Caracas, October 30, 2007: Produced as part of Centro Internacional Miranda’s Transformative Practice and Human Development, directed by Michael Lebowitz.
Courtesy: Socialist Project, Canada
Workers’ Control – Theory and Experiences
October 29, 2009 by Leave a Comment
Maoists and the paradox of development
October 25, 2009 by 2 Comments
After opposing the industrialisation in Singur and Nandigram on the premise that the same is outrageous, inhuman and not ‘people oriented’, Maoists find themselves in an apparent dilemma to raise the issue of under-development in Lalgarh, the very next day.
Their illusion of an alternative path of development under capitalism with humanitarian considerations, leads the Maoists directly to the lap of reformism, as this means nothing but craving for a humanitarian face for capitalism. Fighting for this ‘soft’ capitalism, with humanitarian attributes, of course with arms in hands, the Maoists reveal themselves as ‘armed reformists’ or ‘reformist militants’ of a new type, but in essence the armed defenders of the same old capitalism.
Do you want to destroy capitalism? ‘No, not at all! We rather want to see the capitalism grow, as that is the only road to socialism. Our program is to liberate capitalism of the shackles of feudalism and Imperialism’! Maoist retorts. Thus, a ‘Capitalist road to Socialism’, this is what the program of ‘new democracy’ means in essence to our Maoist!
This essentially reformist perspective of Maoists, is completely in consonance with the politics of petty-bourgeois peasantry, their actual social base, which though pulverised under the advance of capitalism, yet craves only for a ‘human’ face of capitalism and not for abolition of the bourgeois property relations, as a whole, as it itself, as a class, rests upon such relations. Maoists, the historical representatives of peasantry-the rural petty producers- thus do not and cannot overstep this limit.
But then the real difficulty presents itself in practice. As capitalism ‘grows’ it invariably grows through appropriation of petty producer, pushing it to the camp of the proletariat. Maoist is however not ready to swallow this bitter pill of capitalism and opposes the appropriation, e.g. in Singur and Nandigram. They defend the petty owner of land against this ‘inhuman’ appropriation and thus oppose the capitalist growth, with arms in hand. But then in the next breath they stake their leadership to Lalgarh movement which poses the question of ‘under-development’, demanding extension of capitalist development, the factories, schools, hospitals etc. etc on their virgin territory.
Thus, aiming for proliferation of ‘capitalism’ in their fancied program of ‘new democracy’, instead of its destruction, Maoists take offensive against the growth of capitalism, its penetration onto the virgin lands like Singur and Nandigram, while simultaneously they demand capitalist development in the underdeveloped regions like Lalgarh.
The paradox of ‘development’ for Maoists is that they are not sure if they are ‘for’ or ‘against’ the capitalist development as a whole. It is because they rest upon the intermediary class-the peasantry-standing with two faces: one towards the bourgeois and other towards the proletariat.
In fact, this paradox of development can only be explained in terms of inbuilt mechanics of capitalism leading to an ‘uneven and combined growth’, but then the resolution would lie not in ‘proliferation of capitalism’ but essentially in its destruction. But for Maoists ‘capitalism’ is sacrosanct, as they have learnt by rote from Mao himself, that proletariat cannot overturn capitalism in backward countries and has to pass through a ‘new democracy’ where capitalism has to be preserved, at any cost. The task for Maoists thus lies in liberating capitalism of its ills and not in liberating the working classes from capitalism itself. In their view, bourgeois not being a good manager of capitalism, destiny has assigned this task of management and cure of capitalism to Maoists. They, thus come forward not as hostile enemies of capitalism, but with their claim as better managers of capitalism. Capitalism under the management of Maoist Bonaparte, the red bureaucracy, is the real essence of ‘new democracy’.
The difficulty of Maoists lies in their flawed perspective of Stalinist ‘two stage theory’, which stops short of aiming for destruction of capitalism. This suicidal formula has already derailed the mature revolutions in China, Spain, India, Iran, Iraq and more recently in Nepal. In the name of ‘new democratic stage’ Maoists refuse to aim for destruction of capitalism, rather advocate its ‘proliferation’ during the new democratic period. This is what was professed by the 1940 pamphlet of Mao-tse-Tung, ‘On New Democracy’. In their view national capitalism has not lost its progressive vigour as a whole. While sections of national capitalism retain a progressive role, in their opinion, it is only imperialism and the comprador capitalism tagged to it which is reactionary. This way, Maoists attempt to segregate the feudal reaction on the one hand and comprador capitalism on the other, from the ‘national capitalism’ as targets of their ‘peoples war’, and thereby create illusions for progressive role of capitalism. They de-compose world capitalism, to get fragments of ‘national’ and ‘comprador’ capitalism and ‘feudalism’ separated from each other, in their laboratory of ‘new democracy’. By not targeting capitalism as a whole, and by sparing its ‘national’ sections, the Maoists not only betray the class whose red banner they hold, but themselves land into a dilemma.
‘Capitalism today, Socialism tomorrow’, is their battle cry, where ‘tomorrow’ is never to present itself to the proletariat!
This very limited political program of Maoists, especially in the age of grown-up Imperialism, instantly becomes a premise of apparently self-contradictory ideas, leading to nowhere, but into a trap of capitalism. Politically disoriented cadres, turned away from a political program against capitalism, are then left in a lurch, cheerleading for ‘armed’ actions of militants, kidnappings and beheadings etc. etc.
So far as advocacy of Maoists for National capitalism, against Imperialism, is concerned, the same is through and through reactionary. Imperialism has not appeared from vacuum, it has grown out of their cherished ‘national capitalism’. Maoists conveniently forget that National capitalism is nothing but pre-monopoly stage of world capitalism, which has gone far back in history, paving the way for Imperialism, the monopoly capitalism, which has since subjugated all forms of economy, national as well as foreign. National capitalism has been substituted by Imperialism in advanced countries, while in peripheral countries it has adapted to Imperialism. National capitalism is thus not progressive from any angle, in comparison to monopoly capitalism-the Imperialism, as our Maoists think, but it is vice-versa. Lenin in his debate against P.Kievsky has been categorically clear on this point:
…..But this Kievsky argument is wrong. Imperialism is as much our “mortal” enemy as is capitalism. That is so. No Marxist will forget, however, that capitalism is progressive compared with feudalism, and that imperialism is progressive compared with pre-monopoly capitalism. Hence, it is not every struggle against imperialism that we should support. We will not support a struggle of the reactionary classes against imperialism; we will not support an uprising of the reactionary classes against imperialism and capitalism. (A Caricature of Marxism and Imperialist Economism; Chapter 5. “Monism And Dualism”).
Working and toiling people suffer under capitalism, not only from its non-development, like in Lalgarh, but from its development too, e.g. Singur and Nandigram. The sufferings of people are thus caused by the dynamics of capitalist regime itself, and not by its growth or undergrowth. Maoists refuse to see this and harp upon the non-issues, in a petty bourgeois populist way. They beat about the bush, leaning upon this or that side of capitalism, and prevent the toiling people from realising that their liberation consists in destruction of capitalism and not in limited reformist program of support or opposition to its advance.
The whole viewpoint of Maoists, revolves around the pivot of intermediary classes and their ideas, chiefly the rural peasantry, while bypassing the industrial working class, the only class standing in opposition to capitalism. The mass following, Maoists claim to have got behind them, is the fallout of their debased policy, where they not only choose backward rural regions as their operating ground, but here also appeal directly to politically most backward sections, e.g. tribals, living in pre-capitalist conditions. These politically backward sections are the best audience for de-classed ideas, at least till the time the most advanced sections of the working class do not organise themselves under a revolutionary proletarian leadership, to lead in turn this backward mass against capitalism and on the road to a proletarian overturn. The absence of political consolidation of the working class in India, however, provides and would continue to provide, a very convenient breeding ground for all sorts of petty bourgeois ideas and organisations, including that of the Maoists.
Failure of Economics to Failure of Capitalism?
September 22, 2009 by Leave a Comment
By Deepankar Basu, Sanhati.
On a visit to the London School of Economics last year, the Queen of England, expressed surprise at the apparent failure of the economics profession to predict the financial crisis and the Great Recession that came in its wake. “Why did no one see this coming?” asked the Queen to Luis Garicano, a professor of economics at LSE. Garicano’s colleague and economist Tim Besley and eminent historian of government Paul Hennessy stepped up to the task and attempted to answer the Queen in a short letter [PDF] written to her on behalf of the British Academy. In the letter they concluded that “the failure to foresee the timing, extent and severity of the crisis and to head it off, while it had many causes, was principally a failure of the collective imagination of many bright people, both in this country and internationally, to understand the risks to the system as a whole.”
Post-Keynesian economist, Thomas Palley, called out the narrow vision of the Besley-Hennesy letter. According to Palley, the cause of the failure cannot be ascribed to the failure of the collective imagination of many bright people, whatever that might mean; instead the failure should be located in the unique “sociology of the economics profession,” which has hounded out most dissenting voices. This failure, moreover, “was a long time in the making and was the product of the profession becoming increasingly arrogant, narrow, and closed minded” and excluding all who did not adhere to the dominant ideological construction of mainstream economics. Interestingly, Palley also points to a host of articles written from a heterodox perspective which spelt out the seriousness of the problems facing the economy as early as 2006; of course, the mainstream media, the US administration and the mainstream economics profession did not heed their advice.
In July 2009, the London-based Economist, the most sophisticated and well-informed voice of capital, ran a series of articles on the problems ailing the discipline of economics. The series took a hard and critical look, always from the perspective of keeping the long-term inst rests of capital protected, at both macroeconomics and financial economics, the two branches of economics at the very center of the current crisis; it all began, one must remember, as a financial crisis – the bursting of the housing bubble, the collapse of investment banks, the falling stock market, the seizing up of the credit markets – and quickly turned into what commentators have started calling the Great Recession.
Nobel Laureate Robert Lucas of the University of Chicago is one of the key architects of recent mainstream macroeconomics, the founder and propagator of the so-called rational expectations “revolution” in economics. In the Chicago vision of the macro economy, all economic actors are super rational. How do they display their rational behaviour? By making decisions on the basis of all currently available and relevant information. In other words, all economic agents are magically endowed with unbelievably large computing capacities whereby they gather all the relevant information, process it at lightning speed and arrive at perfect decisions. In this world there are no manias, no panics, no herd behaviour, no contagion, no asset price bubbles, no crashes; there is only smooth and rational adjustments. If the real world of capitalism does not resemble this, so much the worse for the world! Unfazed, therefore, by the recent economic and financial crisis, Robert Lucas jumped in to defend the recent turn in macroeconomics: even mildly critical pieces in as friendly a journal as the Economist needed to be countered. His contribution, of course, started off a Lucas round table, which, by the way, has some interesting posts (for instance Smither’s post on why the Efficient Markets Hypothesis must be discarded).
University of Chicago economists are notorious for their devotion to the magic of the market. In what even then looked like a wacky position, Casey Mulligan of the University of Chicago, a colleague of Lucas, had argued in early October that the economy was not doing as bad as it looked; the unemployment rate was only about 6 percent and so there was no need either to worry or for the government to work out a fiscal stimulus. Today when the official unemployment rate is nudging double digits and most sensible economists believe that it will remain high for the next year or so, making this the deepest recession since the Great Depression, Mulligan’s position, and the Chicago position in general, seems so horrendously out of touch with reality.
A detour into some details of how the unemployment rate is measured in the US might not be out of place. To start with, one must recall that one of the most serious problems that any capitalist economy, like the US, faces is to provide well-paying stable employment for its working population. The inherent logic of capitalism usually prevents this problem being solved in any satisfactory manner and for long periods of time. Hence, capitalist economies are typically plagued by serious labour underutilization.
There are several ways to measure labour underutilization and the Bureau of Labour Statistics (BLS) in the US currently uses six measures (U-1 through U-6). Data for these measures come from two monthly surveys conducted by the BLS: (1) the Current Population Survey (which is a survey of about 60,000 households); (2) the Current Employment Statistics Survey (which is a survey of about 160,000 business and government agencies). For both surveys, as explained on the BLS website, the data for a given month relate to a particular week or pay period. For the household survey, “the reference week is generally the calendar week that contains the 12th day of the month.” For the establishment survey, on the other hand, “the reference period is the pay period including the 12th, which may or may not correspond directly to the calendar week.”
It has been known for quite some time now that the official unemployment rate (the U-3 measure) provides us with a seriously underestimated measure of labour underutilization. The reason is simple: U-3 does not count those workers who become so discouraged by long spells of unemployment that they stop looking for work altogether, drop out of the labour force and, therefore, not even counted among the unemployed. To deal with this problem, the BLS provides a more comprehensive measure of labour underutilization, U-6, which takes account of part-time workers (who want but cannot find full time jobs) and marginally attached workers (these are the “persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past”). While the official unemployment rate is 9.7 percent (see chart below), the current value of U-6 is a whopping 16.8 percent! And this despite the massive fiscal stimulus of the Obama administration. How about asking an unemployed worker who has not found a job for the last 15 months (say), and has possibly even stopped looking for one due to sheer discouragement, whether her being unemployed is the result of a “rational” decision she has made on the basis of some inter temporal calculations?
At the other end of the mainstream economics profession, liberal economist, Nobel Laureate and New York Times commentator Paul Krugman has written a balanced and even-handed critique of the recent turn in macroeconomics, precisely the turn that Lucas so painstakingly tries to defend. Krugman makes two points: (1) how the orthodox belief in the efficiency of the markets (and especially financial markets) is neither based on facts nor makes for good policy; (2) how and why fiscal policy, long banished from the realms of mainstream macroeconomics, came to the rescue in the Great Recession, i.e., in preventing the Great Recession from turning into the second Great Depression, and why it should become part of the mainstream curriculum again. Krugman ends with a plea to return to the deep wisdom of Keynes, knowing full well that Keynes’ efforts were all directed at reforming capitalism and not replacing it . Even this mild reproach drew fire from Chicago economist, John Cochrane; in his post, Cochrane has, to my mind, not managed to respond to any of the substantive points raised by Krugman. Much along Krugman’s line is also the recent piece by Robert Skidelsky, Keynes’ biographer and the recent interview of macroeconomist Robert Gordon of Northwestern University; in a similar tone, Richard Posner asks whether economists will escape a whipping; no prizes for guessing the answer. For more debates along similar lines see this page on the Financial Times.
As an interesting aside, there was an earlier round of debate between Krugman/De Long and Cochrane. Early in the year, Cochrane had written a piece on why fiscal stimulus will not work. In that article, he had basically repeated some pre-Keynesian fallacies (like the Treasury View that every dollar of debt-financed expenditure by the government necessarily cuts back the same amount of private investment expenditure and hence that fiscal stimulus is ineffective). Brad De Long of UC Berkeley and Paul Krugman took Cochrane to task for repeating these fallacies; here is Delong’s piece (which has a nice example on a credit economy with four agents) and here is Krugman’s. Cochrane makes the simple mistake, as Krugman points out, of assuming that the pool of savings is fixed (i.e., before and after the fiscal stimulus), which leads him to conclude that when the government dips into this pool of savings that must necessarily deprive some private entity of an equal amount of saving (and hence reduce private investment expenditure by that amount). It is amazing how this simple fallacy persists over time, despite repeated attempts by Keynesian economists to point it out over the last 60 years. When the government takes a part of the pool of savings available to society and uses it for making purchases, the multiplier effect of this government expenditure increases the output of the economy (especially so when there is massive unutilized capacity lying around) and, thereby, also the savings out of that output; when the multiplier has run its course, the economy has a larger pool of savings. Therefore, debt-financed government expenditure need not crowd out private investment, other than in the case when the economy is already operating near full-capacity, a far cry from the state of the US economy today.
Limitations of the Debate
While this debate between the “saltwater economists” (liberal wing of the mainstream economics profession in the US, located mostly on the two coasts) and the “freshwater economists” (conservative wing of the economics profession in the US, located mostly in the central part of the country) is a welcome break from the free market fundamentalism of the mainstream press, one should not overlook the limitations of the framework within which the debate is being conducted. Roughly speaking, that framework is marked by its two boundaries, on the left by a version of Keynesianism (that economists like Krugman uphold) and on the right by Chicago-style economics. That is the space that is provided in this debate, and thus it naturally excludes: (a) any discussion of a much broader and richer heterodox tradition in economics (which includes Post-Keynesians, Ricardians, Institutionalists, Marxists, etc.), (b) any discussion of the material basis of the victory of freshwater over freshwater economics, and (c) any discussion of alternatives to capitalism.
It is surprising that Krugman does not even once refer in his piece to the heterodox tradition in economics, especially so because he devotes so much space to a discussion of macroeconomics. Over the last two decades, heterodox macroeconomists in the Marxian and post-Keynesian tradition have developed an impressive body of research, both theoretical and empirical, that speaks to most of the issues that mainstream macroeconomics so cleverly avoids. The Classical-Marxian theory of long run economic growth complemented by the short run theory of economic fluctuations of the post-Keynesian variety offers a real, comprehensive and coherent alternative to the theoretical sterility of mainstream macroeconomics, and it is indeed unfortunate that Krugman does not care to engage with this body of research.
When Krugman portrays the victory of freshwater economics over saltwater economics as a seduction of truth by beauty, he misses one very important aspect of that victory. The victory of conservative economics coincides beautifully with the rise to dominance of finance capital, the fraction of the global ruling class most closely allied with and deriving their incomes from the financial sector. How can one miss the coincidence of the exhaustion of the postwar temporary and partial victory of labour over capital and the rise of monetarism, mark I and then mark II? As economist Gerard Dumenil had pointed out long ago, the fads and fashions in mainstream economics is determined less by the internal logic of the discipline than by changes in the structure and functioning of the world economy and the changing correlation of class forces. This is an aspect that commentators like Krugman totally miss.
Talking of alternatives to capitalism, while it is obvious to many economists and activists that the current crisis is a crisis of capitalism, and that it necessitates the search for alternatives to capitalism by linking up with the long socialist tradition, the current debate does not even entertain discussion of such alternatives. While it is expected that freshwater economists will not tolerate any criticism of capitalism, saltwater economists are no less conscious about respecting the commonly accepted boundaries of the thinkable. For one must not forget that Krugman, like Keynes fifty years ago, is out to reform capitalism and not to replace it. And that is as far left as the framework will allow the debate to veer; even thinking about an alternative to capitalism is taboo within the terms of reference of this debate. Socialism is not even allowed to wander, if only by mistake, into the terms of the discourse.
That is the fundamental limitation of the discipline of mainstream economics: its inability to adopt a historical perspective and see capitalism as merely one way of organizing social production, a mode of production with a definite historical birth and therefore with a future historical transcendence. Mainstream economics, to the extent that it ever reflects on the philosophical foundations and founding assumptions of the discipline, sees the “laws” that it discovers as natural laws, valid for all historical epochs. The obvious corollary is that capitalism is eternal; the way things are organized today is how they have always been and will always be. Of course there will be technological progress and institutional development, but there never was nor will ever be any radical qualitative change in the way social production is organized, in the ownership of property. Much before Fukuyama, mainstream economics had silently accepted the non-existence of history.
This is where the Marxist tradition of political economy is far superior to what Marx called “bourgeois economics”. Grounded in a materialist conception of history, the Marxist tradition analyses the fundamental contradictions of the capitalist system, contradictions which cannot be resolved within the parameters of the capitalist system. These contradictions cannot be dealt with by more or less regulation of the financial or product or labour markets, it cannot be dealt with by fiscal or monetary policy to stabilize business cycle fluctuations, it cannot be dealt with by better regulation of international trade and finance; these contradictions, while changing form according to the changing institutional setting of capitalism, will inevitably and recurrently break out on the surface as long as capitalism survives.
What are these fundamental contradictions of capitalism? The contradiction between social production and private appropriation and control of the product of that production process; the contradiction between use-value and value; the contradiction between the two fundamental social classes, workers and capitalists, of capitalist society. While the first of these is easy to grasp and therefore needs no elaboration, it might be worthwhile spending some time thinking about the other two.
For Marx, capitalism was a type, a sub-class, of commodity producing society and so, to understand the dynamics of capitalism, he started his analysis in Volume I of Capital with commodity production. But what is a commodity? Every society must produce to meet its material needs. Where the products of human labour emerge as the private property of economic agents, and which are then exchanged through a process of bargaining, they are called commodities. Another way to see this is to realize that the products of human labour that emerge in a system of production organized through exchange are precisely what Marx calls commodities.
Come to think of it, there are only two ways that human needs can be satisfied in a commodity producing society, either by consuming one’s own product or by exchanging it for something else that one needs. This simple observation immediately throws up the dual nature of commodities. On the one hand every commodity is a use value because it can satisfy human needs; on the other hand, every commodity can also be exchanged for every other commodity. The aspect of exchangeability of commodities is what Marx terms value. What is the essence of the aspect of exchangeability of commodities? The fact that they are all products of human labour. For Marx, therefore, value is created by labour, properly defined, and is expressed in money (value separated from any particular commodity). What has all this to do with capitalism?
Capitalism is the special class of commodity producing society where labour power (the capacity to perform useful human labour) itself becomes a commodity. While a commodity producing society with owner-producers typically “sell to buy”, the characteristic transaction under capitalism is “buy to sell”. A representative capitalist starts with a sum of money, buys raw materials and labour power with it, brings them together in the production process and then sells the products to end up with a sum of money which is larger than the sum he started out with. If we now recall that money is nothing but the expression of value, we see that the capitalist ends up with more value that he started with, in a word surplus value. Capitalism, therefore, is a system of social production, that is governed by the logic of producing surplus value. The production of use values, things that can actually satisfy human needs, is just incidental; as far as capital is concerned, the aim is to produce surplus value by producing no matter what use values. When those use values cannot satisfy existing needs, new and artificial needs can always be “manufactured” by the capitalist media. Value needs to be embodied in use values and yet it is totally indifferent to the existence of particular use values; this is the sense in which use values and value stand in a contradictory relation under capitalism.
What about the contradiction between the fundamental social classes? Every class divided society rests on the appropriation of unpaid surplus labour by the ruling class (or bloc of classes) from the direct producers. In feudal societies, the ruling class directly appropriates the surplus labour of peasants as “labour services”; similarly, in capitalism, the capitalist class appropriates, but now through the institution of wage-labour, the surplus labour of the workers. The apparent freedom and equality (between the two parties to an exchange) guaranteed to workers through the institution of wage-labour and markets makes the appropriation of surplus labour almost invisible; equality of the relations of exchange make the exploitation of the working class difficult to see. But it exists nonetheless and the tools of Marxian political economy brings it to light.
It is these fundamental contradictions that manifest themselves periodically as crises of the system, the most characteristic feature of which is the simultaneous existence of unfulfilled human needs (unemployment) and unused capacity (idle plant and machinery) to fulfill those needs. Capitalism, as a system, is defined by these contradictions, they are not extrinsic to capitalism; hence, only a positive transcendence of the capitalist system can resolve them. It would have been useful if the current crisis of economics was utilized to focus our attention on the crisis of capitalism, but the way the terrain of debate has been circumscribed by agreed upon assumptions, this seems rather unlikely.
(I would like to thank Amit Basole and Debarshi Das for helpful comments on an earlier version.)
David McNally on Marx and the Global Economic Crisis
June 13, 2009 by Leave a Comment
David McNally, Professor at York University and leading member of the New Socialist Group (Solidarity’s sister organization in Canada, http://www.newsocialist.org), talks about the roots of the the financial crisis and its precise role in the worldwide economic downturn–as well as the depth of its social costs. From the Marx and the Global Economic Crisis panel at the 2009 Left Forum in New York.
Courtesy: Erin, Solidarity (US)
Anwar Shaikh on Marx and the Global Economic Crisis
June 13, 2009 by 1 Comment
Anwar Shaikh, Professor at the New School for Social Research, gives a Marxist account of historic fluctuations in the capitalist economy and how the current crisis fits in the overall picture. From the Marx and the Global Economic Crisis panel at Left Forum 2009, New York.
Shaikh’s homepage, which includes an extensive selection of his articles on economics, can be found here: http://homepage.newschool.edu/~AShaikh/
Courtesy: Erin, Solidarity (US)
Relations of Production and Modes of Surplus Extraction in India: An Aggregate Study
May 17, 2009 by Leave a Comment
Amit Basole and Deepankar Basu
Abstract: This paper uses aggregate-level data as well as case-studies to trace the evolution of some key structural features of the Indian economy, relating both to the agricultural and the informal industrial sector. These aggregate trends are used to infer: (a) the dominant relations of production under which the vast majority of the Indian working people labour, and (b) the predominant ways in which the surplus labour of the direct producers is appropriated by the dominant classes. This summary account is meant to inform and link up with on-going attempts at radically restructuring Indian society.
Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past.
The Eighteenth Brumaire of Louis Bonaparte, Karl Marx.
INTRODUCTION
Assessing the nature and direction of economic development in India is an important theoretical and practical task with profound political and social implications. After all, any serious attempt at a radical restructuring of Indian society, if it is not to fall prey to empty utopianism, will need to base its long-term strategy on the historical trends in the evolution of the material conditions of life of the vast majority of the population. Attempting to contribute to past debates and as part of on-going attempts at radical transformation of Indian society, this paper tries to provide a summary account of the evolution of some key structural features of the Indian economy over the last few decades.
The principal questions that motivate this study are: what types of production relations does the vast majority of the working population in Indian agriculture and industry labor in? How is economic surplus appropriated from the producers? The aim is not merely to arrive at a label such as “capitalist,” “semi-feudal” etc; nor to enter into a debate over whether the transition to capitalism is occurring as expected or not. Rather we are motivated by a desire to understand the material conditions under which the working population labors and the manner in which it is exploited.
The analysis is largely pitched at the aggregate level, complemented, wherever possible, with micro-level studies and data. While a study of the structural evolution of the Indian economy is of interest in itself, this paper uses trends in the structural evolution of the Indian economy to make inferences about the mode of generation, appropriation and use of the surplus product in Indian society.1 The focus on surplus appropriation, in turn, is motivated by the Marxist idea that the form of extraction of unpaid surplus labour provides the key to understanding the structure and evolution of any class-divided society. This important insight was most clearly articulated by Marx in Volume III of Capital:
The specific economic form in which unpaid surplus labour is pumped out of the direct producers determines the relationship of domination and servitude, as this grows directly out of production itself and reacts back on it in turn as a determinant. On this is based the entire configuration of the economic community arising from the actual relations of production, and hence also its specific political form. It is in each case the direct relationship of the owners of the conditions of production to the immediate producers – a relationship whose particular form naturally corresponds always to a certain level of development of the type and manner of labour, and hence to its social productive power – in which we find the innermost secret, the hidden basis of the entire social edifice, and hence also the political form of the relationship of sovereignty and dependence, in short the specific form of the state in each case.(page 927, Marx, 1993; emphasis added.)
The emphasis on the form in which surplus labour is extracted from the direct producers is important and worth dwelling on a little. Every class divided society rests on the appropriation of unpaid surplus labour of the direct producers; the fact that one group of people can, due to their location in the process of production, appropriate the surplus labour of another group is what defines a class. The appropriation of the surplus labour of direct producers by the ruling class is as much true of a feudal organization of production as it is of a capitalist mode of production. What distinguishes the two is the form in which this surplus labour is appropriated by the ruling classes, not the fact of surplus extraction per se. It is only in the capitalist mode of production that the surplus labour of the direct producers, i.e., the workers, takes the form of surplus value and is mediated through the institution of wage-labour. While this makes the exploitation of workers less apparent under capitalism, it also distinguishes the capitalist mode of production from non-capitalist modes, where the appropriation of surplus labour is much more visible, direct and brutal. For instance, in the feudal organization of society in Medieval Europe, the surplus labour of the serf was immediately visible as the work he did on the lord’s land; the surplus labour took the form of the product of the serf’s labour. The visibility of exploitation, understood as the appropriation of unpaid labour time of the direct producers, is lost under capitalist relations of production; it is obscured by the institution of wage-labour.
The study attempts to identify the evolution of the modes of appropriation of surplus labour in India indirectly by studying the evolution of key structures of the Indian economy at the aggregate level. The underlying assumption of the whole study is that the evolution of the aggregate economic structures, like ownership patterns in the agrarian economy, the evolution of labour forms like tenancy, wage-labour, bonded labour, the size-distribution of firms in the informal sector, the patterns of employment and migration, the importance of merchant and finance capital, etc., can provide useful and reliable information about the mode of surplus extraction. While it is possible to form a picture of the aggregate evolution of the Indian economy using data available from sources like the NSSO, the Agricultural Census, the Census of India – and that is precisely what we do in this study – we are fully aware of the limitations of such aggregate accounts. Many micro-level variations are lost in the aggregate story and so, wherever possible, the aggregate picture is complemented with case studies.
The study is broadly divided into two sections, one dealing with the agrarian economy and the other with what has come to be called the “informal” industrial sector. This twin focus is motivated by several considerations. First, the agrarian economy accounts for the largest section of the country’s workforce and population; this makes it a natural focus of any study which attempts to understand the evolution of the Indian economy and society at the aggregate level. Second, while the non-agrarian economy consists of the industrial and the services sector, the majority of the workforce in these two sectors is, again, found in what has been called the “informal” sector; that is why this becomes one of the foci of this study. Third, to the extent that an understanding of the relations of production (and forms of surplus extraction) is at issue, the “formal” industrial and services sector are probably beyond the domain of any debate; most serious scholars and activists would agree that the “formal” sector is characterized by capitalist relations of production. Since, what seems to be at issue is the “correct” characterization of the relations of production and forms of surplus extraction in the agrarian economy and the non-agricultural “informal” sector, this study focuses on precisely these two as an intervention in the broader debate about the characterization of Indian society.
Here we present a summary account of our findings, first for the agricultural sector and then for the “informal” industrial sector and end by raising some political and philosophical issues for discussion; for more empirical details and sources of the data readers are requested to look at the full article (which is posted here as a pdf).
AGRICULTURE: TRENDS AND SUMMARY
Our analysis of aggregate level data has revealed the following significant trends in the agrarian economy of India:
1.The share of GDP contributed by agriculture has steadily declined over the last five decades; this decline has not been matched by a decline in the share of the workforce engaged in agriculture. The result of these two trends has been a declining share of per capita value added from the agricultural sector. This has essentially consigned a large section of the Indian working population to very low productivity (and low income) work.
2.The average size of agricultural holdings, both ownership and operational, has seen a steady decline over the last five decades, with the average ownership holding in 2002-03 being 0.73 hectares.
3.The ownership of land remains as skewed as it was five decades ago; several measures capture this skewed pattern of ownership in the agrarian economy. For instance, the Gini coefficient of landholding ownership concentration has remained practically unchanged between 1960-61 and 2002-03. In fact it has marginally increased between 1991-92 and 2002-03.
4. While the aggregate distribution of land ownership remains as skewed as before, interesting and important patterns are visible within this unchanging aggregate picture. The share of land owned by large (10 ha or more) and medium (4 ha to 10 ha) landholding families has steadily declined over the last few decades from around 60% to 34%; the share owned by small (1 ha to 2 ha) and marginal (less than 1 ha) landholding families has increased from around 21% to 43%, while the share of semi-medium (2 ha to 4 ha) families has remained unchanged at around 20%.
5.Parallel to this decline in the share of land held by large landholding families is their decline as a share of rural households; on the other hand, there is a large increase in the share of small and marginal landholding families among rural households. In 2002-03, 80% of rural households were marginal landholding families; the corresponding figure was 66% in 1960-61. Both these trends seem to indicate the declining economic, social and political power of the landowning class in India.
6.The geographical (inter-state) variation of landholding ownership pattern allows us to divide the Indian states into two groups: large landholding states, and small landholding states. In the “large” landholding states, a substantial share of total area is still owned by relatively large landholding families; in the “small” landholding states, the share of land held by large or medium landholding families is very small. The former group consists of: Andhra Pradesh, Gujarat, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Rajasthan; the second group consists of: Assam, Bihar, Himachal Pradesh, J&K, Kerala, Orissa, Tamil Nadu, Uttar Pradesh, West Bengal.
7.Going hand-in-hand with the decline in the share of land owned by large landowning families, is the steady decline of tenant cultivation and its gradual replacement by self cultivation in Indian agriculture. The share of operational holdings using tenant cultivation declined from about 24% in 1960-61 to about 10% in 2002-03. There are large geographical variations in the extent of tenancy, with the largest share of leased-in land as a share of total operated area occurring in Punjab and Haryana, two prominent examples of what we have called large landholding states; Orissa has high prevalence of tenancy and is an example of what we have called small landholding states. The proportion of area owned and the proportion of area operated by the different size-classes are almost equal; hence, there is no evidence of reverse tenancy on any substantial scale at the aggregate level, though this might hide reverse tenancy at state or regional level.
8.In most places where tenancy exists, the largest form of the tenancy contract is still sharecropping. In 2002-03, share cropping accounted for about 40% of the land under tenancy; this has more or less stayed constant over the decades. An important exception is Punjab and Haryana, the two states which have the largest share of leased-in land, where the predominant form of the tenancy contract is for fixed monetary payment.
9.Effective landlessness is large and has steadily increased over the past few decades. The share of effectively landless households in total rural households has increased from about 44% in 1960-61 to 60% in 2002-03.
10.Small holding agricultural production has increasingly become economically unviable over the years. In 2003, the average income from cultivation was insufficient to cover even the very low level of consumption expenditures of the majority of rural households. This is one of the primary causes behind the recent increase in rural indebtedness. This increasing difficulty of sustaining incomes through cultivation was probably what led close to 40% of farmers in 2005 to suggest, in the course of a NSSO Survey, that given a chance, they would opt out of agriculture. Changes in the agrarian structure of India seem to have already brought the question of collectivization on the historical agenda. We return to this point in the conclusion.
11. Disaggregating total incomes of rural households engaged in agriculture show that wage income has become the main source of income for a large majority of the population. For about 60% of the rural households in 2003, the major share of income came from wage work, supplemented by income coming from petty commodity production, both in the agricultural and non-agricultural sector. Another 20% of rural households drew equal shares of their total income from wage work and cultivation, both at about 40%.
12.Prevalence of informal sources of credit through moneylenders had seen a sharp decline over the 1960s and 1970s, but the decline seems to have been halted since the early 1980s. The moneylender has made a comeback in rural India, facilitated by a steady retreat of the institutions of formal credit.
13.There was significant capital accumulation in the agricultural sector during the 1970s and 1980s; this has drastically fallen during the 1980s and has picked up a little during the 1990s. The fall in the growth rate of capital formation has been largely driven by the fall in public sector investments in the agrarian economy.
Putting all these trends together, one is led to the following tentative conclusions (more in the nature of a working hypothesis): over the past few decades, the relations of production in the Indian agrarian economy have slowly evolved from what could be characterized as “semi-feudal” towards what can tentatively be termed “capitalist”; this conclusion emerges from the fact that the predominant mode of surplus extraction seems to be working through the institution of wage-labour, the defining feature of capitalism. Articulated to the global capitalist-imperialist system, the development of capitalism in the periphery has of course not led to the growth of income and living standards of the vast majority of the population. On the contrary, the agrarian economy has continued to stagnate and the majority of the rural population has been consigned to a life of poverty and misery.
Aggregate level data suggests that the two main forms through which the surplus product of direct producers is extracted are (a) surplus value through the institution of wage-labour (which rests on equal exchange), and (b) surplus value through unequal exchange (which mainly affects petty producers) where input prices are inflated and output prices deflated for the direct producers due to the presence of monopoly, monopsony and interlinking of markets; semi-feudal forms of surplus product extraction, through the institution of tenant cultivation and share cropping, has declined over time. Merchant and usurious capital continues to maintain a substantial presence in the life of the rural populace, both of which manage to appropriate a part of the surplus value created through wage-labour, apart from directly extracting surplus value from petty producers through unequal exchange.
The process of class differentiation has been considerably slowed down and complicated due to the steady incorporation of the Indian economy into the global capitalist system, which has supported and even encouraged the growth of a large “informal” production sector. This informal production sector can be best understood as being involved in petty commodity production, both of agricultural and nonagricultural commodities. Petty commodity production refers to the organization of production where the producer owns the means of production and primarily uses family and other forms of non-wage labour in the production process. Petty commodity production is exploited mainly by merchant and usurious capital where the main form of surplus extraction is through the mechanism of unequal exchange and not through the institution of wage-labour; unequal exchange is often facilitated and maintained through interlinked product, labour and credit markets. The coexistence of both wage-labour and petty commodity production, whereby landless labourers, marginal farmers and small farmers participate in both, in one as free labour and in the other as owner-producer, has impeded the development of proletarian class consciousness and complicated the task of revolutionary politics. It is to a detailed study of petty commodity production in the non-agricultural sector that we now turn.
INFORMAL INDUSTRY: TRENDS AND SUMMARY
In the second part of this study we have attempted to take a broad look at the organization of informal industry in India. In particular we have focused on the evolution of firm size, the types of production relations and the modes of surplus extraction prevailing in informal industry. The following conclusions can be drawn:
1. The industrial sector as a whole (formal and informal) has not expanded greatly in terms of employment in the past three decades and today stands at around 18% (compared to China’s 24%) of total employment in the Indian economy.
2. The informal sector still accounts for around 75% of industrial employment in India. The employment share of the formal sector in general and large-scale industry in particular has been stagnant for the past three decades.
3. Informal industry produces a wide variety of commodities including food products, textiles, wood and metal products and provides services to several types of heavier and more capital-intensive industry.
4. The number of informal firms and workers has been more of less stationary since the 1980s and the relative share of petty-proprietorships, marginal and small capitalist firms is also largely unaltered.
5. As expected most informal firms do not own substantial amounts of capital equipment. The land or building on which the firm is situated accounts for 60-80% of asset value for informal firms.
6. Even though GVA for the formal sector far outstrips GVA in the informal sector, value added in informal industry has increased significantly in the last decade. Since the number of workers has remained more or less the same, this suggests that labor productivity has been rising in this sector.
7. The relations of production in informal industry are neither purely independent producer (characterized by producer’s ownership of labor and capital) nor only industrial capitalist (characterized by a proletarian workforce and a real subsumption of labor to capital). Rather a spectrum of putting-out relations based on formal subsumption of labor and a reliance on extraction of absolute rather than relative surplus value is observed.
8. In addition to putting-out arrangements, nominally self-employed or independent producers are often locked into a relation of dependency vis-à-vis merchant and finance capital. This situation is closely analogous to the position of the peasant in the countryside with respect to intermediaries.
9. Piece-wages, unequal exchange, bonded labor, contingent and casual labor, and gender and caste oppression all conspire to increase the producer’s exploitation largely via extraction of absolute surplus value.
10. In the face of the failure of modern industry to expand satisfactorily, informal industry has acted as the “employer of last resort” for surplus labor in the agricultural sector. Relations of dependency and lack of resources as well as incentives for technical change keep informal workers trapped in low productivity, low wage work. Surplus labor, low wages and intense (self) exploitation in turn create disincentives for technical change.
CONCLUSION
By way of conclusion, we would like to raise some political and philosophical issues and questions for further discussion without in any way claiming to have arrived at any conclusive answers. Though both the authors largely agree to the aggregate trends presented above, we derive different political and social implications from these trends. This derives partly from different political and philosophical perspectives that both of us see ourselves closest to. Rather than paper over our differences, we therefore, present our alternative viewpoints, which might even be contradictory, for further debate and discussion.
The first issue that we would like to put forward for discussion is the continued centrality of the agrarian question to any project for revolutionizing Indian society. This follows simply from the fact that the majority of the working people in India are related, directly or indirectly, with the agricultural sector; this is a direct result of the failure of the structural transformation of the Indian economy. Any attempt, therefore, at radical reconstruction of Indian society will have to deal with the agrarian question effectively. Dealing with the agrarian question will mean, among other things, rapidly increasing the productivity of agricultural activity, the surest way to increase the income of the vast masses of the working people involved in agriculture and thereby create a home market for domestic industry.
But here we come up with some difficult questions that need to be addressed. Traditionally, the Marxist tradition has seen redistributive land reforms as essential to the project of dealing with the agrarian question. The reasons have primarily been political, though some economic arguments have also been developed.2 Politically, land reforms have been seen as a way to decisively break the power of the parasitic class of feudal and semi-feudal landlords; economically, it has been understood as creating conditions for the development of the productive forces in rural society, increasing the productivity of labour, creating a surplus for supporting industrialization and providing a market for domestic industry.
Using Lenin’s distinction between the Prussian and the American paths for bourgeois development in the rural economy lends credence to the call for redistributive land reforms. Discussing the “two forms” of bourgeois development out of the feudal and semi-feudal order characterized by serfdom, he says:
The survivals of serfdom may fall away either as a result of the transformation of landlord economy or as a result of the abolition of the landlord latifundia, i. e., either by reform or by revolution. Bourgeois development may proceed by having big landlord economies at the head, which will gradually become more and more bourgeois and gradually substitute bourgeois for feudal methods of exploitation. It may also proceed by having small peasant economies at the head, which in a revolutionary way, will remove the “excrescence” of the feudal latifundia from the social organism and then freely develop without them along the path of capitalist economy.
Those two paths of objectively possible bourgeois development we would call the Prussian path and the American path, respectively. In the first case feudal landlord economy slowly evolves into bourgeois, Junker landlord economy, which condemns the peasants to decades of most harrowing expropriation and bondage, while at the same time a small minority of Grossbauern (“big peasants”) arises. In the second case there is no landlord economy, or else it is broken up by revolution, which confiscates and splits up the feudal estates. In that case the peasant predominates, becomes the sole agent of agriculture, and evolves into a capitalist farmer. In the first case the main content of the evolution is transformation of feudal bondage into servitude and capitalist exploitation on the land of the feudal landlords—Junkers. In the second case the main background is transformation of the patriarchal peasant into a bourgeois farmer. (Lenin, 1907).
The three main communist streams in India, the Communist Party of India (Marxist), the Communist Party of India (Marxist-Leninist) Liberation and the Communist Party of India (Maoist) more or less accept this distinction, the first two explicitly and the last one implicitly.3 Hence, for all the three streams the main task (or axis) of the current stage of the Peoples (or New) Democratic Revolution is the agrarian revolution, with redistributive land reforms being one of its main tasks.
While it is true that India, because it did not witness any serious efforts at land reforms on a national scale, developed along the landlord path out of semi-feudalism, there are some important differences that need to be considered. One pole of landlord capitalism, viz., landlessness has been growing over the years; the other pole of landlord capitalism, viz., the continued dominance of a few “big peasants” seems to be at variance with the evidence. Aggregate level data about India that we have seen in the course of this study seems to throw up an unmistakable trend of the declining power of landlords (feudal or otherwise), not by any revolutionary means but just by the sheer pressure of demographic developments and economic stagnation. The total land owned by the large landholding families, the “big peasants” that Lenin refers to, have halved over the last five decades and today they own only about 12 percent of the total land. On the other hand, the land owned by medium-to-small landholding families has increased to over 65 percent. Does this, along with other evidence on the decline of tenancy and the increase of wage-labour, not indicate that the rural economy in India is inexorably being pushed in the direction of peasant capitalism? How would this important trend of the increasing dominance of peasant capitalism, and a gradual whittling down of landlord capitalism, change the course of the agrarian revolution? If landlords, as a class, are dwindling in economic and social power, is a programme aimed at breaking their political power still relevant? Is the contradiction between feudalism and the broad masses of the people still the principal contradiction in India today?
Another issue that will need to be addressed in the context of the slogan for redistributive land reforms is to see whether the resulting farms will be viable in any meaningful economic sense. Let us recall that the average size of ownership holding in India in 2003 was 0.81 hectares; so, the most equitable redistribution will result in the average holding of this size. If instead land is only taken from those owning more than 10 acres and all of it distributed among those currently owning less than 1 acre, then the average size of holding for those receiving redistributed land will roughly become 1.25 acres.
If we juxtapose this with the cost of cultivation data, we can easily see that agricultural units of approximately such sizes will not be economically viable in the sense of being able to generate any surplus product after sustaining a decent level of consumption of the producers. It is extremely doubtful whether these small farms can generate any economic surplus even after the onerous relations of unequal exchange have been removed from the picture. Can they, therefore, help in the industrialization effort by generating surplus or will they instead require a net resource flow in their direction with subsidized credit, power, inputs, etc. to continuously keep them viable? This question is extremely important as was shown in the immediate aftermath of the October revolution in Russia when the revolutionary regime was put in serious jeopardy by a severe food shortage.
The growth of capitalist relations, the continued fragmentation of the land, the decline in tenancy, the unviability of small-scale production and other related factors seem to suggest that a higher form of agrarian development, i.e., collective forms of agricultural production, is gradually being pushed on to the historical agenda of the revolutionary movements in India. Collective, cooperative and socialist forms of large-scale agriculture probably need to be seriously considered as an option emerging out of the very evolution of the material conditions of the vast masses of the working people. The agenda of redistributive land reforms creating bourgeois property in rural areas and facilitating capitalist development needs to be seriously rethought, not because of some ideological reasons but because the development of the agrarian structure seems to demand such a revaluation.
The second large issue raised by our study concerns the mode of industrialization of the Indian economy. It is relatively uncontroversial that a shift of the agricultural population into the secondary and tertiary sectors will be required in order to raise real incomes of the vast majority. How this transformation is to be achieved is the question. The structural transformation required to relieve above-mentioned pressures on agriculture cannot be left to the anarchy of the global capitalist market. The “market-friendly” post-1991 period has been witness to a type of growth that has resulted in rising inequality and increasing number of low-wage, contingent and informal jobs. However the contradictions and problems of the pre-Reform, “planning period” also need to be taken seriously. There is an urgent need to break out of certain simple binaries and equations which have been imposed upon us. The first binary is that between State-managed capitalism and market-oriented capitalism. India’s experience shows that the vast majority of the working population has suffered greatly in both regimes. In our struggle against a particularly predatory type of neoliberal capitalism (whose days may in any case be numbered given the global crisis), we must not find ourselves unwittingly arguing for a return to the bureaucratic and corrupt State. Rather the spectacular failure of the neoliberal model can be an opportunity to demand greater decentralization and more autonomous development. The various people’s movements have been articulating precisely such a model of development.
The second simple equation is between rural areas and agriculture on the one hand, and cities and industry on the other hand. The social and ecological contradictions of the large-scale, capital intensive model of industrialization must be taken seriously. Nowhere has this model produced high levels of employment in an ecologically sustainable fashion while giving producers a say in the running of the workplace. It is becoming increasingly clear that the economic viability of such industrialization is obtained only by cost externalization. The Indian experience points to the necessity for developing dispersed, low capital-intensity, sustainable models of industry that nevertheless raise real incomes of the majority (see Datye 1997 for one such model). This is not a utopian pipe-dream but rather a historical necessity if “development” is not to remain an unfulfilled promise for the majority of Indians.
None of the above can be taken only as a demand for better or more enlightened development policy. Rather it articulates what has already been emerging from social and political movements and in turn seeks to ground the political demands in an empirical and theoretical context. There is a need to extend revolutionary people’s movements rooted in peasant agriculture and national resource struggles into the rural, semi-urban and urban industrial milieu. The urgent question here is how can the dispersed industrial working class be effectively politically organized at a national level? This working class does not always resemble the “classical” doubly-free, urban industrial proletariat. Yet, our attempt here has show that it remains exploited nonetheless and can and should form an important component of left revolutionary politics. Is an artisan-peasant alliance a possibility for the near future?
There is a difference of opinion between the two of us on the question of the model of industrialization that might fruitfully accompany efforts at a radical restructuring of Indian society. While one of us believes, as has been stated in the above paragraphs, that a dispersed, low capital-intensity, sustainable model of industrialization emerges from the Indian experience, the other believes that the scale and geographic dispersal of industrialization per se does not lead to its being more democratic or ecologically sustainable. What is rather more important is the institutional setting within which the industrialization effort is embedded. A small-scale industrialization effort in the context of local level inequalities of class, caste and gender can reinforce those inequalities and nullify all attempts at democratic control of the production process; on the other hand, a large-scale, high capital intensity and centralized industrialization effort within a socialist context might be amenable to democratic control if the institutions of workers’ control are in place. Sustainability, again, seems to have more to do with proper cost-benefit analysis rather than the scale of production as such. In a socialist context, where the surplus product of society is democratically controlled, the pace and direction of technical change will be determined in a rational and scientific manner and not left to the anarchy of capitalist production and the imperatives of profit maximization. In such a setting, internalizing the environmental costs of production would flow naturally from the imperatives of all round social development.
Despite the differing views advanced above, we hope the this study and the accompanying reflections and speculations will serve to fuel discussion and debate among those working for a radical restructuring of Indian society along socialist principles.
(We would like to thanks Debarshi Das and Mohan Rao for helpful comments on an earlier version of the paper.)
In Defence of Hamas – Response/Counter-response
January 27, 2009 by 1 Comment
The Original Article by Pothik Ghosh
Is there really a Palestinian bourgeois class, which shares socio-political interests with its Israeli counterpart? For the very same reason that explains the absence of a working class movement in Palestine, there is no capitalist solidarity in that region as well. There have been working class leaders who have failed their class without being bourgeois themselves.
There is greater out-migration from Israel than there is immigration into the country. There is no material pressure to expand territory. After all, Israel did vacate Gaza. You are willing to compromise with Hamas’s Islamicism. Why can’t the Hamas accept Israel in the same spirit? – TK Arun
Dear TK,
I will attempt to address only the fundamental theoretical questions you have raised in your response to my piece on Palestine here. I’ll leave out some of the more empirical details that you have brought up.
To begin at the beginning, capitalist solidarity does not necessarily preclude struggle within capitalism among various sections of the bourgeoisie. In fact, the hegemonic social logic of capital, which would be constitutive of such solidarity, is of competitive socialisation. Capitalist solidarity is, therefore, not without stratification, and domination of one or more sections of the bourgeoisie by others. Capitalist solidarity can never, precisely because of this constitutive logic, be truly envisaged as absolutely horizontal. To that extent, there is no equality, even within the bourgeoisie, in capitalism. And to my mind solidarity among various sections of capitalists cannot, unlike socialist solidarity, be conceptualised (repeat conceptualised) as an absolute state. It exists, provisionally if you like, only in relation to their domination of the working class. I have, if you go back to my piece, said that the PLO-PA – and the Palestinian social groups embodied by them – also pose a Palestinian identity of struggle against Israel. But the decline in the radical tenor of resistance as posited through this ‘secular’ identity, seen in conjunction with its rejection by the Gazan underclass and the ascendancy of Hamas and its Islamism as the principal idiom of Palestinian resistance, indicates that there is a Palestinian bourgeoisie. This bourgeoisie, even as it poses a struggle (competitive) against the Israeli state, and the Jewish bourgeoisie it embodies, for a better position within the larger regional capitalist hegemony, also seeks to protect and preserve its own interests against the assault of the Palestinian underclass. The PLO-PA’s collaboration, ever since Oslo, with the Israeli state to marginalise and even crush Hamas on one hand, and continuing to pose a Palestinian identity of struggle against Israel, on the other, is symptomatic of this strange capitalist paradox called competitive solidarity of the bourgeoisie. You will surely agree, and I have adduced examples to that effect in my article, that the Palestinian question posed by PLO-PA, post Oslo, is an apology of resistance in that it has been perfectly amenable to and even a participant in Israel’s insidious undermining of the Oslo Accords. Or, how else does one explain the failure of the Mahmoud Abbas-led group’s failure to forge a solid solidarity between West Bank and Gaza and conduct resistance against Israel with the same doggedness that Al Fatah, the Yasser Arafat-led main faction of the PLO, did in its heyday. That is something that Hamas has been doing. If anything, Abbas has used the PA security forces, and wonder of wonders Fatah fighters, to quell anti-Israeli dissent within Palestinian society not only in Gaza but also sometimes in West Bank.
If you argue that Hamas too is posing the question of self-determination in the idiom of competition I would certainly not disagree. Given that it’s not a self-conscious proletarian subjectivity, it sure is not self-reflexively aware that the question of political autonomy it’s raising cannot really be resolved unless it’s informed by a politics that shifts the horizon of socialisation from competition (capitalist) to non-alienated association and dialogue (trans- or counter-capitalist). Yet, at this moment this competitive posing of the ‘Islamised’ national Palestinian identity of Hamas – given that it is located in that section of Palestinian society (underclass) that is disenfranchised, dispossessed and dominated by a constellation of various institutionalized and alienated configurations of socio-political power formed by the PLO-PA and the Zionist state together as also separately – objectively poses the decimation of the competitive social logic of capitalism and its hegemony in the region. A hegemony that is, at this moment, precisely, the root cause of this dispossession and domination of a section of Palestinians. By the same token, the PLO-PA’s competitive ‘struggle’ against Israel, considering that it simultaneously seeks to collaborate with it, is an attempt to keep certain sections of Palestinian society at bay and, therefore, seeks to preserves and perpetuate the hegemony of capitalism and its competitive social logic and ideology.
I would, of course, join you in ruing the fact that working class forces have grasped this objective conjunctural situation neither in their theoretical analyses nor political practice. For, only that would break and displace the conjuncture towards a more ideologically proletarianised situation. And yet, that will not be any reason for me to simply reject a political subjectivity, which foregrounds this objective autonomy-association question sharply, merely because it’s not self-conscious of what its subjectivity actually amounts to in the objective realm. Of course, Hamas, or any such agency, will have to be critiqued for its deficit on those terms of self-consciousness. But that to my mind is not accomplished by painting it with the same moral-secular brush of Islamism that is used to taint forces like Al Qaeda or Lashkar-e-Toiba.
Coming back to a problem that has often cropped up in most of our discussions and debates, class for me is, in its essence, not a social identity or group. Though it can appear in that form sometimes. (Hegel’s “the essence must appear” or Marx’s “Class qua class”.) Class, for me, is a logic of relation. When competition happens, as is capitalism’s wont, in its moments of circulation (social) and distribution/regulation (political), we have to see in totality, by retroactive location in the moment of production (economic), what is the point from which absolute extraction of value occurs. The social group or identity that occupies that point at that moment is the form that the working class takes at that moment. In other words, politico-cultural identities have to be located within this matrix of social relations to figure out which class position they hold in themselves. And that would be irrespective of whether or not they display a subjective consciousness of their objective class location (or position) in positing their respective identities.
Your analysis seems to be informed by an economistic view of Marxism and class politics, which conflates the working class with workers and the bourgeoisie with a specific section among them: the industrial capitalists. But in my analysis West Asia, particularly Israel-Palestine, does not need to have heavy-duty industrialisation and thus industrial capitalists and industrial workers, for us to find either the working class or the bourgeoisie in that region. Capital, if I may repeat myself, is a certain configuration of social power.
Therefore, your assertion that there is no working class movement in the region is right. But not for the reasons you seem to imply. This absence is because, as I state above, the left forces in the region, which had some significant presence there once, have not been able to grasp, either in theory or in political practice, the conjuncture of Hamas’s emergence and critically engage with that conjuncture and thereby the Palestinian movement that has engendered a force like Hamas. If that sounds a tad voluntaristic and utopian, let me complete the dialectic, which will dissolve this subjective voluntarism into its objectivity, by saying the same thing from a different angle: only if Hamas succeeds in enabling a truly nationally (repeat nationally) self-determined Palestinian state would the Palestinian society have taken yet another step towards founding such a working class movement. The institutionalisation of Hamas, which the founding of such a nation-state would entail, would lead to the emergence of a new elite and bureaucracy from the currently struggling sections of Palestinian society, its concomitant alienation from the masses and the complete instrumentalisation of its Islamism, something that is at times visible now as fascism at the Palestinian community level.
All that would further deepen the objective conditions for the emergence of a significant working class politics in Palestine. Of course, subjective intervention to seize this objective moment would still be required. And we, who do politics in the shadow of the Islamic Revolution in Iran and the elimination of the Tudeh Party by Khomeini’s band of Islamists, know all too well the heavy price to be paid for not seizing the objective moment through subjective ideological intervention. After all, only that can rupture the conjuncture. Similarly in Palestine. Hamas’s success and institutionalisation, going by the current configuration of political forces, could well lead to the emergence of more radical outfits such as the Islamic Jihad as the principal agency of Palestinian resistance. But Hamas’s marginalisation through military force, precisely what Israel has been trying to accomplish, would surely compel large sections of the beleaguered Palestinian underclass to vest their despair in the pernicious chimera of a hope that the pan-Islamism of Al Qaeda offers. Such perils in political struggles cannot, clearly, be pre-empted. They have to be faced even at the risk of making grave mistakes. For, if people eschew struggles for fear of the perils such struggles are likely to produce there would be no hope of them emancipating themselves. We would do well to recall Mao, who in his peculiarly Chinese Jacobin style used to say, “A revolution is not a dinner party.”
By the way, an aside: revolutionary forces in Palestine might be down but they are not out. Fighters of George Habbash’s Popular Front have reportedly been fighting the Israeli incursion shoulder to shoulder with the guerrillas of Hamas and Islamic Jihad. The opportunity for a socialist revolutionary subjective intervention has not exactly been lost in Palestine.
Pothik Ghosh
Seminar on Socialism For the Twenty First Century
November 26, 2008 by Leave a Comment
New Socialist Initiative: a collective committed to the regeneration of revolutionary socialist politics invites you for a Seminar on Socialism For the Twenty First Century on Sunday 30th Nov at 4 P.M. Venue: Conference Hall, Rajendra Bhavan, 210 Deendayal Upadhyaya Marg, New Delhi – 110002
Humanity stands at the threshold of new crises and new possibilities. As global capitalism takes humanity through another round of economic crisis, increasing unemployment, and poverty, a simple and stark question raises its head. Is humanity condemned to live with exploitation, oppression, dehumanising working conditions, wars and a looming ecological catastrophe, or is it capable of building a society without class, caste, and gender injustices, a society where the path to growth is not paved with poverty, hunger and overworked human bodies, where competitive greed is not the most rewarded human emotion. Rulers of the world since times immemorial, form Egyptian Pharaohs to Greek slave owners to Chinese Emperors to the current capitalist breed have always believed that they rule over the best of the world. The question raised above would scare them. For the people on the other hand, this question offers a stark choice. Either they succumb to ruling class ideologies, their obfuscations, allurements and sedation, and remain blind to it. Or, they doubt, critique and ask questions; if humanity is to make a better world, how should it go about it? What lessons does history teach in this regard?
Ever since capitalism became the dominant social system, socialism has been integral to humanity’s endeavours to imagine and achieve a better social world. Against the private profit greed of capitalism, socialism pitted the ideal of collective well-being; against a discouraged and alienated mass of humans created by capitalist profit machines, socialism envisioned an active and organized humanity that is fully aware of historic capabilities and tasks; against the freedom to make profit by one that leads to the misery of many, socialism raised the banner of a society in which the ‘the free development of each is a condition for the free development of all.’ To imagine socialism will become irrelevant even while capitalist injustices continue, is to believe humanity to be a condemned species. On the other hand to imagine that specific answers to the above questions provided by socialist visionaries like Saint Simon, Fourier and Owen, or by Marx and Engels, who put socialist theory on a firm scientific basis, or by practitioners of socialism like Lenin and Mao, will be correct in every aspect in the context of current too will be incorrect. For, capitalism has changed. It has changed, through trial and errors while dealing with its own crises, and by its efforts to counter and deflect mass movements against its rule. The most significant changes have occurred in the political and ideological domain. Liberal bourgeois democracy has become the norm of state rule, not just in economically advanced countries, but in underdeveloped countries like India too. Feudal ideologies based on ideas of natural hierarchy and blind faith in the super natural have been replaced by individualism and consumerism of a mass society, which while freeing humans of hierarchical constraints also dis-empower them by obfuscating the social context of their life.
Revolutions of the twentieth century, the Russian, the Chinese, the Vietnamese, or the Cuban, managed to rid a segment of humanity from direct capitalism. History has shown that their success was only partial. While they succeeded in saving their societies from the crises they were in, they failed to put them irreversibly on the path to socialism. Our current context in the twenty first century demands a critical engagement with the history and legacy of these revolutions. Interestingly, it is also in the current context, at a stage of history already shaped by two centuries of capitalist rule and at a time when capitalism as a social system reigns unopposed for the first time globally, that one also hears renewed stirrings for socialism in settings as diverse as hills of Nepal in South Asia, and favelas of Venezuela in Latin America. What do experiences of these countries tell us about prospects of socialism?
We feel that it is time that we revisit these ongoing stirrings for socialism and also start the process of reenvisioning socialism for our times. To start a meaningful discussion New Socialist Initiative, which is a collective committed to the regeneration of revolutionary socialist politics has invited eminent journalist Anand Swaroop Verma, scholar-activist Achin Vanaik and thinker Ravi Sinha to share their ideas on the theme.
Bondage and Capitalism
November 22, 2008 by Leave a Comment
Pratyush Chandra
A Review of Labour Vulnerability and Debt Bondage in Contemporary India, CEC, March 2008, xii+92, Price – Rs 200.
The persistence of “debt bondage” in India has long mesmerised the progressive intellectuals and activists, a vast majority of whom still consider its existence as a reminder of the amphibian (semi-feudal, semi-capitalist) character of India’s political economy and its underdevelopment – overloaded with pre-capitalist “vestiges”. The booklet under review drastically differs from such an understanding of bondage. It does not view it as “a unique system”, rather as a form of employment relationship institutionalising labour vulnerability through debt. “Bonded labour is primarily a social relationship and all those labour relations where vulnerability of the workers is institutionalised through debt could be described as bondage”(6). Further, bondage is “a flexible and adaptive system of labour exploitation”(8).
With the development of capitalist relations in India, bondage has increasingly lost its earlier permanent and generational nature, and has become more and more temporary, seasonal and individualised. The public policy and legal-state machinery that are in place to identify and ‘eradicate’ bondage are unable to record and influence its reproduction in the era of globalisation. Informalisation – contractualisation and casualisation – of the work process that characterises the neoliberal regime of accumulation has tremendously increased labour vulnerability leading to a system of “neo-bondage”, as Jan Breman calls it. Debt and bondage are most rampantly used as mechanisms to mobilise cheap labour from hinterlands and ensure migration (seasonal or long-term) for labour supply in the industries in which India has a comparative advantage. In fact, “with respect to bonded labourers, debt is always a precondition for entering the labour market and in establishing an employer-employee relationship” (80-81).
This report based on extensive studies throughout India maps the institutionalisation of labour vulnerabilities through various forms of debt bondage in contemporary India. With the help of many case studies, it shows how debt posits an element of liability on the part of the worker in the employment relationship, thus reinforcing and consensualising the subjugation of labour under circumstances and conditions on which the worker has a lesser control than otherwise. Advance or debt shapes “the situation of being employed”. It reconfigures an employment relationship as that between the debtor and the creditor, thus reducing the “agency of labour” and alienating the rights and entitlements of workers that characterise the ideal contractual relationship. However, the liabilities in the relationship or general costs of labour are accumulated and bestowed on the worker. The report understands that the role of debt in bondage “is not as an element of an agreement for which there are separate rules and practices of enforcement, but rather… to construct how the claims of workers will be interpreted and treated” (20).
The third chapter of the report assesses the interventions of the state and other agencies to eradicate bondage and rehabilitate bonded labour. It details the provisions of the Bonded Labour System (Abolition) Act, 1976 and the subsequent judicial, legislative and executive activism. It enumerates the discrepancies in its implementation. The chapter also examines the intervention of NGOs. A significant conclusion in this regard is that it was the mobilisational and organisational efforts that were most effective in bonded labour eradication.
The report establishes that bonded labour too has contributed in “India shining” and its globalising aspirations. In fact, bonded labour is not just an input in commodity production; rather, workers in the relationship (conditioned by advances or debt) are essentially sellers of their labour power. “They are controlled by the employers in lieu of an advance or delayed payment or non-payment of minimum wages”.(82) Wages in such conditions are squeezed not only through depressed, delayed and deducted payments, but also via uncontrollable interest rates.
It is important to understand Marx’s conception of “wage slavery” here. The usage of this phrase was not at all allegorical or rhetorical, as many tend to believe. It conceptualised the unfreedom or coercion inherent in the dual freedom of labour (from physical compulsion and from the means of production). On one hand, this dual freedom creates an ambience that compels a labourer to sell his/her labour power. On the other hand, once labour power is sold for a period, the labourer has no control over its expenditure for that duration. It should be remembered though the custom is to pay the wages after labour-power is exercised, wages are, in fact, already advanced prior to the labour process not only for the purpose of records, but also as capital required for production – i.e., it constitutes variable capital that is required to buy labour-power and put it to work. In the circuit of capital given below, Money (M) is advanced to buy Means of Production (MP) and Labour Power (LP) before Production (P) can take place.
In fact, “whether money serves as a means of purchase or a means of payment, this does not alter the nature of the exchange of commodities”.(Karl Marx, Capital, Penguin, pp. 279) As “a means of purchase” money is advanced to the sellers of labour power prior to production, while as “a means of payment”, it remains as the worker’s “credit to the capitalist” until production is completed to be paid as wages afterwards. Functionally it hardly makes any difference – “this does not alter the nature of the exchange of commodities”. And both institutionalise labour vulnerabilities in their own way – advance (partial or whole) can easily be transformed into debt, creating liabilities that shape bondage, while wages can be delayed or even lost (when the capitalist goes bankrupt). In fact, the delay in receiving wages is a significant reason for indebtedness among workers. If in Marx’s England debt played a part in tying the worker more to a shop as a consumer, or to sustain the “truck system”, it can instigate other systems, too, to institute labour vulnerabilities. Ultimately the purpose is to increase these vulnerabilities and thus, reproduce the hegemony of capital over labour. The report remarkably succeeds in showing how this is done in various parts of India through debt bondage.
(This review was originally written for Labour File – A bimonthly journal of labour and economic affairs published from New Delhi)
Appendix
A. The process of proletarianisation to which the majority is subjugated, not the number of ‘ideal’ proletarians or wageworkers, defines capitalism. The actualisation of this process – and thus the degrees of proletarianisation or the “dual freedom of labour” differs according to the concrete contexts defined by the needs of capital and class struggle. More technically, this process is a long thread (not necessarily historical) between the formal subsumption to the actual subsumption of labour by capital – its two ends. At various junctures archaic unfreedom, like slavery, which generally characterised pre-capitalism is formally adopted (more aptly, exapted as explained in B) and transformed according to the conjunctural needs of capitalist accumulation. If we don’t recognise this processual aspect of capitalism, we will be lost in the miasma of overproduced forms and appearances in capitalism.
B. Stephen Jay Gould’s conception of exaptation, I believe, is very useful in understanding the dialectical internalisation of “vestiges” by new stages in evolution – both biological and social. Gould and Elisabeth S. Vrba in their 1982 paper define exaptation as (i) “a character, previously shaped by natural selection for a particular function (an adaptation), is coopted for a new use”; and, (ii) “a character whose origin cannot be ascribed to the direct action of natural selection (a nonaptation), is coopted for a current use”. This concept allows us to comprehend the reproduction of “vestiges” as a process internal to the new stage in development, not as something hindering the ‘complete’ realisation of the new stage.
C. The “purist” idea that “vestiges” obstruct (not shape or contextualise) capitalist development has for a long time informed the theory and practice of Marxism in the so-called third world countries – engaging the revolutionaries in the fruitless exercise of fighting the “vestiges” before taking on the basic system, thus investing their revolutionary vigour in the reformist project of the capitalist development. It is interesting to note that this is not only true about the “Leninists” and “Maoists”, as some “anti-Leninists” allege. Many anti-Leninists and anti-Maoists present more vehement denial of the feasibility of any socialist project in “backward” countries. Their conceptualistion of revolution not only goes against the thesis of “revolution in permanence” – “the downfall of all the privileged classes, and the subjection of these classes to the dictatorship of the proletariat by maintaining the revolution in permanence until the realisation of Communism, which is the final form of organisation of human society” – but is also an unconscious reinforcement of the notion of “socialism in one country”, which they profess to hate.
Capitalism Hits the Fan: A Marxian View
November 2, 2008 by Leave a Comment
Capitalism Hits the Fan: A Marxian View from UVC-TV 19 on Vimeo.
Lecture by Professor Rick Wolff, Department of Economics at the University of Massachusetts – Amherst on October 7, 2008.
Radical Notes 