With the neo-liberal regime ushering in the development of a no-holds-barred capitalism in India, one might have expected the main antagonistic classes under this mode of production — the capitalists and the workers — to be engaged in a furious class struggle; but this has not been the case. The corporate-financial oligarchy has quietly gone about amassing huge amounts of wealth, while the workers’ resistance has been steady but not spectacular, which is hardly surprising since neo-liberalism weakens the striking strength of workers by worsening unemployment and by privatizing the public sector.
What has taken centre stage instead is the contradiction between two other classes, namely the urban upper-middle class, at the core of which is what one may call the ‘techno-managerial’ structure (adapting John Kenneth Galbraith’s term, “technostructure”), and the peasantry. Each of these belongs to one of the two hostile camps. Their hostility is particularly manifest over neo-liberal “reforms”: the ‘techno-managerial’ structure throws its weight with the corporate-financial oligarchy, while the peasantry, a victim of neo-liberal “reforms” as revealed by massive peasant suicides, has become dead-set against them. The contradiction between these two classes extends now to their attitudes towards the Narendra Modi government and the fascist groups it has spawned.
Michael Kalecki, the renowned Polish economist, had underscored the importance of the urban middle class in newly liberated third world countries. He had called the dirigiste regimes that came up in many such countries after decolonization “intermediate regimes” — intermediate between capitalism and socialism — whose distinctive features were non-alignment in foreign policy and “State Capitalism”, characterized by a significant public sector, in economic policy. The urban middle class had backed the “intermediate regime” because it obtained substantial benefits from it in the form of public sector jobs against the background of substantial unemployment.
A major feature of societies like ours has been the switch in loyalty of this urban “intermediate class” towards neo-liberalism, which, with the opening up of the world economy, promised much greener pastures than the old dirigiste regime, including through middle-class migration to the metropolis. And it has indeed benefited from the neo-liberal regime that has immensely expanded the opportunities available to it.
The hallmark of this urban intermediate class, or what I have called the ‘techno-managerial structure’, though it includes young bureaucrats, financiers and professionals, is that it is generally upper caste Hindu. It attributes, not surprisingly, the substantial improvement in its economic position under neo-liberalism not to the privileges it enjoys in the matter of education and skills, but to its own innate abilities and talents; it therefore looks down upon those who have been excluded or have suffered under neo-liberalism, such as the Dalits and the Muslim minority, as being untalented and unworthy.
The economic differentiation introduced by neo-liberalism therefore acts as a powerful promoter of caste and communal prejudices; and the public sector, including public educational institutions, is seen as catering to these ‘undeserving’ groups through the policy of reservations they follow as a form of affirmative action. It therefore favours whole-heartedly the privatization of public sector enterprises, and of the education system.
This, of course, is not the only reason, or the main reason, for its support for privatization; but it inclines this class towards privatization as the State is seen as catering to the undeserving and limiting the opportunities for the deserving.
On the other hand, the idea of demanding a universal right to employment or a universal right to education, so that its own children do not suffer while children from deprived backgrounds are not excluded either, does not appeal to it, for those rights would have to be financed largely by taxes levied upon itself.
The petty production sector, especially peasant agriculture, sees a withdrawal of the State from its supporting role that had prevented its becoming subservient to big capital. The ‘withdrawal of the State’ that neo-liberalism proudly proclaims as one of its major goals, is essentially a ‘withdrawal’ from its supporting role for the petty production sector. When it comes to global capital and the domestic corporate-financial hierarchy, the State remains active, giving huge ‘concessions’ and handouts, ostensibly to promote ‘development’.
The other side of such ‘development’ is greater absolute impoverishment: between 1993-94 and 2011-12, the proportion of the rural population not accessing 2,200 calories per person per day (the original official “norm” for defining rural poverty) increased from 58 per cent to 68 per cent; the corresponding figures for urban India of those not accessing 2,100 calories (the poverty “norm” for urban India) were 57 per cent and 65 per cent respectively. The squeeze on the peasantry has been intense, reminiscent of colonial times; and whatever residual support is being provided by the State for peasant agriculture was sought to be removed by the three infamous farm laws, which the State has been forced to withdraw for the present.
The prolonged crisis of neo-liberal capitalism which is certainly going to get accentuated may make the urban upper-middle class change its attitude towards it. But at present, it is clinging on to its neo-liberal illusions by extending support to the Modi government and ignoring the fascist upstarts that have emerged.
The decline of the Congress began with its support for neo-liberalism against the interests of the workers and peasants. Even segments of the Left bought into the neo-liberal ‘development’ discourse and the Left paid a heavy price for it. Its consistent support for the recent peasant agitation however augurs well for the Left and the country at large.
Prabhat Patnaik is Professor Emeritus, Centre for Economic Studies, Jawaharlal Nehru University, New Delhi