Why should it be otherwise for the newly emergent economies?

There are a number of reasons why it should be otherwise for the developing nations, India included. First, the countries named above do not have the same history of colonial underdevelopment, to borrow the phrase coined by the late economist Andre Gunder Frank. The destruction of Indian industries during the period of British colonial rule and the whole scale plundering of the country’s valuable resources place India in a completely different historical and economic category than the industrialized powers, which were able to develop precisely because their ruling classes operated within a system of economic protectionism supported through heavy state involvement and violence, a process which continues right up to this day. The politics of neoliberalism ensure that the rules and policies imposed on the Third World are not applicable in the imperialist metropolis. This is why Western countries continue to offer heavy agricultural subsidies to their farmers while economic liberalization has led thousands of Indian agricultural workers to committ suicide as they are unable to compete with the Western products that flood the country. At the same time that India and other developing countries are told to slash public funding for a number of industries the Western TNCs enjoy state funds and subsidies in the form of R&D grants to ensure that they remain competive–or actually, to ensure that their monopoly never weakens.

In short, when Third World countries are required to operate with ‘open economies’ by the IFIs, it impossible for their economies to function on the same level as the Western powers. A country whi9ch has a history of underdevelopment will never be able to reverse this trend and begin develop in the same way as the industrialized metropoles within the framework of capitalism. Even when domestic production in the Third World is permitted by the metropolis, they still never manage to break the West’s monopoly in the most advanced areas. Thus, if developing countries begin to produce consumer goods, they still continue to import capital goods and heavy industry from the West. If they begin to manufacture limited capital goods, the West maintains the monopoly on petro-chemicals and computer software. What this means is that the only way for the Third World to break this pattern is by rejecting capitalism all togetrher and reverting to socialism.

Shaukat

1. You tend to argue in your article that the Indian bourgeosie or the capitalist class, in the era of LPG, has performed remarkably going to the extent of buying foreign companies. Well true and false both. While you have mentioned, the TATA buy out of Corus, you have failed to mention the systematic sell out of our public sector resources for a song to the Indian capitalists under the policy of LPG. The state’s policy reflecting a complete bias in favour of the capitalists, do not end there. India with the abolition of the long term capital gains tax and many other tax concessions to the rich has one of the lowest tax-GDP ratio in the world, which gives the Indian and foreign capitalists a bonanza in the country. Not to speak of the huge non-performing assets lieing with the national banks because of the Indian capitalists’ refusal to pay the loans. Therefore, the character of the state has undergone a fundamental change in the era of globalization. Today, the Indian state far from retreating from the economy has only changed the character of intervention. Earlier, it tended to be pro-people, now it is blatantly pro-finance capital and capitalists. So, it has been the state, which by facilitating the primary accumulation of capital has helped the capitalists to look to the moon.

2. In fact it can be argued, that the poverty and massive unemployment still plaguing our country is actually a result of providing such sops to the capitalists; in other words the genesis of such agrarian distress and other problems that you have cited in your article is actually a result of the re-orientation of the state’s policy of facilitating the capitalist class. Let me give you just one illustration. Our Parliament has passed an Act called the Fiscal Responsibility and Budget Management Act. This restricts all governments from having a fiscal deficit of more than 4%. Now, in a country where there is no floor on the amount to be spent on social sectors, no floor on the tax to be collected, no floor on poverty, such an Act, essentially means a reduction in public expenditure, particularly in social sectors. In our country, poverty, unemployment, are closely correlated with the public expenditure on social sectors. With LPG, the government in order to serve the interests of finance capital reduces these spendings and thereby generates more poverty and unemployment. Therefore the expansion of the capitalists ad the generation of misery for the people are both opposite sides of the same coin.

3. Coming now to the question of democracy. It is true that the Indian state through the process of elections tests the wicket, so to say and coopts large sections of the marginalized into its fold. But this also undergoes a change with respect to neo-liberalism. While the election results of successive general elections since 1991 will suggest that people have rejected the LPG policies, still every party that comes to power follows the same policies. This is a result of the complete hegemony of neo-liberalism and the logic of finance capital within the political establishment. This hegemony is essentially anti-democratic. Since the popular anger of the people against LPG is never manifested. Therefore you see a Chandrababu Naidu ousted with YSR taking the mantle but following the same policies with cosmetic changes. The CMP of the UPA is a small break from this hegemony, but given the politics of the Congress the CMP is still to be implemented properly. Therefore, the democratic movement in the country has to defeat the logic and politics of LPG. Otherwise the future of the people and democracy are both at great peril.

4. Coming now to the question of imperialism and our development. Imperialism’s motive force is finance capital today. LPG policies actually mean a subservience to this finance capital, and given the earlier paragraphs, it essentially means misery for the people.

5. AS far as the issue of Germany, Japan etc are concerned, they are no comparison to India simply because all of them are advanced capitalist and imperialist coutries, who have fought world wars against each other. Today, because of the resurgence of the finance capital, the intra-imperialist rivalry has muted. It is in the interest of these countries to rally with the US, which is the leading imperialist country of the world and excercise their dominion over the world. The development of India or the third world, has to challenge today’s imperialist policies, which are imposed on the third world by this block itself. Therefore there is no question that India will improve the plight of its poor without coming out from the logic of neo-liberalism or international finance capital. Any attempt to do so will be resisted by the imperialist block led by the US. Therefore any alliance with US is essentially coming under the subjugaiton of the Fund-Bank and inviting misery for the people.

I hope I have not been boring with this very long response.
regards,
Subhanil

There are a few dangerous generalizations you make in your post. You argue that other countries of the G8 are independent vis-a-vis their foreign policy despite their closeness to the American foreign policy. And it wouldn’t therefore make sense for countries such as India which “are on the cusp of joining such imperialist countries” to articulate their own so called “independent” concerns vis-a-vis foreign policy even when pressurized by global hegemons such as the United States.

I sense the above as rather misleading. While it is true that the industrialized nations of the G-8 are governed by the rational concerns that emanate out of Globalization, there are also nations which have tried to formulate alternate strategic alliances in order to militate against the pernicious effects of American Hegemony that is buttressed through the agencies of globalization.

No wonder, you have China and Russia forming the Shanghai Cooperation Council that articulates certain independent objectives that run counter to the imperialist nations’ aims.

The dynamic of globalization has a certain imperative instrumentalist origin. It can’t be merely said to be responsible for the aligning of the national bourgeoisie in India with their global behemoth counterparts.

It is therefore pertinent to understand the dynamic of multilateral relations not only in terms of the machinations of the MNC bourgeoisie and perhaps in realist terms.

I would therefore request you to not to merge the various entities of international relations, the underpinnings of global capitalism and constructivist ideas on poverty in one whole like the way you have done.