Wednesday, 27 September 2017

Resurrection of Hindu Rate of Growth in India

OLD VINE IN THE NEW BOTTLE OR ROOTEN 
EGGS IN THE NEW BASKET!


I never had the illusion about the PM, Modi’s tall claims of quantum leap of 9.5% growth in GDP rather than gradualism overtaking China, both ex-ante and ex-post, about the GDP growth in spite of rigging the base year to inflate the growth rate by 2.2%. The sings of slow growth had already been embedded in the failed neo-liberal economic policies as accepted by Nobel economists like Joseph Stieglitz and Paul Krugman. In fact, it delivered nothing to common man except writing off bad loans and taxes at the cost of the common man around the world since the worldwide economic crisis of 2008. Although early signs of sluggish growth were observed in India even before demonetisation Modi’s sycophants unsuccessfully tried to distract the failures by hijacking the issues by precipitating non-issues such as beef eating, Bharat Mata Ki Jai, Ram Mandir, right-wing changes in the curriculum and textbooks, purging educational bodies like UGC, ICSSR, ICHCR , Universities, etc., to induct RSS agenda. 

However, some friends and foe of the BJP Mr Yashwant Sinha and Chidambaram and to great extent even the scattered opposition is blaming it entirely on the demonetisation and try to compare it with past regime under the UPA which is a big mistake. In fact, there are a lot of similarities between the UPA and the NDA Governments led by Dr MM Singh and PM Modi as their economic policies’ adviser by and large in substance, if not in form (names) remained the same. For example, Dr MM Singh heavily relied on the advice of Prof Jagdish Bhagwati who is a close friend of Dr MM Singh and his sycophant Arvind Panagariya who was conferred a Padma Bhoshan by UPA II Govt who being pro-American latter shifted their loyalty to BJP and Modi, both suffered from the China obsession. Therefore, I am at a loss why Yashwant Sinha and Chidambaram woke up so late in the day to attack Modi on failure on the economic front. In fact, according to their own spokesman Modi has stolen their flagship program and merely renamed them. As to change of name of the Planning Commission was underway since the UPA II except UPA being inspired from China’s renaming their Planning body, it was contemplating it rename it as Reform Commission and Modi Govt has changed it to NITI AYOG (National Institute of Transforming India) to claim the originality. However, in reality, NITI AYOG turned out to be toothless and even Modi Govt continued to rely on the UPA II 13 Five Year Plan and his Finance Minister Arun Jaitley on the UPA II Chidambaram budget. 
The author, in response to Bhawati-Pangariya’s tall claims of 11.5% GDP growth after adjusting with the Purchasing Power Parity (PPP) to boost that India was growing faster than China, characterised GDP growth under UPA was heading toward a Hindu rate of Growth (3-4%) and if adjusted for Green GDP it was tending to Zero Growth. If one applies the same yardstick to BJP Govt, it would be clear Indian economy no better as current GDP is @ 5.7% and if adjured from base year 5.7-2.2 = 3.5% < 4.8% of UPA II and if adjusted for Green GDP it is tending to a zero rate of growth. Indeed, in spite of rhetoric noting has changed in substance or fundamentally in the intervening period of UPAII to NDA I. In fact, disillusioned Modi let the former RBI governor, Raghuram Rajan to let go under mysterious circumstances and recently Panagariya parted with pleasure combined with the appointments of Urjit Patel as RBI Governor, Rajiv Kumar as Head of NITI AYOG and the constitution of PM Economic Advisory Council under Bibek Debroy along with Dr Surjit Bhalla, Dr Rathin Roy and Dr.. Ashima Goyal, and Ratan Watal (unknown in the mainstream economics profession) confirms that the Indian economy is back to square one. In layman’ language former friend of BJP, Mr Arun Shourie puts it very eloquently, “BJP = Congress + a Cow”! The future of Indian economy remains bleak.



Wednesday, 30 August 2017

END OF THE AMERICAN POLITICAL ECONOMY IN INDIA Part II


NITI AYOG FAILURE!


I have previously commented on a somewhat similar article exposing complacency and the nexus between the World Bank/IMF Bandwagon and allegedly Bhagwati-Panagariya approach to development. Therefore, I will deal with the last paragraphs of his article. The author is badly mistaken in categorizing development model into two different schools of thoughts dividing them into Bhagwati-Panagariay and AK Sen although these schools are two sides of the same coin, namely, neo-classical School of thoughts, first propounded an Austrian economist, Hayek who believed in Laissez-fair economy and the second one is welfare economy. In fact, soon after the French Revolution German Chancellor Bismark carried out some of these reforms not so much for the welfare of the people but to prevent possible revolution in Germany. Traces of such reform were also aired by US President Roosevelt in 1930's addressing the workers on the famous Flint Street sit down. The author also claims to have suggested a third approach which also already subsumed into Welfare School of thoughts. 


Bhagwati-Panagariya story of India as an emerging giant appeared to be over as India's growth was heading toward the well-known 'Hindu' Rate of growth. If one follows Panagariya's absurd logic to adjust the rate of growth with the Purchasing Power Parity as he did in 2010 Econometric Society Lecture to inflate India's growth to 11.5%, to make it look, as if India was going ahead of China (what is known as China obsession) than India’s growth turned out to be about 3.5% and further adjustment to work out the green GDP, Indian economy was heading toward a ‘Zero’ rate of growth (after adjusting with devaluation of India rupee and accounting for errors of measurement). The critic of liberalization like AK Sen characterized the growth of India economy as jobless and emphasized the need for investment in the social sector, like in Korea, Japan, & China, which led to higher growth in those countries. Moreover, if the purpose of growth is to improve the quality of life as opposed to a number of billionaires than the hard choice has to be made to improve human capital formation. He also strongly supported the food security bill of UPA II on the ground that it would save millions of lives every year. 


On the other hand, Bhagwati and Pangariya criticized food security bill on somewhat bizarre ground that the poor people would keep the current level of consumption and would sell the additional food and buy something else. This argument is against the very principles neoclassical economics that the agents are rational which they intend to defend throughout their approach. Unless people are irrational they would likely to provide their children better diet by struggling less rather than selling food for the money in the open market. And if the food security bill is amended to include 100% population it would take care of the even remote possibility of black marketing.


The above schools have been around for a very long time under different expect new terminology has replaced the old ones. If one looks at the Development Book of the 1960s by Arthur Lewis, Hagen, Higgins, Todaro, and Yutopolous and Nugent etc. , one could find trickle down, percolation effect, spread effect, divergence-convergence, etc. The author has conveniently forgotten the third school which is often used to save the ‘free-market’ by partial nationalization one of the gradients of ‘Socialism which became less popular since the collapse of USSR model of State Capitalism rather than market socialism.usly commented on a somewhat similar article exposing complacency and the nexus between the World Bank/IMF Bandwagon and alleged

Friday, 18 August 2017

The Greatest Hindi Novelist of the 20th Century!

PREM CHAND REMEMBERED - A UNIQUE HINDI NOVELIST


Mehzabeen Mehzabeen (Translation available at the end) 


प्रेमचंद जी ने लगभग 300 कहानियाँ लिखीं, मगर पाँचवीं कक्षा से लेकर एम. ए की कक्षा तक उनकी कुछ चुनिंदा कहानियों को ही सिलेबस में रखा जाता है, और वो चुनिंदा कहानियाँ गिनी-चुनी 15/20 हैं बाक़ी की 275 के लगभग कहानियों को हाशिये पर डाल दिया गया उपेक्षित कर दिया गया, शायद आलोचक ही पढ़ते हैं उन्हें अपने समीक्षा कार्य की पूर्ति के लिए। क्या उनकी चुनिंदा कहानियों के अलावा दूसरी कहानियाँ बेकार हैं, हमारे समाज की नहीं हैं, उनकी भाषा अच्छी नहीं है? मैं आजकल उनका तीनसों कहानियों का पूरा संग्रह मानसरोवर पढ़ रही हूँ, मुझे एक भी कहानी बेकार नहीं लग रही है, सभी इसी समाज का हिस्सा हैं, यही समस्याएं हैं दहेज़, अनमेल विवाह, विधवा समस्या, पुनर्विवाह, ग़रीबी, दलित - विमर्श, ग़ैरबराबरी, महाजनी साहूकारी इत्यादि... फिर क्यों प्रासंगिक नहीं हैं प्रेमचंद जी की दूसरी कहानियाँ? उर्दू की कहानियों का तो कहीं कोई ज़िक्र ही नहीं होता है, उर्दू साहित्य में भी नहीं हिन्दी साहित्य में भी नहीं, बस उनकी जीवनी में लिखा रहता है कि वो पहले उर्दू में लिखा करते थे। ऐसी स्थिति के लिए कौन जिम्मेदार है पाठक, साहित्यकार, अध्यापक? कहीं न कहीं सभी जिम्मेदार हैं।
कॉलेज युनिवर्सिटी में आजकल ज़्यादातर राजनीति होती है स्टूडेंट्स को भी उस राजनीति का हिस्सा बनाया जाता है, साहित्यिक कार्यक्रम के दौरान सेमिनार कवि-सम्मेलन के दौरान भी बहुत अच्छी राजनीति होती है एक-दूसरे की टांगे खींची जाती हैं, ऐसे कामों में माहिर उस्तादों से तलबा भी बआसानी से यह काट करने का, अवसरवाद का सलीक़ा हुनर सीख रहे हैं और फिर आगे ज़ारी रख रहे हैं, साहित्यिक कार्यक्रम खानापूर्ति के लिए रह गए हैं। सीधे-सादे अध्यापक साहित्यकार विद्यार्थियों की तो अब कोई औक़ात है ही नहीं उन्हें साइड कर दिया जाता है, अपने रास्ते से हटा दिया जाता है। पिछले पुराने अच्छे-अच्छे साहित्यकारों की रचनाएँ उपेक्षित हैं, और नए लिखने वालों के रास्ते में भी बेशुमार रोड़े अटकाए जा रहे हैं।
पक्ष- विपक्ष के नेता राजनीतिज्ञ समय - समय पर वोट बैंक के लिए या फिर ध्यान बुनियादी सवालों से भटकाने के लिए कोई न कोई सोसा बेबुनियादी मुद्दे मिडिया द्वारा फेंक देते हैं चैनलों पर, सोशल मीडिया पर, और आजकल के बुद्धिजीवी वर्ग, साहित्यकार भी उन्हीं फालतू के मुद्दों पर बातचीत करते हैं, चर्चा करते हैं, टिप्पणी, विश्लेषण करते हैं उलझे रहते हैं, राजनितिक लोग तो चाहते ही हैं बेकार की बातों में उलझाए रखना, मगर इन लिखने - पढ़ने वाले छात्रों, अध्यापकों को साहित्यकारों को क्या हुआ है बुनियादी सवालों पर बहस क्यों नहीं करते? साहित्य में आए बिखराव, फ़िरक़ापरस्ती को अपनी आपसी खींचातानी नाइत्तिफ़ाक़ी को क्यों नहीं दूर करते? स्थिति बहुत ख़राब है। बुकफेयर भी अब बाज़ार मात्र रह गया है। साहित्यकारों के ग़ुरूर के बारे में क्या कहा जाए कथनी-करनी में ज़मीन आसमान का अंतर है संपादक पत्रकार सब के सब प्रोफेशनल हो गए हैं इनके बीच शरीफ़ कैसे अपनी जगह बनाए कैसे टिके?
मेहजबीं
Translation of Mehzabeen Mehzabeen post

Munshi Premchand wrote about 300 stories, but from the V class to MA only selective few stories have been kept in the syllabus and the rest 275 stories are put in the margins to undermine their literary significance and perhaps they are read by the critiques only to meet for their review work.  Are other stories apart from the selected ones are useless, or not about our society, or their language is not good enough? These days, I am reading the entire collection of Premchand’s stories from the Mansarovar collection. I do not find even a single story which is not relevant and not a part of our social reality, whether they are pertaining to the problems related to the dowry, mismatched marriages, widowed problems, remarriages, poverty, Dalit Vichar (thinking about the Untouchables), moneylenders, inequality, etc. One wonders why it is often suggested that Premchand’s other stories aren’t’ relevant? In fact, stories in Urdu are not even mentioned either in Urdu or Hindi literature except there is a passing reference in Premchand’s biography that initially, he started writing stories in Urdu. It is worth exploring who is responsible for such a situation, readers, writers or teachers?  It appears somewhere, we all are responsible.


These days the Colleges & Universities have become hotbeds (dens) of politics and the students are also dragged into that politics. In fact, even the literary program, seminar and the poetry programs are not spared as they have become training camps for innocent minds to learn to pull each other’s legs and grind axes. The literary programs have become a formality and the down to earth & genuine people are either removed from the way or side tracked. The innocent and genuine teachers have no locus-standii and capability to alienate these hooligans out of the constructive path. The compositions of the past old good writers are neglected and also obstacles are put in the way of new creative writings.


The leaders of the treasury and opposition benches time to time hijack the fundamental issues on somewhat scandalous TV channels and social media hype to cater their vote banks.  Unfortunately, even the intellectuals and writers also caught in their Cobb-Web and start burning their midnight oil analyzing, debating and commenting on irrelevant and trivial matters. This may well serve the politicians endgame to keep the youth and public engaged all the time in irrelevant matters but what happened to the insight and wisdom of teachers, literary figures, students and educated people who failed to put the debate on its wheels of fundamental issues of public interest! Why these people do not take initiative to correct the distortions, sectarianism, and disaccord in the field of literature. The things as they stand are in very bad shape, indeed!  Even book fares have become a market place and not to say anything about the arrogance of ‘literary’ figures given the gap between their preaching and the practice, there is a hell of the difference.  Most newspaper correspondents have become professional league players midst them how any genuine gentleman could make his place and survive.                

End of American Political Economy Part I

End of an era of complacency and American Political Economy! India can sustain 10% growth', TNN | Jul 16, 2011, 01.38 AM IST
Arvind Panagariya said as follows: "HYDERABAD: Reforms in labor, land and higher education are crucial for India to sustain economic growth over the next 15 years and emerge as a global economic superpower, Prof Arvind Panagariya, the Jagdish Bhagwati professor of Indian political economy at Columbia University, said on Friday". This speaks volumes about his credibility as a Professor of Indian Political economy made in America given the fact that India is struggling to achieve even 6.3-7.5 growth even after rigging the base year from 2003-4 to 2012-13 to inflate the growth rate by 2.2%. Hence, one does not need an American Ph.D. or Columbia University Political economist to figure out that the actual GDP growth rate will be at the level of what Dr. MM Singh left in 2014, i.e., 7.1-2.2 = 4.9%. This, in spite of the tall claim of three years of Modi Rule with an iron fist with neoliberal market reforms and complete surrender to American foreign policy. Further, his China obsession under both the regimes, the Congress led UPA 2004-2014 and since 2014 BJP prompted him to exaggerate growth to 11.5% in 2011 using short lived PPP theory and 7.5% having rigged the base year, has also been shattered with a recently revised estimate, after Annual Survey raises serious reservation about a growth in GDP even at 6.3.-7.5%.
Whatever the either government can claim, in reality, India's growth has been lopsided (jobless & low indices of Human Development) therein major part of the growth has been attributed to growth in the financial sector involving uncertainty, increase in luxury capital intensive goods and services. The manufacturing and agriculture sector continued to be in shambles. This led to the creation of two Indias: Rich and poor. It appears both, the Right consciously and some of the Left unconsciously, have been caught in the neoclassical Cobb-Web!
In fact, Panagariya used to boost a lot about the trickle-down impact of GDP growth claimed to have taken 110 million people off the poverty line reducing the BPL number to 29% according to the Govt figure which was amended to 39% by late Prof Suresh Tendulkar, Vice-Chairman of the Planning Commission. During the last three years of NDA, he has kept complete silence about the impact of economic reforms including the impact of demonetization and the GST.
NITI Ayog that was created in 2015 to replace the historical Planning Commission introduced in 1952 with Nehru-Mahalanobis as its founders. Unfortunately, in spite of the best endure fmto replace the Planning Commission the NITI Ayog could not become its substitute. In fact, in spite of amny tall claims of NITI Ayog, to date Govt continues to rely on the 13th Five Year Plan prepared during the UPA II Govt. On the other hand, there has been an adverse impact of the scraping the Planning Commission since a large number of people has been laid off since 2014. Other than some tangential role in the Centre-State relations NITI AYOG has been toothless and its Vice-Chairman having a ceremonial role. He had no impact at all on the Indian public policy. In fact, Panagariya' did not even got a second place in the NITI Ayog meetings chaired by the PM what it used to be under the old system of the Vice-Chairman of the Planning Commissions. No self- esteem was left for the guy! Perhaps, he got more respect under UPA II than in NDA Raj. No wonder he has resigned....but his exit has been painless contracting with former RBI Governor, Rajan.

To be continued....


Tuesday, 15 March 2016

TRIBUTE TO A MAN OF THE CENTURY!

Marx Remembered Everyday! 
The philosophers have only interpreted the world in various ways; the point, however, is to change it.
Marxian and traditional orthodox economics could be distinguished mainly on three points, namely; (i) the orthodox economists accept capitalism as eternal order of nature while Marx regards it as passing phase in transition from the feudal economy of the past to the socialist economy of the future, (ii) the orthodox economists argue in terms of a harmony of interests between the various sections of the community while Marx conceives of economic life in terms of conflict of interests between owners of means of production who do not work and workers (proletariat) who owns no means or property. In reality above two points of differences are not unconnected. For example, if the system is taken for granted and the shares of the various classes in the social product are determined by inexorable natural law, all interests unite in requiring an increase in the total to be divided. what is known as size of the pie is increased so each could get more share in the pie. However, if the possibility of changing the system is once admitted, those hope to gain and those who fear to lose by the change are immediately ranged in opposite camps resulting in the class conflict.

The orthodox economists unconsciously, on the whole identified themselves with the system and assume the role of its apologists, while Marx consciously sets himself to understand the working of capitalism in order to accelerate its doom by overthrowing it. The system contains inbuilt contradictions within itself which must lead to its disruption. Marx saw the periodic crisis of trade cycles as symptoms of a deep-rooted and progressive malady in the vitals of the system. 
Since Marx's days development in economic analysis have taken place which enables economists to detect three distinct streams thoughts in Marx's treatment of of crises: (a) the theory of reserve army of unemployed labors due to fluctuate relationship between the stock of capital offering employment and and supply of labor leading go unemployed army. That could be seen in developed countries since 2008 crises resulting in over 10% unemployment, (b) the theory of the falling rate of profit which shows how the capitalists' greed for accumulation stultifies itself by reducing the average rate of return on capital, and (c) there is theory of the relationship of capital-goods and to consumption-good industries which shows the ever-growing productive of society knocking against the limitation upon the power to consume which is set by poverty of the workers. This could be seen in India's jobless growth mainly contributed by expansion of speculative financial sector, service section and capital intensive luxury goods beyond the reach of workers and common man leading to creation of two Indias: Rich and Poor!
Since the WWII the academics economists, without paying much attention to Marx's analysis of capitalism,have been forced by the concrete reality of the modern world to question much of the orthodox apologetic, and recent developments in academic theory have led them to position which in some respects resemble the position of Marx far closely than the position of their own intellectuals forbears.
The modern theory of imperfect competition, though formally different form Marx's theory of exploitation, has close affinity with it. Similarly, modern theory of crises has many points of contact with the third line of argument, distinguished above, in Marx's treatment of subject,and allows room for something resembling the first. However, the second line of argument appears to be confusing and redundant.
In fact, since 2008 worldwide economic crises Noble Laureates like Joseph Stieglitz, Paul Kugman accepted failure of Neo-classical economics. Till to date, the crises is not yet over in spite of partial nationalization of failing banks and corporations by way of bailouts from public money there does not seem to be any sign of recovery. In fact, free market economy has been thriving on it appears there has been socialization of losses and privatization of profits and localization of wages.
Since the advancement of a new theory of industrial economics with separation of ownership and control now the corporations held by millions both the owners and employees/workers. Further the classes are not as crystallized as they were during the 19 century industrial revolution that Marx witnessed. The ownership of means of production has changed from a sole ownership to partnership and then to a loosely held corporations causing confusion who are the owners and employees. And to complicate matters further the emergence of a huge middle class that Marx had not witnessed. Given the overlap of classes and a huge middle class and petty bourgeoisie class it is worth inquiry into the traditional labor theory value? There has been more rhetoric than substance as to development in Marxian economic theories since the WWII. However, no doubts Marx left a lasting impact on capitalism and influence on man kind and its welfare which brought so many reforms for labor which was highlighted in the US President Franklin Roosevelt's speech on Flint Street sit down . No doubt, the nightmare quality of Marx's thoughts gives, in bedeviled age,an air of greater reality than the gentle complacency of the orthodox academics.
On the operational side strategy for revolution is hardly talked about in party school and entire focus of the communist parties is on the tactics to show allegiance to bourgeois democracy once they pledge to destroy. If they are so much committed to democracy one wonders how far Leninist notion of democratic centralism is relevant? The failure of USSR model of socialism also raises the question whether the Socialism in one country could sustain for along time in a globalized world. And most importantly, if central committee of a communist party is derailed as ideas become material force then what is the mechanism to correct the obsolete party? In fact, Party bureaucracy in India has taken over in India ever since the non-working class non-peasant leadership has got on the top even without capturing the power, people are intrigued whether any lessons have been learnt from the USSR model? Finally, the debate of permanent revolution as Trotsky's advanced v/s transition of the revolution via cultural revolution with the involvement of masses is still relevant to complete the dialectics as nothing is absolute. These are some questions remains unanswered! 

Prof. S Deman

Wednesday, 27 May 2015

Politic of Great Divide: Rich and Poor

MODI A ONE MAN INDUSTRY: AKE SAAL AND MODI SARKAR OR ONE YEAR OF MODI GOVT.
A quick review of Indian economy under the UPA I & II reveals that neo-liberal economic policies were unable to sustain a rapid growth as it was halved in just three years from 2011-2014. GDP growth rose marginally to 4.8% during the quarter through March 2013, from about 4.7% in the previous quarter. In fact, UPA government had forecast a growth rate of 6.1%–6.7% for the year 2013–14, whilst the RBI expects the same to be at 5.7%. No doubt, besides rapid growth in GDP neo-liberal policies also gave rise to what is known as ‘Crony Capitalism’ or in communist jargon ‘Lumpen Capitalism’. Further, during the period of liberalisation, particularly from 2000-2010 a number of scams came to light in which top government officials were implicated. Corruption was so rampant that it did not spare even the defence sector. Although Manmohan Singh had two terms as a Prime Minister in spite his best endure to remain Mr Clean, he was also implicated in coal scam.  In his interview, he admitted that Congress’s loss in 2014 was failure to addressing the problem of corruption, unemployment and inflation, particularly food inflation.
Modi Govt. & Budget on Account: 
According to Jaitley the Economic Growth Rate of India would be 5.5% in 2014-15, which less ambitious than UPA’s Finance Minister, Mr. Chidambaram. Besides this, India suffered a very high fiscal deficit of US$ 88 billion (4.8% of GDP) in the year 2012–13. The UPA Government aimed to cut the fiscal deficit to US$ 70 billion or 3.7% of GDP by 2013–14, but again Modi government’s FM is less ambitious than UPA as he sets the deficit at 4.1% of GDP for 2014-15. Combine with poor response of the market leaves one wonders how anyone could claims budget has spurn the economy to meet the desired promises of ‘Good time Ahead’ let alone realizing the objectives of employment generation, eradicating corruption, and controlling inflation.  In fact, it appeared as if BJP Finance Minster Arun Jaitley was presenting UPA Finance Minister, Chidambaram’s budget! 
Modi’s 68th Independence Day Speech:
On India’s 68th Independence Day Modi commissioned a team of his advisor for a feedback for his speech and like his all predecessors he gave a firebrand speech asking deficit to combat the inflation.   In fact, in spite of tall claims made during the election campaign, there was nothing in Modi’s speech about the Roji-Roti, Bijali-pani, Kapada and Makan for common man and there was nothing for women ether as to Sikasha, Suraksha and Sochalaya. Like Mrs Indira Gandhi, he is also merely selling slogans like HIT (Hydropower, Information and Transport) in Nepal, PPP (Paryavaran, Paryatan, Power) in Ladakh and announced BSP (Bijali, Sadak and Pani) on 15th August. Modi also announced that from October 2014 he would ensure Sochalayas (Toilets) in every household, but failed to tell in the absence of water how his dreams will be realised? He has also pronounced that the Planning Commission of India, a constitutional body would be replaced by a more effective body like China has ‘Reform and Development Commission’, without the necessity to have a debate over it in parliament. Hence, this would eliminate the prospective allocation of resources and multiplier effect on various sectors and its review mechanism, thereby no accountability. 
Modi in International Irena        
It appears Modi has merely been engaged in a public relations exercise rather than chalking out a concrete plan to eradicate corruption, unemployment, and fight inflation & poverty. Thus far steps that his government has taken via budgetary instrument as oppose to a long term economic program appears to be counterproductive.  For example, his announcement for 100% FDI in defence sector and 49% in insurance and divestment to limit public sector may help realizing efficiency with increase in output in short-run but at the cost of meeting the increase in employment as why any foreign investor would be increase in employment in India? Those who have a bit of knowledge of economics would realise that growth and efficiency is not the end of the world.  If one examines a relationship between output and efficiency it would show that in the long run more output would mean increase in inflation with almost negligible impact on the efficiency.
Home Performance:
It is an interesting act, but falls short of reflecting the aspiration of Indian people due to superfluous analysis. Before elected as PM Modi promise Good days ahead to for people namely; creating jobs, bringing black money home which will put 1.5 million rupees in each citizen's account, bringing inflation down, and poverty alleviation. Although election manifestos have always been as a document of promise and not delivery unfortunately people being betrayed by past government have taken Modi's words on their face value.

The author of the article is looking at Modi's performance from a neo-classical economics angle that is failure to carry out the reforms necessary for growth and therefore by implication benefiting everyone what Modi describe as 'Sab Ka Vikas San Ke Saath' (Development of every one with everyone).  There is nothing new in this concept, in fact Gandhiji was first to take about 'Greatest good of all'.  This idea, though appears novel, it lacks sound theoretical understanding of economics. Neo-classical theory of growth does not have any theory of distribution. It completely relies upon the percolation effect or trickle down mechanism. History of economics institutions has witnessed and rejected such theory. In fact, even most of the Western and North American economists do not subscribe such an outdated theory. However, some of these very economists and their satellite economists like Bhagwati and Panagariya continue to advocate such theories to India and developing economies so that the West & N American continues to use o stabilize their own economies.   
Since Modi for his failure to deliver on the above promises has come under a lot of pressure both from the Right and most from the Left and now has become defensive on his own promises and said in his first rally in Mathura at the eve of one year, "Entrepreneurs and corporate (capitalists) can’t create jobs"!  This is very alarming statement which out off many pro Modi entrepreneurs into pessimism. Rather than 'ACHHE DIN AGAYE' (Good days have come) he talks about 'Bure Din have Gone' (bad days have gone). This leaves the impression of 'half glass is empty rather than filled'.   
Now look at the performance in terms of some indicators for April 2014 to May 2015: (i) Inflation WPI to some extent even CPI being low from 9.3% to 4.9%, but main credit goes to low fuel prices but prices of common man daily food, pulses or lentils have gone up by 40%. (ii) It is claimed that current account deficit has gown down from     3.9 to 1.6% but again that is also due to lower fuel bill, (iii) Employment growth 0.28 to 0.3% has been the same as it was a year ago, (iv) GDP growth 7.5% claimed to have surpassed China is false claim as base year has changed so after adjustment it is 5% as it was  year ago, (v) Trade deficit down to 137 crores also due to exchange rate low fuel prices, (vi) in spite of Modi' tour of 18 countries financial inflow dropped from 4.29% to 1.76%, (vii) claims has been made that 30000 crores profit from coal auction but that is over 30 years when full potential is realized  realised, (viii) creation of Smart cities for whom as unless people have income thy would turn out to be ghost house as some of did in China 1990s, (ix) bullet trains rather than more trains for common man is a misleading priority,  (x) as to 'Make in India' exports have fallen down from 24% to -21.1% due to low demand, etc.   As to various flagship programs they have only been renamed and allocation to them have been slashed to a great deal.  Of course,  RSS and VHP agenda of communalization overshadowed the key economic issues facing common man in everyday's walk of life.        
Hence, Modi has raised the aspiration of the people but he has done very little to manage them by delivery on the ground.  He has provided the poor farmers 'Soil Health Card', but there is no Health Card for the very people who work on that soil.
Unless we adapt to concrete reality by choosing alternative strategies as China did future of poor looks extremely bleak.   There is no substitute to distributive growth as China has advanced since the 2008, US $950 billion investment to deal with crises in three stages: (i) Infrastructure spending, (ii) focus on rural areas to stimulate demand, and (iii) speeding up of economic growth in new regions, generating housing demand leading up to consumption led growth. This strategy made China a darling of both foreign direct investment and portfolio investment suggesting while the global equity markets were in turmoil, China has emerged as safe parking lot for the global funds.
Last year at the UN submit on environment famous TITANIC Movie star, Leonard DiCaprio said, “I pretend for living I hope you do not”.  Let Modi be his own judge or people should judge him next time!! 


Prof S. Deman

Monday, 18 May 2015

To be Marxist or to be communist, that is the question - Revisted

Recently, Times of India Columnist and retired professor of JNU Dipankar Gupta wrote an article following the alleviation of Sitaram Yechuri as the General Secretary of CPI(M), see: http://blogs.timesofindia.indiatimes.com/toi-edit-page/sitaram-yechury-reloaded/


Letter to the Editor – Times of India 2015-04-26, “To be Marxist or to be communist, that is the question”.
Dear Editor:

I enjoyed reading Dipanker Gupta’s article in which he very eloquently puts top CPM leadership in the dock. However, his analysis appears as abstract and disconnected as the CPM’s tactic with common man since it supported Congress led UPA I government in 2004.  As a keen student of Marxism and having taught for 35 years across 4 continents even I had some difficulty in fully grasping the point the author has advanced in his article. Perhaps he could have made it a bit more understandable to a wider readership.  Keeping in view above limitation, I wish to address the main thrust of his article. 

While making a distinction between Marxist and Communist he attacks CPM’s top leadership who had adopted an orthodox rather than dynamic scientific approach in interpreting and applying Marxism to socio-economic reality in India.

Marxism is an economic and political philosophy driven by materialist view of history and social reality. A Marxist is he who not only shares that view but also advances it.  As Marx wrote in the Poverty of Philosophy- in response to Proudhon’s Philosophy of Poverty as follows:

"The philosophers have only interpreted the world in various ways—the point however is to change it" (Karl Marx).  

Marx famously puts Hegel "on his head" by arguing that man has the capacity to determine history by his actions. In this way, Marx thinks that it is possible for philosophy to change the world if it is oriented towards the possibility of action, rather than simply interpretation or theory.  Hence, simply understanding the world is not enough because you shouldn't perceive the world and everything in it as a static and transcending time, but as a constantly changing set of relationships and the nexus between them that are governed by proclivities but also are capable to stray through "random" events or conscious interventions of the masses. The History drives itself in a deterministic way, but also conscious intervention is possible and sometimes required. The whole point of the above phrase is that we need to understand which way history CAN go and consciously chose the most positive scenario as your political strategy.
On the other hand, a Communist is an actor of the Communist Party which represents the tangible consciousness of a class (mainly the working class) to realise desired objectives: (i) at first stage establishment of a socialist states which eventually wither away to reach the (ii) ultimate goal of communism. A casual reading of the Communist Manifesto makes it unequivocally clear that class struggle is the backbone of that path, but other tactics are not completely ruled out. However, since Marx was a product of industrial revolution, at the relevant time, classes like Bourgeois and Proletariat were by and large clearly crystallised and the antagonistic contradiction was the main focus of organising the working class against the bourgeois, but non-antagonistic contradictions issues such as education and health which were of concern for a vast majority of people as the author pointed out in the Communist Manifesto part 2) were not completely ruled out. In fact, a well known Marxist (some called her a feminist) Kollantai said that the women question cannot be resolved even under  socialism, a transitional stage to communism. Following the passing of equality bill in the Parliament in 2010 the ideological enemies Sushma Swaraj of BJB and Brinda Karat of CPM embraced the victory publicly with a huge HUG. No one knew except this writer who wrote, “I wonder what are they celebrating, an introduction to love or death”.  Even after 150 years the orthodox communists continued to beat the same drums, “Punjiwad to Aag Laga Do”, i.e., Death to Capitalism.  However, capitalism has changed its face (form) much faster than its worst enemies the communists, but no doubt it has not changed its nature (essence).     

The above rhetoric is incompatible with the new theory of industrial organisation propounded under the umbrella of Neo-classical economics. The structure of ownership has drastically changed since 1960s from sole ownership & partnerships to loosely held corporations owned by millions regardless of size of their stakes. The new theory separates the owners (shareholders) from the control (managers). In all, but small organizations social choice takes place by way of delegation of power from many to a few called the agents (managers) who may or may not have stake in the corporations.  20th Congress of the CPM revealed that even many leaders of the Party held shares in the corporations and also spend more time play in speculative activities rather than in party work. Hence, actors of the communist party labour more to preserve the status-quo than engaging in the party activities to overthrow the bourgeois as pledged in their Manifestos.  So one wonders how traditional slogan of “Death to Capitalism” helps here as many of the common owners would turn against the working class! This is a real dilemma CPM faces today. 

The author correctly identifies lack of revolutionary fervour in SitaramYechuri’s speech which had no reference to either the “Class Struggle” or even “Operation Barga”, a very important achievement of Joyti Basu’s LDF government although it was too much to expect given his petty bourgeois socio-economic background. Guy has no mass base and has risen to the highest office in supposedly a proletarian party without shading a drop of sweat, a scratch in scuffle with police and spending a night in a prison cell in any fight for Peoples’ Democratic Revolution.  How could anyone expect from him otherwise?      
As to Sitaram’s reference to US President Roosevelt’s New Deal Policy there is no harm in highlighting the issue raised by him in his 1936 speech in support of General Motors’ workers. One could get a flavour from an American movie Capitalism A Love Story by Moore made in 2010 following the worldwide crises of capitalism in 2008,

The film then shows the events leading up to the 2008 U.S. election, where branding of capitalism as socialism occurs as part of the scare campaign. Moore expressing hope that the election of Barack Obama might turn things into the right track. The film then contrasts the present economic reality in America with the policy of US president Franklin D. Roosevelt, who supported the Flint Sit-Down Strike in 1936. Moore also includes a long-lost archival footage of FDR calling for a Second Bill of Rights that would guarantee all Americans "a useful job, a decent home, adequate health care, and a good education."[

Although the idea is novel to deal with the non-antagonistic issues which sound better than many social programs CPM has taken in Kerala, West Bengal and Tripura, how far it would be possible to provide all the above to all citizens in a capitalist society?

I agree with the author that a real Marxist is he who is willing to adopt new tactics in changing environment. However, to say that the Class Struggle is dysfunctional in a democracy is contrary to example of Latin American experience and the spirit of the Communist Manifesto on which the author relies.  In fact,  abandonment of the class struggle and CPM’s failure to capitalize on its achievements on land reforms, delivery on social indicators, and support to Congress led hotchpotch government in 2004 gave an  impression to common man that the CPM was no longer a party that once stood on the principle  of class struggle and socialism. After the split of CPI in 1964 I wonder how the author could characterize Ajay Bhawan as a symbol of class struggle or revolution!!   

Author appears to be correct about Yechuri who opposed not only withdrawal of support to UPA I, but he also opposed expulsion of Somnath Chatterjee. In fact, his love is not yet lost for Congress when he appeared trigger happy to march behind Sonia Gandhi to hand in a petition on Land Acquisition Bill. Needles to mention it also became evident when he told Burkha Dutt of NDTV in a Town Hall meeting with the students of Stephen College  just a couple of weeks before the Parliament elections, “I wanted Mrs Sonia Gandhi to be Prime Minister in 2004”.    

“To be Marxist or to be communist, that is the question”?  I believe these terms are complimentary rather than mutually exclusive and intrinsic to Marxism, but Yechuri does not seem to fit in with either!!   Given the conduct of JNUine Marxists young generation realise, “Thanks God we are not Marxists”!!

Prof Suresh Deman
London