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.