Business IdeasV V: How the other half lives and dies
The poor, as the Bible has it, will always be with us and, therefore, accepted as part of the human condition. But it isn’t the poverty that is unacceptable; it is destitution, the hopelessness of life at the end of its tether that raises the question, What’s to be Done? And to paraphrase Marx, it isn’t enough to understand why India remains an overwhelmingly poor country after more than 60 years of Independence; the task is to change it. Professor Amit Bhaduri’s The Face You Were Afraid to See: Essays on the Indian Economy (Penguin, Rs 250), which is a sequel to his 1996 book, (along with Deepak Nayyar) The Intelligent Person’s Guide to Liberalization, tells us why and what could be done to get out of the hole we have dug ourselves in.
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The book consists of eight essays written, as Bhaduri says, “with an uncomfortable feeling that despite apparent symptoms of health, a serious illness is spreading fast through the economy and polity of India”. The result is “a bewildering variety of these million mutinies, some transient, some persistent, bearing perhaps their regional marks and yet striving for a greater common cause of a more just society for the poor and the marginalised… It gives a new meaning to the cliché “unity in diversity” among people which comes neither from cultural nationalism, nor corporate-led industrialisation but rather from people’s resistance to them”. A brief summation of the essays, to begin with. The first essay, “The Failed World View” explains how economic theory “maintains the form of an academic discipline, and becomes in content a powerful ideology in the service of the ruling classes”. The essay has focused on the real economy but does not adequately deal with the financial sector which sparked off the recent crisis in the US. Some academic economists of the Chicago school who believed that markets were self-regulating were responsible for this “world view”.
The second essay, “Developmental Terrorism”, points out the many ways in which the state practises terrorism in different parts of the country in the name of development. Bhaduri adds that in India, state “terrorism is practised increasingly with the purpose of enriching big business but under the guise of industrializing and modernizing the economy”. “Predatory Growth” analyses the nature of India’s high growth which had led to rising inequality of income. The result is the alienation of the rich and upper middle class from the poor majority and with no stake in their development. “This is the face our middle class is afraid to see in the mirror.”
“Labour and Industrialization” addresses the vexed question of the rule of trade unions in organised industries as special interest groups. The real issue is the accountability of trade unions to society, because without wider social support, they are imprisoned to act as narrow interest groups. Trade unions need to become more sensitive to the nature of industrialisation, “mineral resource extraction and land acquisition, especially in tribal areas, which enormously raise corporate profits”.
“Economic Openness” places the arguments made in the earlier essays in the context of globalisation which need not necessarily lead to “higher growth and higher efficiency through integration with the world economy”.
The last three essays — Alternatives to Industrialization, The Imperative as an Alternative and The State and its Stepchildren (with Medha Patkar) — discuss the possibilities for a more humane development instead of taking the poor not as “factors of production” but as human beings. This is both possible and within reach because it doesn’t cost the state too much.
Some needling questions remain. First, is it reasonable economics and feasible politics? Second, would socialism, if feasible, be desirable? Given the wide disparities of income in India, the economics is eminently reasonable; even the most ardent capitalist would support it, if only because the market would become that much bigger with a more equitable distribution of income. But politics would make it almost impossible because of the entrenched vested interests — business, big and small, a rising middle class supported by the media that has a growing stake in the status quo. There may be a million mutinies but they are too sporadic and scattered with little stamina for a long-term struggle.
So, whatever we may conclude about the desirability of socialism, we must address the independent question of its feasibility which, on the present account, doesn’t look too promising. And if you throw in the experience of central planning in the Soviet Union and China after it has provided itself with the essentials of a modern productive system, it is clear that the road to socialism is long and arduous with the Promised Land nowhere in sight.
Unlike most academic writing that renders a subject either boring or incomprehensible, or both, this book has three virtues: simplicity, clarity and purity of line. Which is what makes a book eminently readable.