‘We must harness private capital, not be enslaved by it’ | punjab$chandigarh | Hindustan Times
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‘We must harness private capital, not be enslaved by it’

Speaking on the topic ‘Pathways out of neoliberalism -- Can we revive the development state?’ Prof Chibber argued that neoliberalism, globally, is “in deep crisis” and this has become more profound in the last one decade starting from the economic crisis of 2007-08.

punjab Updated: Jul 21, 2017 23:01 IST
Mukesh Rawat
(From left) Institute for Development and Communication director Dr Pramod Kumar, keynote speaker Prof Vivek Chibber, from New York University and Prof Harish Puri attending the first Randhir Memorial Lecture on neoliberalism in Chandigarh on Tuesday.
(From left) Institute for Development and Communication director Dr Pramod Kumar, keynote speaker Prof Vivek Chibber, from New York University and Prof Harish Puri attending the first Randhir Memorial Lecture on neoliberalism in Chandigarh on Tuesday. (Keshav Singh/HT)

One fine Sunday in 1994, Professor Randhir Singh was invited by a small group of budding scholars for a talk in New Delhi.

It will be of only two hours sir, this is how the group persuaded Singh to be part of the discussion, to which he agreed. When the designated Sunday arrived, the group met Singh at 10am and eight hours later, the discussion was still on. This was Professor Randhir Singh, a renowned thinker and author of his time who was associated with various communist movements in the country since 1939.

The anecdote was revealed by Professor Vivek Chibber of the New York University, USA, during the first ‘Randhir Memorial Lecture’ at the Institute for Development and Communication (IDC), Sector-38 A, Chandigarh on Monday. Singh was the founder member of IDC.

Speaking on the topic ‘Pathways out of neoliberalism -- Can we revive the development state?’ Prof Chibber argued that neoliberalism, globally, is “in deep crisis” and this has become more profound in the last one decade starting from the economic crisis of 2007-08.

He said the discontentment among the working class, even in the West, is arising out of stagnated income and the rich-poor divide, which has now been institutionalised.

Reviving the developmental state

Addressing the debate on the relevance of the ‘development state’, Prof Chibber said in the global south (the developing countries of Asia, Africa, and Latin America), people argue in favour of going back to the ‘development state’ from their current neoliberal market conditions.

The development state is the market arrangement that existed prior to the widespread acceptance of neoliberalism. It was marked by a protected economy with varying degree of state intervention.

Prof Chibber reasoned that these countries favour this revival because the regimes under the development state had elements of redistributive justice in terms of anti-poverty commitments. Furthermore, the economic growth in this phase was “quite respectable”. “Thus, people believe that going back to the development state will be a solution to the neoliberal crisis they are in,” he said.

Conflicts under Nehruvian policies

Describing the contradictions in the developmental polices adopted by Jawaharlal Nehru, Prof Chibber said, “Nehru and his planners took it for granted that their responsibility was to guide capitalists how to operate.” For this, they also needed the power to discipline the capitalist class by saying no to things that were demanded against the plan, he said.

He explained that on the other hand, the capitalist class wanted state intervention (in terms of lower tariffs, infrastructure support, availability of market etc) but desired that the intervention should be at their behest. “This is where the conflict arose. It was later responsible for the switch from the protected economy that India was, to embracing neoliberal polices marked by economic liberalisation,” he said.

Criticising the development state under Nehru, he said India was a protected market and the capitalist class “had no domestic or outside competition” because the state took upon itself to protect them.

“However, while the planners protected the domestic capitalists, this also insulated them from technological advancements,” he said.

Going back not desirable

On the question of whether it is possible to go back to the development state and if it desirable to do so, he said it’s difficult to switch back because the political support for the development state is no longer. “Furthermore, the big capitalists are committed to the neoliberal state as it caters to their interest.”

He argues that even if we are somehow able to go back, this switch is undesirable. “This is because the development state failed to live up to its own promises of redistribution of wealth and to ensure that capitalism was favourable to the poor.”

But how was it possible for neoliberalism to be embraced so swiftly? Prof Chibber explains that this was possible because there was no resistance from the working class. This in turn was because under the development state, the working class and the trade unions were “systematically made toothless”.

Is there a way out?

Commenting on the prevailing market conditions, he said they are ironical because despite high growth rates in India, jobs are scanty. “We are presently trying to find ways within the capitalist system. Private capital is needed but we must harness it and not be enslaved by it,” he said.

“The case at present is of humanising capitalism, make working conditions more enjoyable and put socialism as the agenda.”

He added, “We need massive state-led intervention in terms of public sector investment that creates jobs. China, despite its many political and economic loopholes, has been able to resolve its unemployment menace. It will soon enter into an era of labour shortage.”

However, he asserted that this is just a temporary measure. “The permanent change will not come out of the bourgeoisie or the capitalist class. It rather has to come from an organised working class resistance. But, it’s easy said than done,” he said.