Many prominent industrialists from West Bengal paid rich tributes to Jyoti Basu as one who had eschewed militant trade unionism in his later years and even developed a more reasonable approach to the need for industrialisation in the state. Indeed, it is most fascinating to study over time the tentatively changing attitude of Indian communists and other Left-of-Centre formations towards capitalism and capitalists. I have heard many leading industrialists from West Bengal vouching for the way Jyoti Basu or Buddhadeb Bhattacharjee would personally intervene and diffuse a worsening militant trade union situation. One word from the top leader and things would settle. While this did provide temporary relief, it did not solve basic issues. In fact, many would argue it is utterly feudal and if merely a word from the party leader diffuses a trade union crisis. In Marxist parlance, such a feudal approach to collective bargaining happens in society at a stage best described as the primitive mode of capital accumulation. In a sense, both capitalism and trade unionism need to re-invent themselves and become more scientific, as seen in the West, and indeed parts of East Asia, through the latter half of the 20th century.
Attitude to capitalism and capitalists needs to be debated more thoroughly in our society. This is important not just because the communists in India rule a few states. This debate is crucial also to bring greater clarity within the ruling Congress party whose socialist DNA is still very strong. In fact, many big policy initiatives that are supposed to provide a stronger foundation to India?s growing economy are being put off because of opposition from either the communists or other Left-of-Centre formations in West Bengal. In short, the influence of the Left continues to dog the Congress in more ways than one.
There is already a debate going on within the CPI (M) over its approach to industrialisation and rapid capital accumulation after their electoral debacle in West Bengal. Evidently, the CPI (M) leadership is somewhat divided on what strategy it should adopt to enable smooth capital accumulation in the state. A section of the CPI (M) feels the party must allow capitalism to take root and later create its own contradictions for a socialist intervention. This essentially means you allow wealth creation first and then redistribute through state intervention at a later stage. However, the party?s economic ideologue Prabhat Patnaik argued against this approach in an article in the
Economic and Political Weekly last month. Patnaik argues that socialist/state intervention should be a constant process and cannot wait for capitalism to mature to a higher stage. Indeed, this confusion also dogs the Congress party in many ways.
Like the Left parties, the Congress leadership is also unable to decide the optimal trade-off in which modern capital accumulation is allowed enough leeway so that the state will have room for socialist intervention at a later stage. The Indian growth story and the rise of the new entrepreneur class has indeed resulted in more than doubling of the government?s tax revenues over the past five years. Such a surge in tax revenues in a short period has not been seen in decades. Indeed, it is this bonanza that enabled the Centre to implement many social welfare schemes such as the farm loan waiver and rural employment guarantee. But for this generosity on the part of the state to continue, there must be a striving to create more wealth in the years to come. That requires creative thinking that will ensure a further unshackling of the Indian entrepreneurial spirit. New policy initiatives must support that. Such initiatives have not been seen so far. The UPA is currently showing some signs of complacency simply because India was not affected by the global financial crisis in the way other countries were.
Indeed, there is a sense of elation over 7% GDP growth. Many Congress leaders are tending to slip back to the old socialist ways of the party. That will be a grave error. Culinary experts say the tongue develops a deep memory for certain dishes that you then crave all your life. One only hopes the senior Congress leadership is not developing a deep craving for items from the past socialist menu.
One got a small glimpse of that when finance minister Pranab Mukherjee extolled the virtues of Indira Gandhi?s move to nationalise banks that he argued helped the Indian banking system hold firm against global financial crisis. However, it must not be forgotten that when Manmohan Singh launched economic reforms in 1991, most public sector banks were in the intensive care unit. Between 1991 and 1996, over Rs 35,000 crore of fresh capital was pumped into these banks to revive their operations. Subsequently the PSU banks began shaping up only after they got stiff competition from the newly licensed private banks like ICICI Bank and HDFC Bank. This perspective must not be lost. The Congress party must internalise the reality that socialist interventions can become possible only after a strong capitalist growth framework is put in place. It doesn?t work the other way round.
?mk.venu@expressindia.com