Monday, November 24, 2014

India’s new rulers


Capitalism has never anywhere provided good houses at moderate cost. Housing, it seems unnecessary to stress, is an important adjunct of a successful urban life. Nor does capitalism provide good health services, and when people live close together with attendant health risks, these too are important. Nor does capitalism provide efficient transportation for people—another essential of the life of the Metropolis. In Western Europe and Japan the failure of capitalism in the fields of housing, health and transportation is largely, though not completely, accepted. There industries have been intensively socialized. In the United States there remains the conviction that, however contrary the experience, private enterprise will eventually serve.

Source
A personage no less than John Kenneth Galbraith wrote that in his book, The Age of Uncertainty (1977).  America has succeeded in exporting that belief to quite many countries.  India, under the present leadership, is the latest entrant into the elite club of capitalists.  People like Mukesh Ambani escort the Prime Minister on his important trips. Capitalists like the Adani Group get US $ 1 billion (INR 6200 crore) in the form of loan from the country’s premier bank for extending their business to Australia. 

Wayne Roberts, Canadian food policy analyst and writer, pointed out time and again that big corporations moved ahead from being taxpayers to tax recipients.  Tax breaks given to industrialists and corporations cost capitalist governments huge amounts of their revenues in the heydays of capitalism.  Will the huge loan given now to the Adani Group end up as a millstone around the Indian common man’s neck? 

Many economists and thinkers have drawn the attention of various policy makers to the plain fact that capital always drives for power, for control over markets, lands and resources.  “Capital, in corporate hands, can move anywhere and thus demand and get the utmost in concessions and privileges as well as the freedom to operate in the interest of ever-increasing wealth and assets,” wrote Eric Kierans, Canadian economist and politician, in 2001 (Remembering).

America shelled out its taxpayers’ money to bail out the country’s capitalists in the recent past.  American can afford to do that.  It has the potential to tide over every bust engendered by capitalism.  “Boom and bust has always marked capitalism in the United States,” to quote Galbraith again. “There were panics in 1785, 1791, 1819, 1857, 1869, 1873, 1907, 1929 and 1987.”  The more recent busts are still fresh in our minds.  Does India possess the potential to manage the busts spawned inevitably by capitalism? 

My knowledge of economics is limited.  I can only raise these questions and apprehensions.  As an observer of what capitalism has done so far in countries where it was given a free rein I’m afraid that the poor in India will have to be satisfied with Swachh Bharat and such crumbs. 

The BJP government is going to take away the subsidies from the rich.  I think it’s a good move.  But I’m quite sure that it is simply a forerunner of the end of all kinds of subsidies.  That is, in the near future there will be no subsidy for anyone, however below the poverty line may one be.  Welfare government is breathing its last in India, I think.  May I be proved wrong. 

14 comments:

  1. In fact,Tomichan i see signs of hope for all of us in the new dispensation!

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    1. The history of capitalism doesn't endorse optimism, Uppal. Nevertheless, I wish you're right and I'm wrong.

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  2. I do hope we have a Welfare Govt. that cares for the poor.
    May the subsidies for the rich be out. Let there be real development work done in villages.
    I am happy with the Swachh Bharat campaign. At least Modiji has raised awareness. Many things like toilets need to be in place to ensure this.

    I love the pic you have shared! In the promos of the upcoming movie 'Unglee', they actually ask the corrupt people to eat currency notes!!!

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    1. The issue is not at all the Swachh Bharat Abhiyan, Anita. I mentioned it as an example of how the focus is being diverted from major issues. Is the Swachh Bharat exercise a mere ploy to divert the public attention from issues that matter? A clean India is everybody's need. We don't want India to be a public toilet or spittoon or garbage tank. But how to achieve the goal of a clean India? Isn't it by eradicating poverty? Can drama achieve that goal?

      There should be policies for eradicating poverty. Instead the current policies are geared to enriching those who are already rich.

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  3. Lets hope for the best Sir... and can't help enjoying Anita's comment :) dear girl the way you ALWAYS match the situation with a movie is envious and refreshing ... :D

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    1. I'm certainly hoping for the best, Kokila. But I've become a die-hard realist if not a cynic.

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  4. Wayne Roberts, Canadian food policy analyst and writer, pointed out time and again that big corporations moved ahead from being taxpayers to tax recipients.... So true Sir, a very good write up and relevant too!

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    1. Quite many banks had turned down Adani's application for the loan. How did SBI sanction it? You can understand the connections. That's how Adani may become a recipient of the taxes. Thanks for your visit and comment.

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  5. You are right, We all remember how well our public sector banks did against inflation. Privatization is not a remedy for everything.

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    1. India never faced any serious bust in its economy because of the mixed economy we had. We didn't sell out everything to the private sector. But now we are doing it and we will face the same problem that the US and other such countries did. However, the corporates will stand to gain. That's what the present regime in Delhi wants, I guess.

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  6. The concept of welfare state is the only thing which makes capitalism tolerable. If capitalism shows its true face, I think, capitalism won't last long enough for us to worry about it. At least, I hope that.

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    1. Isn't it already showing its true face, Kiran? How far did it influence the outburst of Maoism in India, for example? Well, what's in store in the future, I can't predict.

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  7. You raise valid points that need consideration.

    The question is what has welfare government achieved in our country so far? It isn't like housing or transportation or even food distribution is optimum even with all our subsidies, and decades of socialism. I think focus on raising income levels ought to take priority over subsidies. But the matter of too much capital in the hands of ultra rich corporations is another thing altogether.

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    1. The welfare govt provided jobs to some poor people in the name of NREGA, for example. It gave free education, free medical care... But why such things didn't yield results is the question. Corruption is the easiest answer. The system was not implemented properly. Otherwise India would have been a superpower already. But now as capitalism marches on supported wholeheartedly by the govt we will see a myriad of other problems. How more and more resources of the country concentrated in the hands of a few people in countries where capitalism was given a free rein, I think I needn't repeat.

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