Class Struggle in India

Industry near Mumbai, India

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Notes from my presentation at Socialism 2011

Thesis 1: India Shining is the name given to aggressive neoliberalism in India so that middle-class prosperity is supposed to mask the absolute immiseration of immense majorities of the population; the devastation of state-led social spending has made people increasingly vulnerable while given a free hand to corporations in India to do what they can.

Thesis 2: the last thirty years have been a one-side class war in India which the working class, the peasantry, and the poor have lost decisively

Thesis 3: there are five main areas of class struggle in India (broadly understood): the fight between indigenous people and the state-corporate combine over land; the fight of national minorities against the state for greater autonomy and resources; the fight of the peasantry and poor farmers against the state and the large landlords and agri-business; the fight of the urban poor for greater access to rights and jobs; and most importantly, the fight of labor against capital

Thesis 4: there have been four main ways the class struggle has been contained over the last thirty years: state coercion and force; the diverting of class anger into electoral politics; ideologically through either state-led Pakistan-phobia or populist-chauvinist communalism that is also called Hindutva; the maintenance of an immense reserve army of the unemployed.

Thesis 5: the development of a revolutionary left in India has absolutely been paralyzed by the persistence of mass Stalinist and Maoist parties

Thesis 6: in the absence of major working class fight back the center of gravity has shifted to a civil-rights campaign in defense of indigenous peoples against land grabs, largely produced by the nexus of urban middle-class intellectuals and the indigenous poor – this has an anti-capitalist but not a revolutionary socialist character.

Thesis 7: the development of an independent left in India and the development of mass working class activity is a dialectical process, the beginnings of which are more possible now given the exposure of the CPM as vulnerable in the last state elections.

Thesis 8: the only way that the Indian and Pakistani working class can win real social transformation will be the elimination of the national boundaries between them on the basis of real equality

At the outset let me say two things.  The idea behind pitching this talk was to think about how the Arab Spring might eventually turn into the Indian and Pakistani summer (and make that awful phrase mean something better).  Of course, the spread of struggle is neither spontaneous nor automatic and it rests on developments both structural and organizational that have happened in the various countries in which the mood of revolt has quickly met with the everyday experiences of people living under the brutal heel of both neoliberal capitalism and aggressive American imperialism.  But if you were to do a thumbnail sketch of the countries in which the protests have broken out, I think that you would find enough similarities between India and Pakistan and the countries in North Africa, the Middle East, and Southern Europe to make the question more than simply academic.

Increasing rates of absolute immiseration – depending on how you calculate it between 60 and 80% of the population of the Indian subcontinent lives in poverty (every year there is a big debate about this, but the economists change the way that they calculate poverty, sometimes ideologically to drive the numbers down); there is massive inequality (Mukesh Ambani, the richest man in India built a 27-story skyscraper/mansion for himself and his family worth 1 billion dollars US – it’s spitting distance from some of India’s largest slums in Mumbai); massive growth but horribly uneven: 40% of the gains of growth go to something like 1% of the population; the last twenty or so years have been spent liquidating all state industries and social services and giving massive amounts of what can only be graft to corporate interests both foreign and domestic (in fact, much of the growth of the last twenty years has been the product of a massive giveaway of industries on the cheap to private capital); massive assaults on civil liberties; high rates of unemployment among educated young people (something like 20-30% of college graduates can’t find work); immense social polarization with spectacular spending at the very top and farmers who can’t make enough to feed their own families at the bottom; an enormous ratcheting up of absolute levels of exploitation in manufacturing in the interests of accumulation under the alibi of competition; and the lack of any real political alternative to the neoliberal agenda.  This should all make for explosive social conditions.

At the same time, there is a kind of disconnect between that picture and the picture laid out by the financial experts in the US and the political elites in India, which is a picture that has come to be called “India Shining” in which the vast majority of people are benefiting from economic growth and India is now one of the growing powers in the world.  This claim gets repeated over and over so often that it doesn’t ever really get investigated, because despite the fact that the Indian economy has grown somewhere between 12 and 15 times in the last twenty years, that growth has been predicated on some economic choices that cannot be continued indefinitely.  Much of India’s growth has been financed on credit, transferring wealth from the middle and working classes to the rich, which has contributed to inflation (9.6% over the last 12 months and even that doesn’t tell the whole story as food prices are quite high) on the one hand and real-estate speculation on the other.  Much of the growth has been in the finance and service sector rather in manufacturing, which is also some indication that there are limits to profitable investment in accumulation.  And between 2004 and 2010 the Indian economy generated no more than 2 million jobs for the 55 million people who entered the job market.  There has also been an decline in foreign direct investment into India partly because of the rotting infrastructure but also because of corruption, which has prompted the media shenanigans of people like Ana Hazare and the various political parties to come out and condemn corruption (even though they are all on the till).

Let me just say very quickly, that while there are differences between the BJP, the Congress, and the Communist Parties, at one level or another one is merely choosing between different kinds of neoliberalism not between neoliberalism and its alternatives.  Alongside these processes you also have some very intense levels of struggle that I will talk about in some detail, but just to sketch it out at the beginning: massive resistance to land dispossession through massive social movements or all out military confrontation with the state; a long tradition of labor struggle that is beginning to come up against the leadership of the unions which is connected usually either to the Congress Party or the Communists and therefore unwilling to lead most strikes to successful conclusions; long-standing grievances about national liberation in Kashmir and in the Northeast, places like Assam, Mizoram, Nagaland, and Manipur.  Ultimately, I want to say that these are all part of a struggle between a state allied very closely to capital and ordinary people trying to exist, which sometimes takes the form of economic struggle at the shop floor, sometimes gets routed into political processes, and sometimes becomes open armed conflict.  There are also openly fascistic forces in India which attack these struggles: the far-right parties in the urban areas and the paramilitary groups like Salwa Judum in the rural areas.

To make matters worse, just like Tunisia, India is the darling of the international economic punditocracy.  It’s enviable rate of growth has meant that the economy has doubled every five years for the last twenty years.  This is the image of “India Shining” that the elite in India want to project, growing middle class, fancy technology, slick malls and high rises, Bollywood, and they therefore chafe if you talk about “Slumdog Millionaire” which will be my catchall for poverty with anything other than an air of ironic disdain for a putative Orientalism.  All of this seems like an explosive combination.  In fact, wages for some sections of the new middle-class have gone up for the last 20 years, but we’re really talking about the highly skilled workers in manufacturing or the managerial and clerical workers that make up the army of India’s new high-tech service industries.  Real wages among workers have stagnated over the last 25 years.  There’s almost universal agreement that this is because the vast army of the unemployed, which politely gets called the informal sector, exerts a downward pressure on wages, as employers always have a labor surplus from which to hire.

To be clear, I’m making predictions about any of this – as I read it, the organizational development of a far left in India is so much farther behind than it is in places like Egypt and Greece that you can’t really expect it to happen soon, but at the same time, I thought that about Egypt six months ago.  So what I want to do in the rest of this presentation is really lay out how India came to look the way that it looks and what the primary axes of struggle are in India.

1947-1991: From independence onwards, India pursues a strategy of Import Substitution Investment or ISI to try to get industrial development in India to replace external competition.  So this means a few things: first the raising of tariffs – some as high as 100% — to allow Indian industry the ability to develop, and second the direct control over certain sections of the economy to ensure development and industrialization: construction, infrastructure, communications, mining, etc.  These were done through a series of 5-year plans and the goal was to try to get Indian economic development internally with some gestures towards social redistribution.  Land reform was implemented (though incompletely) and there was investment in education and social services.  Up until the 1980s, though, India performed quite badly economically, growing at 3% a year, what some economists called in a marvelously racist way, the Hindu rate of growth.  The real problem was that India was pursuing a kind of weak state capitalism, which could take advantage of few of the benefits of trade or competition but without the development to be able to meet the needs of its population.

Under Rajiv Gandhi, the process of changing the economy commences more fully.  He ends what was called the “License Raj” because of India’s investment-averse regulatory regime which prevented the free movement of capital; privatizes many of the nationalized industries; and more or less enforces labor discipline on the working class.  But Rajiv Gandhi’s plans are financed through massive increase in public debt by borrowing for international sources which leads to a bailout by the IMF in 1991 and a more aggressive series of neoliberal reforms.  Incidentally this is exactly the period that leads up to the Mandir-Masjid-Mandal crisis of the early 1990s.

In 1991, under pressure from IMF but also indigenous interests in favor of liberalization, India pursues a full-scale liberalization of the economy.  Tariffs and duties are lowered to zero, state industries are fully privatized, international trade was encouraged, and everything was done to cultivate foreign direct investment.  One of the more brutal aspects of this period was the wholescale transfer of investment from the countryside to the urban areas when food subsidies and development schemes for India’s farmers were removed.  This not only impoverished farmers, but it also pushed them into the cities into the slums.  The other that has happened is that ideologically the state has moved over to backing capital at almost every point, so development schemes are now in the interests of big business rather than poverty reduction with the idea that the benefits of growth will trickle down at some stage.

One of the main features of this has been an accelerated push for raw material inputs for the development of manufacturing in India (iron and bauxite, etc.) and taking advantage of natural resources for infrastructural developments (rivers, dams, forests) which all happen to be right underneath the land that adivasis live on.  I’ll say more about this minute.

The resulting picture is one of untenable and protracted crisis all over India.  I want to point to the five main areas along which resistance and suffering are happening: 1) the persistent crisis in agriculture in India, 2) the still unresolved national liberation struggles (Kashmir, and the northeast), 3) the process of accumulation by dispossession that is happening in the “red corridor”; 4) the fight of the urban poor against things like slum demolitions, and 5) the exploitation of labor by capital.

However, it is clear that dualism in the economy (whatever be the terms one uses to describe it) has persisted, even hardened. The vast under-employed labour force in agriculture, despite being available to industry at subsistence wages, has not been, and is not being, absorbed in industry. This fact stands out particularly starkly against the current boom in corporate profits and investment. Of the population between 15 and 64, less than 60 per cent was ‘usually employed’ in 2004-05. More than half of India’s workforce remains self-employed, and the share of wage employment in the economy has actually declined during the last decade.  It was once anticipated that with the spread of new technology from the original areas of the Green Revolution (Punjab, Haryana, western U.P., and pockets elsewhere) the rest of India would catch up with the growth in these original Green Revolution (GR) regions, and regional disparities in agriculture would diminish. However, the liberalisation period witnessed disparate trends: in the GR centres, growth slowed;  in regions without irrigation but with heavy rainfall, crop prices collapsed and so farm incomes declined despite some production growth; and in dryland regions both production and incomes declined. Production in rainfed agriculture, which accounts for 60 per cent of cultivated area, is not only much lower than in the irrigated area, but is more or less stagnant. The bulk of growth has come from expansion of irrigated area and increased production of irrigated land; since the growth of irrigated area has come to a virtual halt under the neo-liberal policy of restricting public sector investment, agricultural disparities have widened.

Manufacturing not keeping up with population growth – means that people who are moving to the cities are caught in a permanent low-wage trap against an enormous reserve army of the unemployed.

Where manufacturing has been able to absorb rural labor, its practices are barbarically exploitative.  Textile manufacturers in Tamil Nadu for instance, recruit young girls from rural areas and place them in gender-segregated labor camps from which they are not permitted to leave in exchange for 3-year contracts and a promise of 30,000 to 60,000 rupees upon completion of the contract – this not only makes them vulnerable to extreme economic exploitation but also sexual exploitation;  those of us who have been involved in the antisweatshop movement in the US will see this as a familiar pattern.  It’s not accidental that the financial and economic planners in India have tried to help Indian textile manufacturers try to pick up the fallout from the collapse of the Chinese textile manufacturing industry.

Capital – land (usually adivasi controlled) – national liberation (can extend the analysis to large chunks of the northeast, much of the red-corridor) – doesn’t explain Kashmir

State hands over land to capital in exchange for “development”; deals are cut with multinational corporations and indigenous capital to develop manufacturing, real estate, or technology.

State uses its eminent domain powers to take land that people use for their subsistence, occasionally using colonial laws which required papers to prove ownership of land to displace and dispossess the local population

Local resistance then keeps the basic infrastructural inputs stalled as long as it can, but more often than not it fails.

Primitive accumulation or accumulation by dispossession.

Farmers – land

One significant feature was the participation of agricultural workers. Agriculture, which is still the mainstay of the Indian economy, provides nearly 60% of total employment. Aggressive liberalisation has deprived the small peasants and the rural workforce of their livelihood. The doing away of agricultural and food subsidies has resulted in the large-scale pauperisation of the rural people. Obeying the dictates of the WTO, the Indian government withdrew the restrictions on the import of agricultural commodities. As a result, the rural economy is in shambles. The dumping of cheap agricultural products has driven many farmers and peasants to distress suicides in Andhra Pradesh, Karnataka, Orissa and even in Punjab.

Immiserated peasants then try as hard as they can to get to the cities.  Some of the better-off farmers can afford to send a son or two to college, where the majority of them become skilled blue-collar workers and the lucky ones get white-collar jobs.  Otherwise they migrate as entire family to the city where they join the ranks of the slumdwellers.  In Bombay for instance, almost half of the population is composed of migrants who are all a part of the informal economy.  60% of Bombay lives illegally because housing prices are so high (the real estate bubble has not yet burst in India).

Capital – labor

The contradiction of growth in India is such that the consumption patterns of the top 20% of the population make up for the declining or stagnant consumption of the bottom 80% — so it looks like the country is doing better off as a whole.

One of the key problems continues to be the domination of unions by the various political parties (and the proliferation of large trade union federations).  So in India there is the All-India Federation of Trade Unions (run by the CPIML-Janashakti), All India Central Council of Trade Unions (run by the CPIML), All India United Trade Union Center run by the Socialist Unity Center, the All India Trade Union Congress (run by the CP) – roughly 2 million members, the Hindustan Mazdoor Sabha run by the BJP, Center of Indian Trade Unions (CPIM), United Trade Union Congress (Run by the Revolutionary Socialist Party), the Indian National Trade Union Congress (run by the Congress Party).  Now since many of these parties are no longer revolutionary parties in the long run, they tend to play a dampening rather than developing role on class struggle.  Which is not to say that workers don’t fight back, they do, but that their fights are limited from the top.  In 2006, there was an attempt to form a federation of Independent Trade Unions called the New Trade Union Initiative, but that is still too new to tell the story of.

But there have still been major bits of resistance: in 2005, more than 29.6 million days of labor were lost to striking activity in 456 industrial disputes – some of these are industry-wide and so they get aggregated; in 2006, 20.3 million days in 430 disputes, in 2007 27.1 million days in 389 disputes, fast-forward to last year, though, and the number drops off quickly to 1.7 million days in 99 disputes.

All of this is really to point out that the coming years will see the intensification of struggle in India, but it will require two things.  First, the development of an independent left and second a more serious fight from labor against capital.  Those two processes are inter-related, of course, and whatever we can do to support them from abroad will be instrumental in bringing Tahrir Square to India.