“Sensex rises despite inflation,” blares the newspaper headline. Sweet innocence: the cub sub-editor who arranged the heading obviously does not know that actually one reason for the buoyancy in the share market is inflation. The constituents of society’s creamy layer mostly speculate in shares, including in foodgrains futures. Rising prices lead to further increases in their income, and a large part of the extra earnings once more travels towards the direction of the stock exchanges.
The callow sub-editor’s ignorance can be put up with. What about the country’s prime minister though? He has warned the political parties against playing petty politics with the misery of the people; they must, he insists, stay away from making an issue of rising prices. The gentleman has a past as a teacher of economics and is at present a practising politician, he should know the meaning of meaning. Politics in all epochs and in all countries aims at the seizure of power. The capture of power is not an exercise in abstraction. The power politicians aspire to — and seize — is intended to make use of instruments of various descriptions available to the State — administrative, legal, fiscal, monetary — to further their own interests and those of their near and dear ones; the latter category includes not just kith and kin, but caste, religious class or ethnic fraternities too. Those entrenched in power use this power to ensure the enlargement of economic benefits for their particular constituency. Those at present outside the orbit of power will similarly shout themselves hoarse to espouse the economic interests of those who make up their support base.
Politics, it follows, is all about economics, and vice versa. A very learned Russian gentleman has expressed it succinctly a century ago: economics is distilled politics. If the prime minister of our country does not know it, he can be politely invited to grow up. The more likely thing is that he himself is playing politics by claiming not to know what is what. The Left parties in the country have their support base amongst the weaker sections, most hard hit by inflation. The Left must therefore, for sheer survival, protest against rising prices and apply pressure on the authorities to do something about it. At the other end, the prime minister happens to be the person, who, as finance minister, way back in 1991, initiated the neo-liberal era by invoking the ‘animal spirit’ latent in our entrepreneurial classes to spring to life, thereby enabling the nation to embark on a great adventure of lush economic growth. The unleashing of the animal spirit is akin to prodding the predatory instinct of the producing and entrepreneurial classes to go on rampage and maximize their profit-taking to the extent possible by riding roughshod over all other considerations; how others in society live or die need not be on the agenda of the profit-takers. The inflation the Indian economy is currently experiencing is only a specific instance of predatory behaviour. Rising prices offer opportunities galore for raking up extra profits on the part of producers and traders. The rule of neo-liberal economics is very clear: the government has no business to interfere with the ongoing inflationary proceedings. It will now be tough going if the prime minister and his party request the profit-takers to exercise some moderation on the ground that elections are round the corner.
A dilemma is involved. It is a multi-party democracy, the poor make up the overwhelming majority of the electorate. There has to be at least a temporary restraint exercised by the predators at work on the price front if the party which has been their patron saint is to emerge successful in the forthcoming polls. This could, however, be a mission impossible. For meanwhile the predators have tasted blood. The concept of permanent loyalty too is alien to free enterprise. The prime minister has already come across evidence of this hard reality: deviant voices are a-stir even within his cabinet on both the wisdom of and the modus operandi for pulling back inflation. The creamy layer has travelled along its own learning curve. Since the government has, over the years, voluntarily withdrawn itself from the economic sphere and left it to the care of private entities, the levers of economic power are currently under the effective command of the creamy layer which has been the exclusive beneficiary of neo-liberal growth. This class, growing in size and strength over the years, may now be as many as a hundred million, or even more. Whatever the colour of the government nominally in charge, it has to seek the help of this set if economic administration is to proceed on a more or less even keel. At least, such is the assessment of those guarding the ramparts on behalf of the comfortably-placed legions liberal economic growth has begot. If a particular political party chickens out and fails to go the whole stretch to advance the cause of predatory capitalism, why, there are other parties of the right to do the job with joyous éclat.
True, the creamy layer is not an integer, it is marked by heterogeneities. On occasion, the interests of manufacturing entrepreneurs can be in conflict with those of traders or of the rich peasantry. At the same time, it can happen too that, for instance, a group of textile manufacturers simultaneously exercises control over groups entrenched in cotton-trading and cotton-growing as well; their internal contradictions can then be sorted out with relative ease. In any event, predatory groups working out compromises with other predatory groups is not that unusual in the nascent stage of capitalist growth; the magnitude of the plunder is so enormous that exploiting groups take to the policy of live-and-let-live. A kind of chaos comes to rage as profiteers determinedly proceed to make their pile, the workers and the rest of the poor are squeezed and squeezed, while the honest householder does not know in which direction to look for protection.
Given this lay of the land, the prime minister’s complaint does not even qualify to be described as clever by half. He himself is playing the game of politics when he expresses his reluctance to raise the interest rate across the board or to ban futures trading in foodgrains or to tax capital gains or share market transactions or to enlarge the public distribution system or to hunt down black money in order to control inflation. He cannot, after all, disown his support base. Should not one go a bit further? The prime minister is prime minister on account of the economic factors involved. There is, of course, the accompanying honour and glory, but these are incidental by-products of the opportunity the occupancy of the position provides to influence the distribution of income and wealth in society. Otherwise, the incumbent prime minister would by now have been a retired burgher whose last tenure was perhaps as vice chancellor of a dull, quiet university. Perhaps even this statement needs amendment. Because politics is economics, a university too is no longer just dull and quiet. Even within its precincts, a spoils system has come to exist. Some politicians regard the sphere of education to be an important base for grooming political support. They are therefore keen to manipulate university appointments. Even the admission of students is sought to be subcontracted to student groups supportive of the cause of this or that political party. There is no such thing as pure politics or, for the matter, pure education any more: it is all economics.
Courtesy: The Telegraph