This is a very wide subject and I shall try to take up some of the major issues which we should be concerned with at this present juncture and how the Left should respond to these major issues and challenges. 

We are witnessing very major changes in the world today. Exactly two decades ago, when the Soviet Union disintegrated all over the world there was the triumphant call that capitalism has won and that socialism, or the goal of socialism is no more relevant. And this capitalist triumphalism also proclaimed that for humanity, the eternal future is capitalism. Today if you go to the United States or to the advanced capitalist countries in Europe you find that this triumphant mood of capitalism has completely evaporated. 

Today the discussion is about the uncertain future of capitalism. I read in the ‘Financial Times’ of London, which is the biggest business paper, an article written by a banker that said, “We are experiencing a very Marxist crisis today.” 

What is happening today, what we had been saying earlier as well, is that this finance capital driven globalisation is unsustainable. And the fact that for four years this crisis has gone on, from 2007, and the ruling classes in Europe and America are not being able to find a solution to this crisis – they are trying all sorts of methods. First they bailed out the big banks and corporates, billions of dollars were spent to bail out the very people who created this crisis by speculation, excessive spending, etc. Once the bankers and corporates got the money and started making profits again, they said, stop this bailout and now impose austerity on the people. And that is what is going on in Europe and America today. 

What we are seeing is cuts in jobs, cuts in wages, cuts in social security benefits – all the gains made by the working class and the working people in the second half of the 20^th century. What is known as the social welfare State, where unemployment benefits, free health care, pensions were given – all this is being taken away now. 

And people are now coming out in the streets in protest, students are protesting. In Britain, tuition fees have been tripled in universities. No student can afford an education; they have to take big loans from the banks. And after getting a job, for the rest of their life they will be paying back the loan taken for their education. So that is why the students are protesting. In Greece every month there is a general strike by the workers, because Greece is the epicentre of this crisis, it is in deep debt. 

Even in America, which is a country without a strong Left movement, or a strong working class movement, you’ll find movements like the Occupy Wall Street which gives the slogan, ‘we are the 99 percent, you the one percent’ are the ones responsible for this crisis whom the government has bailed out. 

The future of this finance capital driven system where inequalities have grown is uncertain. In America the middle class has one asset, they have their own house. They borrow money, mortgage and have their own house. In the last four years, three million houses have been taken back because these people could not pay their loans. 

So this is the depth of the crisis and it will affect us also eventually, but we have in India not suffered the same extent in the crisis. Why is that? 

Firstly, because of the Left in India had never allowed the Central government to open up our financial sector to speculative foreign capital. None of the banks in India collapsed in 2008 or 2009 because the bulk of it is still in the nationalised sector and we have prevented the foreign banks buying up our Indian banks. It is because the Left parties during the first term of the UPA government refused to allow it to amend the law which would have allowed foreign banks to buy up Indian banks, refused to allow increase in foreign direct investment in the insurance sector, refused to allow privatisation pension funds. All this is there in the Western countries and that is why banks collapsed, financial sector collapsed, pensions were wiped out, savings were wiped out – that crisis India has not faced. That is because the Left in India could prevent the UPA government, which wanted to do it. Dr. Manmohan Singh & Company even now wants to do it. They are still trying to open up our financial sector. 

So what has happened in the world today, our ruling classes have not drawn any lesson from it. Dr. Manmohan Singh and Finance Minister Shri Pranab Mukherjee still say, yes we will increase FDI in banks, we will increase FDI in insurance. Unfortunately in Parliament many of these parties do not support us. If they support us, we can pass this. 

So they are determined to carry on the neo-liberal agenda. This is the paradox. All over the world the neo-liberal policies are getting discredited. Even in America, the people are saying these policies have ruined us. They are not Marxists, these people. They are ordinary people, who have experience of neo-liberal capitalism. They are rejecting these policies, but our government and our ruling classes want to push through these policies. 

If these policies continue in India, what will happen? That is the first major challenge we have. 

In our country we have had economic growth for the last one-and-half to two decades after liberalisation. That economic growth has been of benefit to the big capitalists, the big corporates, the foreign multinationals and the urban and rural rich – only they have benefited. 

So India can now boast of the highest rate of billionaires. Today there are 55 billionaires in India, and one billionaire means somebody having at least Rs. 5,000 crores of property. So you have 55 people in India owning one lakh crores or two lakh crores  in property and assets. So we can claim that we have increased the number of billionaires in India; that is one product of liberalisation.  

On the other hand, class exploitation of the working people has increased. I have the latest figures, which show that in the 1980s, before liberalisation, the total share of profits as part of the net value added was lower than the share of wages. The total share of wages, which was there in the value produced was more than the share of profits, share of profit was only 20 % of the net value. In 1990, the first decade of liberalisation for the first time the share of profits was more than the share of wages; it went up to 30 %. And now, from 2001 to 2008, the profits share has gone up to 60 percent. From 20% in 1980s, it has now reached 60%. The share of wages has come down accordingly. 

This is the rate of exploitation and this is a challenge we are facing. Neo-liberal policies, have created new types of exploitations and new differentiations among the working people. When we talk about the working class, today everybody knows 86 % of the working people are in the unorganised sector – either contractual, casual or self-employed people. The Arjun Sengupta Commission’s report gave those statistics. 

Now this section which isi not there in the organised sector, they are the most exploited by neo-liberal capitalism. Neo-liberal economics and capitalism creates a section of the working class which is outside the sphere of any protection, outside the sphere of any legislation or labour laws. They have no income security, no job security, no social security. Now this has become the bulk of your working class today and it is up to us to organise them. 

This is the first challenge – under neo-liberal capitalism, to organise the working people, the bulk of whom are not in the organised sector, who are subject to the most ruthless exploitation. For them there is no question of protecting their social security benefits because they never had those benefits. 

Organising them by trade unions, bringing them into the fold of the organisational movement – this is a big task before us. Because of the nature of this employment because it a scattered, because it is casual, because it is precarious – the jobs that they have – we have to find ways to organise them and bring them into the working class movement. 

The earlier we do it, the more effectively we can fight these neo-liberal policies. We cannot do it with organising the workers in the organised sector alone. Of course we have to organise the working classes in the organised sector, but this large section of people who are today in various forms of contractual and casual work and who are not easily brought under the purview of the benefits are rights legally there for workers, how do we organise them? This is going to be the major issue for us in the coming days. 

Here there are some positive developments. For the first time the central trade unions in our country, ranging from the INTUC to the BMS including the CITU, AITUC, Hind Mazdoor Sabha – all these trade unions have for the first time forged a joint platform. There was a general strike in September 2010, in which INTUC participated but BMS did not participate. Now we are going to have a strike in February 28 in which all trade unions have given the call jointly. One of the demands of that platform and that strike is exactly this demand to protect the rights of this contractual labour, to end this contractualisation of labour this process of casualisation of labour. 

This is a movement not only in India, you go to any capitalist country in the world today, go to Japan, go to Germany, go to the United States – the working class is fighting against this major attack on its livelihood and their rights by this contractualisation and casualisation of labour. And this applies not only to industrial workers, it applies to all sections – service sector workers, etc. 

This fight against neo-liberal policies and neo-liberal capitalism requires first of all this major urgent task of bringing into the organised movement all these sections of the working people. 

The second major issue that I want to focus on is that in our country today still 50% of the workforce is in agriculture and agriculture related activities. And neo-liberal policies have caused havoc in agriculture. For the farmers, for the peasants the very basis for remunerative livelihood by producing crops – because of the high cost of inputs, because of the privatisation of all inputs, whether it is seeds, whether it is fertilisers whether it is electricity, whether it is water with the multinationals coming into these sectors and the price they get for their produce – it is becoming unviable for many small and medium farmers to continue with their agricultural pursuits. 

We have seen large scale agrarian distress in the 90s, in the decade of liberalisation. The figures are there – from 1995 to 2010, according to the national crime bureau statistics 2,56,913 farmers have committed suicide in our country. It is most rampant in Andhra Pradesh, in Karnataka and in Maharashtra. 

This distress is a feature we have experienced in most parts of India, but it was not experienced in West Bengal earlier. When the Left Front government was there we did not see the spectacle of farmers committing suicide because of agrarian distress, because of indebtedness or because of crop failure. 

I’m told at least 21 farmers have committed suicides in the recent weeks in West Bengal. And that is also related to the policies of the State government. If you do not intervene to see that farmers get a minimum price through procurement, if you do not take steps to alleviate their indebtedness – this will happen. 

I recall what happened in Kerala. Till 2006, there were a number of suicides in Kerala by farmers in one district called Wayanad. The Left Democratic Front came to power in May 2006 and took some measures. They passed a law in the Assembly whereby they set up a Commission for indebtedness. Farmers could apply to get relief from their debt, if they went to that Commission. Immediately the suicides stopped. By the end of 2006, there were no suicides in Wayanad and till 2011 there were no suicides. 

Seven suicides have taken place in that district in the recent period after the Congress-led government has come to power. 

Suicides are not natural disasters; they are man-made. Because of man-made policies, suicides happen and 2.5 lakhs farmers committing suicides is a telling commentary on the nature of Neo-liberal policies that were pursued in the last two decades in India. So we have this vast mass of people whose livelihood is threatened in India–those who are engaged in agricultural pursuits and the worst off are the agricultural workers, who do not get even minimum number of days work in agricultural operations. 

So organising them and linking up this movement of the working class to build a powerful worker-peasant alliance is I think the most important task before the Left today. 

The third area that I’d like to talk to you about is that why is it that our ruling classes – the UPA government or earlier the NDA government of the BJP – why are they pursuing these policies? When it is blatantly clear that if you pursue the policy of liberalisation, you can have high GDP growth, but that growth will only be beneficial to small strata of people, but will cause deprivation for the vast mass of the people, why are they pursuing these policies? 

And there I would like to take up the third issue which is that the way capitalism is developing in our country. We have a very powerful stratum of Capitalists – the big Capitalists, the big Bourgeoisie. You have people like the Ambanis, who are some of the richest people in the world; their companies are some of the biggest companies in the world today. Now they have got completely interlinked with international capitalism and finance capital and their interests are more in tune with the interests of this international capital, not in tune with the interests of the people. 

So you find that our ruling classes are more and more allying themselves with Imperialism, particularly United States – whether it is in our foreign policy, whether it is in our strategic alliances or our domestic policies. 

I can give you an example. A few weeks ago, the government announced its decision on FDI in retail trade. I know that Dr. Manmohan Singh has been trying to get this policy implemented since around 2005. The first time I met him as the General Secretary of the Party, he told me, why are you opposing foreign companies coming in for retail trade? I said we can’t accept it. He said the Wal-Mart chief is coming and I’ve told him to go to Kolkata and meet Buddhadeb Bhattacharjee to persuade him. 

And that man came here to Kolkata, the Chief of Wal-Mart, and met Comrade Buddhadeb Bhattacharjee at Writers Buildings. 

After the meeting I telephoned Buddhadeb and asked him what happened. He said he came here and told me it will be very good if Wal-Mart comes, there will be more employment and he told him that so many people will lose their livelihoods – from small traders, to intermediaries to shopkeepers. So that we cannot accept. 

So from 2005 to 2009, they could not bring this policy, because we were strongly opposed to it. Of course now I find that Ms. Mamata Banerjee has also become an opponent of FDI in retail, I don’t know where she was all these days, sleeping. Suddenly she has woken up.  As long was we are supporting this government, there is no question of FDI in retail. 

But they still want to bring it. Again they have said, once the Assembly elections are over, we will implement it. Everyone else is opposed to it; the people in this country are opposed to it, but why do they want to bring it? Because the United States of America has said that you have to do it. 

This is an agenda they gave the UPA government in 2004, when they came to power. When Obama comes, Hillary Clinton comes they ask what have you done about retail. Bringing Wal-Mart to India is on the priority list of the American government because that is their biggest Multi-national company and they want it to enter India. 

So, when we say we are opposed to American Imperialism’s influence in India or when we say we are opposed to the pro-US policies of India it is not abstract. It is because it directly affects the lives of the people in this country. 

If Wal-Mart comes, lakhs of small shopkeepers and trades will lose their livelihoods. It has happened in other countries. FDI in agriculture, FDI in Higher education, FDI in Banking – all these we are opposing because it will have a disastrous effect on the lives of the people of this country. And that is why we say that this foreign policy which is a reflection of the internal domestic policies of tying up with the United States of America, that has to be fought – whether it is the Nuclear deal, whether it is FDI in retail, whether it is America pressurising us to give up our own interests. 

We have to get oil from Iran. We purchase 12 percent of our oil from Iran. America says you cannot buy from Iran. They are pressurising us now. They’ve stopped the pipeline from Iran. We gave that up that. So this affects our own national interest. 

The third area – in the coming days, the Left has to mobilise the people on a large scale against this pro-imperialist foreign policy, which also has a direct impact on the domestic policies and the livelihood of the people. 

Another challenge that we face is the growing influence of identity politics. Identity politics means, politics based on the identity of caste, religion, ethnic community and so on – this sort of identity politics is being fostered and encouraged in our country. This is encouraged both by the ruling classes and imperialists. 

We have seen after the fall of the Soviet Union, many countries were destabilised and Balkanised with the direct support of imperialism on the basis of identity politics. It started with Yugoslavia. 

Yugoslavia was a federation of six Republics – all of them were living in peace and harmony together. But after the fall of the Soviet Union, suddenly the Croats remembered they are Croats and the Serbians saw the Croats as their enemy and the Slovenians said we don’t want to be a part of this country. Everybody, based on their ethnic nationalism or their religious identity, eventually fought each other and it led to the disintegration and break up of Yugoslavia. It happened in many other parts of the former Soviet Union and Eastern Europe. 

And today that identity politics has become globalised. It is being promoted. People are told that this is the way you must organise and mobilise, based on your identity of caste, identity of religion, identity of community and new ethnic identities are being manufactured, which did not exist before. 

So many people face some oppression in our society. There is a lot of social oppression. Some communities, some groups and some castes – they suffer from oppression. But in the name of fighting that oppression, they are told only you should organise on the basis of your identity – no one else should join with you. Only people of one identity should combine to fight for your rights, and in the process you must also demarcate from others. And that is happening in many places. 

If you go to the North-East, you will find ethnic groups and ethnic nationalisms have arisen which are pitted against each other. There is bloodshed, there is fratricide. The most deprived, the poorest the most wretched people are organising to fight an equally poorer and wretched people, who are now considered an enemy because they belong to another tribal or ethnic identity. 

And that politics just leads to fragmenting people. People who are facing common oppression or exploitation get divided on identity lines. That identity politics is being utilised all over our country today to disrupt broader democratic movements, to disrupt the class based solidarity movements which have been built up over the years. 

In West Bengal too we find that such identity politics has been utilised in the recent period to try to divide people, to pit people against each another. 

This identity politics gets its backing from fashionable ideologies. In the West, Post-modernism is the basis for identity politics. It tells a worker in America, you are from the working class, but you are black first, organise only as blacks. It tells a woman worker, you are a woman. You may be a worker, but you are a woman, organise as women. It tells a male white worker that you are different from all these people, your interests are not common to any of these people in the working class with you, organise separately. 

This politics has grown in the advanced Capitalist countries. It is now being spread, through the usual imperialist and ideological apparatuses, into our countries. You have NGOs spreading this in various places, many of which are foreign funded. 

When I used to go to UP 20 years ago there used to be what is generally called the Other Backward Classes (OBC) mobilisation. Today that does not exist. That OBC has been broken up another dozen sub-castes and a dozen political parties have sprung up, representing each caste or sub-caste. 

This is the politics of identity which is dividing people and it is the way to fight the Left – to break up the class based movements, to divide the class solidarity of people who face a common exploitation and oppression. We have to fight this identity politics. 

To start believing that identity politics is a movement of only oppressed sections,  minority groups and oppressed people and therefore is a progressive phenomenon, will be to fall into the trap set by imperialism and the ruling classes. We have to patiently counter identity politics. 

Identity politics can only be effectively countered when we take up those genuine issues of oppression that is faced by those sections – whether it is caste oppression, whether it is gender oppression, whether it is oppression of the tribal people, who face a social oppression which distinct from class exploitation. If the Left does not take up those issues and fight, you will not be able to rally these people and bring them out of the influence of identity politics. That task will have to be waged by us in the coming days. 

Increasingly in the globalised capitalism and finance capitalism which is imposing its hegemony in the rest of the world, you will find that in order to capture markets, in order to dominate those markets they find identity politics is a very convenient instrument. Because people are divided on ethnic, caste and religious lines but the market is homogenous. They will all go and buy coco-cola from the market. 

So we have to take up this challenge. The old political slogans and methods will not do to counter identity politics. Understand the basis of the oppression of these communities which attracts them to identity politics, take up that cause, champion that cause and try to isolate those who purvey identity politics. 

These are some of the immediate challenges we face in India. We should also look at the way forward. How do we take up the struggle against Neo-liberal capitalism, which is creating havoc with the lives of ordinary people? How do we counter identity politics? How do we prevent the steady erosion of our national sovereignty and the increasing influence of imperialist capital and ideologies? 

In the world today no more is there a talk about the death of Socialism and Marxism. In fact, what is in the dock today is the future of Capitalism. 

The alternative to capitalism today still is and can only be socialism. Today in the world, all progressive forces, all Marxists, all Left forces are discussing this – what can be the socialism that we can strive for in the 21^st century? Can it be the exactly the same type of socialism that existed or was practiced in the 20^th century? 

Different ideas are coming up. That itself is a positive sign. That today in the world people are discussing, what is the alternative to capitalism? But if socialism is that alternative, how do we build that socialist alternative? 

We have to learn from the experience of the 20^th century. Starting with the Russian Revolution and the Soviet Union and the socialism that existed in the countries after that, there were tremendous achievements and historic gains made by the working people in the history of the 20^th century, which cannot be erased. 

It was also a new system, that was charting a new course travelling on unchartered waters. There were mistakes made, there were errors and sometimes wrong turnings were taken in this journey. We have to identify the errors and mistakes that were made and learn from them so that we do not repeat them. That is why I say that we have to talk about fashioning socialism in the 21^st century. 

In one part of the world today, Latin America, we have seen the success of the Left movement. Amidst the setback to socialism and Left forces worldwide after to the fall of the Soviet Union, the change has come, the turn has come in Latin America – where country after country the Left has advanced through various struggles of the people against liberalisation, privatisation and imperialist hegemony. They have won elections and in some countries not once, but repeatedly like Venezuela, Bolivia, Ecuador and Nicaragua. 

Particularly, Venezuela, Bolivia and Ecuador are countries where the government has implemented policies which are different from neo-liberal policies and shown that an alternative to neo-liberalism and imperialist hegemony is possible. 

Unlike many other countries in the world, Venezuela has renationalised industries. The power industry had been privatised, now it has been renationalised. Telecom industry had been privatised, now it has been renationalised. All of the Oil and Gas resources – and Venezuela is the richest Oil and Gas country in Latin America – has now been brought under State control.

 Same thing in Bolivia – they have brought oil and gas under State control. They have implemented land reforms. In West Bengal, we are proud to have distributed 11 lakh acres of surplus land to landless people. In Bolivia, in the last three years, they have distributed one crore acres of land – because there were huge landed estates with big landlords and companies, they have just taken it over. Here of course it was on a different scale as there were smaller land holdings. 

They are moving in a different direction and that is why they are talking about a ‘21st century socialism’. This socialism is not the same type. They say, we will maintain a democratic system; we will contest elections and establish our hegemony through democratic politics. 

In Venezuela, Hugo Chavez has won three presidential elections so far, the fourth one is now coming up and they have won 13 elections at different levels – in provinces, in Parliament, etc. Evo Morales in Bolivia has increased his vote in his second election, he has crossed 60 percent. He represents the majority indigenous Indian community there, so he says our socialism will be based on how to bring up this indigenous community – that socialism will be different from what it was in the Soviet Union. 

How do we go towards socialism, learning from the experience of the 20^th century? Yes, certain steps were taken in the Soviet Union and other socialist countries, where they thought socialism can come very quickly. Once we capture State power, we will pass certain resolutions, the party implements it and socialism will come. 

It does not happen that way. There is a process. You have to develop the productive forces, you have to ensure the redistribution of income and wealth, you have to bring about basic changes in the State structure, it takes time. So that socialism will go through many phases and after the experience of 20^th century socialism, we will make corrections. 

Yes, there will be planned economy, there will be central planning, but market will not be eliminated. The market will be utilised, incorporated within the central planning. Because without the market we cannot get correct indicators in a modern economy of how much is to be produced, what is to be produced and how you can price that product. 

Bringing in the market does not mean bringing in capitalism and development of capital in a big way. Within a planned economy, the market will have to play a role at various stages under socialism too. This is what is now being done in many of the socialist countries too, the most recent being Cuba, which has adopted it. Before that China and Vietnam had adopted it.

So, we will have to go through different phases of development of socialism, but I am confident that what is happening today in this world – the churning up that is taking place – out of this prolonged capitalist crisis, new contradictions will develop. The world cannot be the same again because America’s economic decline has set in – it is in a period of long term decline. China is going to emerge by 2025 as the world’s largest and most powerful economy, overtaking the United States of America. 

There are going to be new contradictions. You can see that even today. When America, France, Britain and Japan are in crisis, you don’t find the same economic crisis in the major developing countries. China has no such crisis, India had very little of that crisis, Brazil, Indonesia and Turkey had very little of that crisis. 

So within the capitalist world, the balance of forces is going to change. New capitalist economies will mean new contradictions. But that does not mean that the people of these countries will benefit. Even in these countries, India or Turkey or Brazil the working class exploitation has become more intense, there is unemployment, there is farmers’ distress – so the contradiction between the people of these developing countries and the imperialist countries, the big bourgeoisie along with the imperialist countries on one side and the people of these developing countries – these contradictions are going to increase and intensify in the coming days. 

Our ruling classes are going to be with them, not with us in this fight. They are siding with imperialism. But the people of these countries and their contradictions with imperialism are going to intensify. 

In this period the scope is increasing for developing the revolutionary movement, for utilising these contradictions to see that we are able to defend our national sovereignty, ensure that our country departs from this new-liberal path, adopts a new path. For that, how we rally all the forces in our country will show the way forward. 

And the essential element of this new strategy and path will be how far we are successful in meeting these challenges that I told you about, how far we can successfully fight the neo-liberal capitalism and exploitation by mobilising and organising the working class, how we will fight against the increasing imperialist influence in our country and how we counter identity politics. 

Since the Left has been the most consistent fighter against neo-liberal policies and this strategic alliance with the United States, it has invited the wrath of the ruling classes and imperialism. 

And that is why we have seen in West Bengal, this attack has been very concentrated and severe against the CPI (M) and the Left. Because they feel that only by weakening the Left can their path to go ahead with these neo-liberal policies can be smoothened. Their alliance with the United States can go ahead, but the Left is the stumbling block. 

It is our task to fight back these attacks, to counter these attacks by relying on the people and mobilising more and more forces to join us in the fight against neo-liberal capitalism and against the oppression and exploitation of the Indian people which is now so widespread. 

I hope we will be able to meet these challenges in the coming days successfully. 

(Full text of the speech given on the subject “Challenges of the time and the task before the Left” at a seminar on 17^th January, 2012, organised by the CPI (M) North 24 Parganas District committee at Unnayan Bhavan Auditorium, Bidhannagar.)

James Petras :: 12.11.11

(Invited paper to be read at the “Symposium on Re-Publicness” Sponsored by the Chamber of Electrical Engineers. Ankara Turkey, December 9 – 10, 2011)

Introduction

The relation of information technology (IT) and more specifically the internet, to politics is a central issue facing contemporary social movements. Like many previous scientific advances the IT innovations have a dual purpose: on the one hand, it has accelerated the global flow of capital, especially financial capital and facilitated imperialist ‘globalization’. On the other hand the internet has served to provide alternative critical sources of analysis as well as easy communication to mobilize popular movements. 

The IT industry has created a new class of billionaires, from Silicon Valley in California to Bangalore, India. They have played a central role in the expansion of economic colonialism via their monopoly control in diverse spheres of information flows and entertainment. 

To paraphrase Marx “the internet has become the opium of the people”. Young and old, employed and unemployed alike spend hours passively gazing at spectacles, pornography, video games, online consumerism and even “news” in isolation from other citizens, fellow workers and employees. 

In many cases the “overflow” of “news” on the internet has saturated the internet, absorbing time and energy and diverting the ‘watchers’ from reflection and action. Just as too little and biased news by the mass media distorts popular consciousness, too many internet messages can immobilize citizen action. 

The internet, deliberately or not,has “privatized” political life. Many otherwise potential activists have come to believe that circulating manifestos to other individuals is a political act, forgetting that only public action, including confrontations with their adversaries in public spaces, in city centers and in the countryside, is the basis of political transformations. 

IT and Financial Capital

Let us remember that the original impetus for the growth of “IT” came from the demands of big financial institutions, investment banks and speculative traders who sought to move billions of dollars and euros with the touch of a finger from one country to another, from one enterprise to another, from one commodity to another. 

Internet technology was the motor force for the growth of globalization at the service of financial capital. In some ways IT played a major role in precipitating the two global financial crises of the past decade (2001-2002, 2008–2009). The bubble in IT stocks of 2001 was a result of the speculative promotion of overvalued “software firms” de-linked from the ‘real economy’. The global financial crash of 2008-2009 and its continuation today, was induced by the computerized packaging of financial swindles and underfunded real estate mortgages. The ‘virtues’ of the internet, its rapid relay of information in the context of speculator capitalism turned out to be a major contributing factor to the worse capitalist crises since the Great Depression of the 1930’s. 

The Democratization of the Internet

The internet became accessible to the masses as a market for commercial enterprise and then spread to other social and political uses. Most importantly it became a means of informing the larger public of the exploitation and pillage of countries and people by multi-national banks. The internet exposed the lies which accompany US and EU imperialist wars in the Middle East and Sothern Asia. 

The internet has become contested terrain, a new form of class struggle,engaging national liberation and pro-democracy movements. The major movements and leaders from the armed fighters in the mountains of Afghanistan to the pro-democracy activists in Egypt, to the student movements in Chile and including the poor peoples’ housing movement in Turkey, rely on the internet to inform the world of their struggles, programs, state repression and popular victories. The internet links peoples’ struggles across national boundaries – it is a key weapon in creating a new internationalism to counter capitalist globalization and imperial wars. 

To paraphrase Lenin, we could argue that 21st century socialism can be summed up by the equation: “soviets plus internet = participatory socialism”. 

The Internet and Class Politics

We should remember that computerized information techniques are not ‘neutral’ – their political impact depends on their users and overseers who determine who and what class interests they will serve. More generally the internet must be contextualized in terms of its insertion in public space. 

Internet has served to mobilize thousands of workers in China and peasants in India against corporate exploiters and real estate developers. But computerized aerial warfare has become the NATO weapon of choice to bomb and destroy independent Libya.The US drones which send missiles that kill civilians in Pakistan, Yemen are directed by computer ‘intelligence’. The location of Colombian guerrillas and the deadly aerial bombings are computerized. In other words IT technology has dual uses: for popular liberation or imperial counter revolution. 

Neoliberalism and Public Space

The discussion of “public space” has frequently assumed that “public” means greater state intervention on behalf of the welfare of the majority; greater regulation of capitalism and increased protection of the environment. In other words benign “public” actors are counter posed to exploitative private market forces. 

In the context of the rise of neo-liberal ideology and policies, many progressive writers argue about the “decline of the public sphere”. This argument overlooks the fact that the “public sphere” has increased its role in society, economy and politics on behalf of capital, especially financial capital and foreign investors. The “public sphere”, specifically the state is much more intrusive in civil society as a repressive force, particularly as neo-liberal policies increase inequalities. Because of the intensification and deepening of the financial crises, the public sphere (the state) has undertaken a massive role in bailing out bankrupt banks. 

Because of large scale fiscal deficits provoked by capitalist class tax evasion, colonial war spending and public subsidies to big business, the public sphere (state) imposes class based “austerity” program cutting social expenditures and prejudicing public employees, pensioners, and private wage and salaried employees. 

The public sphere diminished its role in the productive sector of the economy. However, the military sector has grown with expansion of colonial and imperial wars. 

The basic issue underlying any discussion of the public sphere and the social opposition is not its decline or growth but rather the class interests which define the role of the public sphere. Under neo-liberalism, the public sphere is directed by the use of public treasury to finance bank bailouts, militarism and expanded police state intervention. A public sphere directed by the “social opposition” (workers, farmers, professionals, employees) would enlarge the scope of public sphere activity with regard to health, education, pensions, environment and employment.

The concept of the “public sphere” has two opposing faces (Janus-like): one facing capital and the military; the other labor/social opposition. The role of the internet is also subject to this duality: on the one hand the internet facilitates large scale movements of capital and rapid imperial military interventions; on the other hand it provides rapid flow of information to mobilize the social opposition. The basic question is what kind of information is transmitted to what political actors and for what social interest? 

The Internet and the Social Opposition: The Threat of State Repression

For the social opposition the internet is first and foremost a vital source of alternative critical information to educate and mobilize the “public” – especially among progressive opinion- leaders, professionals, trade unionists and peasant leaders, militants and activists. The internet is the alternative to the capitalist mass media and its propaganda, a source of news and information that relays manifestos and informs activists of sites for public action. Because of the internet’s progressive role as an instrument of the social opposition it is subject to surveillance by the repressive police-state apparatus. For example, in the USA over 800,000 functionaries are employed by the “Homeland Security” police agency to spy on billions of emails, faxes, telephone calls of millions of US citizens. How effective the policing of tons of information each day is another question. But the fact is that the internet is not a “free and secure source of information, debate and discussion. In fact as the internet becomes more effective in mobilizing the social movements in opposition to the imperial and colonial state, the greater is the likelihood of police-state intervention under the pretext “combating terrorism”. 

The Internet and Contemporary Struggle: Is it Revolutionary?

It is important to recognize the importance of the internet in detonating certain social movements as well as relativizing its overall significance. 

The internet has played a vital role in publicizing and mobilizing “spontaneous protests” like the ‘indignados’ (the indignant protestors) mostly unaffiliated unemployed youth in Spain and the protestors involved in the US “Occupy Wall Street”. In other instances, for example, the mass general strikes in Italy, Portugal, Greece and elsewhere the organized trade union confederations played a central role and the internet had a secondary impact. 

In highly repressive countries like Egypt, Tunisia and China, the internet played a major role in publicizing public action and organizing mass protests. However, the internet has not led to any successful revolutions – it can inform, provide a forum for debate, and mobilize, but it cannot provide leadership and organization to sustain political action let alone a strategy for taking state power. The illusion that some internet gurus foster, that ‘computerized’ action replaces the need for a disciplined, political party, has been demonstrated to be false: the internet can facilitate movement but only an organized social opposition can provide the tactical and strategic direction which can sustain the movement against state repression and toward successful struggles. 

In other words, the internet is not an “end in itself” – the self-congratulatory posture of internet ideologues in heralding a new “revolutionary” information age overlooks the fact that the NATO powers, Israel and their allies and clients now use the internet to plant viruses to disrupt economies, sabotage defense programs and promote ethno-religious uprisings. Israel sent damaging viruses to hinder Iran’s peaceful nuclear program; the US, France and Turkey incited client social opposition in Libya and Syria. In a word, the internet has become the new terrain of class and anti-imperialist struggle. The internet is a means not an end in itself. The internet is part of a public sphere whose purpose and results are determined by the larger class structure in which it is embedded. 

Concluding Remarks: “Desktop Militants” and Public Intellectuals

The social opposition is defined by public action: the presence of collectivities in political meetings, individuals speaking at public meetings, activists marching in public squares, militant trade unionists confronting employers, poor people demanding sites for housing and public services from public authorities… 

To address an active assembled public meeting, to formulate ideas, programs and propose programs and strategies through political action defines the role of the public intellectual. To sit at a desk in an office, in splendid isolation, sending out five manifestos per minute defines a “desktop militant”. It is a form pseudo-militancy that isolates the word from the deed. Desktop “militancy” is an act of verbal inaction, of inconsequential “activism”, a make-believe revolution of the mind. The exchange of internet communications becomes a political act when it engages in public social movements that challenge power. By necessity that involves risks for the public intellectual: of police assaults in public spaces and economic reprisals in the private sphere. The desktop “activists” risk nothing and accomplish little. The public intellectual links the private discontents of individuals to the social activism of the collectivity. The academic critic comes to a site of action, speaks and returns to their academic office. The public intellectual speaks and sustains a long-term political educational commitment with the social opposition in the public sphere via the internet and in face to face daily encounters. 

PEOPLE’S DEMOCRACY wishes it readers a very happy new year.

As we go to press, as 2011 ends and 2012 begins at least three important developments that will determine the status of our livelihood continue to unfold.

First, a legislation for the institutionalisation of the Lokpal at the all-India level and the Lokayuktas at the state level, to combat corruption in high places, has finally been adopted by the Lok Sabha. The first time that a bill for the creation of these institutions came up before the Indian parliament was on the 9th of May 1968. Before that bill could be passed on the basis of the report of the Select Committee, however, the fourth Lok Sabha was dissolved. The bill thus lapsed. Similarly, the bill introduced on the 11th of August 1971 lapsed due to the dissolution of the fifth Lok Sabha. The bill that came on 28th July 1977, in the post-Emergency Janata Party government period also lapsed before the recommendations of yet another Select Committee could be considered with the dissolution of the sixth Lok Sabha. Once again, a bill introduced on 26th August 1985 did not see the light of the day because of lack of agreement on the recommendations of the Joint Select Committee. Post the defeat of the Rajiv Gandhi government following the Bofors scandal, a Lokpal Bill was introduced on 29th December 1989 at the insistence of the CPI(M). This also lapsed consequent upon the dissolution of the ninth Lok Sabha in March 1991. During the United Front government from 1996, again at the insistence of the CPI(M) and the Left parties, a bill was introduced on 13th September 1996. The Parliamentary Standing Committee that conducted a detailed examination submitted its report in May 1997. However, once again, before these could be finalised the bill lapsed with the eleventh Lok Sabha being dissolved. In the second 13-month instalment of the Vajpayee led NDA government, after the first instalment of the 13-day government in 1996, a bill introduced in August 1998 lapsed with the dissolution of the 12th Lok Sabha in April 1999. In the third instalment of the NDA government, a bill introduced in August 2001 was examined in a detailed manner by a parliamentary Standing Committee headed by Shri Pranab Mukherjee. Though the government lasted for two full years after the report was submitted the BJP chose not to legislate. This is the ninth occasion that the Lokpal and the Lokayukta Bill has come before the parliament. In a sense, thus, there is progress with the Lok Sabha having adopted it, finally, now.

Secondly, as it comes to the Rajya Sabha for consideration the CPI(M) will press for amendments through a vote on at least four issues in order to make these institutions more effective. These relate to the manner in which the personnel for these institutions will be selected and appointed, with a view to make them more democratic and representative; to provide for an effective and independent investigative mechanism in order to ensure that no external influences operate while combating the menace of corruption and bringing the guilty to book; the need to include in its ambit the corporates and foreign funded NGOs; and, to ensure that the constitutional rights of the states are not encroached upon or violated by a parliamentary legislation.

If any one, or more, of these amendments are carried then the legislation would have to go back to the Lok Sabha for its approval as amended by the Rajya Sabha. The government can either choose to appoint a Joint Select Committee to iron out these differences in order to make these institutions more effective or convene a joint session of both the houses for consideration and eventual adoption of this legislation.

In either case, 2012 appears all set to finally establish these institutions after a four-decade long struggle for creating institutions to combat corruption in high places. This, however, may not happen automatically. This will have to be ensured through relentless public pressure.

Thirdly, as we go to press, Anna Hazare has withdrawn his hunger strike called to coincide with the parliament session, and has also announced the suspension of his jail bharo agitation. He has however declared that he will campaign in the forthcoming elections to the state assemblies. This is welcome. In a democracy, its vibrancy is always determined by larger participation in the political process and to this extent it is hoped that Shri Hazare and his ‘team’ come out openly with their political positions and leave it to the people to determine their correctness or otherwise.

However, during the course of this entire welcome campaign against corruption in high places, a crucial issue that remains either missing or brushed aside is the fact that the large-scale corruption and mega scams that we are seeing today are directly linked with the trajectory of economic reforms that have been put in place during the course of the last two decades. Corruption has been a curse that has accompanied our society since time immemorial. But the corruption that we see around today is of a qualitatively different and higher nature associated with the opportunities for sleaze and making the ‘quick buck’ as a result of these economic reforms. It is only the CPI(M) and the Left that is today highlighting the need to bring the corporates and the private players who are party to such corruption at high levels under the ambit of the Lokpal. Combating corruption thus is not only a moral issue. It diverts humungous amount of resources away from social development denying our people a better life. The effectiveness of this fight cannot be ensured unless it is linked with fighting these economic reforms that are continuously opening hitherto unknown avenues for corruption at high places. The CPI(M) is committed to strengthen the struggles on this count, which alone can ensure that the holes that continue to be created for such corruption can be plugged.

Unfortunately for the Indian people, however, the Manmohan Singh government appears more determined now, than before, to carry forward the process of such reforms even further. On the one hand, in the background of the deepening global economic recession, this will mean further ruination of the livelihood of the vast majority of our people; on the other, the drain of our country’s wealth through corruption and sleaze will also continue. In the new year, therefore, the Indian people must brace themselves for mightier struggles against such reforms in order to improve their livelihood status.

With the relentless rise in the prices of all essential commodities continuing unabated the assaults on the people’s livelihood continue to mount. As these continue to further erode the quality of life of our people, the struggles for a better life and a better tomorrow need to intensify.

Therefore, while wishing our readers the very best in the coming new year we call upon them to strengthen the struggles and popular mobilisations aimed at creating better conditions for the Indian people to realize their true potential for creating a betterIndia.

Greetings for mightier struggles to improve the quality of life of the vast mass of Indian people and for the creation of a better India!

November 1, 2011 

November 7 this year marks the 94^th anniversary of the socialist revolution inRussia.  It is also 20 years since theSoviet Union was dismantled in 1991 after being in existence for 74 years.  The observance of the fall of theSoviet Union two decades, hence, has been different in tone and content from what we saw in the decade of the 1990s.  At that time, the disintegration of theSoviet Union was hailed as the final triumph of capitalism. It was claimed that it marked the end of history and that the future of mankind was the permanent era of liberal capitalism. 

This time, while observing the completion of the second decade of the end of theSoviet Union, the triumphalism has gone.  Those who proclaimed the end of history have been silenced.   The focus is now on the future of capitalism and the uncertain times faced by it.  Even the bourgeois ideologues have begun referring to Karl Marx and what he wrote about capitalism.  

This is happening in the background of the first prolonged capitalist recession of the 21^st century.  Finance capital-dominated  capitalism has led to growing  unemployment, homelessness and rising levels of poverty in the most powerful capitalist country – theUnited States of America.  In the debt crisis which has erupted in the Euro zone countries, the European Union is looking toChina for help in bailing out  the European countries by buying up some of the debt and the bonds floated by the governments.  

In the advanced capitalist countries, people are seeing how bankers and financial institutions have been bailed out by the governments – to the tune of billions of dollars while the common people are facing austerity measures and asked to sacrifice.  

It is in this background that significant developments are taking place in the sphere of socialism which is the only alternative system to capitalism.  In the years immediately after the disintegration of the Soviet Union and the restoration of capitalism in Russia, the debate centered around what happened to the experiment of building socialism in the Soviet Unionand what had gone wrong.  These were the discussions and debates that dominated among Marxists and activists of the Communist and working class movements in the nineties.  But by the turn of the century, attention turned towards what should be the shape and nature of socialism in the 21^st century. 

From a postmortem of what happened to the socialist experiment in the Soviet Union, the debate has now moved forward on what should be the nature of 21^st century socialism.  To come to this level, it was necessary to first to come to terms with the building of socialism in the Soviet Union and the type of socialist that existed in the 20^th century thereafter.  The Soviet model exercised a predominant influence in all the countries where the transition to socialism occurred.  This was  but natural. After the 1917 revolution, theSoviet Union blazed a new path.  In the building of socialism, theSoviet Union made remarkable achievements – a rapid expansion of the  productive forces, a universal education and  health  system,  improvement in the material and cultural standards of the people.  All these were accomplished facing ruthless efforts at counter revolution and eventually the heroic fight to defeat fascism.  

In trying to build socialism in isolation and capitalist encirclement, theSoviet Unionhad chosen a path where there was great reliance on the State sector, forced collectivization of agriculture, highly centralized planning  with no market relations and the constant struggle against external and  internal counter revolutionary attacks.  

After the first phase of extensive development, this model began to falter. The Ideological Resolution adopted by the 14^th Congress of the CPI(M) in 1992 pointed out some of the distortions and defects of the system in theSoviet Union that resulted in bureaucratic centralism, lack of democracy and the merger of the party and the State and so on. Unlike  capitalism, the socialist model in theSoviet Union failed to harness the scientific and technological revolution to revolutionalise the productive forces and to create new avenues for social relations to develop. 

The East European countries which were liberated from fascism followed the Soviet model and they suffered a greater degree of  bureaucratism and alienation of people as a result. China,Vietnam,Koreafollowed suit. However,Chinawas the first to break out of the Soviet model. By the mid-fifties, Mao Zedong had concluded thatChinacannot undergo the  forced collectivization of agriculture as  theSoviet Unionhad done.  From then onwards,Chinatried to innovate its own path through various ups and downs. 

It is by a critical examination of the experiences of socialism in the 20^th century that we can arrive at a new and more meaningful concept of socialism at the 21^st century.  This requires carrying forward some of the original impulses  of the October revolution and  some of the valuable achievements.  At the same time, we have to discard some of the negative aspects and distortions which manifested in the existing socialism of the 20^th century. 

The debate on 21^st century socialism is ongoing and has not reached a finality.  This was so, because the socialism in the 21^st century will arise not just from theory but also from practice.  But we have now some broad contours of what a renovated socialism  of the 21^st century will look like.  Here we can only set out some of them in an outline form. 

I.  Socialisation of the means of production is a cardinal principle of socialism.  This requires that the capitalist forms of ownership of the means of production be replaced by social ownership. In the socialism of the 20^th century, basing on the Soviet model, public ownership of the means of production was, by and large, equated with State ownership.  State owned and run enterprises was the main form.  This led to the heavy hand of the bureaucracy controlling and running the economy.  The workers had no say in the running of the enterprises. The growth of bureaucracy and bureaucratic centralism can be attributed to this.  We have now been able to understand this. The experience of the other socialist countries likeChina,Vietnam andCuba show that what is required is ‘public’ ownership and not  just State ownership.  Public ownership can be of diverse forms and State ownership is just one of those forms.  There can be State owned enterprises or a public sector where there is wider shareholding, or collective enterprises which are owned by the workers and employees, or cooperatives. Unlike the highly centralized system which existed in theSoviet Union, there can be different forms of public ownership and competition amongst them.  

II. The existence of commodity production and the market is not the negation of socialism. Unlike in theSoviet Unionwhere small commodity production and retail trade were nationalized, in the period of socialism, commodity exchange and markets should play a role.  They should be regulated by the State. 

III. Planning: A planned economy is another basic principle of socialism but the nature of planning should not be such as to centralize all economic decision-making and eliminate the market.  Further, in order to ensure popular participation in economic decision-making and the running of economic enterprises, planning has to be decentralized.  

IV. Socialism and Democracy are not antithetical. On the contrary, democracy is the life blood of socialism. In the capitalist system, democracy becomes ‘formal’ as the control of the bourgeoisie over the means of production and the institutions of the State leads to restricting democracy and the democratic rights of citizens. In the case of socialism, it cannot develop without the active and popular participation of the people at all levels.  Because of the historical circumstances in theSoviet Union, the development of democracy under socialism was curbed. It is necessary to have a political system under socialism which ensures popular participation.  This requires the creation of popular assemblies at different levels which have powers not only with regard to the administrative sphere but also the economic.  A multi-party system under socialism will ensure that there is no scope for a permanent one party rule with all its attendant distortions.

 V.  The demarcation between the State and the ruling party has to be institutionalized.  The socialist State represents the entire people and the party can never be a substitute as it represents only a fraction of the working class and the working people. 

Some of the reforms adopted in the socialist countries likeChina,VietnamandCubahave brought about changes in the economic structure and policies which are in line with the renovated concept of socialism.   There may be some wrong steps taken in the course of these reforms, but there is no doubt that the changes are essential. 

Another area where new thinking and practice with regard to socialism is taking place inLatin America.  Since the late 1990s, the Left forces have registered significant advances inLatin America.   Today, there are Left-led governments inVenezuela,Bolivia,Ecuador,NicaraguaandUruguay.  InBrazilandArgentina, there are Centre-Left governments.Peruhas elected President with a progressive agenda.  It is inVenezuelaandBoliviathat major steps have been taken to move away from the neo-liberal framework and put in place alternative policies. Policies which strengthen national sovereignty, promote public ownership in the key sectors of the economy and initiate changes for ensuring popular participation and widening of the democratic process.  

InVenezuela, which is rich in oil, the State has taken control of key oilfields and reduced the share of the foreign multinationals; the biggest telecom company and the biggest electricity company have been taken over by the State.  In the banking sector too, the public sector has been expanded and the control of foreign banks reduced.Venezuelahas set-up community councils which participate in budget making and local planning. They have been given powers to decide on their local administrative and economic matters.  Workers’ participation in the State enterprises have been ensured.Boliviahas undertaken a major land reform by which twelve million acres of land have been distributed to the landless indigenous people. Bolivia has also taken steps to nationalise its natural resources like natural gas and oil. 

In both countries, there are powerful political mobilizations and mass movements to counter the forces which represent the bourgeois and foreign capital interests.  The Movement for Socialism inBoliviaand the Bolivarian revolutionary process inVenezuelaare examples. 

The movements for socialism in Latin Americahave debated and put forth their concept of what socialism should be in the 21^st century.  This is rooted in the history and society of Latin America and has rejected any model to be imported particularly that of theSoviet Union.  If they have drawn any experience of building socialism, it is from the Cuban experience. 

The contours of the 21^st century socialism are just in the process of emerging. The struggles inLatin America show: that it is possible to challenge the globalization-neo-liberal paradigm and work for alternatives; that it is possible to defend national sovereignty and the exercise of democratic power by the people.  The success of these efforts will go a long way in projecting socialism as a viable concept – as an alternative to the present crisis-ridden financial capitalism which is destroying the lives of millions of people around the globe.  

Ganashakti, November 7, 2011

Hindustan Times, New Delhi, October 18, 2011

The Prime Minister, last Saturday, met the advisors and managers of the Indian economy.  The concern and anxiety over soaring inflation and sharply declining industrial growth was the agenda. 

This comes in the backdrop of global anti-Wall Street protests which reportedly  spread over 1500 cities.  The palpable anger of the people against the deprivations imposed upon them since the financial meltdown of the `Big Five’ on the Wall Street in 2008 have now reached unprecedented levels of unemployment and declining livelihood standards. The rallying point was a focus against `corporate greed’ as the genesis of their travails. 

It is, therefore, not surprising to see screaming banners calling for a `class war’.  Since the global recession began, reportedly the sale of Karl Marx’s Das Kapital have soared.

They will do well to read the concluding chapter of Volume I.  “Capital comes dripping from head to foot, from every pore, with blood and dirt”. He buttresses this with a quote, in a footnote, from a worker T. J. Dunning: “With adequate profit, capital is very bold. A certain 10 per cent will ensure its employment anywhere; 20 per cent will produce eagerness; 50 per cent, positive audacity; 100 per cent will make it ready to trample on all human laws; 300 per cent and there is not a crime at which it will scruple, nor a risk it will run, even to the chance of its owner being hanged.” It is this pathological drive to maximise profits at any cost, the inherent character of the capitalist system and not the individual greed of some or weakness of regulatory mechanisms that is the root cause for the present crisis.

Greed is but a euphemism for profit maximization, the raison d’etre  of the capitalist system.    The myth  that greed is something alien to capitalism and, hence, can be kept under check is, once again, exploded. Capitalism has  greed as its inseparable companion.  It is the system and not the avaricious attributes of individual capitalists that is the culprit. 

Another consciously engendered myth that the State under capitalism is a benign neutral  entity has been shattered.  True to its character, the capitalist State intervened to bailout those very financial giants who, in first place, caused the current crisis.  The Special Inspector General for theUSgovernment’s  financial bailout programmes says, “Since the onset of the financial crisis in 2007, the federal government, through many agencies, has implemented dozens of programmes that are broadly designed to support the economy and the financial system.  The total potential federal government support could reach upto $ 23.7 trillion.”  Compare this withUSA’s GDP which is just over $ 14 trillion.  The US Treasury spokesman, however, denies the veracity of this figure.

Similarly, there has been large-scale borrowings by the governments of several developed countries to finance such bailouts.  Corporate insolvencies have thus been converted into sovereign insolvencies.  In order to meet this debt burden, the EU is today in convulsions with governments likeGreece, nowSpain, more likely to follow, adopting severe `austerity’ measures, meaning, drastic cuts in social benefits and expenditures for the working people.  General strikes and protests have become the order of the day. 

On the other hand, the Bank ofAmerica, having now acquired the `bankrupt’  Merrill Lynch  has earned $ 3.7 billion in the first half of 2011.  Goldman Sachs set aside $ 5.23 billion as bonuses to its executives. 

In this context, theIndianStatepursuing the trajectory of neo-liberal reforms is, naturally, concerned as reflected in the PM’s Saturday confabulations.  While headline inflation stood at 9.72 per cent in September, food, fuel and consumer goods grew costlier than this.  On the other hand, the index of industrial production  fell to a dismal 4.1 per cent. Global recession has seen exports falling from 82 to 36 per cent between July-September.  Imports fell likewise indicating a sluggish domestic demand.  This has widened our trade deficit to an unprecedented $ 73.5 billion. 

Investors are complaining that the RBI’s measures to control inflation has pushed the cost of credit, leading, in turn, to declining investment.  The presumption is that if cost of capital is cheap, then investment will rise leading to higher growth. 

The fallacy lies in the fact that what is produced through higher investments needs to be sold which requires purchasing power in the hands of the people.  With this drastically declining globally and in our country, the neo-liberal prescription simply cannot work.  It is only the veil to camouflage the earning of higher speculative profits utilizing cheap credit.

KeynesianStateintervention was one possible way in which such naked pursuit of profit maximization could have been muted.  Keynesianism  far from being the palliative to provide relief to the people was structurally designed to stabilize the capitalist system from its inherent tendencies of plunging into recurrent crises. Under the neo-liberal dispensation, however, State intervention comes to the rescue of corporates at the expense of the people further destabilizing the system. 

In the Indian context, our economic fundamentals can only be strengthened  and stabilized when interventions are designed to expand the purchasing power of our people, thus, enlarging aggregate domestic demand. This, in turn, would set in motion a trajectory of sustainable growth. 

The PM and his advisors could do well to reconsider and reverse  the trend of providing over Rs. 5 lakh crores as tax concessions to the rich, as revealed in the last two budget documents.  These monies, if instead, were invested in public works projects, this would have built the much-needed infrastructure while generating large-scale employment and, thus, vastly enlarging people’s purchasing power. 

The choice can still be made.  The UPA-II government must be made to make this choice through mounting popular pressures. 

eom

What is happening across United States is simply amazing.  That something of this nature could have happened would appear simply unimaginable even sometime back.  It is true that the global financial meltdown of 2008 which was triggered by the sub-prime crisis in which the entire labyrinthine intricacies of the global financial system was drawn and sucked up by the vortex of the failure in repayment of loans by ordinary citizens which in the first place were unviable.  That this was not merely about the greed and the deceitful maneuvers of the top brass of huge financial behemoths was crystal clear.  But that was how it was sought to be explained by the official apologies of neo-liberal globalization and its governmental backers.  But that it was deeply systemic was apparent, as and how the meltdown led to Corporate insolvencies. These at the outset resulted out of unsustainable proliferation of debt-driven consumption were sought to be compensated.  Obviously, this led to the transformation of such corporate debt getting blown up into full-fledged sovereign debt crisis.

The transfer of earnings of people – ordinary people who eked out a living with their toil – physical or intellectual –to financial Corporates for overcoming their bankruptcies.  The financial meltdown, therefore, led to the daily drudgeries which they were completely unprepared for.  The subsequent economic recession which refused to disappear led to persistent levels of unemployment which North America and Western Europe had perhaps never witnessed.

While all these were happening, raising questions about the sustainability of this model where finance would dominate other areas of economic activities – and larger human endeavours – the entire consequence of this could not be fully fathomed.  More so, when within a year of Obama’s ascendance to Presidency saw the rightwing Republicans bounce back in its electoral fortunes in the congressional and senatorial.  The ultra right `tea party movement’ was the new political phenomena which startled political commentators by making their entry to the political centre stage. Paradoxical as it may sound today, but the voice of the common man was not heard loud and clear.

But in a way it seemed inevitable.  Even if we have not heard of consistent intervention of forces who are zealous in articulating and influencing the official establishment in Washington DC, the White House and so on and so forth, the situation had become so precarious for the common citizen – a collective expression of their individual woes were a certainty.  And that is what has happened now – simply three words `Occupy Wall Street’.

One of the greatest paradoxes of our present times is, perhaps, in the very name of the square in front of the New York stock exchange – ironically it is `liberty plaza’. And, of course, the Wall Street itself is the biggest symbol of the hegemony of finance – home to the headquarters of financial oligarchies – banks, insurance and mortgage companies and so on and so forth.  Therefore, the common men and women who wanted to focus on the mishap that has befallen them wanted to be very precise about the source of their misfortune.

In their own words: “A worldwide shift in revolutionary tactics is underway right now that bodes well for the future.  The spirit of this fresh tactic, a fusion of Tahrir with the Acampadas of Spain, is captured in this quote:  “The antiglobalisation movement was the first step on the road.  Back then our model was to attack the system like a pack of wolves.  There was an alpha male, a wolf led the pack, and those who followed behind. Now the model has evolved. Today we are one big swarm of people.”

“The beauty of this new formula and what makes this novel tactic exciting, is its pragmatic simplicity: we talk to each other in various physical gatherings and virtual people’s assemblies….we zero in on what our one demand will be, a demand that awakens the imagination and, if achieved, would propel us toward the radical democracy of the future….and then we go out and seize a square of singular symbolic significance and put our assess on the line to make it happen.”

The strategy of the protagonists of `Occupy Wall Street’ is as simple as their compelling and irrefutable legitimacy – “there is a very real danger that if we naively put our cards on the table and rally around the `overthrow of capitalism’ or some equally outworn utopian slogan, then our Tahrir moment will quickly fizzle into another inconsequential ultra-lefty spectacle soon forgotten”. Therefore, they want to demand “something profound, yet so specific and doable that it is impossible for President Obama to ignore…something that spotlights Wall Street’s financial capture of the US political system and confronts it with a pragmatic solution…like the reinstatement of the Glass-Steagall Act…or a one percent tax on financial transactions…or an independent investigation by the US Department of Justice into the corporate corruption of our representatives in Washington…or another equally creative but downright practical demand that will emerge from the people’s assemblies held during the occupation….and hang in there day after day, week after week, until a large swath of Americans start rooting for us and President Obama is forced to respond….then we just might have a crack at creating a decisive moment of truth for America, a first concrete step towards achieving the radical changes we all dream about unencumbered by commitments to existing power  structures”.

From Al Tahrir in Cairo to Punte del Soc in Spain, to the series of social protests on boulevards of Tel Aviv – it is a new way to express the burgeoning coming together of the 99 per cent.  Occupation of public space to focus attention on conditions that afflict the aam admi of the world – that grips the imagination.  And, ultimately, it has hit the fountainhead – the Wall Street which the occupationists term as `the financial Gomorrah of America’.

On 17 th September- the day it started-the numbers assembled in Zuccotti Park were modest – far less than the 20,000, the initiators of `Occupy Wall Street’ had conceived. But just as they had pronounced and hoped they are clinging on – now almost for a month. As time rolls on, it is spreading like wildfire.  Numbers grow not just in Wall Street but in dozens of cities across the United States.  And, it is not just a flash in the pan. It is pushing its way into mainstream America.  Reports suggest that increasing number of influential trade unions are joining. So do human rights and environmental groups.  And, it is no surprise that intellectuals led by the redoubtable Noam Chomski can be heard distinctly in support of those who claim they are ‘the 99 per cent’.  But it was not that alone.  The Congressional Progressive Caucus and the Congressional Black Caucus also joined in endorsing the bourgeoning national challenge to corporate greed and corrupt politics.

And, predictably, as the Nobel Laureate Paul Krugman puts the ‘plutocrats’ of finance have clearly panicked. Krugman goes on with candour- “Wall Street’s Masters of the Universe realize, deep down, how morally indefensible their position is…..They are people who got rich by peddling complex financial schemes that, far from delivering clear benefits to the American people, helped push us into a crisis whose aftereffects continue to blight the lives of tens of millions of their fellow citizens.”

With this new reality and changed perceptions, people keep moving on asserting their collective might. It remains to be seen whether ‘Occupy Wall Street’ can really change the direction of the financial, economic and political system. But American people have discovered their collective internal strength. The 99 percent have arrived. 

Friday, October 14, 2011 at 11:00pm

Hindustan Times
September 19, 2011

Narendra Modi’s fast reminds us of an old adage common to many Indian fold tales: a cat after devouring hundreds of rats proceeds on a pilgrimage to seek atonement.

Fasting  as a means of atonement is an universal value recognized by all religions and cultures.  Jews fast on Yom Kippur, the day of atonement. Christians observe Lent. For Muslims, it is the month of Ramzan. Quran says: “to fast is to do good unto yourselves, if you but knew it”. In our cultures, Hinduism, Jainism are replete with fasts observed for cleansing and repentance. The Mahatma elevated this to a spiritual instrument of struggle affectively used during our freedom struggle.

Mr. Modi’s fast, however, makes a mockery of these lofty values.  The 2002 communal genocide inGujarathas been decried by all the constitutional authorities in the country like the National Human Rights Commission, the Election Commission and a plethora of NGOs.  Apart from the deaths, the ghastly rapes and the maiming of thousands, even after nearly a decade, there are 21,448 internally displaced people inGujaratliving in 45 camps over eleven districts today.  Without expressing any remorse, Mr. Modi says that he gave “the mantra of development, so that wounds could be healed”.  All economic studies point to what a prominent economist has said that there is deep rooted poverty and income inequality inGujarat.  The claims that  benefits of development have reached all people, irrespective of their creed, is dispelled by the findings of studies by expert committees that show that the Muslims are most educationally deprived community inGujarat.  There is no Urdu daily published fromGujarattoday.

There are various reasons why this fast has been undertaken at this time. The obvious is the effort to break out of the `communal monster’ mould.  This is  based on a deliberate misreading of the latest Supreme Court decision interpreting it as a `clean chit’ absolving him of his complicity in the communal carnage.  The apex court, on the contrary, has directed the trial court to expeditiously proceed with the trial of theGulbargasociety case by handing over all material before to it including the reports of the Amicus Curae and that of the special investigation team, to be considered as evidence.  The matter has, thus, gone beyond the filing of an FIR against Mr. Modi.  The issue is now of a trial on these charges.

Another reason for this fast is to divert attention from the appointment of the Lokayukta fearing exposure of large-scale alleged corruption.

Mainly this is an effort to declare his entry into the national scene as a potential Prime Ministerial candidate.  The BJP President has recently announced that it would contest the 2014 elections on the basis of a `collective leadership’.  Soon after Mr. L. K. Advani, virtually declaring  his candidature, undeterred by the law of diminishing returns, that has been operating exponentially with him, decided to embark on a sixth yatra since the 1990 rath yatra.

That yatra under the battle cry of “mandir wahin banayenge” led to the demolition of the Babri Masjid – universally considered as the darkest blot in the history of the modern secular democraticIndianRepublic.  This yatra left behind a bloody trail.  Within two months, by December, the media was reporting the death of nearly a thousand people in communal clashes.

Karl Marx had once commented that Hegel had said that history repeats itself.  The first time as a tragedy and the second time as a farce.  This yatra of Mr. Advani would be a farce of the sixth order.

In the meanwhile, the BJP President himself, according to media reports, underwent a bariatric surgery – recommended only for severely obese people – to loose weight. While his medical condition needs to be sympathized, this move is cynically being seen in some quarters as an effort to be physically fit for any eventuality.   Further, it is a well-known fact that the BJP leaders of the opposition in both the Houses of the Parliament are also serious contenders for a future PMship.

Returning to Mr. Advani’s yatra. He has declared that this would be against corruption.  Riding on the widespread popular sentiment against corruption glavanised by Anna Hazare’s fast, Mr. Advani seems to believe that this anti-corruption campaign is transferable! Mr. Advani and the BJP will do well to look inwards. The Lokayukta of Chattisgarh has severely indicted the Raman Singh-led BJP  government in the state  for rampant corruption in every department, equating corrupt officers with “fish in the pond dying to consume more and more water”.  This comes soon after the Karnataka Lokayukta’s severe indictment of the BJP state government.  After much reluctance, the BJP was forced to ask CM Yedyurappa to step down. Soon followed the arrest of the Reddy brothers, former ministers in the state cabinet, on the issue of large-scale illegal mining.  In haste, the BJP has changed its Chief Minister in Uttarakhand before charges of corruption could consume its state government. This is its track record.

The RSS/BJP’s internal bickering over the potential PM candidate  is it’s internal affair.  However, this reminds us of a saying in Telugu.  A person who is neither married nor has a home declares his son’s name as `Somalingam’!  There is no general election in the offing and there is no indication of any groundswell of support for the BJP, yet, such a rat race.

Those who argue that `India 2011’ is different from `India 1992’ will do well to realize that at this very moment, communal riots are claiming innocent lives. More than a dozen lives have been consumed in Bharatpur, Rajasthan.  Nothing else need be said.

eom

EPW, Vol XLVI No.34 August 20, 2011 

Prabhat Patnaik’s article entitled “The Left in Decline” (EPW, 16 July 2011) raised, among other things, some important questions about the role of the Communist Party of India (Marxist) [CPI (M)] and the Left Front (LF) government in West Bengal particularly in the wake of the LF’s electoral defeat in the last assembly elections. 

Frankly speaking, I read the text more than once. Immediately after finishing it I browsed a booklet, the updated Party Programme of the CPI (M) and glanced through the Para 7.17, a portion of which is quoted:

…the Party will utilise the opportunities that present themselves of bringing into existence governments pledged to carry out a programme of providing relief to the people and strive to project and implement alternative policies within the existing limitations. The formation of such governments will strengthen the revolutionary movement of the working people and thus help the process of building the people’s democratic front. It, however, would not solve the economic and political problems of the nation in any fundamental manner.

This is perhaps enough to understand the CPI (M)’s programmatic understanding (tactical direction) of the power and jurisdiction of the Left-led state governments in the present Indian context. 

It is not clear why the whole project of the West Bengal LF government is labelled as a process of “empiricisation or the pursuit of a political praxis that is uninformed by the project of transcending capitalism”. It is too ambitious a move for a Left-led state government to undertake a project of “transcending capitalism”, which obviously is an intervention “fundamental” in nature and, therefore, is beyond its capacity. It is not possible for even the LF government to change the nature of the capitalist path of development or to transcend capitalism in one state alone when all the “state powers” are vested with the centre. 

I would like to recall the Political-Organisational Report of the 19th Congress of the CPI (M) held in 2008 which referred to a discussion in the 12th Party Congress (1985) on the West Bengal LF (WBLF) government’s decision to go in for the Haldia Petrochemical joint venture project. B T Ranadive summed up the discussions by stating that:

       within the existing capitalist system and the para­meters set out by the big bourgeois-led government at the Centre, it was not possible to develop industries in West Bengal with the limited resources of the state government. Neither was it possible to change the nature of the capitalist path of development in one state alone when all the powers are vested with the Centre. West Bengal government cannot by itself break from this bourgeois landlord system.

A Left-led state government can provide “relief” and even can strive to “project and implement” and may carry forward some “alternative” policies. But such an alter­native policy is not a “socialist” alternative or a “people’s democratic” alternative; not even a “Left and democratic” alternative, that is, an “alternative” in any fundamental way. 

It may not be concluded on the basis of the assembly election result that the WBLF government was alienated from the “basic classes”. Despite the toughest challenge from the ruling classes, the LF won not less than 27 elections, including panchayat and municipal elections in 34 years. Any objective analysis of the experiences of a Left-led state government, particularly in a state like West Bengal, needs to take into consideration the discrimination of the centre (led by a government of the ruling classes) it faces, apart from the limited power of a state government inherent under the existing structural framework of the Constitution. Unlike a state government run by the ruling classes, a Left-led state government, for its fundamental class approach, is always discriminated against on a class basis by the centre and other constitutive institutions of the existing bourgeois system. For a Left-led state government, the implementation of a pro-people agenda became extremely difficult after the advent of neo-liberal globalisation, which, however, is not faced for obvious reasons by the state governments led by pro-liberalisation, bourgeois-landlord parties.

Despite all these constraints, the whole experience of the WBLF government (along with the experiences of the Left Democratic Front in Kerala and the LF in Tripura) exemplifies remarkable achievements in defending and advancing the interests of the “basic classes”. The unprecedented success in implementing the land reforms programme, decentralisation of administrative powers through the panchayats and municipalities, success in agriculture, guaranteeing democratic rights of the people, especially poor people, reduction of poverty, expansion and improvement of education, success in micro, small and medium scale industries, protecting the interests of the unorganised sector workers, empowering women substantially, assisting self-help groups, fighting communal dangers, improving the conditions of the minorities by providing better educational facilities and implementing the Ranganath Mishra Commission’s recommendations certainly helped to strengthen the Left and democratic movement. So, it will not justify a critical observation if one stops at the point of “empiricisation”. 

The bourgeois order does not offer to the Left-led governments any level-playing field or provide a space where only its performance matters – where its successes are recognised heartily, failures are assessed objectively or limitations are acknowledged with an open mind. Take, for instance, the industrialisation move by the WBLF government. Though the Singur project created much hue and cry, the people of West Bengal did not oppose it; in fact, they supported the industrialisation programme of the LF government. The Singur project was not a compromise with the interests of the people, including the “basic classes”. However, it could not be completed due to certain mistakes (the industrialisation move as such should not be blamed). The conspiracies of the “rainbow opposition”, well-groomed and generously aided, could not be tackled successfully. 

The anti-Left propaganda brigade in West Bengal may be successful temporarily in putting the Singur project issue in direct confrontation with the “interest” of the peasantry, but it was – and still is – just to vilify the LF. This propaganda brigade is very keen to maintain a golden silence about pushing forward the question of “land reforms”, because this has been an important issue in bringing in radical “change” in the lives of the rural poor and this is a field where the LF government’s contribution is perhaps the most difficult to refute. 

However, the LF government in West Bengal had never faced the question: What after land reforms? First, perhaps “all” was not done in land reforms despite commendable success. So the question did not arise. Second, the WBLF government was not given any responsibility at this stage to carry forward the “democratic revolution” to its “completion”. Such a project cannot be taken up exclusively at the state level (The CPI(M)’s Party Programme says that it is the “first and foremost task of the people’s democratic revolution” to “carry out radical agrarian reform in the interests of the peasantry…”). Third, the WBLF government’s drive for more investment in all sectors of industry was not a post-“democratic revolution” project. 

The election result indicates a defeat of the LF, but not a defeat of the LF politics. Patnaik’s analysis, though objective, misses the link with the pronounced objectives of the LF government. 

For Prabhat Patnaik’s article “Left in Decline”, you may visit www.pragoti.in/node/4473

In the classical Marxist debate on the agrarian question, Lenin identified two distinct paths to the development of capitalism in agriculture, namely, the “Junker” (or “Prussian”) path (capitalism from above) and the “American” path (capitalism from below). Since then, the world has witnessed a rich variety of agrarian transitions, including those of present and erstwhile socialist economies and of countries in other parts of the Third World.5 The experiences of agrarian transition in India and in West Bengal have their own distinctive characteristics. 

While these experiences merit careful study, it can be stated with confidence that the capitalist development that has taken place in West Bengal in the last three or four decades is primarily a product of class struggle, that is, a form of capitalism “from below.” 

Given the situation in West Bengal today, what are the options before us? 

The CPI (M) has been of the considered opinion that production relations have to correspond to the degree of development of productive forces, and that a Marxist-Leninist assessment of the concrete situation, and of the correlation of class forces prevailing at the national and international levels, is required in this regard. After 1977, thanks to the land reform carried out by the Left Front Government, West Bengal achieved the highest agricultural growth rates in the country, and these were based on the productive performance of small farms. West Bengal made substantial progress in respect of rural per capita food grain consumption. It saw the sharpest decline in the country of income-poverty. The internal market expanded as a result of increased purchasing power in the hands of the rural masses. Above all, the policies of the Left Front Government changed the correlation of class forces in the countryside, a change that has been sustained for three decades. 

At the same time, there was some capital formation in the primary sector. Bank deposits in rural areas grew, and the State mobilised the highest levels of small savings in the country. Despite the fact that surpluses generated in the primary sector enhance the potential for the industrialisation of West Bengal, the class nature of the Indian state and specific policies of the Central Government have discouraged the industrial development of West Bengal. 

Agriculture

With respect to agriculture, we certainly cannot embark on a policy of corporate farming in the way some other States have. These States have doled out vast stretches of agricultural land (on the pretext that they are wastelands) to agribusiness companies for captive farming. Some options, however, merit serious consideration. 

First, we can upgrade small farms technologically. We can do so by mobilizing public and private investment, and utilizing contract farming arrangements in a way relevant and appropriate to our situation. This will enable us to replace, in collaboration with domestic capital, inefficient marketing systems as they exist today (and which have significant pre-capitalist characteristics). To ensure that the gains of this accrue the peasantry and the people, we have to depend on the bargaining power of the organised peasantry and regulatory measures by the Government. 

Secondly, a functional consolidation of holdings, for instance by hiring in tractors and other equipment collectively, has emerged spontaneously in the West Bengal countryside.6 There is much room for organizing such initiatives in a planned manner. Cooperatives and self-help groups organised into clusters and federations can play a significant role in providing credit, other services, extension and marketing support. 

While it would be utopian to attempt large-scale cooperative farming or collectivisation in an age when even socialist economies like China or Vietnam have, on the basis of experience, gone in for decollectivisation followed by peasant farming, we must not be mistaken for those who eulogise petty commodity production from an anti-Marxist viewpoint and derive satisfaction from the collapse of collectives in the former USSR and elsewhere.7 The disastrous consequences of the forced dismantling of collective and State farms in former USSR have been noted even by bourgeois economists. 

Thirdly, while de-peasantisation is not unexpected under capitalism, this phenomenon serves to emphasise the importance of using the possibilities of the National Rural Employment Guarantee Programme (NREGP) to the full in order to create employment and new assets. Such employment and asset-creation may be in the form of water harvesting, land development, plantation in the lands of land-reform beneficiaries, the creation of assets and employment for households below the poverty line, Scheduled Caste and Tribe households, and other schemes. 

The industrialisation imperative

The seventh Left Front Government came to office with a mandate to go ahead with industrialisation and consolidate the gains in agriculture. It can be said that the issues of the conversion of agricultural land to industrial land and the issue of whether elections in the State were free and fair became the two main issues on which the electorate delivered its verdict. 

The electoral verdict was unequivocal, and the strength of the Left Front increased both in terms of seats and vote-share. Any vacillation or backtracking with respect to industrialisation would represent a breach of faith in the trust reposed by the people in the Front. 

The issue is not of industry versus agriculture, as the Opposition – who are the known enemies of the peasantry – would have us believe. The issue now is that of industrialisation for the sake of the peasantry and agriculture itself. All that the State and its people have achieved on the agrarian front will be at peril if balanced growth of secondary and tertiary sectors fails to take off. Nothing other than such growth can release the burden of the workforce dependent on agriculture and subjected to both pre-capitalist and capitalist mode of exploitation, thereby making a more equitable distribution of work and earnings among the workforce in all three sectors possible;

· ensure a more sustainable growth of the primary sector by providing inputs necessary for the modernisation of and higher productivity from this sector;

· add value to primary-sector products, thereby enhancing income and employment; and

· augment revenue resources of the State Government, thereby enabling more public investment in the primary sector in infrastructure, inputs, extension and human resource development possible. 

In class and political terms, nothing other than such growth can

· deliver yet another blow to pre-capitalist elements and their political mentors;

· utilise the contradiction between Indian big bourgeoisie and imperialism and the difference within the ruling classes and their parties in the country in such a way as to develop a Left and democratic alternative by changing the correlation of class forces;

· meet the onslaught of globalised finance capital to de-industrialise our economy; and

· meet the immediate need of forging the broadest possible unity of the peasantry, working class, petty bourgeoisie and all patriotic and democratic sections of the people to resist the terror let loose by the grand alliance of the most reactionary section of the ruling class. 

As contradictions and the class struggle intensify, Right and Left opportunists, along with vacillating sections of petty bourgeoisie, the lumpen proletariat and both varieties of communal forces are sought to be mobilised into this grand alliance in order to isolate and attack the CPI (M). 

History teaches us that this attack against CPI (M) will not remain confined to the Party. The situation in West Bengal is reminiscent of the 1970-77 periods, although it is too early to identify and list the common features at the present moment.  The design to expand the current attack to a semi-fascist offensive against the all sections of people, irrespective of their political affiliation, in this advanced outpost of democracy in the country, has to be properly understood and explained to the people all over the country. 

ISSUES FOR DEBATE

Many issues of theory and practice have been raised in the aftermath of the events in Singur and Nandigram. 

Some of these proceed from the assumption that the opposition of the Left Front Government to neo-liberal economic policy is less sharp, and has somehow been blunted in recent times. Such a perception maligns the most advanced outpost of democracy. It not only ignores the Budget speeches and other policy statements of the Left Front Government, but also the stark reality that West Bengal has made the biggest contribution – inside parliament and outside – to the struggle against neo-liberal policies. Critics who say that the Left Front Government is to be criticised for not protesting against the imposition of neoliberal economic policies on the people have lost sight of the fact that it is because of this resistance that the UPA Government is unable to push through fully the neo-liberal agenda to which it is committed. 

Industrialisation

With respect to industrialisation in the State, one position is that, since the only industrialisation possible under the neo-liberal regime is corporate industrialisation, it is anti-people, since very little, if any, new employment is created. This position rejects as baseless the argument that industrialisation is necessary because it will take surplus labour out of agriculture, and states that it is awareness of this fact that “makes peasants most reluctant to part with their land for industrial purposes.” Further, the argument goes, the situation in India today is not one of industrialists competing for the attention of State Governments, but of State Governments competing to attract capitalists to their respective States. 

These arguments must be met squarely. First, they do not take into account the relative advantages of West Bengal as an industrial destination. We have mentioned the nature of changes wrought by land reform, and the situation with regard to small savings and other forms of capital formation in the primary sector. West Bengal also has a stable and transparent State Government and a vibrant system of local self-government. Its geographical location permits it to serve as a gateway for some 200 million people in the region, besides being a gateway to South East Asia. It also has a reasonably large pool of skilled workers. 

Going by our experience, we believe that the present situation, particularly after de-licensing and the partial withdrawal of freight equalisation, is more one of capitalists opting to invest in West Bengal than of the Left Front Government running after them to invest. The fact is that it was not the Tatas who threatened to go to Uttaranchal, but the grand alliance of anti-CPI(M) forces that threatened them and told them to move out of West Bengal. Nor must we forget that capitalists compete against each other and attempt to prevent their competitors from investing in “flagship” technology that threatens their own markets. 

Secondly, it is useful to remember that the Left Front Government has never forced reluctant peasants to part with their land. It was the armed goons of the grand alliance who forced peasants not to transfer land in exchange for one of the best compensation and rehabilitation packages that have been offered in the country. 

Thirdly, it is often forgotten that the Left Front Government in West Bengal distributes more land every year free of cost to the peasantry than it acquires for all purposes taken together – and the current period is no exception. 

Fourthly, the Left Front Government has been able to make progress with respect to Public Sector Undertakings, Central and State. Over the last year, investment of Rs 10 billion for the modernisation of IISCO has been ensured; in addition, progress has been made with respect to the revival of Bengal Chemicals, Gluconate, Infusion India, as well as the fertilizer industry and the Mining and Allied Machinery Corporation. 

The Left Front Government, too, is concerned about the limited potential of corporate industrialisation with respect to employment creation. In its last Party Congress, the CPI (M) emphasised the need to engage with the current situation, to look for new productive investment (including foreign direct investment that brings in new technology) and add to our productive capacity and ensure whatever employment growth is possible. 

Thus, while the argument in question correctly opposes the Luddite argument against industry as indefensible, it also asserts that an employment argument for industrialisation is unacceptable. Our contention here is that the employment argument is valid, and serves to demystify the debate. 

“Vulgar” economy

Further, an exclusive reliance on the argument that industrialisation can be justified only on the grounds that it produces use values also has problems. As Marx wrote in the Afterword to the Second German Edition of Capital, “overwhelming and exclusive emphasis on ‘thing-ness’ (use value) is nothing but a modern variant of ‘vulgar economy’.” 

Let us pursue this matter further. While opposing any method of analyzing a situation exclusively based on the materiality of objects, that is, its “thing-ness” or use value (the “vulgar economy” error), Marxist-Leninists must not make the mistake of passing judgments exclusively based on social relations as they appear, ignoring their material basis. These deviations represent opportunisms of Right and Left variety in the sense that they attempt to erect a Chinese Wall between “things” and “relations”, “use value” and “exchange value”, “concrete labour” and “abstract labour”, “productive forces” and “production relations”, and so on. 

A commodity represents a unity of opposites — its origin, development, decay and final disappearance being manifestations of the intensification of the contradiction between its use value and exchange value, which correspond to concrete and abstract labour respectively.8 An error of some Left intellectuals and progressive scholars is that of assuming that this two-fold nature did not characterize pre-capitalist societies. Such an assumption implies that commodity production was non-existent in pre-capitalist societies, which was clearly not the case. The most concise definition of capitalism was given by Lenin when he stated that capitalism is a system of generalized commodity production where labour power itself has become a commodity. This definition differentiates capitalist commodity production from pre-capitalist commodity production. 

The relevance of the issue under discussion in the Indian context must not be underestimated. Production relations continue to exhibit pre-capitalist fetters. This explains in part the vulnerability of our economy to the pressure of globalised finance capital. 

Issues of strategy and tactics

It is our position that, with the big bourgeoisie, which is the leader of the bourgeois-landlord class alliance, increasingly collaborating with global finance capital in the pursuit of its bankrupt capitalist path of development, it is only a People’s Democratic state that can accomplish the anti-feudal, anti-imperialist, anti-monopoly and democratic tasks of the Indian revolution. The CPI (M) has much experience of the disastrous consequences of mixing up the tasks of different stages of revolution. The entire construction of those engaged in the battle against “vulgar economy” runs the risk of being misunderstood. It gives the impression that there is nothing much left to be done to abolish new forms of landlordism, the hegemony of the rural rich, and remnants of feudalism. The underlying view here seems to be that the focal contradiction between the landlords and the peasantry is being replaced by a contradiction between imperialism and the Indian people as a whole that is, including the entire rural population. Such a view fails to understand that mobilising the rural poor against landlordism is critical to ensuring the broadest mobilisation against imperialism. 

While the development of capitalism in agriculture as well as the development of democratic and peasant movements have been uneven in the country, nowhere (including in the Left-led States) have pre-capitalist relations been eliminated. There are wide variations in the levels of socio-economic development and in historical background even among the three Left-led States, and it cannot be wise to offer a single set of solutions for all situations. For example, if one area in India today has a Permanent Settlement background, another has a history of predominance of ryotwari, and yet another history of tribal-communal ownership of land with shifting cultivation. Even today, a substantial part of the peasant economy in West Bengal is characterised by a combination of subsistence farming and commodity production. That West Bengal is the highest producer of rice and has a relative surplus with respect to rice production today is because of the fact that poor peasants who benefited from land reform have focussed almost exclusively on rice production to ensure their own food security. They had, after all, learned lessons from the food movement and its brutal suppression in the days when West Bengal was dependent on the supply of rice from the Central pool. Thus, a good part of the rice that these peasants produce is for their own consumption, and has only use value (and no exchange value).9 This is a form of security that they would like to protect. 

The fact that capitalism tends to destroy petty production shows that pre-capitalist relations are inherent in such production. That these relations survived so long is not because the Indian state after Independence has provided support in the interests of getting “crucial petty bourgeois support” for strengthening the base of capitalist development. They persist because of the inherent limitations of the development of the capitalist path pursued by the Indian state, which provides all its support for landlord capitalism (from above) and not peasant capitalism (from below). 

Let us reiterate an issue raised earlier in the article. While the solution to the present problems of petty production does not lie in corporate agriculture promoted by neo-liberalism, it is utopian to talk of “cooperatives and collective forms” (if those are to mean cooperative or collective farming) as an immediate alternative direction for the Left movement. Following the cataclysmic changes in the international polity and economy in the early 1990s, the discussion in the CPI (M) on “Certain Ideological Issues” concluded that production relations have to correspond to the degree of development of the productive forces. The point here is whether the Indian Left today can afford an alternative that is currently only being experimented with in socialist states. We are aware of some of the experiments pursued in People’s Republic of China. It may also be relevant here to quote the experience of the Communist Party of Vietnam with regard to collectivisation and co-operativisation: 

However, despite the positive factors, there was stagnation of production and food scarcities, given the lack of sufficient care of collective land. The life of peasants became more difficult and there were years when 3-4 million peasants suffered from food shortage while tens of thousands of hectares of land were left uncultivated…Thanks to the extensive and intensive reform already undertaken, Vietnam has been transformed from a food importing country into one that not only meets its own needs but can also export 4 million tons of rice every year.” 

Similarly, the Cuban experience is that the economic mechanism of the agrarian state sector was based on centralised planning with restricted enterprise autonomy, a limited market and little use of prices and finance. The mechanism was intrinsically expensive, inefficient and bureaucratic, which explains the unprofitability and high subsidies needed to cover losses that became unbearable for macroeconomic balance during economic crisis of the 1990s. The Cubans also recognize the existence of a powerful peasant sector, which is growing rapidly in the rural Cuban environment today. Of course we would prefer the cooperative peasant, once he represents a higher productive and social form in our society. 

As mentioned earlier, we in West Bengal believe that while cooperatives can help a lot in providing credit, other non-land inputs and services, and other forms of support, functional collectivisation in form of farmers collectively hiring machinery and so on, can provide support to sustain peasant farming. Some Left intellectuals not only lay lopsided emphasis on production relations or productive forces in isolation from each other, but also fail to take an all-sided view of other phenomena as well. There are problems of de-linking tactics from strategy, realisable demands from propaganda slogans, the immediate from the ultimate and, above all, practice from theory. 

The CPI (M) has to work for many alternatives. These include the socialist alternative (achievable only after the People’s Democratic revolution has been accomplished); the People’s Democratic alternative, which requires “the actuality of revolution” to occur; and the Left and democratic alternative, based on programmes to advance the cause of People’s Democratic Revolution that are worked out in Party Congresses. Our Party-led State Governments, however, cannot be expected to implement any of the alternative programmes mentioned above. Within the constitutional and other limitations under which they function, they offer alternatives that fall short of full Left and democratic programmes. 

It is clear that the alternatives that the Party proposes at the national level are not ipso facto applicable to Left-led State Governments. Sweeping formulations that do not take this distinction into consideration create confusion. When the Left Front Government talks about the need for “a shift of the agriculture-dependent population to manufacturing and other non-agricultural pursuits”, “competitiveness”, “Public-Private Partnership (PPP)”, “productivity increases”, “modernisation”, or even “investment”,     “development”, and “growth rate”, it is not unaware of the class content with which each of these terms is loaded. Terms such as these have meanings that vary with the class interests that underlie their use. Awareness of such class content also involves a recognition of the present change in correlation of class forces at the international level in favour, albeit temporarily, of imperialism. How the Party and movement are to engage with such a situation has partly been dealt with in the document titled “Certain Policy Issues” approved by the 18th Party Congress. 

There must be no confusion in our minds with regard to the difference between “Xian” and “Yenan”. Defence of the CPI (M)-led Governments and the Left bastions in the country is an integral part of the struggle against neoliberalism. 

NOTES

5. The Dept. of Development and Planning of the Government of West Bengal organised an International Conference in Kolkata from 3-6 January 2002 to provide a forum for discussion and debate on agrarian problems in less developed countries from a Left perspective. The papers presented and the discussions that followed the presentations were published that year by Tulika Books under the title Agrarian Studies. The volume contains useful material on the experiences of several countries and of West Bengal with respect to agrarian problems.

6. Consolidation of holdings was an option that we had rejected in the pre-landreform period, since, in those circumstances, it would have been used by the landlords and rich peasants to their advantage. Discussions in the 1990s on the same issue also roused no enthusiasm.

7. It must be noted that it is the use and not the ownership of land that has been privatised in China or Vietnam. Land itself belongs to the socialist state.

8. Marx points out that exchange value itself is the phenomenal form of value under commodity production, and value corresponds to “abstract labour.”

9. The trend of employment growth in petty commodity production sector at All India level, as analysed by C.P. Chandrasekhar and Jayati Ghosh, based on 61^st NSS Round, also shows a substantial portion of whatever little growth in employment we find these days has been in the self-employment (Social Scientist 406-407). 

Part of the article ‘On Agrarian Transition in West Bengal’, published in THE MARXIST, VOL. XXIII, NO. 2, APRIL TO JUNE, 2007.

Economic and Political Weekly, Vol XLVI No.32 August 06, 2011  

If doi moi (renovation) was a turning point in Vietnam’s history, the 2011 Congress of the D’ang Công Sán Viêt Nam (the Communist Party of Vietnam) has sent a clear message to the party leadership that it cannot rest on the modest success of past reform. The congress called for the immediate attention of the one-party government to basic economic, administrative and social problems. What will the impact of the congress be on the short- and long-term political and economic policies and strategies of Vietnam? 

In preparing this commentary, several documents presented at the Eleventh Party Congress were referred to. In addition, commentaries posted online at www.viet-studies.com, the government’s reports and the World Bank’s databases were also a good source of information. In Vietnam, the party and government circles decline to use the term “corruption” but use terms such as “misbehaviour by civil servants” or “malpractices”. Such semantics, party leaders agree, do not dilute the challenges ahead. 

Ly Thuong Kiet is based in Vietnam and studies Vietnamese society and politics. 

In January 2011, D’ang Công Sán ­Viêt Nam (the Communist Party of Vietnam) held its Eleventh Party Congress (EPC) in Hanoi. Prior to this, in February 2010, the party organised its 80th anniversary. In between these two events, the government battled rising inflation, the debt crisis of Vinashin (one of the biggest state-owned enterprises (SOEs)), and continued anxiety over foreign policy and tense ­relations with China. In short, it was business as usual. The finance ministry issued a ­circular on price control, leaders went on friendship missions to neighbouring ­coun­tries and a meeting of the Association of Southeast Asian Nations (ASEAN) was hosted in December 2010 in Hanoi. Meanwhile, within government circles, the ­impending party congress was hinted as the reason for delays in policy changes and for the slowdown in policy as well as decision-making. 

This note reviews the 2011 Party Congress in terms of its impact on the short- and long-term political and economic policies and strategies of Vietnam. It starts with a background on past party congresses, goes on to summarise the deliberations at the EPC and finally, analyses and discusses in detail the three key issues identified at the congress. 

Background 

Present-day Vietnam is a one-party state which draws its legitimacy from economic performance and nationalism, while the leadership and ministerial changes remain in the grip of the congress. It is in these two areas of economy and national sovereignty that the party is generally expected to guide and confront the leaders and government and reiterate its commitment to the people. Signs of this first emerged at the Sixth Party Congress in 1986, with the adoption of doi moi (renovation) strategy comprising several key measures and a road map for economic and admini­strative reforms. This process, in its broadest ­definition, encompassed many aspects of reforms, particularly changes in the role of the state in economic management as well as in the structures and ­systems of public sector management. The initial focus was on refor­ming economic institutions. 

In understanding the party-development arena in Vietnam, it is important to note that till 1986, the party was battling post-war issues with conservatives leading policymaking. The 1986 Congress saw the introduction of a “development model” framed as doi moi. The implementation of doi moi, between 1986 and 1996 coincided with the dismantling of the collectivisation system and the decline of Vietnam’s main economic partner, the Soviet Union. The period that followed included strategic political compromises with countries in south-east Asia, China and the United States, in particular. 

In early 1996, before the Eighth Party Congress, it appeared that the party’s conservative faction had gained ascendancy over those clamouring for reforms. Visible demonstrations of power included social evils campaigns opposing not only prostitution, gambling and drugs, but also adver­tising and commercial logos of products. Efforts were made to restrict the ­operation of foreign investors and their representatives. In sum, the 1996 gathering highlighted the tension between conservatives and reformers. The rift between conservatives and those pushing for reform became more pronounced in the following years, with both groups influencing specific policy documents and party platforms. However, the campaign against “social evils” whipped up by the conservatives only strengthened the reformers who pressed for further changes and greater openness in governance. A post-congress analysis concluded, “…the congress demonstrated the continuation of reforms ­under doi moi and that the party’s hold on the population remains strong” (Shivakumar 1996a, b). 

Between 1996 and 2001, the US-Vietnam relationship improved greatly, as ­Viet­nam joined the ASEAN and emerged as a strategic regional player. Memories of the brief cross-border war with China in the late 1970s and early 1980s were shelved, for the moment. With strategic alliances with the US and China on track and regional partnerships gaining momen­tum, Vietnam started to focus on economic performance. This phase saw mixed economic signals with the party stalling ­reforms to inefficient SOEs, while the macroe­conomy relied on foreign investment and exports to spur growth. During this time, the government made several ­attempts to maintain social subsidies and introduced social taxes to cover the costs of these ­subsidies. Despite continued economic downturns, the expanded role of the state in the national economy ­per­sis­ted. In ­hindsight, Vietnam attempted to go much further in shaping its economic ­policies than circumstances allowed. It appe­ared for a while that the party was changing, with younger and better-educated cadres taking the lead. Since grassroots and provincial party congresses were still in their nascent stages at the turn of the century, it was too early to discern which way the ­political winds were blowing. The dilemma of the political leadership ­became more obvious and the run-up to the 2001 Congress saw as much chaos as cohesion. 

After the Ninth Party Congress in 2001, most analysts concluded that because of the “start-stop” character of the reform, the party and government confronted ­significant challenges. The deliberations at the 2001 Congress reflected the impact of the Asian financial crisis that rocked the region in 1997-99 and the general ­nervousness prevalent in the region. The party faced serious resistance from ­ideologues anxious to protect the people from the consequences of the Asian financial crisis. On the political and social front, the party was struggling to come to grips with two critical issues: (a) the ­divide between the pre-war and post-war generations; and (b) the external influences that might ­persuade younger generations to ignore the party. The long-term influence of ­independent media and persistent rumours of government censorship were also discussed at the congress. Thayumanavan (2001) noted that this was problematic for the party because “the leadership had ­relied on its performance in the economy as the basis for its poli­tical legitimacy”. 

The Tenth Party Congress (2006) was convened in an atmosphere of anxiety, uncertainty and contention over leadership succession created by a corruption scandal involving high-ranking officials. The weeks preceding it saw the resignation of the minister of transport and the arrest of his deputy in a multimillion dollar gambling scandal. He resigned after sustained media criticism over the scandal, a rarity in Vietnam. The government and party leaders were rattled. The country’s most powerful voice, General Vo Nguyen Giap issued a public statement asking the party to address this issue in the national congress. Taking note of the tense situation that prevailed before the congress, for the first time in the history of Vietnam, many newspapers opened discussion forums. On the issue of corruption in public life, the party congress acknowledged that corruption was a serious obstacle to development and combating it was the party’s central priority. However, the extensive debate at the party congress established that the leadership continued to be ambi­guous and perspectives tended to vary. 

At the 2006 Congress, three people, ­including the minister of transport and his deputy, were removed from the list of party delegates. Several analysts (for example, Koh 2006) had argued that the final distribution of ministers and top party delegates, at the conclusion of 2006 Congress, showed a marked departure from the ­regional representation formula. Further, at the 2006 Congress, the party also faced changing attitudes among younger leaders and delegates who had become more assertive. The majority of the delegates demanded amendments that would allow party members to participate in the private sector. The congress ended with a reiteration of Vietnam’s commitment to equity and social justice for disadvantaged individuals, groups and regions. It was emphasised that this could only be ­achie­ved through socialist principles and strategies – a cue for senior party members to take over; younger leaders retreated to the wings. In sum, the congress showed a ­remar­kable increase in intraparty ­demo­cracy and willingness to go beyond mere economic growth; but it also saw ­conservatives consolidating their ­central role in policymaking. 

Highlights of the EPC 

The 2011 Party Congress held on 11-19 January in Hanoi was billed as an event to assess the past and chart the political and economic future. Preparations and consultations for the EPC began in late 2009 at all levels, from the villages/communes to national stage. Party cells reviewed the work of the preceding period and sub­mitted a report to the central committee. Through this process, a full draft of the political report was prepared in early 2010. This document contained detailed strategies and procedures to be followed. It allocated responsibilities and tasks for the party and the government, and was then submitted to the party congress for discussion and adoption. These preparatory activities were fairly open, and even outsiders were allowed to join and ­observe. This characterises the political quality and inner strength of the party and its cadre. The 2011 Congress was atten­ded by around 1,800 delegates from the district level upwards, where except for the opening and closing events, the ­deliberations were closed. 

To start with, 2011 marked the silver ­jubilee of doi moi policies for political and economic reforms in the country. The ­extent of openness of the Vietnamese eco­nomy was raised at various party forums and platforms. Also given the recent changes in international relations and the tensions with China, it was important to discuss and decide what kind of foreign policy ­Vietnam was expected to pursue in future. Three important areas were discussed. First, ­foreign policy and national sovereignty ­issues, as Thayer (2010a) describes, ­repeatedly referred to the growth of hostile forces and the need to pursue peaceful ­evolution (the term “peaceful evolution” refers to the plots by hostile external ­forces, in alliance with domestic dissidents to take advantage of buzzwords like ­human rights and ­demo­cracy to overthrow communist rule); ­second, the need to ­focus on the quality and efficiency of macroeconomic management and economic development; and third, the issue of corruption and calls for greater openness and transparency in government and party functioning. 

Foreign Policy 

The bilateral relations between Vietnam and the US have been troubled by years of occupation and war. Meanwhile, bilateral relations between Vietnam and China have seen extended periods of cooperation and occasional conflicts triggered by regional rivalry and border issues (including a brief border war in 1979). Vietnam’s military intervention in Cambodia in 1978 caused tension with both the US and China. Since then Vietnam has worked hard to improve its relations with both these ­superpowers. However, there have been occasional terri­torial skirmishes between Vietnam and China since the 1980s, and in the last decade, we have begun to witness a growing economic rivalry too. 

There are clear signs of domestic discontent and anti-China sentiment, notably since 2007, with students leading anti-China protests in Hanoi and other cities. Commentators like Carlyle Thayer, arguably one of the most knowledgeable on the political scene in Vietnam, reasoned that the anti-China rhetoric within Vietnam’s political elite was triggered mainly by ­China’s attempt to slow down Vietnam’s marine economy. There were news reports that China even threatened foreign investors (ExxonMobil and India’s Oil and Natural Gas Agency) that their commercial interests in China would suffer if they ­invested in Vietnam. Thayer (2010b) ­deduced that these actions had a negative ­impact on Vietnam’s party conservatives, who prior to 2007, generally remained pro-China. But the public protests resulted in several leaders calling for self-reliance in national security and the party faced a dilemma: Do we allow nationalistic sentiments to rule, as students were seen as patrio­tic, or clampdown on them? The government and party conservatives opted for a wait-and-see approach. However, in 2008-09, the anti-China sentiments took centre stage. Several leaders questioned the handling of the government’s bilateral relations with its northern neighbour. By late 2009, a loose network of ­Vietnamese opinion leaders had come together to question the government’s role in protecting territorial integrity and ­sovereignty. The spread of anti-China sentiment was instant, moving from a small group of ­political elite to academics and the common people, adding a new dimension to the one-party state in Vietnam (Thayer 2009 and 2010b, c). Such protests were doused by the government which ­acknowledged that China’s approach was not acceptable, while simultaneously working to strengthen the bilateral ­relation and its share in the regional economy. 

Continued domestic pressure within ­Vietnam led to a recognition in Beijing that its relations with its southern neighbour could not be taken for granted. Within the Chinese leadership, there was recognition that in the near and medium terms, ­Viet­nam would not develop into a rival economic or political power. Moreover, while the ASEAN countries welcome China’s good neighbour diplomacy, they are not appeasing it either and are in fact strengthening their relations with other major powers such as the US, Japan and India. All these factors resulted in China slowing down and adopting a good neighbour diplomacy ­approach. This did not prevent the 2011 Congress from deliberating on this issue albeit in subtle ways. 

The documents prepared for the EPC made several references to hostile forces and peaceful evolution, revealing the pro­minence of the security-conscious group of party leaders (Thayer 2010a, b and Thayer 2011). These leaders believed that reform was necessary but “peaceful evolution” was the real danger. The political position of the security proponents was that bilateral trade agreement with the US brought benefits but might also hurt the security of the party, which could fall prey to the American global agenda to spread democracy, in the US style. They cited ­instances like continued demands by the US government on domestic issues in ­Vietnam, such as curtailing the suppression of political and religious dissidents. The other group of leaders, who were pro-­reforms and “reaching out” to the US and other ­nations called for broad-based economic and political potential of Vietnam. The country’s work as part of the ASEAN was often cited as an example. In any case, a balan­cing act was needed on the part of the government. 

In response to hard-line rhetoric, party leaders added their voice to calls for greater caution in Vietnam’s foreign policy. All said, despite differences between the two nations, the China factor always plays a special role in Vietnamese politics. In sum, a challenge faced by the leadership was how to further develop foreign policy while reassuring every section (including the war-veterans, pro-liberals, conservatives and both pro- and anti-China factions) that the future course would be just and fair. That said, overall, Vietnam’s ­bilateral relations and regional alliances have made steady progress, a factor which China could not afford to ignore. 

Macroeconomic Management  

In Vietnam, central planning was never as entrenched or as pervasive as it was in other transition economies. Rural production remained independent and national policymaking affected only a limited range of goods and activities, even though ­doi moi introduced a contract system for ­agri­cultural production, allowed state ­enter­­prises to trade in open markets, and relaxed administrative constraints on ­private sector activity and domestic trade, allowing rapid development of private markets for agricultural goods. Despite statements to the contrary, the country’s overall financial health and persisting ­inequalities continue to raise questions at the congress. 

Despite the global downturn, the growth rate of the gross domestic product (GDP) of Vietnam reached 6.7% in 2010 with GDP touching $102.2 billion. Vietnam’s industrial production has also grown. Industry and construction contributed about 40% of GDP in 2010, up from 27.3% in 1985. ­Agriculture remains the mainstay of the economy and Vietnam continues to be among the world’s primary exporters of rice. Increasingly, the key drivers of growth have been accelerated international integration, market liberalisation and job ­creation in the private sector. Despite progress, by 2010, the trade deficit was up to $13 billion. Inflation continued to be one of the most troubling challenges for ­Vietnam in the past few years. On a year-to-year basis, in 2010, inflation averaged about 10%, much higher than the estimates. Rising inflation has been partly ­influenced by several factors such as ­spiralling world food and oil prices and frequent floods in the country’s central provinces. From 2007, the government ­resorted to various measures to curb ­inflation by tightening monetary policy, cutting public expenditure, ­issuing admini­strative orders for price control, and so on. Yet, inflation remained high with food inflation higher in several provinces. The estimated 10-12% gap between the ­official and black market exchange rates was seen as the basis for the weak foundations of the economy. With rising inflation and trade deficits, macro­economic stabilisation turned out to be the priority for the government. In recent years, ­subsidies have been cut, though state ­enterprises still receive priority access to resources, including land and capital. However, to date the government continues to ­maintain control of the largest and most important companies. 

At the government-donor dialogue in December 2010, while pledging sums ­totalling $7 billion as development assistance, several multilateral and bilateral ­institutions stressed that macroeconomic stability should be recognised as a pre­requisite for Vietnam to accelerate its socio-economic development as a middle income country. They also cautioned that in combating and restoring stability, ad hoc and trade restrictive measures such as the new price registration and import licensing systems are unsustainable. 

Most recent studies confirm that Vietnam has achieved substantial economic progress in terms of poverty and inequa­lity, since the doi moi process began in 1986. Since 1993, the growth in real GDP has ­averaged around 7.5% a year and the ­poverty rate reduced from 58% in 1993 to about 13% in 2008. Additionally, the in­equality in per capita expenditure is relatively low in Vietnam by international standards. However, both poverty and ­inequalities continue to persist along with ­unequal ­access to productive resources – raising serious concerns at all levels. Commentators have argued that wage and ­income disparities have already had an impact on urban-rural divide and government expenditure. Acknowledging such concerns, in spite of recent progress and the country’s gradual transformation into a manufacturing and services-based eco­nomy, party delegates have declared poverty as the most important issue to be addressed. 

The congress debated on the centrality of core development issues over related policy areas such as trade, migration, minimum wage for workers, climate change and good governance. Some of the pre-congress documents and reports examined how institutions are governing and handling wage rates, trends in employment and unemployment, inequality, diffe­rential access to home ownership, etc. The documents also acknowledged that poverty has been concentrated in social and geographical pockets and gender ­remains a significant determinant of poverty. Documents shared at the congress acknow­ledge that income inequality was greatest in large cities and parts of the ­upland areas. Not surprisingly, these areas were also large-scale labour supplying zones. The number of extremely poor people was found to be very low but this was off-set by losses in wage-inequality and ­resultant household income inequalities. About two-thirds of the in­equality was found within districts rather than between them. At the congress, there were calls for continued social sub­sidies and ­enhanced ­social safety nets for the poor. In the era of galloping inflation, low wages and large income disparities are a marker for discontent. 

Any discussion on poverty and income inequality in Vietnam leads to a debate on escalating administrative corruption levels. This was well-illustrated by an event that shocked the nation in 2007. That year, in response to the serious ­economic damage caused by the floods, the central government disbursed $12 million to impoverished Vietnamese in the run-up to the Vietnamese new year (Tet). These cash handouts were apparently pocketed by corrupt local officials, sending shock waves across the nation. In some provinces, local officials had deducted “tea money” or the gifts were taxed to the point that there was little left. It tarnished the government’s image to such an extent that the leaders are still struggling to recover from this shame. But few were surprised by this evidence of rampant corruption in admini­strative circles, not a comforting situation for any government. 

Some commentators have concluded that both Vietnam and China have a ­high level of de facto decentralisation of the state functions and activities and this results in a high potential for informalisation and corruption, and a growing set of performance accountability problems in the delivery of public services. While some of the issues raised in this analysis may be relevant, others demand more debate. Nevertheless, it is increasingly recognised in Vietnam that there is a growing gap ­between the clear need for expansion in services production and delivery, and the declining capacity of the state to ensure accountability and performance (for example, Painter 2008). 

Corruption and the Need for Openness and Transparency  

The party wants to gain people’s trust through efficient administration and making civil servants free of corruption. The party’s concern for legitimacy also requires its leaders, even today, to distance themselves from Vietnam’s domestic business people. That way they would be able to justify the continuation of their one-party rule. Since inefficiency and widespread corruption would lead to the collapse of the political system, administrative ­reforms have been initiated since 1991. But it has also been argued that excessive reform could loosen the party’s grip on the government and bureaucracy. In facing this dilemma, as several analysts have ­observed, in the initial phase of doi moi the party seems to have tolerated a certain degree of misappropriation as a necessary evil. They also point out that due to budgetary constraints Vietnamese civil servants are poorly paid and therefore seeking additional income to maintain a family was seen as acceptable. In sum, this group has argued that what matters is not whether there was an exchange of money outside the rules for performing certain admi­nistrative tasks, but how large that sum was and whether they fairly shared it among themselves. This subtle approach in understanding “corruption” has in many ways prevented any serious charges of corruption being levelled against party leaders, at least till 2006. 

The scandals that broke prior to and in 2006 (Nam Cam scandal in the south and ministry of transport, at the national level, to cite two ­examples) damaged that image. On this subject, some liberals had taken a circuitous route and highlighted, even at the 2001 Congress, that preventing party ­cadres from holding private property or engaging in business or small trade has led to double standards and is not feasible. There were others who argued that the essential reform needed to meet the minimum requirements of governance for initiating sustained growth was ideal for encouraging clandestine business and property holdings, which, they reasoned, allowed corruption at various levels. At the 2011 Congress, the party, for the first time in its history, saw delegates openly calling for stringent anti-corruption measures, particularly among higher echelons of leadership, highlighting the significance of good governance. This was attributed to the fact that not only the party, but the government is also smarting from the floodgates opened by the 2006 revelations of corruption involving high-ranking officials in the ministry of transport. More such revelations of administrative corruption in government circles have emerged since then. 

Land and Natural Resources 

If the ministry of transport dominated discussions at the party congress in 2006, land and natural resources sector was in the limelight in 2011. Stories of land-related corruption are all over Vietnam. Dang Hung Vo, former vice minister and a party delegate and one of the authors of recently completed research on this subject, reasoned that unless the party and government leaders focus on greater transparency and accountability in land administration and management, risk factors inherent in triggering bribery and corruption will be hard to contain. He reasoned that government officials assigned to safeguard the system are in fact a large part of the problem, particularly at senior levels. He advocated the establishment of public checks and balances, failing which the scale and volume of corruption within the government circles are bound to escalate on land matters. This was reflected at the party ­forums at the provincial and national levels too, with delegates demanding an open and transparent process for land ­allocation for private and public purposes and payment of adequate compensation for acquired land. There were suggestions that the government should focus on land use efficiency as part of broader rural ­development and food security. Given the intensity of the issue nationwide, not surprisingly, the minister for land in Vietnam Pham Khoi Nguyen was voted out at the party congress for poor performance, and inability to control corrupt practices in land management and he lost his nomination to the next cabinet. His failure to be renominated was described as a way to create space for newer and younger party leaders in government. Though, the 2011 Congress did not see many changes to the leadership line-up, it is a clear signal that the party is taking corruption charges ­seriously. Clearly, political and government circles are nervous about the subject of corruption in public offices and the growing number of capitalists, drawn mainly from the country’s political elite. On the issue of corruption, so far, the govern­ment is seen as lagging behind in gaining public confidence. 

In highlighting the area of foreign ­policy and governance, the openness of the media came in for serious deliberations. Delegates pointed at the recent govern­ment executive order that banned local journalists from using unnamed confidential sources in their reports as this would impede “people’s interests”. Obser­vers commented that the selection of Nguyen Phu Trong as party’s secretary general at the January 2011 Congress should be seen as a hardening of the government’s stance towards the media. It was reported that at the beginning of the congress, Dinh The Huynh, the editor-in-chief of Nhan Dan, the party’s official news outlet, joined other leaders of the party ­hierarchy in calling for an end to all forms of pluralism. On the other hand, the party has taken a serious note of widespread discontent on administrative corruption and has given a definite signal to the government to crack down on erring party cadres. Such exposures are possible only because of a free flow of information, the party acknowledged. Additionally, the younger generation is already hooked on to the outside world through the internet and other means placing an additional burden on the “old” school which assumes information flows only from newspapers or tele­vision. Finally, occasional media clampdowns should be seen as a part of a process by which a country like Vietnam incrementally attains maturity, and, therefore, cannot be interpreted as signs of government control or denial of free infor­mation flow. More broadly, Vietnam may provide a valuable lesson on what can happen to a single-party state if it persists in curtailing free media while ignoring the threats posed by rising food inflation and economic inequalities among its population, along with increasing incidence of corruption and changing attitudes among younger leaders and party delegates. 

Prime Minister Nguyen Tan Dung himself was attacked by conservative ideo­­lo­gical groups for his management of the economy. Several influential leaders held the prime minister and his government culpable in the Vietnamese financial crisis of 2007 that predated the global one, as well as the macroeconomic instability in late 2010. The near-bankrupt Vinashin, the shipbuilding conglomerate, which is directly under the control of the prime minister, further dented his reputation and rumour mills claimed that more such collapses are in the offing. The new forest and mining concessions, mostly given to Chinese, also put the government in a bad light. Despite all these allegations, the prime minister and his colleagues are not held responsible for the failures, as the ­political analyst Koh and others put it, “benefiting from the system of collective political leadership where all major decisions taken by the PM are duly endorsed by the party’s political bureau”. In reality, the political bureau is supreme as it has no institutional counterpart to place checks and balances on the decisions made. Hence, the party is less critical of the prime minister and the government as a whole. In the end, the 2011 Congress endorsed only a modest leadership changes. 

While several commentators deduced that while the leadership line was a strong ­indication of continuity, there are prota­gonists who believe that change is possible within this or the next generation, and strong pressures must be put on the leaders to effect these changes as soon as possible (Koh 2011). This group was quite ­active in their reasoning that any delay in effecting changes would be irrevocably late. In that sense, while the 2006 Congress saw the decline of regional ­distribution of ­party and government ­positions, the 2011 Congress reaffirmed the Vietnamese ­political culture that places a high premium on unity and consensus. In endorsing the government and leaders, the 2011 Congress also reaffirmed its support for the SOEs and termed SOEs as “state sector” and a key for economic development. 

Time for Policy Changes 

This article began with the objective of ­understanding the party’s continued role in Vietnam. An essential task before such an analysis, however, is to determine exactly the extent of opening and openness the country is seeking and the party’s role in it. In that sense, the first 25 years of doi moi has seen modest and gradual change. A noteworthy aspect of this modest record is reflected in reforms pursued across the economy, progressively declining the role for the SOEs, administration, media freedom, and continued emphasis on social subsidies. Broadly speaking, the reforms have triggered economic growth without disturbing national institutions. It now viewed the economy as a combination of government enterprises, institutions and other private sectors. There has been a significant advance in Vietnam’s regional integration as well. The experiences have also dispelled notions that communism and one-party rule are biased against the market economy, with privileged policies, limited access to information, and so on. This cannot be seen as a characterisation of the strategies at work in Vietnam. Also, the party’s continued role in state affairs, particularly in defining the strategic directions in political and economic affairs ­remains solid. 

On the economic front, it appears, however, that returns from the first round of economic policy reforms are dropping off as international competition picks up, mainly in rice and other products. While the economy has been responding well to the changes summarised above and the country is able to weather frequent economic shocks, the legacy of many years of running the economy on a war footing meant that many of the legal and insti­tutional underpinnings remain poorly ­developed, as are the mechanisms of ­public financial management. These were ­well-illustrated by the numerous public protests and simmering discontent on corruption and governance that have come to pervade large parts of the country in recent times. The state and the party system remain slow in responding to these paradigm shifts. Across dominant streams of thought and policy prescriptions, the general consensus seems to be that the govern­ment is the problem. Noting this, the 2011 Congress acknowledged the persistent gap between laws and implementation. The party debated at length about the ideological and strategic implications of reform, and the challenges of reconciling the transition with the prevailing ­socialist orientation sending positive signals across the board. There were marked debates on the government’s inability to manage inflation, escalating food inflation in particular, national debt, rising unemployment, wage inequalities, continued importance of SOEs to the national economy, and corruption. While Vietnam is on track to achieve middle-income country status in the coming years, its more ambitious goal of becoming an industrialised country by 2020 and simultaneously, ­reduce the level and extent of poverty ­demands institutional and policy changes, i e, some hard decisions from the party and the government.

The deliberations at the congress suggest that corruption has been flagged, as has the need for good governance. This has now become associated with the ­legitimacy of the party itself and sidelining the issue was not easy. On the subject of corruption, a large majority of party delegates seem to believe that a broad interpretation of good governance fails to acknowledge the importance of the stages of development the country is currently in. This group tends to reason that administrative reform is a vast and complex process with a significant financial burden. Opponents to this view contend that vested interests and rigid conventionalism prevent any desirable measures. Equally interesting is the fact that common citizenry is willing to freely discuss the issue of corruption and informal payments. And with a few exceptions, even those who deny large-scale corruption are seriously concerned with day-to-day events. The congress sent a clear message that a developing nation like Vietnam cannot afford to take refuge in archaic or regressive assumptions that are divorced from both reality and their past experience. Finally, no society is perfect. Each has its inescapable inequalities and injustices which need to be redressed. The challenge for Vietnam’s party leadership is to get its members to see this and then mobilise moral and ethical energies in the state, party, and indeed, the nation.

The 2011 Congress confirms that in terms of discussions on corruption and governance, Vietnam has advanced beyond the wildest imagination of any previous era. A positive outcome, however, has been an increased popular awareness and party and government’s eagerness to avoid public reprisals. It has also triggered calls for delimiting the government’s role in economic matters and putting in place a number of support measures to encourage greater transparency in the public sector and government operations. In the medium to long run, with the twin challenges of corruption and foreign policy, it ­remains to be seen if the government will continue to maintain its independence or if the party will feel obliged to intervene in the functioning of the government. In any case, Vietnam is worth watching this decade for more than just its feud with China over a few islands in the South ­China Sea though that would demonstrate the country’s willingness to take political risks to protect its economic growth and independence. 

Conclusions 

The diversity of experiences, the variety of institutional changes effected, and the significant variation in its political and economic policies the country has pursued since doi moi has shown that most of the initiatives and efforts were taken with a clear focus, commitment and a willingness to learn. There has been continuing debate about the benefits and costs of poli­tical and economic reforms. It includes the ways in which patterns of investments in agriculture, industries and social services are grounded. The initial evidence suggests that provinces and regions continue to maintain autonomy both at the party and government structures. Recent reports of corruption and governance warn against complacency over the sustainability of the development strategies and in turn, doi moi. In case of leadership, the Tenth Vietnamese Communist Party Congress in April 2006 carried out significant changes in the party leadership and govern­ment. The congress showed increased intra-party democracy. However, no significant changes were made in the 2011 Congress and only a handful of ­leaders lost renomination to the government, though it importantly included the minister responsible for land management. The wait continues for the younger leaders to emerge. Taken together, the 2011 Congress signalled no significant change in Vietnam’s political system, with the D’ang Công Sán ­Viêt Nam maintaining a single-party state. But governance ­reforms are clearly underway, driven by economic reform and a desire to maintain social stability. In that sense, in incre­mental terms, governance is changing. 

If doi moi was a turning point in Vietnam’s history, the 2011 Congress has sent a clear message to the party leadership that it cannot rest on the modest success of those reform processes alone. It called for attention to more basic issues about the economy, social safety nets and social protection measures and administrative reforms to deal with the overall problems of governance. With regard to corruption, while government programmes and measures do not provide solutions to all problems, they do carry with them authority and resources to change behaviour. Many of the goals of the party could be best achieved by improving the status of the masses through public policy. The party has a challenge of ensuring that its goals and objectives are not ignored in the ­public policy initiatives. One thing that became obvious is that a thorough overhaul of the government and its institutions and policymaking should be at the top of the agenda, if the leadership is to leave a legacy of its own. 

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