Economist Venkatesh Athreya delivered an inaugural lecture during the national seminar "The Working Class Movement in India- Past,Present,Future" on September 24-25, 2009 at at the University of Mumbai. Pragoti carries the text of the lecture as a story.
1. Colonial Rule
As this seminar gets under way in the city of Mumbai, one naturally recalls one of the pioneers of the working class movement in India in the late nineteenth century, N. M. Lokhande, a disciple of the great social reformer Jyotiba Phule. Long before trade unions of a modern type came into being in India, Lokhande espoused the cause of workers and was a pioneer in attempts to impart literacy and rudimentary education to the workers of factories in the late 19th century. The credit for producing one of the tallest leaders of the Indian working class, Comrade B.T.Ranadive, also goes to Mumbai. Permit me to commence this inaugural address by paying my homage to these two leaders and other countless leaders and activists of the working class movement who are no longer with us now.
One of the key impacts of colonial rule in India was the process of decimation, through most of the nineteenth century and especially its first half, of artisanal industry and massive deindustrialization which led to the shift of population on a large scale from urban areas to rural India. This was of immense political and economic significance. It meant that the emergence of a modern working class would be an enormously complex and protracted process under especially unfavourable circumstances characterized by the threefold exploitation of labour: pre-capitalist, colonial and capitalist. Although the railways and associated engineering industries beginning in the 1850s, soon followed by the development of the cotton textile industry, and later, jute, sugar and cement, did see a rapid increase in the numbers of the industrial workforce, it was a workforce drawn from a distressed rural population rendered greatly vulnerable by British colonial policy in relation to land tenure, land revenue and agriculture. This not only meant extremely low wages determined by the prevailing miserable living standards of the rural poor and highly exploitative conditions of work, but also that the emerging working class would be steeped in pre-capitalist relations, both in terms of economic ties to land and agriculture and in terms of caste and other obscurantist structures and values. Even the very process of recruitment of workers to industrial jobs through labour contractors would often imply that workers in any factory would already be compartmentalized in terms of religion, caste and location of origin. This would of course pose huge challenges to the working class movement in its efforts to organize workers into unions and to develop their political and class consciousness.
Under these circumstances, it was no surprise that while the political organization of the Indian bourgeoisie had already taken concrete shape in the formation of the Indian National Congress by the mid 1880s, the first modern trade union emerged only in the second decade of the twentieth century in the shape of the Madras Labour Union of the workers of Buckingham and Carnatic Mills in the then Madras Presidency. The first national conference of the All India Trade Union Congress took place only in 1920. However, as is well known, the trade union movement made rapid strides in the 1920s, inspired both by the Russian Revolution of October 1917 and the mass national movement against colonial rule. Plagued by internal divisions and facing the systematic repression of trade unions by the colonial rulers who foisted conspiracy cases against prominent trade union and working class militants, the movement of the working class suffered several setbacks in the 1930s, but managed to survive and then gradually strengthen itself under the leadership of the political Left, with intermittent but inconsistent support from a section of the leaders of the Indian National Congress. The working class played an important role in the transition to freedom from colonial rule, a wave of industrial action being a prominent feature of the two years on the eve of independence, 1945 and 1946.
2. Working Class Movement in Independent India prior to neoliberal economic reforms, 1950 to 1990
The national and international context at the time of India’s independence was conducive to the relatively autonomous development of capitalism in India. For over three decades, the Indian ruling classes did attempt such a path of development. While this path, based in the first instance on stimulus to growth from public investment, import substitution and limited land reforms, did produce a rate of economic growth and diversification of industrial activities that was impressive in relation to the stagnation of the colonial period, it ran into a crisis by the mid 1960s, and the economy was characterized by relative stagnation from the mid 1960s to the end of the 1970s. The roots of the crisis lay in the fact that the Indian bourgeoisie compromised with landlordism and imperialism, with the result that neither the agrarian revolution could be completed nor the fight against imperialism carried forward consistently. However, during this phase of economic development from the early 1950s to the end of the 1970s, the working class expanded significantly and the working class movement made rapid strides as well.
The impressive achievements of the working class and trade union movement in this phase become evident when one recalls that during colonial rule, well into the twentieth century, fifteen hour working days were common in factories and the daily real wage was often poorer than the daily prison rations. Despite the systematic attempt by the Congress after independence to split every one of the mass organizations that had been under one banner during the freedom movement, and despite serious ideological differences within the Left movement itself, militant and united trade union struggles took place through the turbulent 1970s, thanks to the maturity of the leadership of the most militant segments of the trade union movement in that period, the high points of that decade being the formation of the United Council of Trade Unions (UCTU) and the historic strike of railway workers.
By the end of the 1970s, major changes occurred in the international economy. Massive building up of financial surpluses in the hands of the global transnational corporations following thirty years of uninterrupted growth at about 5 % per annum compound of the world from the end of the second world war, the petro-dollar accumulation in the metropolitan banking system following the massive increases in the price of crude oil in 1973 and 1978, and the vast expansion in the various funds emerging from the savings of workers and employees for the post retirement phase of their lives all led to the rise of finance capital on an unprecedented scale. The breakdown of the international monetary system evolved at the Bretton Woods conference of 1944 where the World Bank and the IMF were created, and the simultaneous revolution in information and communications technology led to the emergence of a world economy in which highly centralized, large finance capital acquired enormous power.
The 1980s saw both the rise of finance capital and the massive attack on trade unions and working class rights on both sides of the Atlantic-the USA and the UK. The new international conjuncture provided the Indian bourgeoisie the opportunity to borrow from international financial institutions, both official (World Bank, IMF etc.) and private (such as commercial banks), and embark upon a loan-financed expansion of government expenditure to stimulate economic growth. Acceptance of large scale international loans, beginning with the 5 billion SDR loan from the IMF in 1981, brought with them strong conditionalities requiring reining in of wages and rising administered prices. The early1980s saw a major attack on trade union rights in India, with the passing of the National Security Act (NSA) and the Essential Services Maintenance Act (ESMA). Sustained and militant struggles of the working class sought to stem the rising tide of repression.
3. Working Class Movement and Neoliberal Reforms, 1991-2009
By the end of the 1980s, the global tide of reaction had been greatly strengthened by the smashing of militant trade unions in USA and UK and the weakening and ultimate collapse of the socialist economies of Eastern Europe, with imperialism playing a key role in these events. The restoration of capitalism in Russia and the break-up of the USSR by 1991 made the international situation dramatically different from what it had been between 1950 and 1980. Meanwhile, the policies of loan-financed government expenditure and import liberalization of the 1980s led India into a twin crisis- a fiscal crunch and collapse of the balance of payments-by 1991, brought forward by massive capital flight in early 1991. This provided the minority Congress government of Narasimha Rao the excuse to effect a major shift in economic policies in favour of foreign finance capital.
Popularly known as LPG –L for liberalization, P for privatization and G for globalization-policies, the economic reforms have entailed removal of most norms of accountability of private capital in the name of deregulation, opening up of vast new spaces for profit-centered operations in fields as diverse as education, health and infrastructure in the name of privatization, and the relatively unrestricted movement of goods, services and finance into and out of India. The period of neoliberal reforms has been by far the most challenging period for the Indian working class movement. With the State lining up strongly behind both international and domestic large capital, and ignoring the interests of working people, both rural and urban, altogether, the working class has had to fight a defensive battle, especially with the collapse of socialism in many countries and a strong ideological offensive mounted by a triumphant capitalist order.
In retrospect, and contrary to claims made sometimes that the neoliberal order has more or less eliminated resistance, with even such resistance as has been mounted by the political Left being largely ‘tokenist’, it is remarkable that the working class movement in India under Left leadership has managed to sustain its struggles and retain its base among working people, having successfully carried out major partial and general industrial strike actions over the last decade and a half. The electoral verdict of 2004 and the impact of the Left on government policies in the period 2004-2009 stand testimony to the resilience of the Indian working class movement under trying conditions. While the neoliberal policy framework remains in place, the ruling classes have also had to concede ground in a number of instances. Thus, the UPA 1 regime which began by notifying the Fiscal Responsibility and Budget Management Act three days before presenting its first budget in July 2004 ended its first term by passing two important Acts-the National Rural Employment Guarantee Act and the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act-in versions that had been improved substantially by the intervention of progressive forces both inside and outside the Parliament.
The UPA began its second term in office by admitting the role of such measures as the national rural employment guarantee scheme (NREGS) and the Farm Loan Waiver in its electoral victory, thus attributing the victory not to neoliberal policies but to potentially pro-people interventions. It would of course be completely wrong to suggest that the government has moved away from neoliberal policies. On the contrary, its panic stricken measures to further liberalise the financial sector and open it up to speculative forces of global finance indicate that even while advanced capitalist economies are seeking greater regulation of private players in the wake of the global economic crisis, our rulers remain firmly committed to disastrous neoliberal policies. The government has also repeatedly declared its commitment to privatization of even profit-making public sector enterprises. But it is important to understand that the slowing down of the reform juggernaut preceded the global economic crisis and is in substantial measure due to the active resistance put up against these policies by the working class movement led by the political Left in our country.
4. Challenges Ahead
The point of the foregoing narrative is not to encourage any sense of complacency about the progress of the working class movement, but merely to recall its resilience during a phase when objective conditions-both national and international-have forced it to be on the defensive. In fact, as should be obvious, the working class movement in India faces immense challenges. First of all, the very structure of India’s workforce highlights the complexity that the movement has to confront. As of 2004-05, India’s workforce was estimated at nearly 460 million. Of these, only 70 million were in any kind of regular employment. Another 130 million were casual or contract wage workers. But the majority of India’s working people-the remaining 260 million-were in fact ‘self-employed’, being for the most part tiny producers or persons forced to engage in some income earning activity on their own for a pittance, given the absence of any kind of social security for the poor in our country. Such increase in employment as has taken place since the late 1990s has been either in the informal sector or in informal employment in the formal sector.
Absolute levels of formal employment in the organized manufacturing sector have shown no rise for over a decade, despite high rates of growth of manufacturing output. The share of wages in gross value added in manufacturing has been declining steadily since the early 1980s. A significant part of the country’s workforce-including the wage employed- is at very low levels of education. A substantial part of the working population is linked to land and to pre-capitalist relations.
Ideologically, the forces of obscurantism and of identity politics continue to exercise a strong influence even on the segments of the working population including industrial workers that are part of the technologically advanced sectors of the economy. Divisions of caste, religion, language and ethnicity have not disappeared, and continue to influence the consciousness of workers, thus making the task of developing the class and political consciousness of the working class a major challenge. Where the democratic movement has advanced through decades of struggle, there is emerging an all-in unity of the most reactionary forces against it. Neoliberal policies, while deepening the crisis of working people’s lives, also provide a fertile soil for growth of divisive forces that make it even more difficult to build the unity of the working class and of the broader sections of working people.
It is only through a relentless struggle against both neoliberal policies and obscurantist forces of all hues that the working class movement will be able to go forward. The current global economic crisis and the bankruptcy of neoliberalism that it has exposed as well as the present disarray in the camp of obscurantism may well be an opportunity that the working class movement can seize to go forward. However, this demands also that the working class movement must carry with it the overwhelming mass of petty producers including the peasantry but without succumbing to the political illusions of petty commodity production or romantic conceptions concerning the dynamics of social change that tend to underplay the role of science and productive forces.
 Interestingly, the emergence of the Ahemdabad Textile Labour Association, at about the same time, represented a very different response to dealing with the conflict between Capital and Labour. Formed with the blessings of Mahatma Gandhi, the ATLA was based upon the paternalistic notion that employers and workers were one family, and the employers as the heads of the families should treat their children, the workers, kindly, while the workers should accept the parental status of their employers and obey them. Historical experience has shown the irrelevance of the ATLA model.