Industrial blunders

India’s only social scientist to be decorated with a Nobel Prize, Amartya Sen recently offered for the first time his views on land acquisition for industrialisation in India, perhaps the most sensitive issue in Indian politics right now.

This essay takes issue with Sen’s recent public pronouncements on the topic in an interview given to The Telegraph in Kolkata in July (http://www.telegraphindia.com/1070723/asp/nation/story_8094453.asp). (One could as easily take issue with his panglossian view of Indian agriculture and food security – a view which pretends to explain why colonial-era-style famines cannot happen in a democracy with a noisy media but 20,000 farmer suicides can take place every year and hundreds of millions can suffer from chronic malnutrition. Curious thought.)

One hesitates to add that Sen discusses the ethics of land acquisition. Simply because he doesn’t. In a 1,500-word interview the term does not appear. It is because Sen appears to be in harmony with the views of so many chief ministers today that the State has the right to take over the lands of farmers and hand them over to corporations. Why does he think so? Because “when people move out of agriculture, total production does not go down. So per capita income increases. For the prosperity of industry, agriculture and the economy, you do need industrialisation. Those in effect preventing that, either by politically making it impossible for an industrialist to feel comfortable in Bengal or making it difficult to buy land for industry, do not serve the interest of the poor well.”

The following questions appear in anxious, sceptical heads: Can’t overall per capita income increase even as people displaced from rural livelihoods suffer actual declines in their standard of living? Isn’t this precisely what has been happening to millions of displaced tribals and dalits in this country during the past 60 years, as Medha Patkar and others have ably documented? Is bribing the rich (notably, Sen makes no mention of the public subsidy of Rs 850 crore given by the CPM government to the Tatas to lay down the automobile plant in Singur, an unconscious oversight perhaps?) the only way to “serve the interest of the poor”? Has this strategy ever succeeded anywhere? For someone who has ridiculed the trickle-down theory of economic growth leading to the termination of poverty on numerous occasions, isn’t Professor Sen being blithely disingenuous in making a claim like the above?

Sen acknowledges that “the market economy has many imperfections…but it also creates jobs and if income goes up, government revenues go up, so there is money available for education and healthcare and other things.” What guarantee can he give that the government will not use growing revenues to fund ballooning military budgets? Is he being naïve in thinking that health and education have got short shrift in this country over the past half-century because of a mere lack of funds?

There is yet another issue with regard to economic growth and its relationship to the quality of life. Economists typically suffer from a growth fetish and imagine that it can solve most of the problems of the contemporary world. But there are a thousand reasons to suspect that the reported numerical increases in GDP and its growth do not add to the welfare of ordinary people in the country to the degree normally believed. In many cases, “better” numbers are portents of decline and failure in often immeasurable ways. Apart from well-known conundrums such as the GDP going up if a wife divorces her husband and sells him sex thereafter, or the GDP rising with greater medical expenses on account of the growth in respiratory diseases from pollution, there are numerous problems (too many to go into here) with taking the GDP measure of human welfare seriously. One problem with GDP measures is that if growth is accompanied by rising inequalities and expenses on guard labour to control growing crime rates, many of the purported benefits are cancelled out. An even more intrinsic problem with using the GDP measure as an index of human welfare in a country like ours – with such a huge unmonetised subsistence economy – is particularly serious: losses occurring in the economic realm outside the measured markets (tribal populations living on gathered minor forest produce or fisherfolk catching fish to eat for themselves along the coastline or small farmers growing their own grain) remain unreckoned. Thus, unsurprisingly, the government will offer figures for the creation of jobs (in say, SEZs) but never for the number of livelihoods (which are more than jobs after all) lost.

The losses will look small only to those who do not have to suffer them. But for those many millions who do, they are of pivotal significance. So often, policymaking elites in independent India are repeating and compounding the errors made by British colonialists who failed to take adequate cognition of pre-existing local subsistence economies, arrogantly imposing the “modern economy” on top of them, as if there was only empty space before the latter arrived on the scene.
A good example of such callousness from present-day India is the SKIL Infrastructure SEZ that has been approved to come up at Nandagudi (near Bangalore) in Karnataka. A Rs 100 crore local economy based on the sale of milk, vegetables and silk cocoons and giving each family of five an annual income of Rs 200,000 every year is being supplanted by supposedly more productive modern production units. Compensation is being considered only for landowners, not for wage labourers. No heed is of course being paid to the breakdown of local communities and the termination of established ways of life and culture and the distress induced thereby. Under the rhetoric of “progress” and “economic development”, colonial-era-style crimes are being enacted. Understandably there is a growing pitch of local protest against the project.

Where is Gandhiji’s “last man”, for instance, in Sen’s worldview? Awaiting the arrival of a primary health centre and a school for his children, once the finance minister has allocated resources for such priority tasks upon seeing his revenues climb in the wake of the rapid economic growth attained by the industrialisation following upon forcible land seizures from people like himself? Isn’t there a less tortuous route to enable the poor to find a semblance of economic freedom? Wouldn’t there be other, new pressing heads (like nuclear power plants and infrastructure for SEZs) to which public money must be allocated from the admittedly larger budget made possible by economic growth?  

What about a free market in land?

The glories of the free market are constantly being sung. But where is the famed free market when it comes to land? If rational consumers can be trusted to demand the correct amount of toothpaste at the right price and rational workers can be trusted to sell the right amount of labour at the appropriate wage, one is baffled by the presumption that farmers cannot be relied on to sell their land at fair prices! Why so much song and dance about land acquisition in the first place if markets are working freely and if the will of the people is being registered in the price of land? If there is a deficit of information no one will object to farmers being exposed to relevant data and projections (without entering too much fantasy). But beyond that, why not stay loyal to the tenets of economic science and let markets roll out results instead of pre-empting them with dictated policy manoeuvres from Washington or Cambridge? Why can’t the government stand behind the operation of a free market in land (instead of interfering with it), just as it does in the world of financial paper?

What if the democratic poor themselves prevent land acquisition, by refusing to sell (read, surrender) their lands? What would Sen have to say, for instance, to the woman who came to Delhi last December to register her protest, one arm in bandages after a brush with the police while she was attempting the impossible – trying to harvest the paddy crop from her own field in Singur? Logically, Sen would have to maintain that such people stand in the way of their own prosperity by not allowing what would be in their own greater long-term interest. Just like the decimation of the European or Russian peasantry in the course of industrialisation in those parts of the world was in their own long-term interest. How, for instance, does Sen view the resistance put up by the peasants of Nandigram? Or the way women were raped and subjected to unspeakable forms of barbarism by the police and CPM workers? “I have not studied it in the way I have studied Singur. So I won’t comment,” was his reply.

About Singur Sen says that the protest by the people against the seizure of their lands “not only goes against the policy of the West Bengal government but also against the 2,000-year history of Bengal.” What is so holy about the Bhadralok class in charge of the political affairs of the state? So what if the protests go against the policy of the government? Isn’t that what protest in a free, democratic society is all about anyway? And if something had currency in the depths of the past, assuming Sen is entirely right about it, does it naturally validate its wisdom today? Human populations then were a fraction of what they are today. Even if the ancient and medieval worlds knew some form of industry, high energy, resource and water-intensive industrialisation only gathered speed some decades after the 18th century Industrial Revolution in Britain. There was no environmental crisis, pollution, mercury, lead and arsenic poisoning when Ptolemy was reading the accounts of Mediterranean traders who had visited India. What sense does it then make to long nostalgically for a past whose wisdom would be an inevitable anachronism today, when we are called upon not to produce and grow, as the economists would like, but to survive, conserve and create, as men like Tagore and Einstein were keen to remind us ages ago?

Besides, for the 10,000 livelihoods that the Tata project in Singur is taking away it may be providing employment to some few hundred people, who are unlikely to be from the ranks of the displaced peasantry. (Where are the jobs Professor Sen and others seem so concerned about?) The spoils from projects like Singur will accrue to big capital and a handful of high-salaried skilled workers, leaving out all those that automated industry finds redundant today. Landless workers, sharecroppers, rural artisans, small vendors and others will have to wait (mostly in vain) for the meagre, distant benefits of “trickle-down” to percolate to them. Cold comfort.

Sen also overlooks the fact that the Tatas have received for their project in Singur an area several times the size of what they will actually need for the factory (seeing as they intend to replicate the plant they already have in Pune on less than a few hundred acres of land). Does he not see the massive windfalls corporate India is accumulating these days from publicly subsidised land scams in the real estate sector?

Sen is eager to point out that “prohibiting the use of agricultural land for industries is ultimately self-defeating”, that you can’t say in a market economy that “this is fertile agriculture land and you should not have industry here.” “The locations of great industry, be it Manchester or Lancashire, these were all on heavily fertile land (sic). Industry has always competed against agriculture because the shared land was convenient for industry for trade and transportation…there is no way in which you will be able to avoid industrialisation around Calcutta, any more than you could have avoided it in London, Lancashire, Manchester, Berlin, Paris, Pittsburgh. You will find industry will come up where there are advantages of production, taking into account also the locational preferences of managers, engineers, technical experts as well as unskilled labour.”

In other words, we should repeat all the industrial blunders of the white man which have brought our species to the environmental precipice today. How about learning from the Chinese for a change, who themselves learnt from their bitter SEZ experience and passed a Land Conversion Act nearly a decade ago to ensure that land was not taken from agriculture for industrial purposes anymore? Doesn’t the State play a key role in the location and kind of industrial investment? Could British industrialists during the early phases of capitalism have got their way without the bitterly resisted Enclosure Acts which not only enabled convenient location of industry but perhaps even more importantly, paved the way for forcible removal of peasant populations from the countryside so as to make land and resources accessible to industry, in addition to making available to it a labour-force desperate for alternative means of survival, not to forget a readymade market for industrial products? Modern industrialisation, historically, is a form of conspiracy against the public, though intellectuals like Sen see only “freedom” emblazoned in gold letters wherever industrial interests hold sway. All else belongs to backwardness and the dying past where peasant conservatism runs rife. Submit, therefore, in the name of freedom, to the destructive sweep of corporate industrialisation.

Like most other economists, Sen does not take seriously the possibility of rural, small-scale, low-impact sustainable industrialisation as a means of improving the lot of the poor. That the sort of industrialisation by corporations (involving heavy use of energy, water and other resources) that he and other economists advocate with such zeal might devastate this country’s ecology permanently is of no concern to him. Environmental matters are largely ignored by such experts. Deforestation, desertification, the groundwater crisis, climate change, the melting of glaciers, the growing incidence of floods and many other such problems – all symptomatic of fundamental ruptures in the sub-continent’s ecology – do not strike the growth economist as matters for which his policy-prescriptions are directly responsible.

And what happens to agriculture and employment?

Sen is remarkably silent on the issue of farmer suicides. There is virtually nothing in his recent writings on the topic. That they might be directly resulting from the pincer movement of rising costs and falling prices for output in which farmers are caught, thanks in good measure to official State policies since the 1990s to please the WTO and IMF, is not a possibility he explores. A credit crunch, after all, has afflicted peasantries in all sorts of times and places throughout history.

That Indian agriculture could have been made deliberately sub-optimal from the point of view of small and marginal farmers – by policies engineered by Washington’s imperial institutions in the interests of global agribusiness and routed through the ministries in New Delhi – in order to drive the peasants off the land and make it possible for companies like Monsanto or Cargill (or even Reliance or Walmart) to gradually take control of the large food market in India is a very important hypothesis to consider. It could explain much of what has transpired in the Indian countryside over the past decade-and-a-half.

As for concern for national food security, in a world of trade, it is a “fetish”, Sen has argued. Why worry about giving away precious fertile land to industry when you can always import food from abroad. Let’s kid ourselves that there is no energy crisis and fossil-fuel-based sea transport is not an issue. In other words, let us throw ecological rationality to the vultures and import rice into traditionally rice-growing areas from regions of the world never known for growing the cereal – just because we can and there is money to be made for those who have cornered the market already. Why not sell French water in California and Californian water in France as long as affluent (effluent?) consumer tastes have been prepared by adequate commercial propaganda – just like the multinational Vivendi has done? Why should a rising economic power worry about such archaic matters as self-sufficiency in food? That countries like Australia – from whom India has been importing wheat in recent years – recently had serious droughts (the worst in recorded history) isn’t something that bothers the economist schooled in the wisdom of free markets. It also doesn’t make him ponder that Western nations (sobered by the memory of wartime shortages) have zealously ensured (through unfair subsidies and suchlike) their self-sufficiency in food.

Okay, so you get farmers to leave their lands for a better life elsewhere. But do displaced peasants have jobs to run to? Do they have the qualifications required to make the grade of employment on offer today? Can a 55-year-old from Telangana who has tilled the land for several generations and never signed his name take calls from an angry client in Boston? The question answers itself, given that the skill-sets required by modern industry and services simply do not coincide with those of the displaced peasants. Someone wins. Someone else loses. And there is no simple way for the winners to compensate the losers, an idea economists are tutored to be enamoured of. Economists and policymakers fond of dreams like Sen’s are all too keen to entice farmers and agricultural labourers away from the land for better urban, industrial pastures. But where are the jobs they all keep promising, which would provide compensatory incomes to the migrating poor?

When Europe industrialised and moved millions away from rural occupations (over a period of centuries, one may add) conditions were such as to allow for sufficient absorption of displaced populations elsewhere. In the cities factories were coming up, requiring both unskilled and skilled labour. Mines were being developed to supply the raw materials for industry. The world was living very far from its carrying capacity. Externally, colonies in the new world served as sinks for surplus labour. Writing of the Scandinavian experience, noted historian Eric Hobsbawm has written that “with the rapid rise in population a growing number of the rural poor found no employment. After the middle of the 19th century their hardship led to what was proportionately the most massive of all the century’s movements of emigration mostly to the American MidWest…”

Conditions for countries like India today could not be more different. Transitions of the sort that pundits like Sen expect are not even remotely possible. There are several reasons to believe that the European experience cannot be repeated here. Firstly, there are no colonies (except tribal and dalit areas within the country) to exploit, extract surplus from or send surplus labour to. Secondly, there are enormously more pressing environmental constraints on industrial expansion anywhere today which industrialising, urbanising Europe did not have to worry about. Thirdly, markets abroad are limited, unlike in the case of industrialising Europe. This is especially so since trade is free only for corporations from rich countries. Unlike Europe, there are no captive markets in the colonies where India or even China can sell their products. Most importantly, when Europe was in its incipient stages of industrialisation industrial technology had not evolved in such a heavily labour-displacing direction. As Marx had noted, even if industrial expansion can occur with advancing technology making increasingly smaller inputs of labour produce vastly greater outputs, the working classes would not benefit from the prosperity unless ownership of capital was socialised. That would have to mean the end of capitalism and the onset of socialism. Any signs of it?

Even a casual consideration of Indian economic realities today illustrates the points being made. It is a sobering official statistic (Economic Survey, 2007) that between 1991 (when liberalisation of the economy began) and 2004 (the last year for which reliable data is available), the entire organised sector of the Indian economy (including both private and public sectors) could give employment to 0.3 million fewer people! (In 1991 it employed 26.7 million people. In 2004, 26.4 million. Meanwhile, the total workforce grew from 370 to 430 million.) The organised private sector gave jobs to 7.7 million people in 1991 and 8.3 million in 2004, an unimpressive growth of 600,000 jobs in 13 years! (Now, while net jobs created in the organised economy may be growing at 100,000, 200,000 or even 500,000 per year, 10-14 million people are getting added to the workforce every year: An Australia is being added to the workforce each year even as job generation is at the rate of a modest South Delhi colony!) Roughly the same number of people in the industrial workforce as in 1991 today produces four to five times as much industrial output as in 1991. This has understandably made the top quintile of the population much wealthier. But meanwhile India’s workforce has grown by 50-60 million people! It is not clear how large overall gains in output will be distributed such that redundant sections of the population share in the benefits and do not turn against the “reforms”. Realism was never the growth economist’s strong point. And yet today, we are all imprisoned by his illusions made real.

It is not the fault of the economists, to be sure, that despite their best intentions the employment picture looks so bleak. Modern industrial technology has evolved in labour-scarce, capital-rich countries. So while it flatters the productivity of an employed worker it makes enormously larger numbers redundant and disposable. For instance, the Tata steel plant today produces more than five times as much steel as it did in 1990, with only half the workers it employed then. To believe that corporate-led industrial growth will be ultimately anything other than jobless or even job-destroying is to spit against the wind – to throw bird-feather pebbles at the hurtling juggernaut of Western technology.

What if such technology was not used and some other, more appropriate, technology was utilised for industrial production in India and the poor countries? Chances are it would not be able to stand the tide of competition in a globalised world where low costs and quality (pre-defined by corporations in control of marketing and advertising) are the dimensions along which economic destinies are decided.

Unemployment is perhaps the most devastatingly urgent socio-economic and political issue in India. Without serious changes in the framework of economic policy it is quite likely that the ballooning numbers of unemployed (especially male) youth will generate unmanageable amounts of frustration and urban violence – which can only serve the nefarious populist purposes of political parties who need disaffected young men to drum up the necessary hysteria and political support. Other than rising crime, communal and caste riots can be expected to grow in frequency.

This gloomy scenario should make the policymaking elite and government strengthen and implement schemes like the rural employment guarantee scheme on a war footing – even if it means taking public resources away from other expenditure heads.

And what about democracy?

And what of democracy, whose paeans Sen never ceases to sing?

Perhaps economists are too educated to realise that politics inevitably intrudes on every significant economic transaction in this world. Their senior colleague Abba Lerner said that “Economics has gained the title of queen of the social sciences by choosing solved political problems as its domain.” Do they realise how dirty the entire business of land acquisition is in India? Do they remember how bloody and rapacious the enclosure movement in Europe was when it was in its early stages of industrial capitalism.

As Tagore noted in his 1916 book Nationalism, modern societies modeled after the European pattern have become monstrously well-organised structures for the generation of wealth and power. They are primed for economic growth and warfare in a more or less pre-determined fashion with few options for individuals or communities to forge for themselves an independent way of life. The risks are being continually ratcheted up by the growing availability and sophistication of lethal weaponry, including nuclear bombs and missiles. It is a trivial truth that industrial strength decides wars, once agriculture assures adequate supply of food. This is the reason why industry is emphasised today when already existing prosperity could give everyone a decent life: to win wars it is not enough to be rich. You have to be richer. Tagore was concerned precisely with this global competition for power: because it would bring down everyone in the end. When will our economists face up to this fact?

The truth is that modern industrialisation – under capitalist or communist auspices – has been a coercive, disruptive process in every single case. Entire ways of life and human culture have been laid waste to make way for the supermarkets, expressways and concrete jungles which now besiege us – as the only alternatives of economic life. If Sen reaches for the travelogues of Fa-hien (never mind the fact that Calcutta was not even a thought in the 5th century AD!) or the distant musings of Ptolemy it is fair to expect him to at least draw the obvious lessons from more recent economic history. But does he?

Where has modern industrialisation happened without the use of force with or without the assistance of the State? Did the peasants of early modern Britain vacate the commons, the forests and the open fields to allow the formation of enclosures by virtuously understanding the great merits of the satanic mills bemoaned by William Blake? Didn’t Britain go into peasant insurrections repeatedly over the early centuries of industrialisation, all the way till resistance ceased after the passing of the Corn Laws in 1846?

Listen to famed historian Christopher Hill writing about the enclosures in 17th century Britain: “The royal policy of disafforestation and enclosure, or of draining the Fens, as applied before 1640, involved disrupting a way of life, a brutal disregard for the rights of commoners…a consequence of the policy was to force men to sole dependence on wage labour, which many regarded as little better than slavery.” And here is another authority, Eric Hobsbawm, writing of England a century-and-a-half later: “Some 5,000 enclosures under the private and general Enclosure Acts broke up some six million acres of common fields and common lands from 1760 onwards, transformed them into private holdings…The Poor Laws of 1834 were designed to make life so intolerable for the rural paupers as to force them to migrate to any jobs offered. And indeed they soon began to do so. In the 1840s several counties were already on the verge of an absolute loss of population, and from 1850 land-flight became general.” Finally, the great historian E P Thompson: “Enclosures were a plain enough case of class robbery.”

Sen keeps referring to “the standard experience” of industrialisation and economic growth. It bears recall that in almost every case democracy has been conspicuous by its absence at the crucial stages of modern industrialisation – which inevitably involves coercive displacement of large numbers of the rural population.

Didn’t voting rights for European workers come after bloody and bitter struggle lasting centuries? Did the conservative French peasantry not stick like a thorn in the flesh of the bourgeois classes even into the 19th century? Did the Russian kulaks yield to Stalin’s ruthless collectivisation, or Chinese peasants to Mao’s Great Leaps Forward, from love of industrial communism? Or is it not true that their lives were taken in the tens of millions before their remaining numbers were fed like fodder into the mills of modern industry and mining, leaving many others starving and begging in the streets of Moscow and Shanghai? More recently, South Korea and Taiwan were openly authoritarian societies while industrialising. War beyond the borders also means war within.

Sen assures us that “the prosperity of the peasantry in the world always depends on the number of peasants going down”. One way to achieve this of course, is to simply kill off a chunk of them. Remarkably, perhaps because he has not seen the SEZ Act of 2005, Sen fails to notice that the entire SEZ strategy of economic growth, long abandoned in China as environmentally and socially destructive, is only a pilot experiment in corporate totalitarianism in disguise. Unaccountable power will be vested in private authorities who will decide the economic and political fate of large numbers of people. Capitalism works far more efficiently under conditions of tyranny. Thus, moves are under way to rewrite the laws and undermine the Constitution, prompting leading jurists like Upendra Baxi to describe the entire SEZ strategy as an exercise in “unconstitutional economics”.

Nandan Nilekani of Infosys noted in an August 2006 interview to London’s Financial Times that India is the first country in history to be industrialising and urbanising under conditions of universal adult franchise, a fact which has gone remarkably unnoticed by our pundits and experts the world over. When the British state moved large numbers of the rural poor out of their homes and fields, only propertied white men could vote. The US was a slave-owning aristocracy in which only white men had the vote when the great migrations happened. Women did not vote till the 1920s and African-Americans not until the 1960s. (India had universal suffrage before the US.) Soviet Russia and China have been totalitarian societies when forcing the peasants to move or collectivise.

These facts only underscore the peculiar situation in which formally democratic India finds itself today as it asks the rural population to abandon their customary ways of life to make way for industrial prosperity and the imminent greatness of the nation. It only shows that there is nothing intrinsically democratic about modern industrialisation. On the contrary, countries like China where tyranny has a free hand, are producing impressive growth results, to the envy and consternation of the rest of the world. They are setting the pace for democracies as much as for countries under other forms of political dispensation.

No one should be allowed to get away with exposing the causes of poverty and malnutrition all his life only to end up dispatching the peasantry (still two-thirds of us, alas) to the dustbins of history.

InfoChange News & Features, August 2007