Post by ananyomukherjee on Jul 22, 2012 13:55:50 GMT -5
Debarshi Das is one of the most promising economists in India. He is well known for his papers on political economy and mostly for his works on the class analysis of Indian agriculture & so on.
Towards a New Dawn :- What is your view about the ongoing worldwide economic stagnation ? Can it be reversed?
Debarshi Das :- The present phase of economic slowdown had been triggered by the financial crisis of 2008. But one needs to go deeper and further back in time to understand the causes. In the developed countries there has been a suppression of income of the wage earners since the 1970s. While productivity has risen, real wage rate has hardly moved upwards. There are political and social reasons why this happened, and how labour unions were beaten into submission in order to perpetuate the steady rise in profits vis-a-vis wages. Suffice it is to say that with the rise of neo-liberal policies globally, share of income of labour has plummeted in developed countries. In the capitalist economy the squeeze gave birth to a new contradiction: how to sustain the aggregate demand in the economy if wages are suppressed? It is true that profit earners were gaining income share, but they do not constitute the majority. The majority was facing an income stagnation which meant their spending also got decelerated, and with spending stagnating production slumps.
In the USA an alternative route to jack up the demand was found in credit financed spending. The workers were not given income but their spending was supported by advancing credits on easy terms. This development was related to the fact that finance capital was gaining considerable influence around this time. Credit financed spending by the working class kept the US economy afloat. But this again led to a new contradiction. Credit instruments are assets in the hands of the lender, mortgage banks in this case. Proliferation of the financial instruments enabled the rounds and rounds of trade of such assets at a high volume, and worryingly in the most opaque manner. The ultimate lender of a housing loan to a poor black man living in Mississippi may be an ordinary investor in the share markets of Mumbai, who has no idea of the risks he is undertaking. This opaque architecture rested on the mumbo jumbo of financial experts, bankers and had to collapse one day, for loans were being to made to people who did not have the capacity to pay back, and neither the lender had any way of knowing this. With the collapse of many a giant financial organization in the USA, the effect soon spread to other countries. The financial crisis led to stagnation of real economic activity, because without a vibrant financial sector the hinges of the economy get stuck. Another factor which played a part is that the leading capitalist country, the USA, had been losing market to other countries, especially the low wage economies of Asia for quite some time. This is important because with the loss of market the working class in USA lost jobs. This had two implications. One, power of the labour to confront capital eroded, which helped in executing the wage squeeze without much trouble. Secondly, less jobs meant less purchasing power with the workers, which again contributed to the economic stagnation, described above.
The crisis underlines the incessant upheavals the capitalist economies go through. It is not that short fixes cannot be found to tide over the crises. The USA had embarked on a recovery plan based on stimulation spending package by the federal government. This came handy but arguably was not immune to the machinations of their ruling oligarchy. And this is the main point. The solutions found within the system may work temporarily but they do not rid the system of its essential nature. Only a socio-political transformation to a more rational system will be the way forward.
TND:- How do you see the occupy wall street movement which has now turned to be occupying all streets? has it been helpful for the re-invigoration of Marxist praxis in the modern world after the deviation in USSR & China?
DD:- The political character of the participants, methods of organising of these protests are not very clear to me. From the media reports the picture one gets is that of spontaneous demonstrations by disparate groups, many of which are of anarchist persuasion. The cut in social expenses in the first world countries in the neo-liberal decades, and specially after the recession, has severely affected the middle class as well as workers. Funds meant for education, health are getting curtailed. This is driving a wedge between the ruling classes and the middle class. Aside from economic grievances of the middle class which is a factor propelling such protests, one should not ignore the element of moral outrage. Book cooking, seedy machinations and underhand deals between different corporate and financial interests as well as government bodies were instrumental in the making and the outbreak of the crisis. To be sure such games are routine in a capitalist polity. But the current phase of economic hardship has certainly painted the moral transgressions in a darker hue.
At the same time lack of coherence of demands which these protests are raising is worrisome. The fact that spontaneous outbursts are taking place is not surprising. What is more important is if they would be effective in achieving any substantial and positive change. Yes, it is possible that growing disenchantment which underlies these protests may push interested groups towards communist politics. That would be one great positive development to have come out of the occupy movement. But one needs strong subjective forces to make that possible.
TND:- Occupy movement has not been successful in India till date. What do you think the reason behind this?
DD:- Has OWS itself been successful so far? Or has occupy movement (of the OWS kind) been successful in consolidating sizable support in any third world country? There were demonstrations and occupations in the Middle-East and North Africa which predate OWS. They were more political, and were specifically directed towards a particular dictator or a regime. These were certainly encouraging events. But if one talks of the OWS kind of occupy movement, perhaps that was more focused on the economic turmoil, rather than a particular political leader or regime. India did not see occupy movement of OWS for various reasons. The space of dissent and protests in India is traditionally occupied by parties, or groups like the NBA to a limited extent. Since the differences between these formations are a common knowledge, it is difficult to imagine that an overarching platform could be forged. Also many of the parties run state governments or are in the ruling coalition. They are hand in glove with the ruling classes. Therefore tough uncomfortable questions can seldom be raised by them. Or if they are raised it is done in an insincere manner, which disillusions and alienates people. The IAC (India against corruption) campaign which was dubbed as the Indian version of OWS seemed to have had plenty of corporate media backing, which makes it suspect prime facie. IAC also has an opaque organisational structure and people with strange convictions leading it.
TND:- The most blazing issues of the day are high rate of inflation through out the country, privatization and opening of the agriculture,retail sectors for the FDI and on the other hand a very repressive state structure determined to squeeze every democratic space? Are these inter-connected ?
DD:- The neo-liberal policies are usually anti-thetical to the democratic spirit. The economic policies which promote the interests of the big corporate houses many a time displace petty traders from their occupation, slum dwellers from their rickety shanty houses, marginal peasants from the land, adivasis from the forest. These are some instances where the impact of neo-liberal policies is direct. But there are indirect effects of consolidation of power by corporate houses. Take the case of high inflation. Inflation erodes the share of national income which the working people are entitled to. In a subtle but coercive manner it transfers wealth from the hand of those who cannot adjust their earning to the price rise. This includes those who earn their livelihood from manual labour. In short neo-liberal economic policies engender an architecture of structured violence in the society. In normal circumstances people fight back. However economic policies do not hang in thin air. A state apparatus is there to back them. Hence a regime of minimum tolerance toward dissent, toward democratic space is complementary to neo-liberal policies. So, yes, in an indirect way shrinking of the space for dissent is connected to the pro-corporate policies.
TND:- Regarding Operation Green Hunt there are bifurcation between opinions. One upholds the neo-liberal concept of development and other questions the role of government in it. The widespread displacement and oppression and right to dissent of the people and violence against state by the people has been key issue till date. Would you elaborate your stand on this?
DD:- Actually it is a carefully constructed myth that neo-liberal economic model has no role for the government in it. We have witnessed how the governments of the first world came to the rescue of big financial houses as the financial crisis unfolded. The textbook variety of capitalism would not have the government influencing the market outcomes. So, all those sermons of minimum state control of the economy were convenient talking points. They are useful when organized labour resistance are to be crushed or consumer protection or social security are to be folded up. In reality the state has been there to help out the big capital. In the context of the third world, the business of the state is conducted in a more brazen manner. The Operation Green Hunt, the security exercise to eliminate the Maoists, is being used as a ground clearing tool in the mineral rich hinterland. The land are then to be leased out to corporate houses at throwaway prices. Curiously many a time the minerals which will be extracted will not even be processed in the country but will be exported to countries like China. In such cases, one is not even sure if this can be characterized as primitive accumulation of capital since no capitalist production process is getting the benefit of such encroachment. Along with the displacement itself, the OGH is also being deployed to silence any protest against displacement. In the rest of the country the campaign is proving handy in throttling voices which speak out in favour of labour rights, against the ruthless exploitation in unorganized manufacturing units, mines, or against police atrocities. The dissidents are being painted with the Maoist brush before they are put behind bars or are simply eliminated. These violence are necessary. As mentioned earlier these are is essential to push the neo-liberal agenda.
TND:- Caste,religion,ethnicity,community are some of the things that have played a very important role as the structure of Indian society. One the other hand, transformation of capital's character into a financial oligarchy rather than a classical industrial capital with the transcendence of neo-liberalism has created a more fragmented and dismantled working class than ever before. Generally speaking, doesn't it seem too difficult for you to find a way for a better alternative seeing from here? Also the question of self identity has been much debatable issue. To assemble all the identities in jointures is a herculean task. To implement affinity line and to tether the the whole movement on it has been a failure ever since. What is the reason behind it?
DD:- The politics of identity is an important issue. Capital has always sought to divide its dialectical opposite, labour, so that labour can pose no stiff, united resistance. When capital becomes globalized, facing little barriers in its search for higher returns across the globe, it actually succeeds in pitting labourers of one country against another. This is because the agenda of indigenous development of capital does not have priority in any nation state. The ruling classes seek development salvation which is to be achieved through inflow of global capital. Therefore minimum policy resistance is put on its way. At the same time global capital may be huge, but it is not infinite in size. Inflow of it into a country is often at the cost of outflow from another. Hence as capital travels to country A, and combines with its labour to produce output and employment, it leave the labourers of country B jobless. Thus labourers divided along national boundaries find their interests getting directly antagonistic to each other. Notice this is being achieved through the mediation of global capital. Aside from globalisation, and running parallel to it, is the whole politics of identity. It seeks to divide labourers on some primordial ideas, ideas which precede the birth of industrial capitalism. These may be religious, racial etc. These identities, and their articulation, help capital in keeping the labour camp divided, so that in the era of global dominance of capital no united, across-the-border consolidation of labour can materialize, which can challenge its hegemony. So I see global dominance of finance capital, and rise of identity discourse somewhat related. Yes, this make the task of building workers' unity very difficult.
Perhaps a disclaimer should be added here lest there by any scope for misunderstanding. As far as identities are used as weapons of oppression and exploitation, there is a case for asserting and celebrating the identity of the oppressed. This is akin to supporting nationality struggles against imperialist exploitation. But one needs to be alive to the dangers foregrounding identity can generate in fragmenting unity of working people across countries.
TND:- Earlier Latin American economists as Andre Frank, Theotonio dos Santos have argued that in neo-liberal semi or neo- colonial economy the presence of a progressive national bourgeois is not possible b'cause in an age of monopoly capital as the bourgeois has become increasingly dependent on the capitalist monopolies for financing,marketing,capital goods,technology,licenses,patents etc. Keeping in view that more or less the economic model which is running our country and most of the developing countries has been experimented in Latin America . So could the arguments of these economists be true for our country also?
DD:- What is crucial in this context is the size of the capital. In Marxist literature the age of imperialism has been associated with the rise of monopoly capital. Monopoly capital willy-nilly implies capital whose size is large, which can dictate its terms to other capitalists of smaller size, as well as workers. In the colonies and semi-colonies, the domestic big bourgeoisie is identified as the lackey of imperialist capital. Now there may be truth in identifying the big bourgeoisie as comprador in character, or perhaps as partners of the imperial capital, but there is not much disagreement that these capitals are not national bourgeois in character. But does it mean that there is no national bourgeois class in third world countries? Are capitals of all size and shape act as underlings (or partners) of imperial capital? Perhaps we should view capital recognising that it is a remarkable heterogeneous category. There are many networks which work through them, but it would be a stretch of imagination to claim that all these networks connect all capital to the imperialist capital or the big capital. In particular the small size capitals one finds in the vast unorganised sector of India may have little to do with the functioning of the big capital.
TND:- Many of the Marxist organizations see feudalism and imperialism as the main contradictions which has to be resolved in order to build a more progressive society. And many other see feudalism only as a mere super-structural remnant pointing out the base-superstructure relation to be vertical and point out the national bourgeois of our country the principal contradiction. So as an economist what is your view on the formation of capitalism in our country ?
DD:- It is debatable if the contradiction between feudalism and rural masses has disappeared, or if it has simply been relegated as a component of the super-structure. What I find interesting is the change which is taking place in the political economic sphere. Traditionally the Left have identified the dominant contradictions of Indian society as between feudalism and broad mass of people, and between imperialism and the Indian people. The ML groups posed the first of the above two as the principal contradiction, resolution of which will enable resolution of the other contradictions. But it would be ahistorical to think that nature of feudalism and its strength has remained the same over the years, or that the the contradiction between imperialism and Indian masses has remained the same. The winds of globalization blowing through the country have become stronger over the years, especially in the last few decades. Economic policies have undergone major changes. This indicates at least two things. First, the policy changes could not have been possible without the big bourgeoisie gaining substantial power via-a-vis other partners in the ruling class alliance, the landlord class most significantly. How, and under what circumstances this tilt of power was achieved could be the subject of a long and hugely interesting research. Second, continuation of such policies indicates consolidation of the power of the big bourgeoisie. Now the big bourgeoisie might be gaining ground, and lands monopoly might be breaking as more of it is diverted towards real estates and industries, but it is doubtful if this change would bring about capitalist development in the classical sense. For, the economic activities which are coming into being through the primitive accumulation of capital is incapable of absorbing the displaced people. The displaced and the uprooted people do not not constitute the working class, the proletariat, of the kind one found in Western Europe with birth of industrial capitalism. They constitute a floating mass of footloose people. They are often without employment and are ceaselessly migrating from one site of labour exploitation to another across the country. The lack of transition to the capitalist mode is not surprising. In the era of monopoly capital capitalism is bereft of its progressive transformative capacity.
TND:- Unlike the country of developed capitalism, Indian middle class has not been on the roads in recent history since 80's. surely they were posting a lot in facebook about the Anna Hazare movement and now-a-days Satyamev Jayate but they are not that sensitive to raise their voices on the basic issues. Is this the effect of consumerism or ignorance is a bliss for them whereas being ignorant is only by their own choices ?
DD:- The middle class in India is not a homogenous category. Moreover, the divisions among different sections of it have accentuated with the onset of neo-liberal reforms. For example those with secure jobs, or the financial backup to send their children to the private technical colleges, have hugely benefited by the reforms. Education in government colleges is a privilege too. First, the fees are being raised due to commercialization. Second, seats have not risen to the extent they should due to cut on government expenditure. Third, to admission in reputed government colleges, whose pass-outs are certain to land good jobs, one needs private coaching which costs a fortune. In short, the windfalls of reforms have not bypassed a certain section of the middle class. This section is a staunch supporter of neo-liberal reforms. One also needs to remember the bureaucratic class. They have been often theorized to belong to the ruling class alliance. They come from the middle class. Their allegiance also shifted in general towards neo-liberalism. In sum, there exists a section of the middle which have received windfall gains of reforms. They have no reason to oppose the present policy regime. Indeed they are its most vocal supporters. However this is one part of the petty bourgeoisie. There is another section of the middle class who have sunk, and not swum, in the tide of the reforms. These are mostly of the lower middle class. People with uncertain jobs, with little educational qualification, living in urban shanties, engaged in blue collar jobs, or engaged in petty retail trade. Their economic status has not improved, and relatively speaking has indeed gone down. One does not see them protesting on the streets on progressive causes. The reasons for this could be very complex. It must be admitted that for various reasons the Left parties have not been able to consolidate their support. One saw a rightward shift of the urban middle class in the 1980s and 1990s, which has to do with rise of identity politics that we have discussed earlier. Some of them can be drawn towards the IAC sort of campaign. But I suspect the character of such campaign would soon leave them disillusioned, for the reason that such campaigns seeks to target the symptoms of the ailments, not the root cause.
TND:- How would you picture these nationwide, exactly to say worldwide turmoil and agony of the people coming to an end ?
DD:- This is a big question. I do not have any definite answers to it. All I can conjecture, the spirit of democracy alone can show the way. After all, what is socialism but the democratic transcendence of the capitalist society.