcing of clinical research.
The companies and the Commerce Minister spoke the language of the market. The CPI(M) provided it the cloak of ‘national interest’. The fulminations of a decade earlier, when the Indian ‘bourgeois-landlord state led by the big bourgeoisie’ was ‘surrendering’ to imperialism, turned into an obfuscating ‘protection of national interest’. But it was still the language of opposition and resistance to the Ordinance route that the Government had taken.
Flexibility of the Left
But this was to be short-lived. On March 22, 2005, the Left performed a breathtaking political somersault and voted for the Patents (Amendment) Bill 2005 in Parliament. The BJP had announced its opposition to the Bill out of sheer opportunism, having supported the UPA at every preceding stage up to the issuance of the Ordinance. There was every possibility of the Bill not being passed in the Budget session at all and the Ordinance lapsing. The Left rushed to the rescue of the Congress in the Lok Sabha and voted for the Bill on March 22, 2005. On March 23, the Martyrdom Day of Bhagat Singh, the Left paid their respects to him by safely passing the Bill in the Rajya Sabha. Behind this magnificent volte-face was the new General Secretary of the CPI(M). The Hindu editorialized, “Mr. Karat, in fact, was instrumental in narrowing the differences with the Central Government by extending support for the Patents (Amendments) Bill in return for crucial concessions such as the exclusion of embedded software from the patents regime and the redefinition of “new inventions.” (‘Karat At The Helm’, April 13, 2005)
The Left claimed that the Bill passed had incorporated amendments proposed by the Left parties, which were “an attempt to provide for the maximum safeguards in the new Act making use of flexibilities available in the TRIPS agreement”. They claimed that the Government was forced to accept the amendments because of sustained pressure by the Left parties and the countrywide campaign against the Ordinance; and that the incorporation of the amendments was “a major advance for those who have been campaigning for the safeguarding of national interests.” (‘Amendment to the Indian Patents Act: The Battle is Joined, the War is Not Over’, People’s Democracy, March 27, 2005 – statement issued at the press conference of the four Left parties – CPI(M), CPI, Forward Bloc and RSP – held at the CPI(M)’s national party office in Delhi, AKG Bhavan, on March 23, 2005)
So what were these amendments?
In sum, the Left’s myth of the ‘flexibilities’ of TRIPS have been busted yet again by the hard realities of the global market. The power of capital sets the rules of the game, and not an undefined ‘national interest’. The Commerce Ministry that pilote the Amendment Act and the Mashelkar Group can hardly be called ‘imperialist agents’. It will suffice to say that the Indian pharmaceutical industry is interested only in the global market, of which the Indian market is a part. For Indian corporates, the ‘national market’ is a reserve market, to be used as a bargaining chip to secure market concessions from global powers, in what can only be an asymmetrical contest. Even the Union Commerce Minister made this aggregate interest of the Indian corporates behind the Patents (Amendment) Bill 2005 clear when he said that its content was “not externally driven, it is nationally driven. It suits us to have a modern patent regime in line with what most countries in the world have already adopted, including China and Brazil”. (‘Enough Safeguards in Patents Act to Prevent Price Rise – Domestic Pharma Industry Interests Fully Protected: Kamal Nath’, Commerce Ministry Press Release, April 4, 2005)
Losing the Battle in Delhi to Win the War in Geneva
Criticised by NGOs like Medecines Sans Frontieres for ushering in a TRIPS-compliant product patents regime in the pharmaceutical sector, the CPI(M)’s counter-arguments flowed, specious and self-contradictory, all the time masking the fact that it had succumbed to the TINA argument to the WTO. To wit, (i) if the Left had not supported the Bill with these cosmetic amendments, the BJP and Congress would have joined hands later and have passed a worse Bill (Prabir Purkayastha, ‘Patents Amendments and the International NGOs’, People’s Democracy, April 3, 2005), (ii) not passing the Patents (Amendment) Bill would result in WTO sanctions against Indian pharmaceutical exports and cross-sectoral sanctions, the same argument used by Kamal Nath while issuing the earlier Ordinance and which had then been vehemently opposed by the Left with examples of several countries having missed WTO deadlines and not experiencing sanctions, (iii) “the arena of forcing a change in TRIPS and WTO is Geneva and not New Delhi”. (ibid.)
Having thus far argued that its mobilisation was to pressurise the Indian Government to take full advantage of the ‘flexibilities’ of TRIPS, the Left argued that “the TRIPS agreement itself places severe limitations on our ability to enact national legislations that address public interest…the ultimate aim should be to overturn the TRIPS agreement and bring it out of the WTO.” (‘Amendment to the Indian Patents Act: The Battle is Joined, the War is Not Over’, People’s Democracy, March 27, 2005.) Yet, in the same breath, the Left argued that they would “continue to apply pressure on the government through mass mobilisation to balance its position on IPRs in favour of the Indian people” (ibid.) So TRIPS was both ‘flexible’ and ‘inflexible’, the Left would mobilise to ‘balance’ the interests of the people and the interests of MNCs and corporates, while at the same time strive to bring TRIPS out of the WTO! Having fully collaborated with the Congress in the Indian Parliament while it had the opportunity to uphold the public weal and oppose the Patents Bill, the Left argued that it would force a change in WTO negotiations. To Medecines Sans Frontieres, till the other day an ally in the fight against the Patents Ordinance, a Left columnist posed loaded queries: whether western NGOs wanted Indian pharmaceuticals to be denied a place in the global market due to WTO sanctions, what action had NGOs from imperialist countries taken against TRIPS in their home countries etc.?
Can the Left Be Reformed?
“Can the Left be reformed?” is the question asked both by civil society activists and by long-time fellow-travellers of the Left who are discomfited by Singur and Nandigram. For the latter especially, articulating the question is itself a painful process after a lifetime of loyalty. Will questioning the Left weaken it and open the floodgates to neoliberalism, they wonder.
The short answer to the question is that the Left, in the current form to which it has grown and developed, cannot reform itself. If the old Left’s political objective was retaining power in Bengal, Tripura and Kerala with sham anti-Congressism and underhand deals with the Centre, the ‘New’ Left has set its sights on a role at the Centre. The ‘New’ Left’s political vision is one of partnership with corporates in the world of ‘inevitable’ globalisation. The Left leadership is therefore practising duplicitous politics; it is fully committed to liberalisation, privatisation and globalisation. It sees these as ‘inevitable’. Its main objective is to remain in power in the States and enhance its say at the Centre. As Prakash Karat puts it, the Left wants to put forth ‘policy alternatives’. But in the age of neoliberalism, when corporates have a powerful and overt say in policymaking, it cannot but acquiesce to their demands and see ‘logic’ in them. What the patents imbroglio and the ongoing SEZ and land acquisition debates show is that there is no real policy alternative, what the Left does is hardly different from what others do. At the same time, the Left needs to keep its flock together and its electoral base, for that gives it salience in India’s electoral democracy as it exists today. To its support base, it needs to continue speaking the language of resistance. Hence, it holds token demonstrations, issues statements, and works with civil society in the World Social Forum. The contradictions between its actions in these two spheres show up as doublespeak. This was very apparent in its role in the Patents (Amendment) Bill and in the land acquisition debate now. While its role in Singur and Nandigram is stark, its role in amending the patent regime is disguised in technicalities. But the underlying reality is the same. What the Left is quickly embracing is neoliberalism, and this has been well understood by the proponents of neoliberalism. As Manmohan Singh said to the CEO of McKinsey, Rajat Gupta in an interview in 2005, “Our colleagues who are in government in West Bengal . . . do appreciate the need for labor market flexibility. It is my task to carry conviction to our Left colleagues in Delhi. I haven’t given up, and I am confident that when all things are considered I think the reform will have more broad-based support. Our coalition today represents nearly 70 percent of the Indian electorate, so we may be slow moving, but if we build a consensus, that will be far more durable than any other mechanism that I know of”. (The McKinsey Quarterly, 2005 Special Edition: Fulfilling India’s promise)
TINA Without the Left?
In a perverse extension of the slogan popularised by Margaret Thatcher, the official Left in India perpetuates the myth that there is no alternative to itself. Let us look at the reality. Public healthcare is all but absent in India. Public health expenditure as a proportion of GDP has been relentlessly falling. Under the influence of liberalisation, privatisation and globalisation policies, there is a further attempt to reduce Government expenditure on healthcare. News channels regularly put out stories of people at the mercy of the completely unregulated private sector in healthcare, suffering, dying, and turning to crime to meet their healthcare expenses. The story of successive Governments’ lame efforts to control pharmaceutical prices merits a separate telling. It will suffice to say that over and above the huge margins and malpractices that abound in the pharmaceutical trade, the prices of both common generic drugs and new inventions are set to sharply increase under the new patents regime, and especially if the Government amends the law on the basis of the Mashelkar Group’s recommendations. The MNC Novartis has filed a suit against the very clause of the Patents (Amendment) Act, 2005 that the Mashelkar Group has now found non-compliant with TRIPS. The simple, unalterable fact is that it is the so-called Left that passed a Bill in Parliament to introduce a WTO-compliant product patent regime and no amount of verbal acrobatics can cover this up. The ‘TINA without the Left’ logic among a section of civil society activists fighting neoliberalism is strangely defeatist. The Left will continue to reach out to intellectuals and activists. The latter need to be much more sceptical of the Left, post-Patents Act, post-Singur, and post-Nandigram. The struggles against the various attacks of neo-liberalism are very concrete ones- whether in the fields of health or education, or against land-grab. Civil society activists can no longer surrender a leading role in these struggles to the Left. In particular, they will have to insist that demands and memoranda be democratically and transparently discussed and drafted, uncontaminated by TINA to neoliberalism/globalisation and the urgency to ‘provide’ jobs, education or healthcare within the ‘realities’ of the neoliberal framework. Above all, the capacity of ordinary people for sacrifice and political struggle should not be under-estimated. It is in the ordinary citizen’s interest to fight against the product patent regime in toto and not just against the Mashelkar Group’s recommendations. The era of convergence of the citizens’ interest and the ‘national interest’, where a large public sector and the private sector supplied reverse-engineered generics at a relatively low price (by world standards) to a sheltered national market, is well and truly over. The big sharks among the corporates are swimming in the sea of the global market, bargaining with the bigger sharks, with the nation-state as legislative ally. The moment a section of Indian pharma enters into new partnerships with MNCs to use the Mashelkar report, that will become the new ‘national interest’, the new ‘inevitable reality’ to bow to. Such are the slippery slopes of neoliberalism.
The Left is very firmly a party of this established order. To be out of power and work as an organising force at the grassroots for resistance against neo-liberalism is unthinkable for it. But the need to build up an alternative politics right from the grassroots and patiently organise has never been greater.
Rajesh Ramakrishnan is an engineer-turned-development consultant who has also worked in the NGO sector. Involved in democratic movements, he has a keen interest in Marxism and political economy.