Over 1500 telecom towers have been damaged in Punjab, allegedly by protesting farmers. One straightforward response is to hold the state government accountable for the failure to protect private property. Another is to point out that telecom towers are also a social good, an essential service, especially in these coronavirus infested times.
It’s obvious that such lawlessness must be condemned---it badly affects people’s lives, harms the economy, will hamper the recovery from the pandemic and will send the wrong messages to investors. But the problem is not mere vandalism---far bigger issues are at stake.
Simply put, the farmers’ agitation has been used by vested interests to paint big business as some sort of villain, out to snatch the bread out of the mouths of hardworking peasants. It’s a bit like the caricatures they used to have in the Soviet Union, showing fat cigar-chomping Western capitalists in suits and hats stomping on the face of the poor workers. We know how that worked out.
The gibe is not new in India—successive governments have unfortunately strived hard to create the impression that they are pro-poor and anti-big business, never mind what they are in reality.
Apparently calling a government a ‘suit-boot ki sarkar’ is the political kiss of death. But then, let’s not forget that it was only after China ditched the Mao jacket for the business suit that it saw spectacular progress and lifted millions out of poverty.
By attacking big business, what exactly are the agitators doing? Are they not denigrating the most modern, the most technologically advanced, the most vital and dynamic firms in the Indian economy? Did not Reliance Jio bring the benefits of the telecom revolution to the Indian masses? Has that not helped even poor children attend virtual classes during the pandemic? Has it not been an immense boon for small businesses and even farmers?
But it’s not about telecom--look at the larger picture. It is big business that is bringing the benefits of e-commerce to millions of people, serving as a lifeline for delivering essential items during the pandemic. The economies of scale and the latest technology brought in by big businesses drive costs down, benefiting consumers.
They serve as the main engines of capital accumulation in a nation, providing the fuel for the country’s economic growth. They are the only firms that have the wherewithal to invest in the latest technology and to put aside large sums for R&D. One big company spawns thousands of small firms through its backward and forward linkages. Indeed, many of those small firms become big themselves, although, as several studies have shown, this process needs to be accelerated in India---we have far too many very small firms.
If India is to develop, which means if it is to progress beyond being a country of peasants and petty producers, it will have to be thanks to our large firms. As the Economic Survey said, ‘“The perception of small firms being significant job creators pervades because job destruction by small firms is ignored in this calculus. In contrast, large firms create permanent jobs in larger numbers.'
If India is to expand its far too small formal economy and shrink its large unproductive informal sector, it will have to rely on big business to do the job. All governments know this, which is why there is a gap between their populist rhetoric and actual policy. But even rhetoric has its dangers--it is time to stop the demonisation of big business.
This is all the more so today, when new technologies enable big companies to tie up with many small firms, invest in them and help transform them into efficient modern outfits. To take one example, large e-commerce firms are partnering with mom and pop grocery stores---an alliance that helps both parties as well as the consumer.
The new farm laws will similarly help big firms partner with millions of farmers, as we pointed out has been done successfully in China here and here. Simply put, in an environment where the capital-intensive nature of much of modern manufacturing is a barrier in absorbing unemployed or underemployed labour, such partnerships could cushion the disruption that occurs during the development of capitalism in a country.
Indeed, one can go further and say that it’s time to abandon this hypocrisy of shedding crocodile tears about the masses. There is only one way the country can develop and that is through capitalist transformation. That is the only hope for the masses. None of the alternatives has succeeded. You don’t want to end up like North Korea.
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Why do we need to change our attitudes urgently? We can no longer afford to muddle along---jobs need to be found for the millions fleeing unviable farms. We have one little window of opportunity to make India a global manufacturing base, in view of the current disenchantment with China. There are no guarantees that we will succeed. Development is a hugely disruptive process and only a handful of late developers have successfully avoided the middle-income trap.
Managing the contradictions of development is a hugely complex task. Lots of things can go wrong, from poor policies to opposition by those who lose out to the capture of the state by crony capitalism to sheer ineptitude. All we can do is give it our best shot.
The job of the state, in these circumstances, is to facilitate and hasten the process of capitalist development. The Leftists who oppose it should read this passage from their own Communist Manifesto: ‘The bourgeoisie, historically, has played a most revolutionary part…..The bourgeoisie cannot exist without constantly revolutionising the instruments of production….
'The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together.' There’s much more---parts of it read like a hymn in praise of capitalist dynamism. That might be news to some of the agitators on the Left.
There is, of course, also a more immediate benefit for the poor. It is only if big firms thrive and prosper that the state can garner the resources it needs for constructing a social safety net.
As for those who think that social welfare is not possible under a conservative government, one can only say, ‘There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy’, while pointing to Otto von Bismarck, the conservative Prussian chancellor who brought in a host of social security measures for workers in imperial Germany as early as the 1880s.
Indeed, as Robert Paxton, historian of fascism, wrote: "All the modern twentieth-century European dictatorships of the right, both fascist and authoritarian, were welfare states... They all provided medical care, pensions, affordable housing, and mass transport as a matter of course, in order to maintain productivity, national unity, and social peace.’ All political regimes have to earn legitimacy.
Coming to more modern times, what else is the East Asian model but the alliance of big business and the state? What else were the zaibatsu in Japan or the chaebols in South Korea? Airbus, Michelin, Hyundai, NEC, Samsung, Singapore Airlines, Volkswagen, and LG were all national champions. It was as far back as the 1990s that the Chinese government officially promulgated its policy to foster “national champions and independent core technologies.” Huawei is a shining example.
It’s high time we learnt from them.
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First Published: IST