The Times has two interesting editorials yesterday and today ("What Is to be Done?" and "We, The State") which highlight not only a possible divergence on the editorial board but express an embryonic divide between the conservative "Right" and the social democratic "Left" of the Anglophone classes. The first editorial excoriates the state for not doing its job viz. "governance," especially on terrorism, while the second bemoans the tendency to blame the state for everything, as if the state were anything other than a reflection of the society from which it springs. If the first editorial chides the state to "Be better!" so that the rest of the nation can get on with the business of becoming a superpower, the second calls on all of us to "Be better citizens!", to renew the "social contract" that distinguishes a democratic republic from a colony by practising everyday democracy. The latter is the more fruitful message by far, but it does not go far enough in either diagnosis or solution.
Our problems will not be solved by skirting around formal electoral politics, but to get us to "play our part" fully we need an education system that produces more than technical excellence. To put it in corporate vernacular, citizenship is a soft skill. If our education system is to produce the soft skill of citizenship, it needs to be well-rounded. Strengthen the humanities and the social sciences, and universities will produce well-rounded individuals with the civic and humanistic sensibilities required of a productive polity. Some of these individuals will then value formal politics enough to enter the electoral game and shake it up, creating the meaningful diversity in the polity that is required to produce a robust social contract and strong democratic institutions. Fix the universities by, inter alia, rounding out the curriculum, and you'll fix the nation.
The position of the "Right" predictably crows on about "governance" as if there were a menu of institutions that, if only our wretched politicians had the "political will" to implement, we'd become the mighty nation we ought to be. While admittedly a caricature, this description does indicate an ironic commonality that this position has with the Nehruvian socialists it loves to hate: both have a Plan, all that is missing is (another favourite catch-all term) execution. What the nation needs, therefore, is a CEO. This of course implies share-holder democracy, an institution whose naturalization of inequality is what makes this position conservative and dangerous.
Against this, the "Left" seeks to redefine the State not as something "out there" but as part of a robust quid pro quo that Society has with itself. It implicitly understands that, at the level of society, one cannot simply lay out a menu and execute it without executing democracy itself. While the "Right" would have no qualms about getting rid of democracy (as Sunil Sethi yelped after the Olympic opening ceremony, if democracy can't do the business, what good is it?), the "Left" rejects this on grounds of both principal and pragmatism. It understands that the social contract is not a thing but a process, the very process by which we get strong institutions. It is because this contract is broken, because "we" sit back and loath the state for its lack of will, because "we" have utopian dreams of benevolent authoritarians like good CEOs, that we all are in the present condition. "We" have failed to get our hands dirty with the process of practising democracy, and we all are paying the price.
Yet in pushing us in this direction, the "Left" concentrates on the practise in between elections, claiming that we pay too much attention to elections themselves. While it is undoubtedly true that a strong social contract must reach into the rootlets of everyday life for enrichment, and true that this level of democratic practise has been disastrously ignored, do we not compound our folly if we over-concentrate on the root rather than the trunk?
Elections are ritualized because it is the same set of people running the show, leading to a monopoly which the "Right" correctly sees as leading to criminal inefficiency. Yet the solution is neither centralized corporatization of the state nor simply a ramping up of civic sensibility. It is to enter the messy domain of electoral politics and enrich the process of democracy with a greater diversity of actors.
To examine this lack of diversity in our central political process, we have to disaggregate a little. Who is the "we" who prefer to concentrate on "pursu[ing] our individual fortunes and tend to our private corner of this land"? Clearly this cannot refer to the many thousands who are politically mobilized and participate in elections. The reference is plainly to a set of classes who have been locked out of the political process for too long.
The middle classes, people whose main asset is their human capital, are effectively disenfranchised in our polity. Politics is not a noble pursuit for these individuals. To merely engage in it in any form is to be tainted. Thus the highest expression of civic duty, representing your peers in the collective sovereign body, has been abandoned and indeed demonized by this broad section of society. What results is a debilitating political monoculture.
Now, I would not for a second blame people for demonizing the present political class; it has atrophied our public institutions to a truly criminal degree. But have "we" not left them to it? What prevents a broader section of the middle classes from seeking out politics as a viable and noble profession, I would submit, is not only the abysmal state of play in formal politics but a real problem with the supply side: our citizen factories, the universities, are broken. Without valuing politics as a civic pursuit, we are condemned to outsource it to gross opportunists. Without strong humanities and social sciences, we are equally condemned to a back-office economy. Fixing the universities by rounding them out will create the human capital required for both a strong economy and a vibrant polity.
Saturday, August 16, 2008
Wednesday, August 6, 2008
Class is Thicker Than Communalism
Pratap Bhanu Mehta's impassioned plea for a genuine secular position in the polity is well received and sorely needed; indeed, this blog echoes his call, albeit for a position further to the left ("A Country in 40 Acres.") To my mind, he succeeds in trumping Omar Abdullah's "ridiculously feted speech" by showing how the political class fails to even attempt to alter the terms on which discussions like the Amarnath issue happen. They opportunistically cave-in to communal logic, even, ironically, if their own self-conception is "progressive," as Abdullah's no doubt is.
What is rather sad, however, is the accompanying editorial from the IE, "India's Identity." In trying to echo Mehta's statesmen-like posture, the editorial tries it hand at rising above the fray by calling for what Americans call "bipartisanship": reaching across the political divide to solve something that is of "national" importance. In this case, the Congress is being asked to reach over to the BJP.
Now, Mehta has already noted the emptiness of calling a position national rather facing the communal issue directly. While the editorial no doubt sees itself as avoiding this pitfall by pointing out the dangers of communalizing the Valley, it can't help but exude upper class anxiety at the spillover effects of communal violence. Bipartisanship is often the guise that class interest dons when its basic concerns are so threatened that petty squabbles between, say, the Congress and the BJP have to be put aside.
The same was called for by the IE on the nuclear deal, and the same has been the evidence with economic reforms, wherein a nominally swadeshi party has been happy to continue neoliberal reforms that are anything but. The parallel between the Congress continuing the BJP's nuclear jingoism in more palatable forms and the BJP continuing the Congress' economic reforms is really a clear statement of the common underlying class interest at work. The audacity to call this national interest not only occludes the communal underpinnings of the matter, it does precisely what the editorial either knowingly or ignorantly indulges in, namely the positing of a narrow interest at the national interest.
What is rather sad, however, is the accompanying editorial from the IE, "India's Identity." In trying to echo Mehta's statesmen-like posture, the editorial tries it hand at rising above the fray by calling for what Americans call "bipartisanship": reaching across the political divide to solve something that is of "national" importance. In this case, the Congress is being asked to reach over to the BJP.
Now, Mehta has already noted the emptiness of calling a position national rather facing the communal issue directly. While the editorial no doubt sees itself as avoiding this pitfall by pointing out the dangers of communalizing the Valley, it can't help but exude upper class anxiety at the spillover effects of communal violence. Bipartisanship is often the guise that class interest dons when its basic concerns are so threatened that petty squabbles between, say, the Congress and the BJP have to be put aside.
The same was called for by the IE on the nuclear deal, and the same has been the evidence with economic reforms, wherein a nominally swadeshi party has been happy to continue neoliberal reforms that are anything but. The parallel between the Congress continuing the BJP's nuclear jingoism in more palatable forms and the BJP continuing the Congress' economic reforms is really a clear statement of the common underlying class interest at work. The audacity to call this national interest not only occludes the communal underpinnings of the matter, it does precisely what the editorial either knowingly or ignorantly indulges in, namely the positing of a narrow interest at the national interest.
Flogging a Dead Dinosaur
The main impetus behind this blog is to try and encourage some diversity in mainstream political commentary. What is sad is that, with the decline of the left-nationalist position of Nehru, all we have for political options are from the blatantly neoliberal Right, which come in either CII/FICCI or BJP flavours. This is by no means to romanticize the utter elitism and naive scientism of the Nehruvians, but merely to bemoan the fact that the sclerotic nature of the dinosaur Left has seemingly poisoned the well of all Left-of-centre critique. This leaves the ground open for liberals of all stripes to feed their shallow triumphalism by repeatedly flogging an ideologically (if not, sadly, politically) dead dinosaur.
The latest rendition of this comes from Dhiraj Nayyar's Op-Ed in yesterday's IE, "Left Behind...by Kamal Nath." His contention is that on both grounds of dinosaur-Left concern, the state's immunity from special interest capture at home and Indian sovereignty abroad, liberal economic and political policies have done better than anything proposed by the Left's worn out ideology. Specifically, economic reforms have led to amazing growth which has in turn strengthened India's geo-political hand, as witnessed by both the nuclear deal and the collapse of the WTO talks.
This main indeed be true, but it is an exaggeration to claim that "[t]he fact — and again let’s face it — is that the biggest threat to the autonomous functioning of the Indian state comes from actors within the country, not outsiders. It is the push and pull of coalition politics, which extracts the heaviest price, in policy (concession) terms, from the Indian state." The solution, so sorrily predictable, is to scale back the state to the point where "interest group capture" is minimized into insignificance.
This standard Right-wing line, phrased in the faux common sense of all second-hand dealers in ideas, is based on some very convenient oversights. First, to reduce something as complicated as international relations to a "win" in the nuclear deal and a "win" at the WTO is simply boyish. There is little doubt that emerging powers have more leverage in international fora than at perhaps any time in the postwar period, but to go from that to a claim that the major blockages to autonomy are internal is to paint all elected opposition as enemies of the state! Surely this is a slippery slope to fascism? Neoliberals want a small state, but they want it to be their state none the less.
Secondly, economic growth has been radically unequal, and on the whole there has been little net job creation. Inequalities have consequently multiplied. It is precisely this growth in inequality that has given licence to such blatantly one-sided opinions. Therefore for Kamal Nath to pose as the champion of the farmers is more than a little rich. What Nayyar calls special interests are in many cases countervailing forces reacting to this rising inequality, despite the fact of expression in the venal idiom of Indian politics.
The state is the only mechanism the economically and socially deprived have to redress their condition; the market works for those with these assets. Indeed, for any size of state, the asset-rich will have disproportionate access to its resources. The smaller the state, the less access for everyone in proportion, which still means greater access for the well-off. It is to counter-balance these special interests that the Indian state has expanded to its current bloat.
It is not simply that inefficiency is the price of democracy, it is that access to the state comes from years of political mobilization. Access may have gone too far in the direction of inefficiency, but to call for a minimal state is to bat for special interests in a manner that would over-correct in the disastrously opposite direction. The call for a minimal state may either be an elitist fantasy or a strategy to ask for a Ferrari and settle for a sedan, but either way it avoids serious talk of reform. It also scores very cheap polemical points for a very narrow position by impaling the stuffed-shirt socialists on their own folly.
The latest rendition of this comes from Dhiraj Nayyar's Op-Ed in yesterday's IE, "Left Behind...by Kamal Nath." His contention is that on both grounds of dinosaur-Left concern, the state's immunity from special interest capture at home and Indian sovereignty abroad, liberal economic and political policies have done better than anything proposed by the Left's worn out ideology. Specifically, economic reforms have led to amazing growth which has in turn strengthened India's geo-political hand, as witnessed by both the nuclear deal and the collapse of the WTO talks.
This main indeed be true, but it is an exaggeration to claim that "[t]he fact — and again let’s face it — is that the biggest threat to the autonomous functioning of the Indian state comes from actors within the country, not outsiders. It is the push and pull of coalition politics, which extracts the heaviest price, in policy (concession) terms, from the Indian state." The solution, so sorrily predictable, is to scale back the state to the point where "interest group capture" is minimized into insignificance.
This standard Right-wing line, phrased in the faux common sense of all second-hand dealers in ideas, is based on some very convenient oversights. First, to reduce something as complicated as international relations to a "win" in the nuclear deal and a "win" at the WTO is simply boyish. There is little doubt that emerging powers have more leverage in international fora than at perhaps any time in the postwar period, but to go from that to a claim that the major blockages to autonomy are internal is to paint all elected opposition as enemies of the state! Surely this is a slippery slope to fascism? Neoliberals want a small state, but they want it to be their state none the less.
Secondly, economic growth has been radically unequal, and on the whole there has been little net job creation. Inequalities have consequently multiplied. It is precisely this growth in inequality that has given licence to such blatantly one-sided opinions. Therefore for Kamal Nath to pose as the champion of the farmers is more than a little rich. What Nayyar calls special interests are in many cases countervailing forces reacting to this rising inequality, despite the fact of expression in the venal idiom of Indian politics.
The state is the only mechanism the economically and socially deprived have to redress their condition; the market works for those with these assets. Indeed, for any size of state, the asset-rich will have disproportionate access to its resources. The smaller the state, the less access for everyone in proportion, which still means greater access for the well-off. It is to counter-balance these special interests that the Indian state has expanded to its current bloat.
It is not simply that inefficiency is the price of democracy, it is that access to the state comes from years of political mobilization. Access may have gone too far in the direction of inefficiency, but to call for a minimal state is to bat for special interests in a manner that would over-correct in the disastrously opposite direction. The call for a minimal state may either be an elitist fantasy or a strategy to ask for a Ferrari and settle for a sedan, but either way it avoids serious talk of reform. It also scores very cheap polemical points for a very narrow position by impaling the stuffed-shirt socialists on their own folly.
Wednesday, July 30, 2008
There goes ideology
Apologies for covering the IE again, but today's editorial is simply abysmal ("There goes RBI.") That may be because it has Ila Patnaik's fingerprints all over it.
Yet even Patnaik can't get her economics this wrong: "raising rates is not a good instrument for tackling inflation." Words fail me. This is a national newspaper, how can it get something so basic so completely wrong? How else can inflation be tackled, according to the oracular wisdom of the Express? It doesn't say! Now, every editorial can of course take a position, but doesn't basic argumentation call for a solution to be offered once you've pointed out your opponent's weak points? Flabbergasting.
And what are these weaknesses? The absence of the famed BCD nexus, (straight from the Ajay Shah/Ila Patnaik playbook) and the existence of a huge informal sector (which is an argument for even greater rate hikes, incidentally). All that we can surmise is that the RBI shouldn't have been defending the rupee and flooding the system with liquidity, but we can only make this leap if we have read Patnaik's previous editorial (see below). The action that the RBI should have taken? No action. Please get out of the way, central bankers, as all you can do is spoil things. Neoliberalism 101.
For clarity's sake, note that you can either have a bank-based financial system, as did Germany and Japan for years, or you can have an Anglo-Saxon market-based system. Clearly India has the former, although it is trying to cobble together the latter. The effort is indeed incomplete, but for complicated reasons. The RBI is not independent of the government, why would you blame it for its actions? It is this deeper political economy that is being addressed in a roundabout manner in this editorial: reform the RBI, make it accountable to the markets.
But this is a larger struggle, one that the neoliberals will hopefully lose. With the institutions as they are, the way to curb the monetary economy is to regulate the banks. Either way, under banks or markets, interest rates are the operational variable!
Yet even Patnaik can't get her economics this wrong: "raising rates is not a good instrument for tackling inflation." Words fail me. This is a national newspaper, how can it get something so basic so completely wrong? How else can inflation be tackled, according to the oracular wisdom of the Express? It doesn't say! Now, every editorial can of course take a position, but doesn't basic argumentation call for a solution to be offered once you've pointed out your opponent's weak points? Flabbergasting.
And what are these weaknesses? The absence of the famed BCD nexus, (straight from the Ajay Shah/Ila Patnaik playbook) and the existence of a huge informal sector (which is an argument for even greater rate hikes, incidentally). All that we can surmise is that the RBI shouldn't have been defending the rupee and flooding the system with liquidity, but we can only make this leap if we have read Patnaik's previous editorial (see below). The action that the RBI should have taken? No action. Please get out of the way, central bankers, as all you can do is spoil things. Neoliberalism 101.
For clarity's sake, note that you can either have a bank-based financial system, as did Germany and Japan for years, or you can have an Anglo-Saxon market-based system. Clearly India has the former, although it is trying to cobble together the latter. The effort is indeed incomplete, but for complicated reasons. The RBI is not independent of the government, why would you blame it for its actions? It is this deeper political economy that is being addressed in a roundabout manner in this editorial: reform the RBI, make it accountable to the markets.
But this is a larger struggle, one that the neoliberals will hopefully lose. With the institutions as they are, the way to curb the monetary economy is to regulate the banks. Either way, under banks or markets, interest rates are the operational variable!
Monday, July 28, 2008
Par Patnaik
So is here Ila Patnaik in the IE again, going on about the monetary policy framework and trying to beat poor ol' Dr. Reddy over the head with the Mistry/Rajan reports, ("Pricing the Rupee"). I mean, it's not like she doesn't have a point, but has she no others?
One of her main grouses is that the RBI is burdened with too many objectives (public debt management, banking regulation, exchange rate management, monetary policy, etc.), and that these often come into conflict with each other.
The main bugbear here is the RBI's currency trading, wherein the RBI is basically running a peg to the dollar and therefore has to buy up USD as they come flying into the country least the rupee appreciate. Buying up all these dollars means issuing lots of rupees to do so, and this hits inflation unless this issue is "sterilized" by issuing bonds to mop them up. As Patnaik notes, this stopped happening late last year, and the RBI switched to using hike in the Cash Reserve Ratio to suck cash out instead. Rather than letting the rupee rise and making oil imports cheaper, the RBI kept it low and added to the monetary base in the process. Both measures hike inflation. Reform the RBI to focus on inflation and forget everything else, says Patnaik, and this can't happen.
So is the RBI mad? What's its rationale? For Patnaik, it is "to encourage growth in exports." She makes no mention of the spiralling current account deficit which, if it gets much larger, could make our reserves look puny in the event of a run on the economy. Further, because our reserves are the result of incoming flows rather than earned exports, they are borrowed. So our external position is not that comfortable, and all her recommendations (lift capital controls, open up ECBs and lift NRI caps) could make it worse. The fiscal situation doesn't help matters.
Secondly, what is this model of reform? Transparency? As if that were a virtue in itself. Transparency is the cry of those who wish to hem in the publicly-accountable state and make it predictable so that the unaccountable market can go ahead and make decisions for us. It's a word that uses science to hide politics. She makes no mention of the fact the Bank of England's model of the separation of banking reform and monetary policy was seen as one of the root causes of the recent credit crisis in England, wherein a lack of coordination between the FSA and the BoE made the Northern Rock situation worse.
If she's going to use economic "science" in her arguments, she should not abuse the implicit trust placed in her as an academic to push only one side of the argument. Her inability to be even handed shows her to be an ideologue, pure and simple. Par for the course, Ms. Patnaik.
One of her main grouses is that the RBI is burdened with too many objectives (public debt management, banking regulation, exchange rate management, monetary policy, etc.), and that these often come into conflict with each other.
The main bugbear here is the RBI's currency trading, wherein the RBI is basically running a peg to the dollar and therefore has to buy up USD as they come flying into the country least the rupee appreciate. Buying up all these dollars means issuing lots of rupees to do so, and this hits inflation unless this issue is "sterilized" by issuing bonds to mop them up. As Patnaik notes, this stopped happening late last year, and the RBI switched to using hike in the Cash Reserve Ratio to suck cash out instead. Rather than letting the rupee rise and making oil imports cheaper, the RBI kept it low and added to the monetary base in the process. Both measures hike inflation. Reform the RBI to focus on inflation and forget everything else, says Patnaik, and this can't happen.
So is the RBI mad? What's its rationale? For Patnaik, it is "to encourage growth in exports." She makes no mention of the spiralling current account deficit which, if it gets much larger, could make our reserves look puny in the event of a run on the economy. Further, because our reserves are the result of incoming flows rather than earned exports, they are borrowed. So our external position is not that comfortable, and all her recommendations (lift capital controls, open up ECBs and lift NRI caps) could make it worse. The fiscal situation doesn't help matters.
Secondly, what is this model of reform? Transparency? As if that were a virtue in itself. Transparency is the cry of those who wish to hem in the publicly-accountable state and make it predictable so that the unaccountable market can go ahead and make decisions for us. It's a word that uses science to hide politics. She makes no mention of the fact the Bank of England's model of the separation of banking reform and monetary policy was seen as one of the root causes of the recent credit crisis in England, wherein a lack of coordination between the FSA and the BoE made the Northern Rock situation worse.
If she's going to use economic "science" in her arguments, she should not abuse the implicit trust placed in her as an academic to push only one side of the argument. Her inability to be even handed shows her to be an ideologue, pure and simple. Par for the course, Ms. Patnaik.
Sunday, July 27, 2008
All That Matters (to the Neoliberals)
Two edits are comment-worthy on today's TOI edit page (which is pompously entitled "All That Matters")
This first is an interesting piece from Shashi Tharoor on the massive worldwide market for naklis (fakes; "Get Real, we are living in a fake world"). He traces how fakes are attracted to free trade zones like Hong Kong and especially Dubai by the absence of regulation therein. The interesting information notwithstanding, (apparently this is a $60 billion market!), he chooses to leave some important things out.
For instance, how is it that the attraction of fakes to free trade zones doesn't become a critique of the very idea of a free trade zone that is utterly devoid of any speck of regulation? Instead, we get the standard defence of the one form of regulation the neoliberals are in favour of, namely intellectual property: it's not just that fakes can sometimes kill, as Tharoor points out in the case of fake drugs, but worse, "fakery stifles innovation, depriving the world of the creativity that is our only source of progress."
Now, anyone who knows anything about economic history knows that all nations, when they were developing, learned the tricks of the low-tech manufacturing trade by copying: this was true of the British, the Germans, the Japanese, and yes, the Indians (ask the pharma companies about the deal they cut with the Indian government all those years ago). By copying and learning-by-doing, these nations moved up the value chain. So it was not so much innovation per se but innovating through a learning-by-copying process that developed nations.
On the other hand, it is the now-developed nations, out-sourced out of their manufacturing capabilities, who cling to "innovation" as their sole source of growth; this is nothing but the flip side of their deindustrialization. When innovation no longer occurs through industry, it becomes an argument in itself. Hence all the talk of creativity, hence the ever-expanding worldwide regime of intellectual property. Knowingly or not, Tharoor is parroting this argument.
In so doing, he doesn't see the Economics-101 reason for fakes: When monopolists keep prices artificially high, you get a black market that reflects the "true" market equilibrium. This was true in License Raj India, (hence Bombay!), and it is true of the drug companies today. Intellectual property is nothing but an artificial monopoly, an intentional "market imperfection" introduced to encourage innovation. But is by no means the only way to get there: the Swiss had no patent law until 1888! By keeping the prices of their drugs ridiculously high, via patent laws, the drug companies generate the market for fakes.
This is by no means to condone those rapacious sods who sell people poison. They should be locked up and the key destroyed. But by setting them out in front, Tharoor is throwing us a red herring. These sods are merely fishing in a pond that the drug companies constructed and maintain. Instead of painting all fakery as life-threatening, Tharoor should openly acknowledge that the best fakery takes a great deal of innovation to get right!
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The second piece is one by that arch neoliberal, Gurucharan Das. In trying to make the case for a post-ideological polity ("Go beyond Left and Right"), he only illustrates how solidly the Right's perspective is in place globally. The Indian Left's ideology is indeed exhausted, but one should not say the same for that of the BJP. While the more extreme versions of Hindutva might be abjured by most of the polity, the very fact of the BJP being the only other "national party" indicates the rightward tilt of the nation. As for the Congress, venality mixed with the divine right of kings should not be confused with an absence of ideology.
And as for the rest of the world, that the only argument is over how the market should be regulated doesn't get away from the fact that a) the best regulation is seen to be minimal regulation, and b) even a post-Sarbanes-Oxley, post-Basel II financial world was not saved from the credit crisis; ie regulation in its current state often fails miserably. If the argument over regulation is not one over merely degree but over kind as well, then it is a very ideological one indeed.
Then there is the classical neoliberal desire for the benign technocrat to take over, hence the applause for China and Sreedharan. Das is absolutely right to note that extreme ideologies have never won out, but why does he leave out right-wing market ideologies from the list of failures? When he talks about the need for our politicians to "shed ideology, acquire implementation skills, and focus on the real needs of people," he fails to note that the socialists he dismisses thought that they were doing exactly that, not in the name of ideology but science!
The cry to move beyond ideology often comes from that ideology that is so naturalized and dominant as to think itself free of it. This was the danger of Lenin, Mao, and Hitler: they were ideologues who thought that there weren't ideologues. They were also in charge of unaccountable regimes like China. Das is in fine company.
This first is an interesting piece from Shashi Tharoor on the massive worldwide market for naklis (fakes; "Get Real, we are living in a fake world"). He traces how fakes are attracted to free trade zones like Hong Kong and especially Dubai by the absence of regulation therein. The interesting information notwithstanding, (apparently this is a $60 billion market!), he chooses to leave some important things out.
For instance, how is it that the attraction of fakes to free trade zones doesn't become a critique of the very idea of a free trade zone that is utterly devoid of any speck of regulation? Instead, we get the standard defence of the one form of regulation the neoliberals are in favour of, namely intellectual property: it's not just that fakes can sometimes kill, as Tharoor points out in the case of fake drugs, but worse, "fakery stifles innovation, depriving the world of the creativity that is our only source of progress."
Now, anyone who knows anything about economic history knows that all nations, when they were developing, learned the tricks of the low-tech manufacturing trade by copying: this was true of the British, the Germans, the Japanese, and yes, the Indians (ask the pharma companies about the deal they cut with the Indian government all those years ago). By copying and learning-by-doing, these nations moved up the value chain. So it was not so much innovation per se but innovating through a learning-by-copying process that developed nations.
On the other hand, it is the now-developed nations, out-sourced out of their manufacturing capabilities, who cling to "innovation" as their sole source of growth; this is nothing but the flip side of their deindustrialization. When innovation no longer occurs through industry, it becomes an argument in itself. Hence all the talk of creativity, hence the ever-expanding worldwide regime of intellectual property. Knowingly or not, Tharoor is parroting this argument.
In so doing, he doesn't see the Economics-101 reason for fakes: When monopolists keep prices artificially high, you get a black market that reflects the "true" market equilibrium. This was true in License Raj India, (hence Bombay!), and it is true of the drug companies today. Intellectual property is nothing but an artificial monopoly, an intentional "market imperfection" introduced to encourage innovation. But is by no means the only way to get there: the Swiss had no patent law until 1888! By keeping the prices of their drugs ridiculously high, via patent laws, the drug companies generate the market for fakes.
This is by no means to condone those rapacious sods who sell people poison. They should be locked up and the key destroyed. But by setting them out in front, Tharoor is throwing us a red herring. These sods are merely fishing in a pond that the drug companies constructed and maintain. Instead of painting all fakery as life-threatening, Tharoor should openly acknowledge that the best fakery takes a great deal of innovation to get right!
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The second piece is one by that arch neoliberal, Gurucharan Das. In trying to make the case for a post-ideological polity ("Go beyond Left and Right"), he only illustrates how solidly the Right's perspective is in place globally. The Indian Left's ideology is indeed exhausted, but one should not say the same for that of the BJP. While the more extreme versions of Hindutva might be abjured by most of the polity, the very fact of the BJP being the only other "national party" indicates the rightward tilt of the nation. As for the Congress, venality mixed with the divine right of kings should not be confused with an absence of ideology.
And as for the rest of the world, that the only argument is over how the market should be regulated doesn't get away from the fact that a) the best regulation is seen to be minimal regulation, and b) even a post-Sarbanes-Oxley, post-Basel II financial world was not saved from the credit crisis; ie regulation in its current state often fails miserably. If the argument over regulation is not one over merely degree but over kind as well, then it is a very ideological one indeed.
Then there is the classical neoliberal desire for the benign technocrat to take over, hence the applause for China and Sreedharan. Das is absolutely right to note that extreme ideologies have never won out, but why does he leave out right-wing market ideologies from the list of failures? When he talks about the need for our politicians to "shed ideology, acquire implementation skills, and focus on the real needs of people," he fails to note that the socialists he dismisses thought that they were doing exactly that, not in the name of ideology but science!
The cry to move beyond ideology often comes from that ideology that is so naturalized and dominant as to think itself free of it. This was the danger of Lenin, Mao, and Hitler: they were ideologues who thought that there weren't ideologues. They were also in charge of unaccountable regimes like China. Das is in fine company.
Saturday, July 26, 2008
The Times of India Inc
Now, one knows that the Times is a business, but it really is shocking sometimes the extent to which it is by business, for business, and of business. Take today's editorial, "Fast Forward." It would appear that the business classes' desperation at achieving more reforms cannot be contained now that they are rid of the Left; how else can one explain how reforms have leapt to the headlines? That is, it really needs to be explained how the opening up of the insurance sector has anything to do with our current economic situation.
That the editorial takes this as common sense is a reflection of how normal it has become for particular interests to masquerade as public interest. (As if "the public" at large would benefit from the privatization of PSUs, as recommended). Likewise for pensions and banking. These specifics speak simply to the concerns of the financial classes and are given disproportionate weight in the editorial, while key matters are addressed with bland generalizations like "agriculture" and "infrastructure" as an after-thought in the final para.
The piece appropriately begins by making reference to the SP; it could not have been a better parrot of narrow interests than Amar Singh was for Anil Amabani. How this passes for reasoned opinion is beyond me, its baldness only an indication of how firmly entrenched these interests are.
That the editorial takes this as common sense is a reflection of how normal it has become for particular interests to masquerade as public interest. (As if "the public" at large would benefit from the privatization of PSUs, as recommended). Likewise for pensions and banking. These specifics speak simply to the concerns of the financial classes and are given disproportionate weight in the editorial, while key matters are addressed with bland generalizations like "agriculture" and "infrastructure" as an after-thought in the final para.
The piece appropriately begins by making reference to the SP; it could not have been a better parrot of narrow interests than Amar Singh was for Anil Amabani. How this passes for reasoned opinion is beyond me, its baldness only an indication of how firmly entrenched these interests are.
India Bought and Sold
The impetus for this self-publishing came from a refusal of the Indian Express to publish what I thought was quite a reasoned response to an editorial from Pratap Bhanu Mehta after the recent political spectacle. (See "Remains of the Day," IE July 23rd, at http://www.indianexpress.com/story/339087.html). I felt, perhaps somewhat dramatically, that the refusal to print the letter itself demonstrated part of the content of the letter (reproduced below), namely the media's reflection of the impoverished range of political debate in the English mainstream.
What this blog sets out to achieve, therefore, is an expansion of this range through a thorough examination of the English opinion pages. The examination will try and question the unstated assumptions and presuppositions of our columnists in an attempt to introduce a little diversity into what has become a baleful monoculture.
I'm sure this will be a useful exercise for myself, and I hope that it might be for others. I haven't plunged into the Indian political blog scene as yet, so there's a serious danger of reinventing the wheel here, but we are supposedly the land of self-reliance. Please feel free to use this space to rant about the state of Indian political commentary and provide some yourself.
What this blog sets out to achieve, therefore, is an expansion of this range through a thorough examination of the English opinion pages. The examination will try and question the unstated assumptions and presuppositions of our columnists in an attempt to introduce a little diversity into what has become a baleful monoculture.
I'm sure this will be a useful exercise for myself, and I hope that it might be for others. I haven't plunged into the Indian political blog scene as yet, so there's a serious danger of reinventing the wheel here, but we are supposedly the land of self-reliance. Please feel free to use this space to rant about the state of Indian political commentary and provide some yourself.
Dear Express,
Pratap Bhanu Mehta has raised the level of the present debate by bemoaning the level to which our polity has sunk. But he has left out two critical aspects. The first is the deal itself: it represents a secular expression of the rightward shift in the polity achieved by the BJP. The deal gives the "good guys" a chance to be nuclear nationalists; even its opponents on the Left crow on about "strategic interests." That the baseline common sense in the polity is that we must have nuclear weapons---that there is no room in the mainstream for a reasoned non-proliferation position that embraces a civilian nuclear program---represents a dangerous narrowing of democratic debate.
Secondly, the venality of the SP---which Mr. Mehta rightly sees as inevitably infecting the government and the PM---is merely the front-end of the forceful corporate incursion into the formal polity. This is where the real money in politics comes from, as we all know. Money in politics is not merely a matter of morality; it simply undermines the principle of one-person-one-vote, the very soul of democracy. Certain sections might celebrate the shareholder-democracy that formal lobbying, US-style, promises, but this is no less corruption. The breaching of the divide between editorial content and advertising in our media---especially its electronic version---is another symptom of this money creep.
Disintegration is indeed in the air, but from dinosaur Left to robber-baron Right, all members of the polity are playing their part in it.
Best,
XXXXXXXX
Pratap Bhanu Mehta has raised the level of the present debate by bemoaning the level to which our polity has sunk. But he has left out two critical aspects. The first is the deal itself: it represents a secular expression of the rightward shift in the polity achieved by the BJP. The deal gives the "good guys" a chance to be nuclear nationalists; even its opponents on the Left crow on about "strategic interests." That the baseline common sense in the polity is that we must have nuclear weapons---that there is no room in the mainstream for a reasoned non-proliferation position that embraces a civilian nuclear program---represents a dangerous narrowing of democratic debate.
Secondly, the venality of the SP---which Mr. Mehta rightly sees as inevitably infecting the government and the PM---is merely the front-end of the forceful corporate incursion into the formal polity. This is where the real money in politics comes from, as we all know. Money in politics is not merely a matter of morality; it simply undermines the principle of one-person-one-vote, the very soul of democracy. Certain sections might celebrate the shareholder-democracy that formal lobbying, US-style, promises, but this is no less corruption. The breaching of the divide between editorial content and advertising in our media---especially its electronic version---is another symptom of this money creep.
Disintegration is indeed in the air, but from dinosaur Left to robber-baron Right, all members of the polity are playing their part in it.
Best,
XXXXXXXX
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