Some random thoughts on political economy

Deepankar Basu

1. The Indian economy is currently undergoing a boom, a moderately long boom for a less developed economy: “between 1999-2000 and 2006-07, the gross domestic product (GDP) in constant prices increased at an average annual rate of nearly 7 per cent. And for the past three years, the economy has been growing at 8 per cent.” This boom is a profit-led boom, where surging profits of the Indian corporate sector is leading the growth in savings and investment. This seems to be a far cry from the general economic “stagnation” in the “semi-colonies” predicted by the classical theories of imperialism. Of course, this growth is accompanied by growing inequality; capitalists are gaining more than workers and big capitalists are gaining more than the small-sector capitalists. This is a situation which had occured in Argentina, Brazil and Chile (and Mexico and Iran possibly) about four decades earlier and continues to this day; this is what has been called “dependent development”: dependent, to take account of the continued operation of imperialism (through various channels) and development to take account of the non-trivial industrial development (as opposed to the earlier periods of general economic stagnation and no industrial development). Would this (the move from semi-colonial stagnation to dependent development) change the agenda for radical social transformation?

2. A mark of the recent trend in the Indian economy are the new economic kings, the new capitalist moguls whose wealth (in purchasing power parity terms) would equal those of the richest in the First World. Here is a typical example of the rising wealth of the new capitalists. It is important to reiterate that these are capitalists and not feudal lords, and they are (or will, in the near future, be) calling the shots in India. Is it not capitalism, dependent capitalism to be sure, that is the dominant mode of production in the Indian socio-economic formation?

3. One area of the Indian economy which is going to see a lot of turmoil in the coming months is the retail sector. Recall that the retail sector directly employs about 8 percent of the workforce; the indirect employment is probably much larger. Most of the “firms” in this sector are what are called the “mom-and-pop” shops; these are small family-owned and managed businesses, often employing very outdated technology (transportation, storage, etc.). Big corporate entities, both Indian and foreign, have already started entering this market which is estimated to be around $250 billion! Two interesting things can be expected to happen here. One, big corporate entities entering and wiping out the mom-and-pop shops will considerably increase the technological level of the retail sector; it will lead to a huge growth of the productive forces. Two, Indian big capital, represented by Reliance, is going to fight for this huge market against the Walmart-Bharati enterprises combine which is a foreign capital led alliance. Given these two facts, how will the revolutionary forces consistently oppose this development while (a) accepting the primacy of the development of productive forces for social transformation and (b) adhering to their anti-imperialist stance.

4. I want to return to Marx’s famous letter to Vera Zasulich in relation to the question of the socialist revolution in Russia. In the draft letter to Vera Zasulich, Marx had specifically mentioned that the Russian peasant commune could be used for the development of a higher form of social ownership and labour, i.e., socialist labour and that defending and deepening the communes should be an express task of the revolutionary movement of the working class. In the preface to the second edition of the Communist Manifesto, Marx and Engels added a crucial condition for this possibility to materialise.

“The Communist Manifesto had, as its object, the proclamation of the inevitable impending dissolution of modern bourgeois property. But in Russia we find, face-to-face with the rapidly flowering capitalist swindle and bourgeois property, just beginning to develop, more than half the land owned in common by the peasants. Now the question is: can the Russian obshchina, though greatly undermined, yet a form of primeval common ownership of land, pass directly to the higher form of Communist common ownership? Or, on the contrary, must it first pass through the same process of dissolution such as constitutes the historical evolution of the West? The only answer to that possible today is this: If the Russian Revolution becomes the signal for a proletarian revolution in the West, so that both complement each other, the present Russian common ownership of land may serve as the starting point for a communist development (Source). ”

If we juxtapose this assertion to the debate about the possibility of building socialism in one country then we come up against an inconsistency. Let me elaborate.

It is well-known that the Bolsheviks gave a call for a socialist revolution in Russia in 1917 with the express recognition that the Russian revolution could only be sustained if it “becomes the signal for a proletarian revolution in the West, so that both complement each other”; the Bolsheviks were especially anxious about the outcome of the German revolution. Thus, both the call for the socialist revolution and the movement for the strengthening of the peasant commune (to be used as a springboard for the construction of a higher form of socialized labour) rested on the hope of support from proletarian revolutions in the West. The Bolsheviks gave the call for a socialist revolution but did not give a call for strengthening and deepening the peasant communes. Why?

5. This is a nice picture of the enduring (and possibly growing) strength of the anti-capitalist strand within the anti-globalization struggle.

Comments

  1. Dipankar,
    You talked about the rise of “New Economic Kings” as one of the most important feature of the recent economic growth. But if you see in little detail, I guess these economic kings always existed. For example people like Ambani, Birla or Tatas always existed. Perhaps only their numbers has gone up as a result of more wide spread opportunities that opened up as a result of reduction of barriers in advanced capitalist countries. For example recent call center and outsourcing activities were non existent couple of decades back. Now capitalist forces have come out from their nationalist character after the fall of Soviet Union. For example during the existence of former Soviet Union, capitalist class needed strong state to defend themselves against communism, but fall of the Soviet Union also helped the capitalist class to shed their dependence on State. Now nationality of the company hardly matters, what matters is the fact that they are capitalist. Rather than the growth of “New Economic Kings”, I think what liberalization and growth has done is to strengthen this class consciousness among the capitalists. Not only this, by creating a bunch of model cases like Satyam, Wipro, etc., liberalization has been able to create an illusion that all of us can be millionaires and this system is the only way to realize this dream. As a result what happened is the gradual erosion of class consciousness among the working class. Everyone of us is made to believe that we are all entrepreneurs and it’s just a matter of time this entrepreneurial character will lead us to success. Perhaps a better way to understand the recent trends in India especially those related to creation of disillusionment can only be done if we study it in terms of growth and sudden rise in purchasing power of certain group of people in the society. Growth has been able to alienate a group of people from the labor movement. This alienation is nothing but taking us back in terms of our endeavor for meaningful change towards a socialist society.

    Arindam

  2. Sukla Sen says:

    A nice summing up of the debate.

    It, however, on the one hand, severely underrates Trotsky’s seminal contribution to the whole debate and, on the other, ignores Lenin’s “evolution” – three major milestones being ‘Two Tactics’ in 1905; ‘April Thesis’ and ‘Letters on Tactics’ in 1917; and, finally, ‘Proletarian Revolution and Renegade Kautsky’ in 1918.

    I’d like to quote an earlier intervention of mine in a slightly different context (of revolution in Nepal) elsewhere instead of redoing the whole thing once again.

    Quote
    In the context of the impending revolution in the
    early twentieth century, both Lenin and Trotsky
    actively engaged with the prospects and feasibility of
    a (’socialist’) revolution in Russia under the
    leadeship of the woking class and thereby the RSDLP.
    Kautsky dismissed any such possibility in backward
    Russia toeing the commonly accepted interpretation of
    Marx’s position in those days.
    Kautsky, even when his reputation got severely
    tarnished for taking a rabidly ‘nationalist’ position
    in the First World War, was otherwise considered the
    authoritative interpreter of Marx in those days.

    Both Lenin and Trotsky, two leading figures of the
    more radical trends within the RSDLP, could hardly
    have had accepted the Kautskyist position on the
    impossibility of a revolution led by the working class
    in a backward Russia without damaging the political
    prospects of the RSDLP itself.
    But while Lenin made a clean (theoretical) break with
    the ‘traditional’ position through successive stages –
    quite in tandem with the evolution of revolutionary
    process itself in Russia, Trotsky had achieved it,
    with his characteristic flourish and brilliance, in
    one clean sweep and pretty much earlier.

    Three works of Lenin may be considered as the defining
    milestones indicating the defining stages of his
    (theoretical) evolution in this regard. The first one
    is ‘Two Tactics of Social Democracy’ (1905), wherein
    the concept of Democratic Dictatorship of the
    Proletariat and the Peasantry as the immediate goal of
    the forthcoming Russian revolution, in partial
    departure from and also deference to the traditional
    ‘stagist’ theory. Post-February 1917, Confronted with
    practical question of the precise relationship with
    the government that came into being as the outcome of
    the revolutionary upheaval, Lenin formulated his
    celebrated ‘April Theses’ to the great dismay of many
    of his comrades. He asserted that there’s no point
    collaborating with the Kerensky government and help it
    ‘develop’ capitalism in Russia so as to ripen the
    necessary condition for an authentic ‘socialist’
    revolution. He averred that the ‘old formulas’ were
    dead. He stood for an openly confrontationist stand in
    relation to the new regime. After a bitter struggle,
    which initially had appeared rather hopeless, Lenin’s
    line prevailed within the Bolshevik party and the
    ground for collaboration with Trotsky was laid down
    with the complete (programmatic) break with the
    stagiest theory of revolution. (This, however, didn’t
    stop Lenin in readily coming forward to counter the
    Kornilov reaction – on the specious ground that
    Kornilov and Kerensky are the two sides of the same
    coin, in the name of saving the Kerensky regime. In
    fact, the October revolution turned out almost to be
    the extrapolation of the successful military campaign
    against Kornilov.) Lenin, however, put down his
    theoretical arguments in a much more comprehensive
    manner much later after October Revolution in his ‘The
    Proletarian Revolution and the Renegade Kautsky’
    (1918):
    “But beginning with April 1917, long before the
    October Revolution, that is, long before we assumed
    power, we publicly declared and explained to the
    people: the revolution cannot now stop at this stage,
    for the country has marched forward, capitalism has
    advanced, ruin has reached unprecedented dimensions,
    which (whether one likes it or not) will demand steps
    forward, to Socialism. For there is no other way of
    advancing, of saving the country which is exhausted by
    war, and of alleviating the sufferings of the toilers
    and exploited.

    “Things have turned out just as we said they would.
    The course taken by the revolution has confirmed the
    correctness of our reasoning. First, with the “whole”
    of the peasantry against the monarchy, against the
    landlords, against the medieval regime (and to that
    extent, the revolution remains bourgeois,
    bourgeois-democratic). Then, with the poor peasants,
    with the semi-proletarians, with all the exploited,
    against capitalism, including the rural rich, the
    kulaks, the profiteers, and to that extent the
    revolution becomes a socialist one. To attempt to
    raise an artificial Chinese Wall between the first and
    second [the ‘democratic’ and the ‘socialist’], to
    separate them by anything else than the degree of
    preparedness of the proletariat and the degree of its
    unity with the poor peasants, means monstrously to
    distort Marxism, to vulgarize it, to substitute
    liberalism in its place. It means smuggling in a
    reactionary defence of the bourgeoisie against the
    socialist proletariat by means of quasi-scientific
    references to the progressive character of the
    bourgeoisie as compared with medievalism.”
    By that time, as the leading figure of
    post-revolutionary Russia he had earned the necessary
    prestige to address Kautsky in such abusive terms with
    great self-confidence. Here Lenin proffered that there
    is no Chinese Wall between the democratic revolution
    and the socialist one except for “the degree of
    preparedness of the proletariat and the degree of its
    unity with the poor peasants” (not the peasantry as a
    whole). Post-April the whole theory of ‘Democratic
    Dictatorship’ goes into oblivion. And this was not to
    be resurrected till Lenin breathed his last.
    This was, at least on paper, almost similar to the
    position that Trotsky had arrived at (way back in 1905
    itself in his ‘Results and Prospects’). More so, as
    Lenin talks of the ‘rolling’ character of the
    revolution: “the revolution cannot now stop at this
    stage [i.e. it must roll forward]”. But nevertheless
    the two positions, contrary to the claims made by
    Trotsky and his followers, were not exactly congruent.

    Both Trotsky and Lenin started off from the premise
    that the bourgeoisie had ceased to be revolutionary
    and hence could no longer lead ‘bourgeois democratic’
    revolutions. Consequently, it is for the other
    ‘fundamental’ and revolutionary class viz. the
    proletariat to take the lead. However, Lenin was
    initially unable to think beyond (bourgeois)
    ‘democratic’ revolution. And hence the thesis of the
    Democratic Dictatorship. (It is pertinent to note that
    in putting forward this formulation Lenin had to also
    radically break with the traditional Marxist
    visualisation/characterisation of the peasantry as “a
    sack of potatoes”. Subsequently Mao made an even more
    radical break in this regard. And it was for a
    quasi-Marxist Franz Fanon to make similar
    (theoretical) break with the usual Marxist evaluation
    of the role of the (urban) petty bourgeoisie,
    particularly in capitalistically underdeveloped
    colonised societies. The Cuban revolution was a sort
    of highly successful demonstration of Fanon’s
    theoretical position.) Trotsky, however, went far
    beyond. If the Proletariat emerges as the ‘leader’ of
    the ‘revolution’, it is logically totally untenable
    why they should stop at the democratic stage just in
    order to enchain themselves once again, albeit under a
    new dispensation, under its own leadership! Hence the
    theory of continuous/uninterrupted/telescoped or
    Permanent Revolution. Hence the theory of the fusing
    of two (successive) revolutions – the ‘democratic’ and
    the ‘socialist’ into one integrated whole. (The theory
    of Permanent Revolution, however, has an external
    dimension as well in clear acknowledgement of the
    classical Marxist reservation regarding building
    socialism on a less than global scale and that too in
    an industrially backward nation.)

    But while for Trotsky there is no revolution except
    under the leadership of the proletariat, and once that
    is so, there’s just no stopping halfway; Lenin, even
    in his most matured position, is far less
    self-assured. There’s of course no Chinese wall. But
    that only means that there’s a wall nevertheless. And
    whereas scaling of the wall would evidently be highly
    desirable and it’d be criminal to stop short in
    deference to some (metaphysical) rules of
    impermissibility, whether the wall can be actually
    scaled or not would depend on “the level of
    consciousness of the proletariat and the degree of
    solidarity between the proletariat and the poor
    peasantry”, which evidently is not a given. And, it’d
    also imply that even if you cannot make it to the last
    post, it’d be quite worthwhile to cover as much
    distance as one could under the given circumstances
    (marked by the inadequacies of “the degree of
    preparedness” and “the degree of solidarity”).

    The history of the twentieth century, particularly its
    second half, however, calls for certain basic
    modifications in these formulations.
    The working class, in any case even numerically weak
    in the underdeveloped East, for the most part played a
    rather secondary role, if at all any, in the unfolding
    epic saga of decolonisation. One can of course counter
    with the argument that the resultant revolutions(?)
    were at best “truncated and half-baked” giving
    credence to (at least) the Leninist formulation. But
    given the significant strides made by a number of the
    newly independent nations, an honest reappraisal of
    the role, and potentials, of the colonial and
    post-colonial bourgeoisie, and petty bourgeoisie,
    would very much be in order.
    Unquote

    Sukla

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