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By Aseem Shrivastava "The West must not make herself a curse to the world by using her power for her own selfish needs." "In the so-called free countries the majority of the people are not free, they are driven by a minority to a goal which is not even known to them." -- Rabindranath Tagore (1916) To return to the original question asked in this essay: to what extent are the goals of global capitalism compatible with the aim of ending hunger and poverty? The answer is quite clear: a glance at the evidence that has gathered over the past decade-and-a-half of economic reforms in India indicates that globalisation and the resulting growth is one thing, development quite another. Global capital - which may be Indian - is compelled to play by rules of the game that are quite unmindful of the needs of ordinary citizens. It is interested not so much in the growth and development of the country as in the growth of corporations. (One worker manning 27 machines is not what the country needs even if it brings profit to an Indian company.) Any benefits to the nation are purely incidental and not by design. The chances of developmental failure are far from small. The narrow base of economic growth has meant that trickle-down theories of the spread of prosperity have remained confined to the sphere of illusion. The persistence of widespread hunger, malnutrition, poverty and unemployment reminds one of the economist-diplomat John Kenneth Galbraith's acerbic observation that faith in trickle-down is a bit like feeding racehorses superior oats so that starving sparrows can forage in their dung. When growth is being touted as the great Indian success, it is well worth asking what it is that grows. Of course the claim is that it is the output of the economy. But as argued earlier there are large and significant oversights in the data, apart from questions of sustainability which should disturb any reasonable observer. Was Keynes a madman? Practical genius is as rare among professional economists as eyesight in a school for the blind. John Maynard Keynes was one of the few who could diagnose accurately the potentially fatal economic ailments of the Great Depression which gripped the Western world in the 1930s. It was the acceptance of his recommendations of active government intervention - through large amounts of public spending - that saved capitalism from almost certain destruction. Had prevailing free market orthodoxy been accepted, it is unlikely that the system would have survived. Keynes was a realist and learnt much from the experience of the depression. In particular, he became extremely wary of large financial transactions across international boundaries. Foreseeing some of the problems that the future might bring, here is what Keynes recommended in 1933, two generations before modern globalisation was launched: "I sympathise therefore, with those who would minimise, rather than with those who would maximise, economic entanglement between nations. Ideas, knowledge, art, hospitality, travel, these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible. And above all, let finance be primarily national." http://www.globalpolicy.org/socecon/bwi-wto/critics/1994/94protect.htm |
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What grows with the style of growth that has been adopted in India is also inequality, inflation, unemployment, the size of real estate and financial bubbles, environmental degradation, social unease, crime and violence, not to forget disease. (India has become one of the world's largest traders in toxic waste.) The rate of growth of employment (far more important than the mere rate of growth) has remained far too low to give any comfort to ordinary citizens. Most people would be far happier if the growth rate was halved and the rate of growth of employment was doubled. This is no pipedream. It may, after all, turn out to be the way of the future. The end of poverty? It's not so simple! "Both China and India are still desperately poor countries. Of the total of 2.3 billion people in these two countries, nearly 1.5 billion earn less than US$2 a day, according to World Bank calculations. Of course, the lifting of hundreds of millions of people above poverty in China has been historic. Thanks to repeated assertions in the international financial press, conventional wisdom now suggests that globalisation is responsible for this feat. Yet a substantial part of China's decline in poverty since 1980 already happened by the mid-1980s (largely as a result of agricultural growth), before the big strides in foreign trade and investment in the 1990s. Assertions about Indian poverty reduction primarily through trade liberalisation are even shakier. In the nineties, the decade of major trade liberalisation, the rate of decline in poverty by some aggregative estimates has, if anything, slowed down. In any case, India is as yet a minor player in world trade, contributing less than 1% of world exports. (China's share is about 6%.) "What about the hordes of Indian software engineers, call-centre operators, and back-room programmers supposedly hollowing out white-collar jobs in rich countries? The total number of workers in all possible forms of IT-related jobs in India comes to less than a million workers - one-quarter of 1% of the Indian labour force. For all its Nobel Prizes and brilliant scholars and professionals, India is the largest single-country contributor to the pool of illiterate people in the world. Lifting them out of poverty and dead-end menial jobs will remain a Herculean task for decades to come." -- Pranab Bardhan, Professor of Economics at the University of California, Berkeley, and the Chief Editor of the Journal of Development Economics. http://yaleglobal.yale.edu/display.article?id=6407 |
Around 700-750 million Indians - about two-thirds of the total - live in the countryside, the vast majority of them supported directly or indirectly by agriculture. Of these an estimated 280-300 million are of working age. If agriculture is increasingly an unviable economic proposition, as government officials and politicians are themselves trying to convince us, where are people going to find work? Census data indicates that over the next decade, up to 90 million young Indians will be joining the workforce. Where are they going to work? The informal sector too has its limits. It would thus be most surprising if the energy of youth does not spill over into the perversion of violence. A whole new policy framework is needed for development which pays long overdue attention to agriculture and the environment, because 'development by default', as the fruition of trickle-down economics, has long been a vacuous claim. (See, for instance, Mihir Shah, 'The Killing Fields of 21st Century India', The Hindu, December 18, 2006. http://www.hindu.com/2006/12/18/stories/2006121803471000.htm ) We are a free country. We are not under oath to have to follow policies of energy and resource-intensive economic growth and repeat all the blunders committed by the Western nations. There are other policy alternatives today, just like there were in 1991, when the Indian economy was first opened up. They involve, for instance, evolving a whole new strategy for supporting and strengthening the rural, still largely agricultural, economy. The National Rural Employment Guarantee Scheme (NREGS) is just one starting point for such a "reform of the reforms". However, midway through the UPA government's five-year term in office, there are few signs that it has truly taken off, even though it was launched in 200 districts in February 2006. When there is so little time to waste, the UPA government has been dragging its feet on the key election promise in its Common Minimum Programme for the 2004 elections. In countries like India, given the elite-driven growth imperatives of the economy, socio-economic injustice and environmental degradation are two sides of the same coin. When ecosystems are devastated by economic activity, local communities suffer most from the ensuing pollution and loss of access to resources, while beneficiaries live far from the scene of action. Given the peculiarity of its necessities and challenges, India could take the global lead in setting an example for an entirely novel form of environmental democracy. This would achieve many major goals of policy in the country. First, through programmes like NREGS, not only will unemployment and underemployment (together running into at least tens of millions of people if not hundreds) be drastically reduced, long-standing environmental challenges like watershed management, soil conservation and afforestation could be met. Besides, the income that such programmes will put in the hands of the poor will generate effective demand to stimulate further growth in the larger economy. As of now, as noted earlier, demand can easily get choked off because the gains of growth are so narrowly and poorly distributed. Environmental participatory democracy is also an imperative, because saving our species from ecological crises in the future will necessarily involve decentralised decision-making by locally rooted communities with a lasting stake in the quality of the natural environment around them. It is not something which can be left with any wisdom in the hands of private investors in corporate boardrooms (or ill-informed bureaucrats in government ones) who take a short-term, instrumental and commodified view of all nature, using it for purposes of production, profit-making, and resource-intensive economic growth, eschewing all democratic practices and concern for, among others, affected communities and future generations of humanity. The question that begs to be asked is: will policy-makers perceive and grab such a unique opportunity not only to face the environmental challenge but to heal the age-old, rapidly widening, and potentially explosive rift between India and Bharat? Aseem Shrivastava has a doctorate in Economics from the University of Massachusetts at Amherst. He taught Economics at universities in India and the US for many years and most recently taught Philosophy at Nordic College, Norway. He writes on issues of contemporary concern (globalisation, US foreign policy etc) for a number of magazines and websites, including Outlook, Z and Counterpunch. InfoChange News & Features, January 2007
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