Daya Varma and Vinod Mubayi


Police atrocity is routine in India. But the death of 14 people in police firing in Nandigram on March 14, 2007 in West Bengal, ruled by the Left Front of which has the Communist Party of India-Marxist (CPM) is the leading constituent, has come under more scrutiny and bashing than any similar event earlier. 



Yeh Kahan ki Dosti hai  ki bane hai dost naseh

Koi Chara saaj hota  koi Ghum Ghusar hota


Translating the untranslatable Ghalib:

What a friendship, the friends have become preachers

Wish there were companions, or grief sharers.


Men and women of conscience have branded the “white zone” set up in Nandigram by the BUPC (Bhumi Uchhed Pratirodh Committee) spearheaded by Trinamool’s Mamata Banerjee with the assistance of some Naxalites as “liberated areas”. What some writers like Malini Bhattacharya have described as “the terror” let loose by BUPC is called by others as “revolutionary resistance.” All this is understandable. The left in India is sharply polarized on many issues and the contradictions frequently become antagonistic. What is difficult to comprehend is the remorse shown by certain members or supporters of CPM who are attempting to retain closeness to CPM but not to the policies exemplified by CPM’s Nandigram. The article “In the aftermath of Nandigram” (EPW May 26, 2007) by Prabhat Patnaik, an economist of stature, is an example. At the same time it is to the credit of CPM that it allows dissensions, something quite new in the Communist Party Culture.


Surprisingly, the Patnaik article has received the compliments of many, even some CPM supporters. This is perhaps because the article is ambiguous and says little while it claims to say everything. Indeed a parallel article by Malini Bhattacharya in the same issue of EPW makes more sense.  


Briefly, the main points of the article are: (1) The West Bengal government was forced to undertake the Nandigram project because the country is following a neo-liberal policy of industrialization; in short Buddhadeb Bhattacharjee is an unwilling victim of Manmohan Singh’s anti-people policies. (2) Neo-liberal industrialization does not create jobs but “Grande industry…within the context of a planned economy, not a market-driven one” as in “the Soviet Union and other former socialist countries” does. Surprisingly, Patnaik says this at the same time as he also asserts that “grande industry generates…little additional employment.” (3) Industrialization should be done under the public sector, which can raise finances exactly as are raised by the Tatas and Ambanis.


Before I express my non-economist view, let me express my understanding (most likely wrong) of the key words “neoliberal” and “neoliberalism”. As I understand the term was invented to characterize the economic policies that were implemented in the regimes of Reagan and Thatcher. It was a policy not to replace a public or planned economy but to inaugurate a new era in the most developed capitalist economies. It presupposes that even in the most developed capitalist countries, there is some state intervention in the economy and it is to minimize this intervention that the Reagan-Thatcher regimes advocated additional freedom to capital which assumed the name neo-liberalism and which does away as much as possible with government’s social policies. If so, neo-liberalism is not an alternate to a public sector-dominated or a Soviet type socialist economy but rather a more efficient way of running a capitalist economy. 


Patnaik’s first point that the West Bengal government was forced to undertake neo-liberal industrialization is ludicrous. What is labeled as neo-liberal policy started in India at the time of Rajiv Gandhi, almost at the same period as the beginning of the Left Front rule in West Bengal. Moreover, CPM has been opposing tooth and nail private ownership of public enterprises and even the Manmohan Singh government’s SEZ (Special Economic Zone) policy more or less to the same extent as many Naxalites. So Patnaik’s contention that the “West Bengal government of course may be faulted for not having protested against this (neo-liberal policy) imposition” is a moot issue. The West Bengal government has the choice of not developing the state and allowing it to become from one of the most to one of the least industrialized states in India and survive on the laurels of its land reforms or initiating industrialization by the resources and the methods that are available.


What the Left Front government has done in West Bengal has been done by choice, not compulsion, and I think it has followed, in the main, a correct policy, although it could have been implemented sooner and with greater transparency. Industrial development cannot be judged only by what it costs to a few or a few thousand people affected in the process. The merits of industrialization should take into account an assessment of the extent to which it contributes to national advancement and wealth. Of course in the process care should be taken to rehabilitate those who are dispossessed in the least disruptive manner to their lives. Private ownership even if it involves peasants and indigenous people cannot be accorded sanctity over and above national interest or the interest of all people of the country. Patnaik should recall the dispossession of millions, not thousands, of peasants in Soviet Union for his ideal industrialization unmotivated by the market. Indeed the Soviet method was more brutal than any that has been repeated elsewhere. In my opinion no state government in India will do any better than what the Buddhadeb Bhattacharjee’s government has done in West Bengal in its attempt to rehabilitate the dispossessed. 


In faulting the West Bengal government for acceding to the pressure of the central government, Patnaik also seems to be rehashing the stale argument that a communist government in a part of the country can not do much unless it controls the whole country.  Not only that – he might as well add – unless it suppresses all opposition. But India is a capitalist country and Buddhadeb Bhattacharjee cannot change the laws of economics.


The second point Patnaik makes is that corporate industrialization does not create jobs. He says that the surplus labor out of agriculture during the industrialization of the capitalist countries (18th and 19th century UK and Europe) was absorbed by migration to the new world and colonies. This is an assertion. A lot of migration preceded the industrial revolution in England and France. Migration from Spain and Portugal to South America, leading to genocide of the native population of no smaller magnitude than in the USA has nothing to do with “Grande industrialization”. In England, some of the surplus labor was allowed to starve and rot and a considerable amount of migration took place from parts that were hardly industrialized (e.g. Ireland and Italy).


No industry was started just to create jobs in the past and none is being started now for that purpose. Industries in capitalist countries are created to generate surplus value for their owners not to solve employment problems. Of course they employ the minimum necessary labor force but that constitutes only a fractional share of jobseekers.  Nevertheless the population making a living as workers in industry, services, or intellectual pursuits has increased as industrialization has progressed within the capitalist countries and the population depending upon agriculture has been reduced to miniscule proportions. Indeed advanced capitalist countries such as the USA and Canada are seeking immigrants at a time when there is no sign of “Grande industrialization”.


Furthermore, talking of the positive experience of the Soviet Union or other former socialist countries in creating employment in “grande” (i.e., large-scale) industry begs the question of what happened to these economies. State-led and state-owned industrialization in India, as for example in the energy sector, has been no less disruptive than corporate industrialization. It has also caused massive dislocation and dispossession as the movement against the dams in the Narmada Valley has demonstrated. 


The third point of Patnaik is that the state can find resources for industrialization using the same approach as do the Tatas and Ambanis, who do not invest “out of their “savings” but “obtain finances from various institutions”. The word “saving” is interesting. Tatas and Ambanis do not have savings; they only have “surplus”. The “various institutions” from which they obtain funds are either their own institutions or public financial institutions. The point could be legitimately made that government, including the West Bengal government, should not subsidize the Tatas and Ambanis by creating special incentives for them. But such incentives have a long history in India even in the heyday of the public sector companies in the 1970s in India when government was heavily involved in the economy in the days of the so-called license-permit raj. This era had its own set of negative experiences which created the impetus for implementation of the neo-liberal trend from the mid-1980s onward.  It is a pity that Patnaik does not reflect in his article on the reasons underlying the demise of the license-permit era in India in the context of the changes in the global economy and society and why state-led industrialization become unsustainable. Carping criticism of “neo-liberal industrialization” without offering constructive alternatives in the Left Front ruled states does not serve much purpose. 

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