The cold partnership of capitalism and democracy
By Phrangsngi Pyrtuh
India is living on the edge so the story goes which has nothing to do with its resilient political structure embedded in a fractured democratic system nor has it to do with the highly segmented social structure which is decidedly divisive and communal. Moreover they account for nothing in a world where a country’s health is based on numbers and rankings (and no longer on comparative advantage that one possesses as per traditional economic thought). A downgrade by a foreign rating agency is a country’s worst fear and this is what has happened to India. Standard & Poor rating agency downgraded India’s credit credibility, warning India of further downgrade if reforms and other restructuring does not occur soon. Moody’s and most recently Fitch rating agency have all disclaimed India on its financial health and worrying economic data. These agencies are ruthless in their outlook and have gone on a downgrading spree across the board/countries in recent times. Their complicity with international agencies who overtly seek to provide financial and other assistance to these countries while at the same time forcing ridiculous demandd on these countries to tow their line is becoming a bitter pill to swallow which even the western world find difficult to concede (such as Greece, Spain, France etc)
While India (along with China) has been much praised for its ability to minimize the impact of the recent financial crisis as well as spearheading economic recovery post 2009 the same school of thought is questioning India’s economic strength ex-post. If we are to believe them then the only path that India is now treading is further down the slope of economic distress. This is not because India is internally weak; rather the forces for which this argument heavily relies on is something that is beyond the capacity of India to counter. Since the last year the European Union (aka the EURO dollars) is struggling to find its feet. The crisis which started from the PIGS countries has still not abated (despite the innumerable bail-outs); rather it has become more pervasive and threatens to become a global recession which is far worse than the 2008 financial crisis. The EU along with world bodies such as the IMF have stepped up pressure in these countries to further do away with social spending to what they perceive as unnecessary expenditure in order to contain fiscal deficit. It is the only way out to avoid similar economic woes in these emerging economies. It is another story that austerity measures as prescribed by the EU have been rejected by the people of Europe. All across Europe, presidents and prime ministers have been shown the door via election on account of the economic crisis the latest being Nicolas Sarkozy.
As much as the EU leaders want their economies to rejuvenate and follow stable growth trajectory, they cannot not do it without relying on emerging countries like India. On its part India is expected to further open up the economy to foreign players in several key sectors to leverage the economies of the west. India which has avoided the 2008 crisis on account of its expansionist pro-poor agenda is under immense pressure to adopt strict austerity measures by cutting social spending and reducing deficits. However coalition politics ensure that such actions do not materialize at least not in the near future. But for how long India can be insulated from external pressure remains to be seen. Moreover Globalization and integration of world markets will ensure that collapse of trade and market economies are synchronized across countries.
A significant development emerging from these troubling times is the re-emergence of the leftist forces in the sanctuary of capitalism- Europe. Popular evidence against irrational pursuit of austerity measures has led to the rise of leftist politics such as in France, Greece etc and mass popular movement against crony capitalism initiated by the Occupy Movement continuing till the present times. Also more worrying is the rise of Ultra-right and neo-Nazi Golden Dawn Party in the recent Greece elections- a direct fall out of austerity measures and the stringent bailout package that it is forced to accept. To economic historians we are reminded of how strict fiscal discipline and social cuts directly contributed to the Great Depression thereby leading to the rise of Nazism and Fascism in Europe in 1930s and 40s.
Developments in Europe at this point portend ominous signs of the world heading towards the same dreaded path again. In fact the debate during the inter-war period of the 40s was dominated by intensive competition between three main ideologies – democracy, fascism and communism. The fact that democracy was established in most European countries post World War- II was viewed as a triumph of capitalism. While Socialism has been discarded completely as a policy instrument, its relevance in a highly fragmented/segregated and unbalanced world suggest its continuity to be as much important as the increasing irrelevance of capitalism and neo-liberal thinking at least as social and economic stability is concerned. Socialistic thoughts are here to stay and it is good for an alternative debate to exist alongside the more agreeable and dominant free market thought. However economists like Jayati Ghosh point out that such popular protest does not necessarily imply the resurrection of socialism. The current wave of popular protest is more about resistance rather than transformation. According to her the lack of confidence in anything, other than capitalism as a way of organizing economic and social life reduces socialism to a tool or ideology for resistance and not transformation. Socialism is not only about resistance – it’s a whole package – a transformative (much less revolutionary) force.
The Khasi community has never engaged itself with these alternative thoughts. Is it possible to have a symbiotic relationship in a communitarian structure such as ours based on socialistic ideas and concepts? Such a hypothesis is tenable since democracy and capitalism are at loggerheads with each other and have not been able to usher desired changes perceived from such a relationship manifested in the current popular protest in the west. A community that can incorporate these divergent views is definitely not a weak community. The Khasi community with all its problems is ripe for such debates. It is urgent that we start perceiving and imagining these alternatives because the present nonchalant mindset and contentment built around the institutions of the bourgeoisie state should be challenged externally and ideologically. It seems to be the only alternative to revive the community and to mitigate our descent to irrelevance and obliviousness. (The writer is a scholar at the Jawaharlal Nehru University, New Delhi)