 Hello and welcome to Newsclick. Today we have with us Prof. Prabhat Patnaik and we are going to discuss a little bit of a long-shot view of our history, particularly post-independence and what we are seeing now. Of course, as we know, a new quasi-independence day in which with Ram Rajya appearing with the temple, we are supposed to now see a new dispensation in terms of vision emerging. Of course, as most of us would have commented, this is trying to bring about a Hindu-Rashtra view, though Indian constitution still stands in the way. Prabhat, do you find similar engineering or re-engineering of the Indian political economy? So to say the economic structure that we had, the economic vision we had, that is also being sought to be done at the moment? Yes, very much so. You see, at the time of independence, when we adopted this constitution after the Constitutional Assembly's debates, this constitution carried forward a promise which was made at the Karachi Congress Resolution in 1932. And that had promised a number of things, that had promised a democratic, secular republic, that had promised a federal polity, that had promised that every Indian would have a set minimum standard of life, that had promised free and compulsory primary education, a number of things. And in a sense, the whole constitutional vision was really built at that time in the 1930s. The constitution incorporated some of those into its own corpus. Now it therefore provided everybody a set of fundamental political rights. It did not provide a set of fundamental economic rights, but those were more or less confined to what was called the directive principles of state policy, in which all the economic promises of the Karachi Congress Resolution were put together. Now of course, the basic assumption behind that vision was that the state had the responsibility of converting that vision into reality. This was generally in keeping with the fact that everybody had seen the Great Depression, everybody had seen the achievements of the Soviet Union under state planning. And even in capitalist countries, the huge Great Depression had been overcome basically through state intervention. The post-war period was one through which the state intervened. So the fundamental understanding was that the state has to play a major role in realizing this promise that the constitution had made to every Indian. Of actually creating, if you like, a fraternity of equal citizens with rights and with a minimum material standard of life. Now the basic shift I find in terms of political economy is to believe that really a whole lot of individual capitalists, both multinationalists and corporates are really the so-called wealth creators of the country. That they are the ones who are going to really bring about an improvement in the conditions of everybody. Not that anyone actually talks these days about improvements in people's conditions or everybody having equal rights as citizens with a minimum standard of living. That terminology has gone out of fashion. Suppose you asked somebody in the present dispensation that look, this is what the constitution promised and how do you propose to bring it about? They would say very simply that encourage the wealth creators, which basically means encourage the private corporate sector, encourage the multinationalists. So the assumption is that the more you give to the capitalist, the more automatically would the people benefit by it. So it's producing a kind of fabricated class harmonism, which really is the underlying philosophy of the current dispensation. And that is the excuse under which all kinds of concessions are made to the capitalist. The rights of the tribal people are trampled upon because land is taken away from them in order to set up factories, buy the multinational and corporates and so on. Tax concessions are made to these people. No wealth tax is imposed on these people and so on and so forth. The whole idea is that the more you give to the capitalists, the more they are going to generate wealth and that is going to be of benefit to the entire society. It's the most arch-conservatives bourgeois political economy, which is now the avowed philosophy of the existing dispensation. That's a major change compared to the constitution provisions compared to the vision of the Karachi Congress resolution compared to the post-independence perceptions. So the essential difference is that post-independence, it was felt the state had the primary responsibility of developing the economy. And because the British had clearly siphoned off the wealth, therefore the basic infrastructure which even capital requires had to be built by the state. And therefore the role of the state in building, apart from the infrastructure, even heavy industries. And I remember Ambedkar, which I keep on talking about, was the architect of the 1948 Electricity Act. And he said, providing electricity to every home is the responsibility of the state. It's not the responsibility of private capital who ran some small electricity companies, mostly owned by British capital at that point of time. So that was the distinction that was being made. But at that time, I remember the RSS and its, of course, the political party, which came about in 1951, Janssen, both opposed it to thumbnail and said, this is essentially socialism. This is not how capital should be, not how economy should be built. And planning itself, they considered as socialist. And therefore their argument is market should allow to do what, market should decide what happens. And they also went further. In fact, they were clearly on record saying, if foreign capital wants to come in and develop the country, we have no problems with it. In fact, they're never in all their history of the RSS and the BJP, they never ever opposed foreign capital and they always opposed state intervention in the economy. If you accept this view, which the current government has, then really there is no reason why we should have fought for India's freedom. I mean, in the sense that yes, politically of a government of your own is political freedom. But in economic terms, if the idea is to invite multinationals to come and set up industry here, which is supposed to be the way of India's moving forward. In that case, what was wrong with what the British government was doing? You know, in other words, the colonial government was doing everything was open for people to come in here. The colonial government gave all kinds of concessions to foreign capital. Railways in India, for instance, were built on the provision, 5% guaranteed rate of return and so on. So there is no difference between a colonial government enticing foreign capital into the country to develop the country. And the Indian, you know, independent India's government carrying out an economic policy of the same kind. So if you accept that philosophy, then really there is no economic argument for India's independence. In fact, they would say yes there is because then we get Indian capitalist as opposed to foreign capitalists. So it becomes individuals. It's not capital. It's really the capitalist. Yeah, but you know, Indian capitalists also would have been accommodated by the colonial regime. I know that they were not for a very long time. But after the 1930s, you know, because when, if you like, the British capital in the 1930s made an alliance with Indian capital. They had introduced, for instance, discriminating protection. In other words, Britain was kind of, you know, getting more and more cornered as a world capitalist power by empire, you know, by Commonwealth and so on. So increasingly an alliance was coming about. It's in British capital and Indian capital or Indian capitalists and British capitalists, which could have made, from an economic point of view, India's independence. It's somewhat irrelevant if that is the perspective. It's interesting because Pakistan followed exactly that perspective of riding with foreign capital, free inflow of capital and what are the consequences that they could not manufacture anything for a very long time. In fact, that was there. And the other consequence of great importance was the independence of East Pakistan as Bangladesh because obviously this kind of capitalist development imposes an enormous burden on the people. You have to really squeeze them very hard in order to kind of transfer funds to the capitalist and which they did at the expense of people in East Pakistan. And as a result, the secessionist movement of East Pakistan were going and Pakistan could actually last as a country because of this kind of strategy. So the other, of course, issue which America raised also in the constituent assembly itself, that yes, we are giving political rights, equal political rights as votes to all our citizens, but we are not giving them equal economic rights. And that is something which is going to haunt India if this is not resolved. So medical was actually arguing that economic equality is something which cannot without which we cannot have political equality. And what we have is complete rejection of economic equality, which is at least in what you said, at least they are somewhere in the guiding principles of the republic. But that this is we are at the moment saying people's rights are something, economic rights are something that the state gives as some kind of charity and not as a matter of right. Yes, absolutely. Absolutely. You see, I made the last speech to the Constituent Assembly is where he had actually exercised that, you know, the constitution, political equality, but not social and economic. And for a very long time, it was believed that if the state took the initiative in promoting development, if the state actually followed the directive principles of state policy, in that case, you would find that economic equality would automatically be developed. In other words, you would allow economic inequalities of enormous divergence to come into being. And already by the end of the 1950s, economic inequality were rising because of which Nehru set up the Malanobis committee. But even so, I must say, the kind of economic inequality that existed was really relatively limited. I mean, at least if you look at the statistics produced by Piketty, for instance, and, you know, the other French economy, Piketty and Shanshal, they say that if you look at the percentage of total national income, which accrues to the top 1% of the population, then that percentage was as low as 6% in 1982. I mean, okay, you can quarrel with their figures and so on. That's always possible, I'm obviously. But on the other hand, that shot up during this period of neoliberal reforms, and that has actually shot up enormously now. And now they say it is higher than at any time since 1922, because they use income tax data and income tax introduced in India in 1920, higher than at any time in 1980. But it had gone down greatly until the early 1980s. So to some extent, economic inequality had been kept in check. But what has happened under neoliberalism, and particularly under the current dispensation that is totally wedded to neoliberalism, is really a tremendous widening of income. This of course has happened under neoliberal globalization all over the world. As you said, it starts in the 90s, and we still remember Manmohan Singh's speech where he talked about the animal spirits of capital, and how that must be liberated to develop the Indian economy, which meant greater and greater concessions, giving them free land, free mining rights, access to various other things, virtually gratis in various ways. Airwaves, that also became later on a scandal. So all of these things was there. But this government is combining along with the fragmentation of the people into setting one against the other. It's not just Hindu versus Muslim as it is thought, because the policies that are being set in motion of trying to bring about a unified monolithic Hindu rush denies diversity of various kinds, including linguistic diversity and various other identities besides. But that is being combined in this sense with this extremely aggressive, as you called it, pro-capitalist policies, hoping that people will then not look at all of these issues, but will only look at the Hindu, Muslim divide and rally behind the government. So in some sense, this is a strategy to distract attention away from fundamental issues that are plaguing the people. Actually, no, Hindu rush really is a bit of a misunderstanding, because Hindu rush creates the impression that it is a state in which Hindus are dominant. As a matter of fact, there's no such thing. It is majoritarianism, but the majority has very little to gain out of this majoritarianism. In fact, Hindu rush basically means a move towards an authoritarian fascist kind of state. And that fits in very well with a neoliberal economy, and particularly in a period in which the neoliberal economy is running into a crisis in which the growth rate slows down. As you know, even before the pandemic struck the Indian economy, the economy was doing very badly. It was doing so badly that they even suppressed the real consumer expenditure data, which showed that in rural India between 2011, 2012 and 2017-18, there was a 9% decline in per capita real consumption expenditure, which is an immense decline. So the economy was doing very badly, and so in such a situation, then Hindu rush becomes a way of attacking trade unions, of attacking democratic opposition, of attacking workers' rights, of attacking intellectual opposition and so on. So the Hindu rush is a bit of a misunderstanding, but it's actually a move towards an authoritarian state. Authorities state with the ideology in which they hope they'll unify or create a majoritarian, what shall we say, identity of a certain kind, where the people who are exploited rally behind them as well, thinking they're going to get some identity which will give them some quote-unquote feeling of oneness with the nation. So even if that oneness with the nation means oneness with Mr. Dambani's big telecom and now digital empire. It's a cover behind which you give all kinds of concessions. Yes, that's an interesting proposition. What you're saying is that the ideology is essentially, or the path is neoliberal, the cover. The ideological cover is of Hindu Rashtra, but what it is in essence, politically, it's an authoritarian government that we are going to see, authoritarian state which we are going to see, in which as somebody has written, I think in the Hindu or the expression that the opposition will be consigned to the night. And I like that phrase as the intent that all opposition should be consigned to the night. And that is the intent of this movement, that there should be only people who will say great leader and that is it. No criticism of how you're handling the pandemic, how you're handling the economy, how you're handling anything for that matters. And as you said, this is given the pandemic is given the excuse also for doing away with all kinds of labour reforms, labour rights and so on. Introducing what are called labour reforms, but essentially taking away to workers' rights. Yes, in fact, something with the working class had won after centuries of struggle are just being taken away from them. Including every hour day. Yes, and it's absolutely shocking. Okay, I mean workers not in this country alone, but all over the world had won after centuries of struggle. They've just been taken away, quite amazing. So Pramod, what is the way forward as far as the economy is concerned? As far the workers, the students, the other people, the peasantry, the landless labour. What are the rallying slogans equivalent to the 1930, what you called as a Karachi resolution? What is it that we do today? Basically, the point is that even before the pandemic, there was a very serious problem with the Indian economy. I mean, there was really a massive operation of the people which was taking place. It has been taking place for some time, but it had gathered momentum. And this, by the way, is again an international phenomenon, which is happening with the collapse or with the capitalist crisis. This is something which is there all over the third world, including in India. Now the pandemic has added to it. And therefore, when the pandemic is over, you would not only have the problem of coming out of the pandemic, which is not an easy thing. Because, you know, even if there is some revival of your consumption, revival of your investment would take a very long period of time. 1930s, when various capitalist countries were coming out of the Great Depression, their consumption good sectors revived, but not the capital good sector, not the investment good sector. As a result, the depression continued right until the second world war. So the point in any way, a revival from a shock like the pandemic is a very long drawn out process. But in addition, since the pandemic was occurring in the midst of already an ongoing, very serious crisis for countries like India, this is going to be a very difficult, the coming years are going to be very difficult. Now, many people have been talking about handing over purchasing power, including even the other day Dr. Manmohan Singh wrote about this, that actually there should be the handing over of purchasing power to the people in the state. Now, I am not very much in favor of it because I am in favor of this happening, not as a largesse on the part of the state. But it should be a right of the people. Now, I think therefore I would much rather have the institution of constitutionally guaranteeing a set of economic rights to the people, in which I would talk about the rights to employment, the right to food, the right to universal, publicly funded free healthcare through a national health service, the right to universal, publicly funded free education, at least up to the secondary level to everybody and of course the right to old age pension. So instead of what is being called as universal basic income, universal rights is the right way to go. I would much prefer that because that ensures to everybody the dignity of being a citizen of the country, to have a set of rights. Now, of course, that is a formal provision and these rights have to be justifiable, they have to be universal and so on. But along with the formal provision, you have to have an alternative economic strategy. In other words, simply legislating rights is something that does not really or if so fact to ensure that they would get this. So you'd have to have a kind of economic strategy and that economic strategy would have to emphasize the importance of protecting, promoting petty production and peasant agriculture. I mean, this whole idea that let peasant agriculture decline, let petty production by which I mean, let's say, fishermen, craftsmen, handloom weavers and so on, let them decline but because over a period of time they can get absorbed into the expanding capitalist industrial sector, that argument simply does not work. In fact, my view is that in the West it happened because of massive immigration to the so-called new world. 50 million Europeans migrated to the temperate regions of white settlements. We don't have any such possibility. So the idea that let capitalism grow by decimating the petty production sector, these people would get absorbed into the capitalist sector as proletariat is an idea which I think is untenable into this time and certainly in a third world context. Therefore, it will have to be very important to combine support and protection for the petty production and peasant agriculture sector together with modern industry. In other words, literally we have to walk as chairman Mao and sit on two legs that we cannot just have only one leg. We have to walk on two legs and therefore it requires a sort of variegated strategy which would require a planned intervention, a sort of planned intervention by the state and therefore this whole business of leaving things to the capitalist that the other wealth creators is in my mind completely... Any case is not capital that creates wealth but it is really labour. People's work creates wealth. It's a mixture of illusions. You can talk about even wealth created by capitalists. Even mainstream textbooks and economics. I'm not even talking about any philosophical position. Refer to four factors of production. Land, labour, capital and enterprise. So to pick out one of the four as a creator of wealth is something which is really absurd. That's an ideological prediction. It's not textbook economics or it's not understanding society. It's what you want to tell the people. Anyway, thank you Prabha for being with us and of course we'll come back to you on this as well as other issues. This is all the time we have for NewsClick today. Do keep watching NewsClick on YouTube and also visit our website.