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Mainstream, Vol XLVI No 48

Socialism, Capitalism, Monopoly Capital

Sunday 16 November 2008, by Jawaharlal Nehru

Nearly two years ago, we adopted, at the Avadi Congress as well as in Parliament, the socialist pattern of society as our goal. That was not a sudden decision, but a natural development of our thinking and our national movement. Ever since the twenties, the Congress had been favourably inclined towards socialistic ideas. It is true that Congress thinking was rather vague and not precise, and was governed chiefly by idealistic considerations and a desire to raise the under-privileged and to eliminate vested interests and the big differences between various classes and groups in the country. Some Congressmen, undoubtedly, thought more precisely and definitely about this socialist pattern. When the Socialist Party was formed within the Congress twenty years ago, this did not mean that the rest of the Congress was against socialism.

There has been much confusion not only in India but elsewhere about the content of socialism and the methods to be adopted to achieve it. Outside India, even the communist version of socialism and the way to achieve it, which have been rigid dogmas, are in process of undergoing some change. In the Soviet Union, there is greater flexibility in approach, and in the other Communist countries of Eastern Europe there is a new ferment of ideas. Members of the Communist Party of India, bred up in subservience to rigid dogmas, have been rather at sea because of these developments.

The Socialist Party led by Dr Lohia can hardly be taken seriously, either in its objectives or its methods. The Praja Socialist Party, which is still supposed to represent the mainstream of socialist thought in India, has displayed, in recent times, an amazing confusion of ideas. Indeed, in some ways, their prominent leaders like Shri Jaya Prakash Narayan have drifted away from the basic tenets of socialism. Some raise their voices against state ownership and condemn it as state capitalism. Some even equate democracy with private enterprise and, thus, indicate some kind of a basic conflict between socialism and democracy. The old socialist view has been, on the other hand, that there is an inherent conflict between democracy and capitalism, and democracy can only find fulfilment when it extends itself from the political field to the economic field.

I think it is important that there should be clear thinking. Words and slogans often lose their original meaning and, to some extent, even get rather out of date because of changes. We cannot allow ourselves to become victims of slogans without thinking out clearly what they mean in present circumstances. Unfortunately, people in all parties, including the Congress, are far too much in the habit of allowing a phrase or a slogan to take the place of thought. Because of this, the Communists have become quite out of date in spite of their brave professions. Such reputation and prestige as they have is largely derived from the achievements of the Soviet Union or of China. Members of the Socialist Parties in India equally seem to live in a bygone age. So do, let us admit, most Congressmen.

IT is no easy matter to define socialism precisely, for Socialists themselves differ in their definitions. I do not propose to enter into this rather complicated question in this letter, but I should like to point out some broad considerations which we should have in view. Some people think that socialism means an egalitarian society, that is, equality for everybody and nothing more. Socialism certainly aims at a removal of differences and equal opportunities for all. But socialism is much more than this. The very word came into use after the industrial revolution had ushered in modern capitalism. It was in fact a child, as capitalism was, of the industrial revolution which for the first time rapidly increased the productive apparatus of society and therefore added greatly to the available wealth. For the first time in human history the prospect of a measure of well-being for everybody came into view and various theories were advanced how to achieve it. Marx studied the early days of capitalism with remarkable insight and prophesied that there would be progressively an accumulation of wealth in ever fewer hands and greater misery for ever larger numbers of people. This would ultimately result in a revolution ushering in the Communist era. Indeed, he expected this revolution to take place every time there was some crisis in capitalism.

Marx has been proved right in his analysis in many ways, but he has also been proved wrong in other ways. Capitalism has survived and prospered and even resulted in much higher standards for the industrialised communities of the West. But it is true that the new stage of capitalism, though markedly different from the old stage, bears out the Marxian analysis insofar as it is leading to big monopolies. In the highly industrialised countries a few huge combines have developed and wield enormous power. The main argument in favour of private enterprise was that it encouraged large-scale competition. With the development of these monopolies, the sphere of competition becomes lesser and lesser and the self-regulating character of the old competitive economy ceases to function.

In spite of this growth of monopoly capitalism, to some extent capitalism has been kept in check by two developments which were not before Marx. One is the development to democratic government leading to adult franchise; the other is the development of powerful trade unions in the industrialised countries. Both these have helped in improving the standards of the common man and in checking the predatory character of capitalism. Thus, while capitalism has undergone a considerable change, the conception of socialism also has to be adapted to new conditions. So long as private monopolies remain, it is not possible for any socialist structure of society to develop. It becomes essential, therefore, for society to control the major means of production and to prevent these monopolies from developing. And yet, the very nature of capitalism, aided by continuing technological progress, is to develop these monopolies.

Another aspect which is to be borne in mind is the terrific pace of technological growth and the release of new source of power, finally culminating in atomic energy. While it was bad enough for monopoly capitalism to wield great influence previously, and in fact to grow bigger and bigger, the prospect of this new source of power being controlled by it brings grave dangers.

The result of all this is that even in the highly industrialised countries capitalism, while changing considerably, has reached a stage of monopoly utilising the latest technology to increase its power to a degree which might in future endanger society as a whole. In India, the position is not so developed and is different. It would be folly for us to pursue a path which leads to these dangers and deadlocks.

We have, I think, adopted a wise course in trying to keep this basic factor in view and yet allowing private enterprise to develop in the secondary fields which are not of strategic importance. Gradually the public sector will grow both absolutely and relatively, and the whole economy of the country will be controlled by it. It is interesting to compare what is happening in a number of other countries in Asia, more especially Western Asia, with what we have done in India. Very large sums of money have been given to these countries as aid and or as profit from oil production. These sums have been spent in some improvements, some development of light industries and an increasing consumption of consumer goods. There has been no basic change in the general level of the people. Nor has any foundation been laid for any future progress. In effect these large sums have been largely wasted. We must learn from this.

[Excerpts from a letter by Nehru to the CMs of the Indian Union, October 14, 1956—taken from Letters to Chief Ministers, Vol. 4 (1954-57), General
Editor G. Parthasarathi]

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