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On Some Left Critiques of the Left

On Some Left Critiques of the Left

Much of the recent "Left" critique of the West Bengal government involves little more than an abjuration of both history and complexity. It would be unfortunate indeed if, intellectually paralysed by its electoral reverses, the CPI(M) in West Bengal were to now concede the agenda to such criticisms. To do so would be to betray the basic classes of the Left.

DISCUSSION

On Some Left Critiques of the Left

Indraneel dasgupta

involve what one might term “employment pessimism”.

Employment Pessimism

The critics argue that net additional employment generated by industrial investment would be negligible, when one takes

Much of the recent “Left” critique of the West Bengal government involves little more than an abjuration of both history and complexity. It would be unfortunate indeed if, intellectually paralysed by its electoral reverses, the CPI(M) in West Bengal were to now concede the agenda to such criticisms. To do so would be to betray the basic classes of the Left.

I thank, without implicating, Saumyajit Bhattacharya, Debashis Chakrabarty, Anita Dixit, Surajit Mazumdar and Ishita Mukhopadhyay for clarifying conversations. My greatest intellectual debt is to Prabhat Patnaik, who taught me how to disagree with him.

Indraneel Dasgupta (indraneel.dasgupta@ durham.ac.uk) teaches economics at Durham University, UK.

Economic & Political Weekly

EPW
August 1, 2009

A
ttempts by the West Bengal (WB) government to accelerate the pace of industrialisation, with the help of large-scale private investment, in the state have run into a heavy barrage of public criticism over the last three years. Prabhat Patnaik’s recent EPW commentary on the Left’s electoral debacle, reiterating some of his earlier positions, is the latest in this line.1 While soul-searching on the Left is natural and commendable, inappropriate diagnoses risk governance paralysis, indeed policy regression. The purpose of this note is to engage with some of the more coherent “Left” critics of the WB government’s industrialisation drive, in light of clear signals of such policy regression coming out of Kolkata in recent days.

What is the main thrust of the general criticism against the WB government? Amit Bhaduri has advanced the accusation with helpful clarity. “What we are witnessing is deliberate connivance on the part of the conventional Left in WB with the interests of large corporations against the poor” (Bhaduri 2007a: 553). Patnaik (2007: 1893) appears to concur when he avers that “…the type of corporate industrialisation that can occur … is, …, necessarily anti-people”. Bhaduri (2007b: 1599) concretises further: “ …invariably the gainers are the corporations and the losers are the ordinary people connected to land in many ways”. The WB government and the Communist Party of India (Marxist) [CPI(M)] are thus deemed guilty by Bhaduri (2007a) of “developmental terrorism”.

That large corporations expect profits when they propose to build factories in the state is, of course, as obvious as the fact that the WB government is attempting to facilitate such investment. Why would this facilitation be “necessarily” and “invariably” against the interests of “ordinary people connected to land in many ways”? The basic argument offered appears to

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into account job losses due to conversion of agricultural land to industrial and infrastructural use. Thus, in Patnaik’s (2007: 1893) opinion, “(T)he argument that ‘industrialisation’ is necessary because it will take surplus labour out of agriculture is completely baseless.” “(C)apitalist transformation …. cannot absorb the producers displaced by such transformation, since …. its capacity to generate employment is negligible” (Patnaik 2009: 10). Bhaduri takes a similar position.

Absolute employment pessimism of the kind advanced by these critics however appears dubious, for a number of reasons, which I now proceed to discuss.

First, that new industries have not created additional jobs in the country as a whole over the last 15 years or so is by no means an empirically incontestable proposition. Data from the latest National Sample Survey (NSS) round of 2004-05 suggest that, over 2000-05, manufacturing created jobs faster than services, and casual work decreased while self-employment increased. This was more than a matter simply of depressed conditions in agriculture leading to overcrowding in non-agricultural employment: real earnings did increase on average outside the agricultural sector. Throughout the last 15 years or so, employment in agriculture and allied activities has indeed fallen as a proportion of the workforce in the country as a whole. This fall has typically been quicker in states where the industrial sector grew faster.

While aspects of the liberalisation process did indeed contribute to large-scale job losses in manufacturing in the 1990s, especially in import-competing sectors, the impact fell disproportionately on labourintensive traditional industries and older public sector corporations located in eastern India. Thus, employment growth in new industries, typically coming up o utside eastern India, was counter-balanced by employment shrinkage in old industries,

DISCUSSION

disproportionately located in eastern India. This led to relatively low growth in aggregate manufacturing employment for the country as a whole. Much of the standard Left criticism of the liberalisation process, quite under standably, has concentrated on this phenomenon of employment shrinkage in traditional industries. However, this criticism, by itself, can say little about the employment potential of new industries, which is precisely the question of interest.

The fact that overall manufacturing sector employment did grow at all, despite such employment shrinkage, itself points to significant job creation in new industries. The process of labour shedding in traditional manufacturing had largely flattened out by 2000. Consequently, net employment generation in manufacturing has started increasing in recent years, as evidenced by the latest NSS data. Furthermore, outsourcing and subcontracting, aided by improvements in transport, communications and information technology, led to jobs earlier classified under the organised manufacturing sector being increasingly shifted to the service and informal sectors. For both reasons, extrapolating the employment generating potential of new industrial investment in WB over the next decade or so, from countrywide aggregate employment figures for organised manufacturing averaged over the last 15 years, is bound to lead to significant underestimation.

Second, while the claim that manufacturing has become more capital-intensive over time, and thus generates fewer jobs per rupee of investment, is generally true, it is actually quite irrelevant. What is at issue is not the capital-labour ratio, but the landlabour ratio in manufacturing and allied sectors relative to agriculture. A factory may generate far more man-days per unit of land than agriculture even if its technology is highly capital-intensive. Petrochemical and iron and steel are both highly capitalintensive industries. Yet far more man-days are generated in Haldia or Durgapur than in most, arguably all, areas of similar landsize in agrarian WB. A very large proportion of the unskilled and semi-skilled workforce originating in Nandigram, for example, is actually employed in Haldia and Kolkata. Likewise, large numbers of individuals from small peasant, artisan and landless households from all parts of rural WB have been routinely migrating to the urban areas of the state, as well as to the industrialised areas of other states, in recent years. Such migration itself points to a process of additional job creation as a consequence of industrialisation and its concomitant urbanisation.

Third, WB relies to a very major extent on other states, even foreign countries, to meet its demand for industrial goods. Agricultural (and more recently, service sector) growth in WB over the last two decades has created a large rural and semi-rural market for consumer goods. Much of this market is at present being supplied by industries located in other states. A major proportion of the corporate investment proposals are either intended to meet this demand, or to generate industrial inputs that would be used in downstream industries to produce such goods. Cheap cars, two-wheelers, trucks, cement and steel constitute obvious examples. Many of the factories proposed are also geared towards markets in other states or other countries. Thus, private investment proposals in WB are largely motivated either by “import substitution” or “export promotion” considerations. Patnaik (2007: 1893) argues that “(U)nless the output of such industry is exported or substitutes for imports, …, the net employment generated through the creation of grande industry may well be negative.” Thus, Patnaik’s employment pessimism, by his own logic, appears inapplicable to WB.

Bhaduri argues for greater reliance on the home market relative to the external market. One can only point out that a large “home market” has indeed been generated in WB over the last two decades: much of the investment proposals are aimed precisely at supplying, directly or indirectly, industrial goods consumed by Bhaduri’s “ordinary people connected to land in many ways”. Implementation of such proposals would make industrial goods cheaper for ordinary rural people, quite apart from generating income and employment that is, at present, being e xported out to other states. In sum, the aggregate employment pessimism espoused by these critics seems to be grounded neither in logic nor in empirics.

Some commentators (e g, Kabra 2007) have made a distinction between the encouragement of large industry and that of

August 1, 2009

small and medium ones. In the current context of WB, the distinction is overdrawn. The number of small-scale industrial enterprises in WB is already one of the largest in the country. However, large segments of the small and medium sector in the state exist in a synergistic relationship with large industry. This is especially true of engineering and petrochemicals. Impulses towards outsourcing and subcontracting have strengthened this relationship over the last decade. Thus, for example, downstream projects reliant on Haldia Petrochemicals alone have generated at least 70,000 jobs in the state till now. Likewise, the small and medium engineering sector in the state has traditionally been heavily dependent on the large iron and steel sector for both raw material and final demand. Large industry generally serves to stabilise and expand the small and medium sector in WB, not to supplant it.

Aspects of the process of deregulation and economic liberalisation followed by successive central governments have certainly served to restrict aggregate employment generation. It is quite reasonable to argue that the employment impact of private investment in WB would be much greater if the central government were to adopt a different policy mix. But to surmise from this that, given the current national and international policy environment, the aggregate employment impact of industrialisation attempts by the state is likely to be negligible or even negative, is to draw an illegitimate inference. Their frequent descent into a mode of rhetoric that one can only term “pidgin agitprop of the populist kind”, as exemplified by B haduri’s “developmental terrorist” tag, only serves to accentuate this fundamental fallacy in the critics’ argument.

The Distribution of Gains

A second argument deployed by these critics is that those whose livelihoods depend on agriculture are unlikely to find absorption in the urban economy that will replace agriculture. The argument requires unpacking. Consider first the case of landless agricultural labourers. The critics’ argument would suggest that earnings of such labourers would be significantly depressed in areas contiguous to the zone where land is converted from agricultural to industrial

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EPW
Economic & Political Weekly

DISCUSSION

use, as displaced workers flood the labour market. The exact opposite seems to have happened in WB. Landless workers from Nandigram flock to Haldia, or from Bankura to Bardhaman, not the other way round. Agricultural wages are typically higher in the more industrialised districts of the state. There is no evidence that conversion of agricultural land to urban development has been associated either with a general reduction in earnings of unskilled labour, or with their large-scale out-migration. Landowners, however, can see their total earnings go down if the price they are paid for their land is sufficiently low. Has this really been the case in WB?

Abhirup Sarkar has calculated the real interest income that will accrue to a landowner from the amount paid as compensation in Singur. While Sarkar (2007: 1442) concludes that “…the government of West Bengal is too ….little (concerned) about the displaced”, his own calculations show that the interest income from the compensation payment is not lower than what the peasant owners were earning earlier. Thus, even in the extremely unlikely prospect of the land losers not finding a single day’s work ever again in their entire remaining lifetime, their future (inflation-adjusted) earnings are unlikely to be lower than their past earnings. This hardly suggests that Singur peasants have lost out financially.

It is certainly possible that compensation packages can be improved, or supplementary policies formulated to ease the transition. Serious discussions of the compensation package offered should also involve a comparison of the package offered by the WB government with those in other states. Yet none of the critics appear to offer such an in-depth comparative assessment, nor a discussion of the training and livelihood generation measures introduced in the state. Rehabilitation packages are bound to exclude significant groups when opposition controlled Panchayats boycott and try to disrupt the process of identification of beneficiaries. The Trinamool Congress has chosen exactly such a path of disruption. Yet, the critics appear silent on this key issue.

Critics’ Notion of Alternatives

The critics counter-pose a romantic but nebulous “peasant-led” and “decentralised village-based” industrialisation to the

Economic & Political Weekly

EPW
August 1, 2009

current programme of the WB government. To argue that village-based peasant cooperatives can be mobilised to independently set up iron and steel plants, automobile factories or petrochemical hubs in WB in the foreseeable future appears bizarre. An alternative, more charitable, interpretation, might be that these critics are arguing for an emphasis on agro-based and food processing industries organised by peasant cooperatives. Such models are certainly worth experimenting with in the medium term. Furthermore, there is no obvious conflict between such a proposal and a simultaneous encouragement of private industrial investment. Yet, to collapse the problem of industrialisation, in a state where more than half the population is already employed outside agriculture, and where about three-fourths of the aggregate income originates outside agriculture, into one of developing peasant cooperatives is to engage in irresponsible frivolity.

The search for an alternative economic paradigm cannot be reduced to an o bsession with difference for its own sake. Just as the land reform measures implemented by the Left Front government were of Congress origin, many of the measures currently being pursued in WB have been formally mooted in non-Left circles as well. It is puerile to decry a policy intervention, in isolation, on grounds of its bourgeois origin irrespective of its context or consequences, as many of the critics appear to be doing.

The CPI(M) did not suddenly wake up to the need to develop an industrial base in 2006. Successive Left Front governments in WB since 1977 have attempted to do so. Over the 1980s, successive central governments used various instruments of economic control to starve the state of investment. The industrialisation drive today is simply the continuation of a long process of Left political mobilisation in the face of such economic blockade. This mobilisation has created, for example, a booming petrochemical sector in the state, whose extension beyond Haldia would appear to be its natural objective today. The industrialisation drive of the WB government does not stem from a sudden conversion to neoliberalism. It is instead rooted in the Left developmental mobilisation in the state nurtured over the last three decades. This developmental mobilisation is arguably

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the most consistent force against market fundamentalism in the country today.

Conclusion

On unpacking, much of the recent “Left” critique of the WB government thus turns out to involve little more than an abjuration of both history and complexity. Lacking a persuasive basis in logic and typically short on evidence, this critique often displays a tendency to degenerate into, what I have termed, pidgin agitprop of the populist kind. This is the politics of knee-jerk denunciation that Mamata Banerjee has long since made her personal trademark in WB. It would be unfortunate indeed if, intellectually paralysed by its electoral reverses, the CPI(M) in WB were to now concede the agenda to such criticisms. For, in the not-so-long run, to do so would be to betray the basic classes of the Left.

Despite the best efforts of the non-Bengal Left (and sundry NGOs) a la Mamata Banerjee, land acquisition appears to have proved an electoral non-issue in every other state. It is thus highly debatable whether land acquisition provides the pre-eminent explanation for the Left’s electoral losses in rural WB. But even if this were so, the answer would lie in sustained, determined and intelligent politico-administrative measures to mobilise the beneficiaries and neutralise the losers. Structural transformation cannot even be attempted if politics is approached as a popularity contest, with the winner chosen by universal acclamation. To suggest otherwise is to exhibit naïveté at best, and opportunism at worst.

Note

1 Henceforth, Patnaik (2009). The core criticisms are a summary of those developed in detail in P atnaik (2007).

References

Bhaduri, Amit (2007a): “Development or Developmental Terrorism?” Economic & Political Weekly, 42(7): 552-53.

– (2007b): “Alternatives in Industrialisation”, E conomic & Political Weekly, 42(18): 1597-1601.

Kabra, Kamal Narayan (2007): “Some Issues Concerning Industrialisation of West Bengal”, Mainstream, 45(20), 5 May.

Patnaik, Prabhat (2007): “In the Aftermath of Nandigram”, Economic & Political Weekly, 42(21): 1893-95.

– (2009): “Reflections on the Left”, Economic & P olitical Weekly, 44(28): 8-10.

Sarkar, Abhirup (2007): “Development and Displacement: Land Acquisition in West Bengal”, Economic & Political Weekly, 42(16): 1435-42.

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