Category Archives: Globalization

The Dream of the Celt

The Dream of the Celt, Nobel laureate Mario Vargas Llosa’s latest novel published in Spanish in 2010, and whose English translation appeared earlier this year, recounts the life of Sir Roger Casement in the earlier part of the 20th century. Born of a Catholic mother and a Protestant father, Casement served the British Empire well enough to be honoured with the title of ‘Sir’. His life, however, ended tragically when he was executed by the same British state in 1916 for his role in the Easter Uprising in Ireland.

As a 20-year-old, Roger Casement joined the International Congo Society’s (AIC) operations in the Congo in Africa. A fervent believer in the idea that the West was spreading civilization across the world, his ideas underwent a transformation when he was exposed to the brutalities the AIC–owned by the Belgian King Leopold II–was committing to further his interests in the extraction of rubber in that part of the world.

Roger Casement prepared a report strongly indicting the rubber company and hence the Belgian monarch. This report led to Roger Casement’s recognition as a great liberator of the Congolese people. He was subsequently sent to South America to investigate the treatment of natives. His report had a devastating impact, and the Peruvian Amazon Company that was responsible for the atrocities was forced to close down.

His fame had, by then, spread to all echelons of British society, and Sir Roger Casement was offered a diplomatic post as the British ambassador to Brazil. It was then that he made a surprising decision. He turned down the offer and instead decided to return to Ireland and dedicate his life to the freedom from the very colonial power that he had served until recently. Continue reading

Populism as Legitimate Class Politics

“As philosophy finds in the proletariat its material weapons, so the proletariat finds in philosophy its intellectual weapons, and as soon as the lightning of thought has struck deep into the virgin soil of the people, the emancipation of the Germans into men will be completed […] The head of its emancipation is philosophy; its heart is the Proletariat. Philosophy cannot realize itself without transcending the Proletariat, the Proletariat cannot transcend itself without realizing philosophy”. [Karl Marx, 'Towards a Critique of Hegel’s Philosophy of Right: Introduction']

In his latest post David Harvey explains the current financial crisis and touches upon a number of points. Given its sweep, it is not possible for me to summarize it here, and it is best if you can read the whole post in its entirety.

The only point that I want to make is that the question that he raises about class politics and the leading role ascribed to the industrial working class aka the proletariat. This is because Harvey addresses a question that has befuddled me for over a decade and a half. A classical Marxist position has been the leading role of the proletariat in socializing the means of production and therefore the social surplus (profits) that accrue. The proletariat, whether in the industrialized world or its nascent cousin elsewhere has not taken a leading or even a participant role in anti- capitalist struggles. Lenin explained the absence of a revolutionary proletariat in the West due to the emergence of a ‘labour aristocracy’.

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“I have found a flaw in free markets”. Wow

It is almost like live blogging as history is being made right in front of our eyes- today we have Allen Greenspan admitting that that he has finally found a flaw in the free- market system that he has believed to be working exceptionally well for the last 40 years.

It is one thing when the heathen criticize the neo- liberal assault, another when the gods themselves begin to doubt the divine.

Allen Greenspan: “I have found a flaw

“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Mr. Greenspan said.

Referring to his free-market ideology, Mr. Greenspan added: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”
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From One Wall to Another: Marx’s Spectre Looms Large

First a look at some headlines past few days:

Twenty million jobs will disappear by the end of next year as a result of the impact of the financial crisis on the global economy, a United Nations agency said on Monday. (source)

With capitalism in crisis, Karl Marx has become fashionable again in the West. Das Kapital, his seminal work, is set to become a best-seller in Europe.
(source)

An even more curious bit of evidence: a recent poll of East Germans by a major magazine found that 52 percent had lost all confidence in the free market economy while 43 percent would support a return to a socialist economy. (source)

Capitalism as we used to know it is on its deathbed. And those who predicted that the old brand, the unfettered, American-promoted system, was a danger to the world, are being vindicated.They include Karl Marx, whose thinking on banks seems oddly contemporary these days. (source)

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It was in the aftermath of the fall of ‘existing socialism’ symbolized by the fall of the Berlin wall, that the French philosopher Derrida wrote his book Specters of Marx. This was his manner of acknowledging the great power of the German who was written off as his statues and pictures were dismantled all over Eastern Europe and former Soviet Union.

Such positions were rare, however, and there has been a great diminishing of those who have continued to acknowledge the influence of Karl Marx and his theories. One of the early forebodings was the dramatic lack of interest in the thoughts of Marx and in Left politics in general among students. In some countries like China and India, a new generation that had witnessed only the fall of socialism and were enamored of the immense possibilities that a new wave of capitalism had opened up for them, swerved to the right. Those left out of the limited progress turned towards identity politics, which, carried to its logical extreme, is self- defeating.
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Who is to Blame?

Is it that the Indian champions of the ‘free- market’ and liberalization-as-magic-wand have disappeared or is it just that I am not reading enough?

One of them, Swaminathan Anklesaria Aiyar, whose column ‘Swaminomics’ has been a byword for the neo- liberal assault in the Indian media for many years, does write on the debacle on the Wall Street, but  blames it on the ‘perils of giving loans to the poor’!

The crisis arose from the bursting of a housing bubble. That bubble was created, fundamentally, by government policies and institutions seeking home ownership for all Americans, including low-income ones. Politicians rooted for such inclusive finance. But this ‘inclusion’ extended finance to ever more borrowers with fragile and low incomes,  causing disaster. This holds lessons for India.

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Capitalism: A system built to fail

Professor, Richard Wolff of the University of Massachusetts explains in this superb lecture, why the financial crisis is the biggest crisis of capitalism in his, and our, lifetime. Listen till the end, because that is where the symphony’s crescendo is.

Click here to watch the video (38mins). Link via Lenin’s Tomb

[and WordPress- I hate you, for once, because I can't embed a google video in the post].

Read also Prof Wolff’s recent articles in MR.

Capitalism happens.  When and where it does, capitalism casts its own special shadow: a self-critique of capitalism’s basic flaws that says modern society can do better by establishing very different, post-capitalist economic systems.  This critical shadow rises up to terrify capitalism when — in crisis periods such as now — capitalism hits the fan.  Karl Marx poetically called that shadow the specter that haunts capitalism.

This one is on the so- called distinction between the main street and wall Street, or regulated and un- regulated capitalism. Capitalism is capitalism, in whatever form in comes. The main street leads to the Wall Street.

Capitalism has everywhere oscillated between private and public phases.  Private capitalism minimized government interventions and mostly kept state officials off boards of directors.  In capitalism’s public phases, governments intervened and sometimes replaced private with public members of boards of directors.  Crises of one phase often provoked transition to the other.

‘Bailouts’: Socialism (and Capitalism) on its head

John Lanchester, writing in the LRB has one of the finest writings from the left on the financial crisis (no, unlike the fall of ‘socialism’, it is a mere crisis, not the ‘End of History’!). Lanchester also ends with the general pessimism on the left regarding the lack of a left alternative despite the optimism generated by the vindication of its theoretical criticism of capitalism in general and the neo- liberal led globalization in particular.

Perhaps, Francis Fukuyama was right and it indeed is the end of history.

The invention which made it possible for the lending to become so reckless was securitisation: the process by which loans were added together and sold on to other institutions as packages of debt. This had the effect of making the initial lender indifferent to whether or not the loan could be repaid – he’d already sold the debt to someone else, so he didn’t need to care. These packages of debt were then sold on and resold in the form of horrendously complex and sophisticated financial instruments, and it is these which are the basis of the global jamming-up of capital markets.

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Karl Polanyi’s The Great Transformation and the Wall Street Crisis

Dr Girish Mishra has a very informative piece on Karl Polanyi’s book The Great Transformation (1944). Polanyi’s name has figured in a quite a few places of late in light (or the shadow!) of the Wall Street financial crisis. As neo- liberalism recedes- its most articulate proponents now reduced to a tiny die- hard group of ostriches, it is pertinent to speculate on how things will shape now. Lessons from history may not provide recipes, but help in providing a perspective. The concluding words from the article indicate a much desired possibility, at least on the medium to long term.

A few excerpts:

The mission to create a totally self-regulating market economy is predicated on the assumption that both the human beings and natural environment are turned into pure commodities, that is, they are freely bought and sold.

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Wall Street Crisis and Das Capitalism

One week of the collapse of the New York investment banking network, and its ‘rescue’ by the US federal government speaks louder than any arguments against the “free market”. The stock market, considered the ideal mechanism in identifying winners and losers and thereby contribute to an efficient system in contrast to ostensibly inefficiently run government enterprises, has spoken loudly and clearly. An unbridled, or insufficiently bridled, system where companies run by teams of specialists and accountable to no none but a small base of investors has run amok with the bad bad governments bailing out investment banks in the heart of what Maxim Gorky once called The City of Yellow Devil. The devil has certainly reared its bloody head all over Wall Street last few days with a vengeance.

The $700 billion bailout by the US federal reserves is nearly twice the GDP of the apparently roaring economy of India! While investment banks are in the business of making money out of nowhere, these do have an impact on the real economy since industries depend on investments by what is ultimately speculative finance capital for sustenance and growth. The whole web of finance transactions is said to be so complicated that the bankers themselves have lost track of the sources and direction of transactions.
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The Low Side of High Growth

I wish I could summarize Amit Bhaduri’s critical take on India’s high growth rates in recent years-titled India’s Predatory Growth from last week’s EPW. It is, however, so succinct that I’d suggest reading the whole article. Here are a few excerpts:

Statistical half truths can be more misleading at times than untruths. And this might be one of them, insofar as the experiences of ordinary Indians contradict such statistical artefacts. Since citizens in India can express reasonably freely their views at least at the time of elections, their electoral verdicts on the regime of high growth should be indicative. They have invariably been negative. Not only did the “shining India” image crash badly in the last general election, even the present prime minister, widely presented as the “guru” of India’s economic liberalisation in the media, could never personally win an election in his life.

In contrast to earlier times when less than 4 per cent growth on an average was associated with 2 per cent growth in employment, India is experiencing a growth rate of some 7-8 per cent in recent years, but the growth in regular employment has hardly exceeded 1 per cent. This means most of the growth, some 5-6 per cent of the GDP, is the result not of employment expansion, but of higher output per worker. This high growth of output has its source in the growth of labour productivity. According to official statistics, between 1991 and 2004 employment fell in the organised public sector, and the organised private sector hardly compensated for it.

At the extreme ends of income distribution the picture that emerges is one of striking contrasts. According to the Forbes magazine list for 2007, the number of Indian billionaires rose from nine in 2004 to 40 in 2007: much richer countries like Japan had only 24, France 14 and Italy 14. Even China, despite its sharply increasing inequality, had only 17 billionaires. The combined wealth of Indian billionaires increased from $ 106 to $ 170 billion in the single year, 2006-07 [information from Forbes quoted in Jain and Gupta 2008]. This 60 per cent increase in wealth would not have been possible, except through transfer on land from the state and central governments to the private corporations in the name of “public purpose”, for mining, industrialisation and special economic zones (SEZs). Estimates based on corporate profits suggest that, since 2000-01 to date, each additional per cent growth of GDP has led to an average of some 2.5 per cent growth in corporate profits. India’s high growth has certainly benefited the corporations more than anyone else.

Food in the Time of Crisis

What we are witnessing today is not so much a food crisis, but the question of food in a time of crisis.

Senior Indian ministers have mistakenly attributed the current rise in food prices to the poor consuming more because ‘the economy is growing’.

This fallacy arises when one is blind to both history and the present.

A few days after agriculture minister Sharad Pawar blamed the South Indians for eating more chapatis causing wheat shortage, commerce minister Kamal Nath on Friday said increased food consumption by poor people is a challenge before the government. “We have great supply-side challenges in India at the moment with 15 million people moving from having one meal a day to two meals a day,” Nath said on the the sidelines of a conference in Singapore. (source, via anindianmuslim)

[To be fair, Sharad Pawar has had an afterthought, though he still does not hit the bull's eye:
Pawar said that agriculture was globally faced with serious challenges from factors like climate change, natural calamities and crop failure, diversion of agriculture land for bio fuels and increasing prices of food grain. (source)]

The production this year is estimated to about 227m tons, which is little less than the the current consumption.

It is certainly not a supply side problem, contrary to the minister’s assertions.

Since the food riots of the 1970s, the country, especially its middle classes, have not witnessed a large scale famine or a crisis. However, historically, some of the biggest famines were caused during an earlier phase of globalization- it was then more bluntly called colonization.

In neither case the reason was the insufficiency of food grains. On the contrary, both then as now, the reasons were linked to the vagaries of the world market, ‘free market’ only in name and controlled by financial interests in reality. During the 18th and 19th centuries, for example:

One third of the population of the then province of Bengal, which includes today’s Bangladesh, West Bengal, Orissa, Bihar and South Assam, were wiped out in the famine of 1770, immediately after Bengal was occupied by the British East India Company, due to their inhuman tax system. According to author Mike Davis, during the famine of 1876, “the newly constructed railroads, lauded as institutional safeguards against famine, were instead used by merchants to ship grain inventories from outlying drought stricken districts to central depots for hoarding…In Madras city, overwhelmed by 100,000 drought refugees, famished peasants dropped dead in front of the troops guarding pyramids of imported rice.”

Interestingly, “these famines took place at the very same time that annual grain exports from India were increasing.” (source).

Does history teach us anything? Is there anything in common with the present, almost sudden food crisis?

In the 18th and 19th centuries India suffered terribly as millions starved to death, its countless tons of grain were exported to England because the mother country could afford higher prices impoverished Indians couldn’t.

The situation is similar today though the immediate triggers are different. The 19th century crises was caused because of the de- industrialization of India, forcing a movement from the town to the countryside and increasing the pressure on land At the same time there was a dismantling of its traditional grain reserve system. Finally, the focus of crops shifted to growing “cash” crops that were exported to the global market.

There certainly is no crisis because of the production, or its possibilities, in not being able to cater to demand. It is not a question of supply versus surging demand. Certainly, demand has increased over the years- though not because, as Kamal Nath would like us to believe “because the poor are eating more”.

It is partly due to the increasing demand from the rising middle classes in Asia (FP edit), and also wastage in the developed world. The structural reforms unleashed over last two decades have led to a general agricultural crisis (impacting food grain production as well):

Between 1996 and 2001, prices of all primary products (cotton, jute, food grains and sugar) fell by 40 to 60 per cent and farmers who had contracted private debts in particular, became insolvent. The syndrome of hopelessly-indebted farmers committing suicides in Andhra Pradesh and Punjab started in 1998 and rapidly spread to other areas where cultivation of cash and export crop was predominant. The crash in pepper, coffee and tea prices came a few years later after 1998 and farmer suicides in Kerala and insolvency of tea estates in West Bengal date from around 2002.

Most recently, rising fuel costs that have shot up to $117 from $50 three years ago, have turned many in the developed world towards bio fuels, which means that instead of grains feeding human stomachs they now feed the cars and vehicles in the rich world.

More immediate is the role of finance speculation in futures trading (which means that future products are purchased in advance), because finance capital has to invest where the returns are the highest and in light of the fuel crises means that bio fuels are promising speculations.

Commodity speculation spread long ago from standard products like oil and gold to anything edible and available for trade on the Chicago Futures Exchange. These days there are futures contracts for everything from wheat to oranges to pork bellies. The futures market is a traditional tool for farmers to sell their harvests ahead of time. In a futures contract, quantities, prices and delivery dates are fixed, sometimes even before crops have been planted. Futures contracts allow farmers and grain wholesalers a measure of protection against adverse weather conditions and excessive price fluctuations. They can also help a farmer plan how much to plant for a given year.

But now speculators are taking advantage of this mechanism. They can buy futures contracts for wheat, for example, at a low price, betting that the price will go up. If the price of the grain rises by the agreed delivery date, they profit.

Some experts now believe these investors have taken over the market, buying futures at unprecedented levels and driving up short-term prices. Since last August, this mechanism has led to a doubling in the price of rice — including the 500,000 tons that the Philippine government plans to buy in early May to address its own shortage. (source)

If railroads were responsible for moving foodgrains from areas of surplus to be sent to the ports for shipping to England instead of to areas of famine, computer networks today provide a lightening speed strike for finance capital to move funds from one sector to another, one country to another, creating sudden imbalances. The rich can afford to pay more for food and so that is where the the direction of flow is.

As Woody Allen commented in one of his movies, “the universe is one big restaurant”, in which everything from stars to the lowly organisms in the food chain on this lonely, and at the same time boisterous planet is busy devouring each other, and are thereby linked to each other. One cannot explain the food crisis without looking at whole picture. The food crisis is linked to the fuel crisis which is linked to the war in Iraq. It is also linked to the sub- prime crisis in the United States and the need for finance to grow and bring increased returns to its investors, which at best constitute not more than 15% of the population in any country, whether in the developed world or the so called ‘emerging world’ or the ‘developing’ world (no one seems to use the phrase ‘under- developed’ nowadays, though- even Haiti is referred to as a developing country).

To cut a long story short, it is not the increased food consumption of the poor, but the cycle of production and the fleeting moods of finance capital and the production and exchange cycle that it increasingly determines and that now flows faster than the sun traverses the world each day, that lies behind the crisis.

In the current context of food availability, one of the more fundamental contradictions of capitalism is coming to the fore- when it starts consuming its own potential consumers, when it is not able to sustain their bare minimum existence.

Much of the media, especially television, focuses on single issue of the day, one day it is Tibet, another Iraq, another day it is rising fuel costs and yet another it is food riots now in Haiti and then in another place. Those like the Dalit intellectual Chandrabhan Prasad too err when they stretch the identity issue too far and start looking at globalization and even the British rule as beneficial for Dalits, most of whom are at the receiving end of globalization, whether during the British mis- rule or the contemporary wave of globalization.

A Neo Liberalism Primer

David Harvey, the social theorist known for his work in diverse areas, published his book A Brief History of Neo- Liberalism couple of years back. The book is really short and succinct- I happen to be reading it right now, and hopefully, more will follow on the subject. Meanwhile, here he covers the same issues in an interview.
But here’s the interesting thing: it’s unreasonable to think that actually the US imposed neoliberalization on Mexico. What happened was that the US was putting noeliberalizing pressures on Mexico and an elite inside of Mexico seized the opportunity to say: yes, that’s what we want. So it was a coalition between the elite in Mexico and the US Treasury/IMF that put together the kind of neoliberalization package that came to Mexico in the late 1980s. And actually if you look at the pattern, it’s very rare for there to be a straight imposition of neoliberalizing policies through the IMF or the US. It’s nearly always an alliance between an internal elite, as it had been in Chile, and US forces that put this thing together. And it’s the internal elite who are as much to blame for neoliberalization as the international institutions.

The March of Neo Liberalism in India

The current issue of Frontline has a series of articles on ‘The March of Neo liberalism‘, including one by economist Utsa Patnaik on the agrarian crisis.

The story starts from 1991 when Manmohan Singh as Finance Minister started hounding farmers by reducing the fertilizer subsidy, cutting development expenditures so sharply that per capita GDP actually fell in one year and the death rate rose in one State, virtually doubling the issue prices of foodgrains from the Public Distribution System over three years in order to cut the food subsidy (which predictably boomeranged since the poor were priced out and the first episode of build-up of 32 million tonnes of unsold food stocks took place by 1995).

During the NDA period, the complete submission of the government to U.S. pressure and rapid removal of protection to agriculture between 1996 and 2001 – before the deadline set by the World Trade Organisation, resulted in farmers being exposed to the fury of global price declines. Between 1996 and 2001, prices of all primary products (cotton, jute, food grains and sugar) fell by 40 to 60 per cent and farmers who had contracted private debts in particular, became insolvent. The syndrome of hopelessly-indebted farmers committing suicides in Andhra Pradesh and Punjab started in 1998 and rapidly spread to other areas where cultivation of cash and export crop was predominant. The crash in pepper, coffee and tea prices came a few years later after 1998 and farmer suicides in Kerala and insolvency of tea estates in West Bengal date from around 2002.

Most alarming is the situation of the Scheduled Castes and Tribes, among whom extreme poverty has increased dramatically during the reform decade, with over three-fifths moving under the lowest level of intake, 1800 calories, by 2004-05 in urban India.

Meanwhile, at Foreign Policy, its editor Moises Naim asks whether the world can afford to feed the growing middle class in China and India.

If they don’t find the bread, perhaps they can eat cake, while the children of the poor will be fed via mid- day meals according to the Indian Finance Minister

“If we continue to grow at this rate, India would be among the most prosperous countries in the world” dominating in education, services and goods….

“Next year, thanks to growth, I will provide Rs 15,100 crore for this scheme. Similarly, in 2003-04 we had provided Rs 1,175 crore for the mid-day meal scheme.

The “growth” he is referring to is the 8-10 percent annual growth rate during the “reform” decades, of course. The amounts mentioned for his schemes are drops in the ocean of poverty that may engulf the small islets of “growth” in urban India, sooner than later. Of late, I have been wondering if I need to go back and re- read Mao’s thesis on the villages encircling the cities.

As to India soon dominating the world in education, it is a joke in a country with the world’s largest illiterate population and the UPA government’s continuing disinterest in it.

(you need to register at the outlook site to eat the cake… read the article in the link)

A Common Indian is a Poor Indian

In this article (pdf) in the latest issue of EPW (alternate location), economists Arjun Sengupta et al contest the official levels of poverty and indicate that 75% of Indian population is poor, which is twice the official figure. This means a staggering 836 million as of 2004–05.

The difference in the approach is their criteria for measurement of poverty that they insist needs to measure relative poverty as opposed to absolute poverty. Also interesting is the authors’ analysis by community (SC/ST, OBCs and Muslims- the overlap between poverty and these communities is evident.)

I do hope this stirs up debate around the jingle of ‘trickle down’ economics that one has heard over the last two decades and recognize the darkness in the noon of unprecedented growth rates.

Our estimate that a little more than three-fourths of the Indian people are poor and vulnerable in 2004-05, based on a value that is double the official poverty line, is consistent with other estimates. For example, the World Development Report 2006 of the World Bank reports 35 per cent of the Indian population as living below the extreme poverty line of one PPP $ per day.

The notion of an absolute minimum of a basket of goods yielding a calorie value plus some essential items loses most of its significance in a growing economy relative to per capita income. Poverty should be reckoned in relative terms to capture the inequalities in the system. There is nothing absolute about an absolute minimum for a poverty line when the economy is on a growth path of an unprecedented kind. That this point has not been factored, not just in India but even in some other countries with much faster rates of growth (e g, China), perhaps reflects an eagerness to show a declining trend in poverty or, for that matter, the magic of “trickle down” growth. There is no doubt that the case for revisiting the poverty line could become stronger as the economy continues to grow.

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A Chinese Road for ‘Rural India’

Sagarika Ghose’s Farming the Colonial Dream  purports to be a criticism of policy makers, “leftist intellectuals and politicians” as well as certain type of journalists. In essence what the article suggests is that wasteful schemes like the National Rural Employment Guarantee Scheme (NREGS) need to be discarded, agriculture needs to be liberalized and mass migration from rural hinterland encouraged to enable the people to move into manufacturing.

In the course of her ‘argument’, Ghose takes a few potshots at un- named “celebrated journalists who have made the “rural areas” into their personal visiting cards” as well as “careerists of poverty, the vote-seeking politician, and the westernized romantic.” There is nothing in the article that, however, suggests that she herself belongs to a different universe. Perhaps as not to be accused of being a ‘Westernized romantic’ herself, she deftly alludes to the Chinese way where mass migration from the villages to the cities is ostensibly paving the way for the uplifting of the impoverished rural masses.

After having disarmed the windmills, Ghose goes on to demolish the NREGS lock, stock and barrel for an aim which was never intended for the NREGS. She accuses the NREGS of “ignoring a basic right of every Indian, that is the right to migrate …The right to migrate is an inalienable right and applies to every Indian equally.” Not just that, “according to the NREGA, the rural poor must stay trapped in their socially unequal and violent villages, and undertake meaningless exercise in earthworks to be then handed a paltry wage”.

Wow! The NREGS seems to be having a dramatic impact on rural India !  This, however, is not really the case. Recent reports, suggest that the scheme with Rs. 15,000 crore in its first year has been nothing short of a failure benefiting just about 7- 10 percent of the intended beneficiaries (link). (Jean Dreze and associates on NREGA).  She herself is closer to the mark when she acknowledges later in the same article that “the NREGA, at best is a semblance of a safety net for the absolutely destitute, that those surviving by eating worms on riverbanks, can be assured of some food for a few days, if that.” If that is the case why accuse it of holding back the “rural masses” from the urban paradise in the first place?

One, however, cannot disagree with Ghose’s assertion on the “socially unequal and violent village”, but the urban landscape hardly offers a better picture for the migrant poor. With the prices of houses in cities sky rocketing, even the middle classes outside the IT and BPO sector shudder at the thought of owning a flat. For the urban poor, in the absence of any worthwhile housing schemes by the government, the situation is deteriorating fast. In the 1980s and 1990s, China was alone in the developing world to construct decent housing for the urban poor. Even then, the population of slum dwellers in China is as high as 193.8 million, or 37.8 of the urban population, compared with India’s slum population of 158.4m constituting about 55.5 percent of urban dwellers. (Planet of Slums by Mike Davies, page 24).

Worse still is Ghose’s recipe. Liberalize the agriculture sector, she says, which for her means abolishing ceiling laws that impact the farmers’ mobility. Not a word for the landless, not a word for land distribution as if something like land reforms did not exist. If at all it exists, it does so only in the sense of ‘buying and selling of land’. While accusing others of ‘glorifying a monolithic rural India’, she herself does no better.

What does one do for those who do not own any land at all? Though the landless do not seem to exist in her article, implicitly Ms Ghose’s recipe for them is to send them to the cities, along with those smart farmers who can now easily sell off their land under a liberalized agriculture. In that, Ms Ghose discovers the solution in China. 

Follow the Chinese path, she declares. No, not that of the Chinese Revolution but its counter- revolution in the era of ‘colourless cats’:

That only 20 per cent of our GDP comes from an occupation in which 60 per cent of Indians are trapped against their will, should wake up the babus and ministers to the fact that agriculture equals poverty and the only way out is to follow the Chinese example by creating avenues to allow the millions to move out of agriculture into mass producing industry. China has done exactly this with tremendous success. The descendants of Mao have got over their “farmer glorification legacy” far quicker than us.

The trouble with those who call for copying China today is that they want the thin icing without the cake, that is to copy everything minus the Chinese Revolution itself !

She ignores what is practically an urban nightmare in China. Overwhelming migration from rural areas, a reversal of the 1960s forced migration, has led to increasing social problems. While uprooting the people from their villages and providing cheap, unprotected labour in a country that does not permit forming of labour unions for unrestricted exploitation so severe that in many areas, there is a reversal in trends with people migrating back to villages (link). The example of the Chinese peasants who are ostensibly migrating to the cities to become productive clogs for industries manufacturing everything from diapers to electronics for the Western consumers, is a cruel joke which would be hilarious were it not just sad in its implications.

To the chimera of the rural migration to Chinese cities, this is what Li Changping has to say in his essay The Crisis in the Countryside (One China, Many Paths ed. Chaohua Wang, page 213-14):

But the new regulations also meant that the peasant could not alter his or her rural registration status. Economically they ensured a huge supply of cheap labour to developed regions along China’s coastline, as some 80 million peasants rushed to join its booming cities. Socially, however, the result has been a set of injustices that have got steadily worse. …”

In the same book He Qinglain (page 179-80) points to the increasing tendency to form criminal gangs in urban China.

The large number of wandering peasants in Chinese cities and suburban areas are also a well- spring of various forms of criminal activity in the PRC today. The majority- over 75 percent- of criminals in big cities such as Beijing, Guangzong and Shenzhen, are non- resident ‘three-have-nots’. …three demographic features defined these peasant offenders. The majority- 64.5 percent were unmarried; most- 59 percent- had criminal skills; and not a few- 16.5 percent- had been in jail before… the most shocking finding of the survey, however, is the changing motivation behind peasant criminality in recent years. Previously, many peasants displayed clear signs of psychological imbalance, which had led to conflict with the law without any deliberate aim of challenging it. By contrast, majority of those caught after 1996 had committed crimes with the conscious intention of breaking the law and defying moral prohibitions. ‘Since other people are living a highly enjoyable life’, one prisoner said, ‘I, who am lonely and impoverished, should be able to find some stimulus and relaxation too.’

That is the direction that the Chinese path leads to. This is at a time of an overall boom in the manufacturing sector and the absence of a recession in the developed world, which is what has sustained China’s growth. One wonders what the situation will be at a time of decline.

Whatever be Ghose’s motivations for such a misdirected ‘solution’ for rural Indians, the fact is that rural India has always subsidized the city. Those who claim that India needs to move away from its ‘socialist’ past are actually treading an extreme version of broadly the same path as the ruling classes have followed since Jawaharlal Nehru’s time, using whatever little pretensions it had to being ‘socialist’, as a punching bag.

The fact is that the total outlay for rural development is measly as compared to the incentives given to the industry that is producing some of the world’s richest people even as the rest patiently await their promised trickled down share. In a recent article, economist Kamal Nayan Kabra observes that the “public expenditure on rural development … in the Net National Product that used to be 3.6 percent for a population of 70 percent has come down after liberalisation and is just 2.7 percent…. Similarly, the share of total public expenditure in agricultural and allied activities, including irrigation and flood control, that used to be 37 percent in the First Plan total expenditure has come down to 16.5 percent in the Tenth Plan period.” In contrast, the corporate tax foregone (Rs. 50,000 crores in 2006-07) by the Union government last year is only trivially less than the total amount spent by both Union and state governments on all rural development schemes. (link)

People like Ms Ghose would like the amount for rural development to come down further so that the largesses can be given to urban India. Perhaps in her universe, all urban Indians own companies. In reality the corporate beneficiaries are not even one percent of the population.

But then, perhaps it does not matter.

Related Post: An Alternative to Globalization

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A Novelist of Early Globalization

(On the 150th birth anniversary of Joseph Conrad that seems to have gone largely unnoticed today)

Joseph Conrad’s works written in the early part of the 20th century were unbelievably perceptive of his times and deeply insightful into the 19th century globalisation phase in world history that came to an end with the Great War.

Early twentieth century had seen an upsurge in the East West encounter in literature. This was caused primarily by the colonial expansion of the Western world over the East. Joseph Conrad was an outstanding author who wrote much on this from first hand experience.

Born in the Russian part of Poland, Conrad spent twenty years on sea before settling down in England. From the age of thirty eight, he wrote a number of novels that established him as a novelist of import in English and in which he wrote about the East- including the psychologically penetrating and prophetic Under Western Eyes about the Russian revolutionaries of the time.

He also wrote about Africa, the Far East and Latin America (in The Heart of Darkness, Lord Jim and Nostromo respectively) in which he painted a rather dreary picture of the East. With the benefit of hindsight one can say that Conrad’s perceptive insights into the limits and ability of Western ideas to break down the physical as well as mental structures in the East sound quite true. During those times, however, this truth was less visible, even as critical a thinker as Marx had expressed the hope in his famous phrase about British colonialism in India creating the world in its own image.

As we are drawn by the wave of renewed imperial expansionism under globalization, Conrad’s works help us to reflect again on the East- West encounter.

Conrad remained, with the influence of his father’s revolutionary ideals, a sympathetic liberal, though his works on Africa have been criticized by no less than the great African writer Chinua Achebe.

Heart of Darkness projects the image of Africa as “the other world,” the antithesis of Europe and therefore of civilization, a place where man’s vaunted intelligence and refinement are finally mocked by triumphant beastiality. The book opens on the River Thames, tranquil, resting, peacefully “at the decline of day after ages of good service done to the race that peopled its banks.” But the actual story will take place on the River Congo, the very antithesis of the Thames. The River Congo is quite decidedly not a River Emeritus. It has rendered no service and enjoys no old-age pension. We are told that “Going up that river was like traveling back to the earliest beginnings of the world.”

His novel, The Secret Agent that celebrates its 100th anniversary this year was a study of anarchism and the psychology of its adherents. Conrad’s prognosis of his times was rather dark.

One of his finest works is Under Western Eyes, a prophetic successor to Dostoevsky’s The Devils that pre- empted the developments of the Russian Revolution by a couple of years (I think it was published in 1914, three years before the Russian Revolution.)

A large number of Conrad’s works, including the complete texts of The Secret Agent and Under Western Eyes are available here.

An appraisal of the writer in The Guardian and The Independent.

Update: A defence of Conrad’s allegedly ‘racist’ viewpoints by Jonathan Jones at the Guardian’s arts blog (and a very good discussion in the comments section).

Also check out ‘Conrad through the movies’ by James Hynes (link via Maud Newton)

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Globalization or Americanization Index?

India 2nd least globalised economy: Report

Is there something wrong in this Globalization Index for 2007 published by AT Kearney, or am I missing something?

The only country in the the top 20 in terms of population that figures in the list is the United States, with the exception of United Kingdom, the world’s 20th most populated country. Countries at the top of the population list (China, India) are way down in the GI.

The AT Kearney methodology is less well documented than another comparable one- that by KOF, though the latter results also follow the same pattern- the United States is ranked 19th and the United Kingdom and France make it to the top 20 ranked 4th and 6th respectively, but none of the other high population countries make it to the top 20 Globalization Index list.

The KOF index methodology is more detailed and some of the indicators included may help to understand the pattern- besides the count of the internet connections which in itself is reason enough to influence the results significantly, one of the measures used are the number of McDonalds outlets in a country!

As an additional cultural proximity we thus include the number of McDonald’s restaurants located in a country. For many people, the global spread of Mcdonald’s became a synonym for globalization itself. In a similar vein, we also use the number of Ikea per country. (page 2 of the methodology document)

GI    Country            Population          Country                  Population
1    Singapore                 1                China                     1,315,840,000
2    Hong Kong                2                India                     1,103,370,000
3    Netherlands              3                United States            298,210,000
4    Switzerland               4                Indonesia                 222,780,000
5    Ireland                     5                Brazil                       186,400,000
6    Denmark                   6                Pakistan                   153,960,000
7    United States            7                Russian Federation    143,500,000
8    Canada                     8                Bangladesh              141,820,000
9    Jordan                      9                Nigeria                    131,530,000
10    Estonia                  10               Japan                      128,080,000
11    Sweden                  11               Mexico                     107,030,000
12    United Kingdom       12               Vietnam                    84,240,000
13    Australia                13                Philippines                84,210,000
14    Austria                  14                Germany                   82,690,000
15    Belgium                 15                Egypt                       74,030,000
16    New Zealand          16                Turkey                      73,190,000
17    Norway                  17                Iran                         69,520,000
18    Finland                  18                Thailand                   64,230,000
19    Czech Republic       19                 France                     60,500,000
20    Slovenia                20                 United Kingdom        59,670,000

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Journalism- Then and Now

The 12th anniversary issue of Outlook (link via Abi) carries a discussion on the changes in journalism in the last twelve years, though I’d say that the changes started in the late 1980s.

Some of the most incisive insights are by P. Sainath. Here are a few excerpts from the discussion. All the comments below are by Sainath.

The biggest trend is the growing disconnect between the mass media and the mass reality. A very tiny Indian press, for a hundred years, served a very large social purpose, and tried to speak for the masses. Today, paradoxically, a gigantic Indian press serves a very narrow social purpose, which continues to narrow everyday

If 80 per cent of your revenues comes from advertising, and 20 per cent from sales—what that means is you’re going to give advertisers four times the importance you give readers. Their preferences and priorities take precedence

You see it in the simplest and most direct way: the organisation of beats.

Many beats have become extinct. Take the labour correspondent: when labour issues are covered at all, they come under the header of Industrial Relations, and they’re covered by the business correspondent. That means they’re covered by the guy whose job is to walk in the tracks of corporate leaders, and who, when he deigns to look at labour, does it through the eyes of corporate leaders. Now find me the agriculture columnist—in most newspapers, the idea doesn’t exist any more. If you lack correspondents on those two beats, you’re saying 70 per cent of the people in this country don’t matter, I don’t want to talk to them, they don’t make news.

That is, until the elections, when they screw the media’s happiness

Everyone keeps dividing journalism into serious and non-serious journalism—it’s a bogus division. What is called non-serious journalism is in fact a very serious business proposition, or at least it’s perceived as that by the media owners. They divide journalism into what’s serious…and what makes revenue.

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