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Mainstream, VOL LVII No 14 New Delhi March 23, 2019

Growth or Well-being In a 21st Century New Order

Saturday 23 March 2019, by Kobad Ghandy

(This is another article that the well-known Marxist Maoist thinker, Kobad Ghandy, sent to us from the Hazaribagh Central Jail in Jharkhand where he is currently lodged. He completed this article on March 1, 2019 and thereafter sent it to us. We are publishing as soon as we received it for the benefit of our readers.)

It is well enough that people of the nation do not understand our banking and monetary system; for, if they did, I believe there would be a revolution before tomorrow morning. 

Henry Ford

What the once President of the USA said decades back would be even more relevant in India today:

 where the citizens’ bank deposits are threatened due to the looting of our public sector banks by big corporates, of lakhs of crores of rupees, threatening them with possible collapse; temporarily rescued by the infusion of huge amounts of taxpayers‘ money;

 where thousands of crores of employees’ savings are being lost by a new ruling that allows Provident Fund money to be invested in IL&FS-type institutions which face bankruptcy due to the mismanagement of its funds (yet given a triple A rating);

 where thousands of home buyers have been cheated out of their flats (worth crores) by builders siphoning off their money into shell companies;

 where builders have sunk Housing Develop-ment loans of NBFCs to the tune of thousands of crores;

 where Indian big corporates borrow abroad at virtually zero per cent interest, while foreign funds invest huge amounts in India at high rates of interest and siphon off their windfall profits abroad;

 where foreign funds zoom in and out of our equity and debt/bond markets creating havoc with our Stock Market Index as also the value of our rupee.

The list could go on and on; but suffice it to say that when Henry Ford said these words financial swindling was probably not a fraction of what it is today. And this keeps increasing by the day. Imagine, when even British law-makers in a recent report refer to Google, Facebook etc. as “Digital Gangsters”, what must be the level of loot in countries like India which have barely any control on their operations, compared to the West.

All such financial swindles result in vast sums of money/wealth being transferred from the pockets of the poor and middle-classes to the super-rich and foreign companies, no matter what the levels of growth may be.

Due to these and numerous other factors, though India may be the fastest growing economy in the world, its human development indicators compare with the worst in the world —Sub-Saharan Africa. Though this is so obvious, articles and statements keep portraying high growth rates as the sole panacea for poverty alleviation.

Growth Fundamentalism

It is a misnomer to think that growth and well-being are automatically linked. In fact, some go so far as to state that for every one per cent rise in the GDP, two million people come out of poverty, when all are well aware that what India (and many other countries) face is jobless growth. In reality, in backward countries like India, the situation could be quite the reverse. There would be many examples wherein a poor quality of life itself tends to push up the GDP growth rates—which are merely based on consumption figures (of goods and services).

So, for example, due to poor levels of hygiene and cleanliness, the insect/mosquito repellent market is growing at over 15 per cent (that is, twice our GDP rate) and is now a gigantic Rs 4400 crores. Then again, due to the horrific living conditions (adulteration, pollution, hygiene, use of chemicals etc.) and excessively low govern-ment spending, the healthcare market leapt a gigantic 43 per cent in just one year to Rs 10 lakh crores in 2017—imagine its impact on the GDP growth rates! Yet another example is the huge amounts the middle-classes have to pay for want of proper/basic infra-structure—on items like electric generators, water purifiers, now air purifiers and numerous other necessities. A most cruel example is the Rs 800 per week villagers have to pay for water-tankers in drought-hit areas, that is, who have already been devastated by the loss of their crops! Take even the question of basic education: with the government cutting expendi-tures on schooling and making government schools sub-standard some 1.6 crore children have been forced to shift to private schools— a big boost to the GDP, but a huge burden on the parents. There would be hundreds of other examples, and though a few (poor paid) jobs may be generated, overall there is a huge decline in the quality of life; yet, such factors tend to boost consumption and services and so add to the GDP growth.

In fact, the Nobel Prize winning economist, Joseph Stiglitz, says, in Project Syndicate, that “the focus on GDP, or material well-being, distorts government’s view of its people’s problems. What we measure affects what we do; and if we measure the wrong thing, we will do the wrong thing.” He adds that the focus should be on things like health, education and environment, rather than the production of goods, because “GDP is not a good measure of well-being”. Stiglitz points out that a growth- focussed mindset has increased financial insecurity amongst the masses...... As GDP and inequality increase hand in hand, he says, common people’s lives have become harder, they are being priced out of education and healthcare.

What has been mentioned by Stiglitz has been chronicled in detail by Thomas Picketty in his book Capitalism in the 21st Century.

Having said this, what would be criteria for assessing

well-being

? What would be its measure? While calculating the World Happiness Index, leading factors the study associates with well-being are: general health, mental health, income and employment. Scandinavia, it says, scores high with the elaborate social safety nets that include free schools and hospitals, parental leave, generous employment benefits and later life-care for old people. India is at the very bottom of this index, indicating pathetic levels of well-being in spite of high growth rates. In fact, India is the worst in entire South Asia, worse even than Bangladesh which is 115th to India’s 133rd out of 156 countries. In India one could not even dream of the facilities enjoyed in Scandinavian countries.

Here, of course, happiness is being equated with well-being, which it is not. Though well-being would be one factor in the measurement of happiness—no doubt basic; there would be many other indicators, once a person’s basic needs are met.

As the question of happiness would later be central to my arguments rather than the GDP growth, let us consider what these additional factors would be.

So, ‘ease of mind’ and living in a relaxed, tension-free atmosphere would be a key factor for happiness, once the basic needs of well-being are met. This would entail a number of factors like freedom in all spheres of life; democracy and equality in all relationships (family, workplace, organisations, with the state/institutions); to be able to live in an atmosphere free from fear, free from intrigue, back-stabbing, duplicity, one-upmanship etc; and particularly in a country like India free from caste, religious and patriarchal persecution. Another important criteria for happiness must also be their right to privacy, particularly from the prying eyes of the state. Yet another important factor facili-tating happiness is a hassle-free administration (no red-tapism; no corruption), with decent basic services to the citizen like hygiene, cleanliness, fresh air, pure water, electricity, unadulterated food/milk/vegetables/fruits and facilities for recreation/sports/exercise/yoga.

In fact, if all these additional aspects were to be considered, India would be even lower in the Happiness Index. Considering mere growth rates, let alone all these aspects of happiness, even those of well-being are not factored in.

Besides, even if the growth obsession was to be honestly seen, these economists should suggest the socialist model, as no two economies saw such spectacular growth in the 20th century as took place after the Soviet (1917) and Chinese (1949) revolutions—that too without the massive colonial loot that facilitated the growth in the West. But our policy-makers and journalists are not an honest breed, who prefer to use growth data merely as a tool to justify existing policies.

In today’s world there are two alternative policies before any country—the socialist model and those of the Western democracies . Here we shall first view the ‘Growth’ in the two major socialist countries of the 20th century. Then we shall look at the Western democracies. If, today, neither seems satisfactory, one needs to look for something new. But first, the socialist experience.

20th Century Socialism

‘Growth’ protagonists need to consider the following factors:

Both Russia and China before their revolutions were the most backward countries of the world; both of them were additionally devastated by World Wars— Czarist Russia suffered during World War I and the Soviet Union during WW II; while China faced the most cruel aggression and occupation by the Japanese during WW II. Yet both these countries, within four to six decades, rose to become the most powerful countries of the world, even challenging the might of the only superpower, the USA. Compare this with other (similar) backward countries of Asia, Africa and Latin America that continue to languish.

By the 1960s itself the USSR was termed a superpower along with the US. That too after having to pass through the Great Depression of the 1930s (the biggest world economic crisis ever seen), and face the full brunt of World War II, where the Soviet Union lost 20 million of its people (not to mention destruction of property, equipment and arms) to free the earth from the Hitlerian hordes. Compare this massive destruction it faced with that of the US, which watched both the World Wars from the sidelines, making huge profits from arms sales and war credits to its Allies. In spite of these heavy odds, and also starting from a state of extreme backwardness, the Soviet Union could achieve superpower status and even challenge the might of the US by the 1960s. Though later, in the 1980s and 1990s there was a severe setback (this will be considered separately, while analysing the setback to socialism/communism worldwide); yet, in economic terms, it could revive to be part of the G-8 block of the most powerful world economies (before being ousted due to its contention with the West).

The Chinese growth has been even more spectacular and having taken lessons from the Soviet experience, its economic and political model has been somewhat different from the start, and therefore is unlikely to see the type of economic setback as witnessed by the Soviet Union. Before the revolution, China was probably more backward than even India, having been ravaged by a decade of Japanese aggression during WW II. And though it accomplished its revolution two years after India’s independence, its economy today is five times that of India’s. In addition, today it is the world’s largest economy (in purchasing power parity) having overtaken even the US, its techno-logy in all spheres is all set to surpass that of the US and its goods have veritably swamped all markets around the world, including that of the US. And regarding its worldwide invest-ments, besides owning over $ 3 trillion of US treasury bonds, its Belt and Road Initiative (BRI) is said to be the biggest infrastructural project ever undertaken in world history.

Seen purely from a growth angle, should not, at least, this model, in particular, be considered by India’s GDP growth ideologues, given its success, and specifically given that it too is an Asian country of similar size as India?

Why even a small country like Cuba, in spite of facing decades of economic blockade and boycott by the US, has become a model for many a Latin American country? And now even the two front-runners for the US Presidency and UK Prime Ministership—Bernie Sanders and Jeremy Corbyn—are both socialist in orientation. In spite of all these examples, our policy-makers, advisors, journalists etc. cannot see growth in any other format except the Harvard/Colombia University school of thought.

The fact that the socialist/communist systems and movements worldwide have faced a severe setback, is another matter (to be considered in depth elsewhere), but then so have the capitalist democracies. The single point here is only that those obsessed with GDP growth, if honest to their own concepts, should give consideration to these socialist models, as they have been able to push growth, particularly in backward countries, at the fastest pace, and that too without any colonial/neo-colonial loot (except maybe, at the later stage) as has been the case with the West since its inception.

Besides, today even the Western democracies are no longer what they were earlier and their economies are in the 11th year of stagnation since the 2008 banking/sub-prime crisis, with GDP growth rates stuck at around one per cent and even negative—that too after having heavy doses of ‘Quantitative Easing’ (that is, borro-wings) and a continuation of their extraction of super-profits from their neo-colonies. Hardly a model for replica!

Western Democracies Today

The concepts of ‘Liberty, Equality, Fraternity’ in the capitalist democracies, ushered in by the French Revolution, seem to be receeding. Noted economist, Samir Amin, says: “Capitalism has reached a level of concentration of power, economic and therefore political, that is not comparable to 50 years ago. A few tens of thousands of enormously large companies, and a smaller handful, less than 20, of major banking institutions, alone decide everything. Francois Morin, a top financial expert, who knows this field, has said that less than 20 financial groups control 90 per cent of the operations of the integrated global monetary and financial system. If you add to this some 15 other banks, you go from 90 per cent to 98 per cent... This has led to the control of political life. We are now far from the bourgeois democracy of the 19th and the first half of the 20th century.” Of course, even this “first half of the 20th century” of “bourgeois democracy” witnessed massive devastation by two World Wars, and the throttling of freedom on a scale rarely witnessed before by nearly two decades of fascism in large parts of the world, not to mention the Great Depression of the 1930s.

So even the historic call of the French Revolution of ‘Liberty, Equality and Fraternity’, which resulted in the reorganisation of the earlier monarchical/feudal systems on modern concepts of democracy and freedom, are beginning to fade... Yet, even in its heyday, little did these democracies impact the bulk of the colonial/neo-colonial world of Asia, Africa and Latin America (where they exercised enormous influence/control), which were never allowed to rise from the abyss into which they had been continuously pushed. For example, India’s GDP as a proportion of the world GDP was 25 per cent prior to the arrival of the East India Company; at the time of British departure it was two per cent. Simultaneously British GDP rose phenomenally in the same period.

So, where then is the hope, with socialism in setback and Western democracies in decline? Are we approaching the ‘End of History’, with the continuous crisis/stagnation in the developed countries resulting in a 1930 like situation, with parties and countries turning to fascism, pro-tectionism, and increasing contention amongst the big powers? With the US more and more using its diplomatic and military might to desperately maintain its superpower status, which is strongly being challenged by China and the China-Russia axis, are we heading towards a 1940-like scenario? Such US brink-manship and gun-boat diplomacy (as with Venezuela, Iran etc.) are fraught with the danger of a new world war, where the use of nuclear weapons could wipe out much of the human race.

Meanwhile, increasing hatred is being whipped up to promote the fascist agenda throughout the world along racist, religious, caste and other parochial lines. Where are we heading?

With technology reaching unbelievable levels of advances why is the world heading towards this morass, when its advantages should have been a source of pleasure and enjoyment? What will pull our country and world out of this quicksand into which it is sinking? Surely, to answer this one would need to think afresh; not along the hackneyed concepts of GDP growth being repeated day-in and day-out.

In this connection it may be well to reflect on George Monbiot’s new book, Out of the Wreckage: A New Politics for an Age of Crisis. Monibiot looks at a future when humanity initiates a new politics of belonging...... where he pictures the central feature of the human condition as being altruism, empathy.....

Towards a 21st Century Model

The real issue before the people of our country and world is not Growth but

Well-being

and

Happiness

. With both the democratic and socialist models of the 19th and 20th centuries facing a dead-end; there is need for a re-think towards some new 21st century model. For this, of course, there would be a necessity for an elaborate analysis seeking the reasons for the setbacks. Regarding the capitalist model there have, I believe, been numerous analyses (not available in jails); regarding socialism I will try and undertake a review if I come out alive, but here I will merely restrict myself to a suggested framework of a new model—a mere skeleton to be given flesh and blood later.

Now, to build a new model, it does not mean a total negation of the past. There is no need to throw out the baby with the bathwater. One has to take what is positive, discard what is negative, and introduce fresh concepts and ideas.

So, given that the socialist economic model has proved a more effective tool for inclusive growth—that too on its own strengths, and not built on any gigantic colonial or neo-colonial loot as with the democracies of Europe, the US and Japan—it would be the more effective model (no doubt adjusted, taking lessons from flaws) from which to build on.

In the socio-political sphere, the French Revolution’s concepts of ‘Liberty, Equality, Fraternity’ are as valid today as they were 250 years back.

Leaving the economics of the new model to a later discussion (after a more detailed analysis) here we will merely focus on some super-structural aspects of socio-political recons-truction. Also, it needs to be remembered that the economic model needs to fit in with the suggested socio-political structures, and help promote them. In turn, the socio-political structures need to facilitate an economy geared to promote the well-being of the masses.

In our new socio-political framework one has to build on the existing concepts of ‘Liberty, Equality and Fraternity’ as also Democracy and Freedom (LEFDF). But unlike how they are viewed today, these concepts should not be seen as being absolute in themselves, but as concepts that have to be progressively advanced as the new state consolidates, as peoples’ awareness grows and consciousness heightens, and forces of destabilisation are continuously weakened and isolated. Past history has shown that the powers that be will never tolerate the type of change being suggested. So, while guarding against over-centralisation of power one also has to draw a balance to prevent a Venezuela-type destabilisation of legitimate governments/movements.

Besides, the concepts of LEFDF have to be inbuilt in the new platform and movement itself from the very start. The problem with the earlier revolutions—both democratic and socialist—was that these concepts, of either LEFDF or ‘Equality and Socialism’ respectively, were seen as ends in themselves. But these, in themselves, cannot be the final goal—not as ends in themselves, but as means to the end. Once the priorities are changed, it would more clearly be seen that the above-mentioned concepts are part of a long-drawn and continuous process to achieve what should be the final goal.

But what then should be the real goal towards we should strive? This should be the

universal happiness for all

—at least, the majority. Once this is clearly set and becomes the key measuring rod for progress, then all other concepts of LEFDF, as also economic well-being, will be sought to be continuously deepened to achieve greater and greater levels of happiness. That either democracy and/or socialism should be the final goal is a misnomer; these should only be the tools to achieve the ultimate. It is only then that economic, political and other policies could be framed to promote the maximum well-being of the citizen—rather than taking the mechanical growth-rate figures alone.

Now, if happiness is to be the final goal, while LEFDF and economic well-being are to be the means, there is yet another

key

factor which has to be brought onto the agenda, without which

none

of this is possible. What then is this new/other factor rarely taken into consideration by either democrats or socialists? And it is probably the lack of this single factor that saw these very democratic, socialist and other processes being reversed, and, in fact, in some places, turned into their very opposite?

It is none other than the question of

Ethics

. Without keeping the question of

Ethics

as central, all the concepts of LEFDF tend to degenerate, particularly when they are associated with

money

and

power

. It is a fact, of course, that without the organisation of a new political (as also economic, social, cultural) power, no socio-economic change is possible—as the anarchists may suggest. But with power—even petty levels of power—comes all levels of degenerative practices and corruption, reversing all practices of LEFDF in daily life.

As it is, the seeds of these negative values are already within all of us, as they are part of the existing establishment environment. And if anything, they have been enormously magnified in these past two decades of neo-liberalisms— going so far as to legitimise dishonesty/falsehood by calling it a post-truth era. Much of these values are deeply embedded in our sub-conscious and tends to take a vicious form when associated with power. Unless these are countered at every step, day-in and day-out, they will soon envelope the individual, the organisation, the party, turning the earlier practice of LEFDF into their very opposite. Particularly the leadership at all levels of organisational power are the most susceptible.

The Animal Farm syndrome comes into play— power corrupts, and absolute power corrupts absolutely. This applies equally to the socialists as also the democrats if unchecked by ethical standards. There have been numerous top-level ideologues in the socialist camp who have dwelt on this issue—like Roza Luxemburg, Trotsky, Gramsci, Althusser etc.—but they mostly found answers in structural and organisational terms, rather than through the question of Ethics. Whatever may be the organisational/structural forms, as long as ethical values are not present in the individuals (and particularly the leader-ship) degeneration is inevitable, particularly with power, money, popularity etc.

Given its importance, in the new scheme to be evolved, what then are these ethical values for which we should all strive—particularly those actively seeking change. In essence, they are the Anuradha-like values outlined at length in my Mainstream article commemorating her 64th birth anniversary in March 2017. In short, they are the values of: honesty, truthfulness, straightforwardness (no duplicity and manipu-lation), simplicity (no ego), openness (avoiding jealousies, favouritism, flattery, factionalism etc.) and complete democratic functioning at all levels of relationship and organisation, with no trace of casteism, patriarchy, one-upmanship etc. ‘Ease of mind’ and a relaxed atmosphere should be promoted in all circles which will also facilitate the development and growth of all individuals.

The more these ethical values evolve in the individuals/leaders/organisation, the more will democracy, freedom, liberty, equality, fraternity in relationships be facilitated, increasing, in turn, the levels of happiness all around. So all these three aspects (that is, value system, LEFDF and happiness) are deeply intertwined and one is dependent on the other. None can grow in isolation from the other. And these, in turn, must be linked to the economic policies that promote the well-being of all; only then will happiness be fully assured and sustained.

But to ensure that ethics/values is given primacy in any organisational structure, it must become a key factor in the promotion policy of cadres and must be a prerequisite for any level of leadership. Particularly in a country like India, where brahminical values of superiority, casteism, patriarchy etc. are so deeply engrained in our psyche and Chanakya-type cunning is considered an asset, the question of ethics gains even more importance than elsewhere. If mere ability and knowledge remain the prime criteria for promotion/leadership, the upper castes have a natural advantage over the lower cadres, adivasis and women. They would automatically seize/acquire leadership if ethical values are reflected to the background. Thus, in a country like India, the question of ethics must be given even more primacy at all levels of promotion and leadership—besides, with a good outlook, knowledge and ability can quickly be acquired.

Thus the model for the 21st century must be through the creation of socio-political structures based on LEFDF, with a focus on ethical values; an economic model of inclusive development ensuring the well-being of all, through secure (not contract) jobs, education, healthcare, environment, hygiene, etc. etc.; and a goal seeking the promotion of happiness to the maximum number of people.

And to promote such a new model, the first task would be the construction of a New Platform, built on a strong foundation of Anuradha-style values and LEFDF, arousing the masses of our country in the spirit of Swadeshi, Swarajya, Janvad for Jal, Jungle, Zameen as a first step.

March 1, 2019 Hazaribagh Central Jail

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