Critical Observations on Neo-liberalism and India’s New Economic Policy by Raju Das

1. Critical Observations on Neo-liberalism and India’s New Economic Policy by Raju Das Vishaal Yepuri

2. What is NEP? • “Represents demands of the capitalist class, and more specifically, the demands of hegemonic fractions of the domestic and foreign-diasporic capitalist class at a particular stage in the development of Indian and global capitalism.” • Creates a set of conditions that allows for domestic and foreign capital to invest money to make a lot of money through use of cheap natural resources, speculation, and exploitation of cheap skilled/unskilled labour. • Key goal is to bring in foreign capital/technology and strengthen the Indian business position within the export markets

3. Implementation of NEP • Big business make specific demands on the state (deregulation of private businesses, privatisation of government businesses, trade liberalisation, permissions for foreign capital to own businesses in India, tax cuts and other incentives for businesses, freedom to hire and fire labour) • NEP not only deals with economic matters but also political and ideological conditions for accumulation strategies. (political – state repression/judicial coercion, ideological – market fetishism) • Neo-liberal program of bourgeois class first, and government policy second. A capitalist class project.

4. Effects of NEP • Small minority of winners and large majority of losers. • Greatly benefits capitalist class and upper castes of working class such as those in Finance, IT, real estate, and natural resources. • Foreign technology and cheaper intermediate goods. • Private wealth is displayed through pretentious lifestyles leading to differentiation of elite from majority. This reinforces class inequality and is often used by the elite to prop up neo-liberalism and market fetishism. • Bottom feeders (peasants, urban workers) experience economic inequality, insecurity, unemployment, casualisation, informalisation, greater labour exploitation, and lax implementation of protective factory acts. Lead to higher rates of suicide.

5. Rural neo-liberalism • Rural development expenditure as a percentage of the net national product has been decreasing. • Peasants are losing land to capitalist industrialisation and land speculation. The costs of cultivation increase with shrinking government support and there is a negative impact from the import of subsidised foreign farm goods. • Food production and availability per capita is decreasing as land is converted to non-food crops by big companies and small owners looking to make some cash. • Trade liberalisation cause farmers to be more vulnerable when prices fall. This distress creates a large reserve army of labourleading many to migrate to cities.

6. NEP as a Geographical Project • Massive restructuring of space relations produces geographical unevenness at multiple scales. (production of special economic zones/urban shopping malls, new roads, railway lines, airports, seaports geared towards the rich) • Peasants and bottom feeders of society are dispossessed of their lands. Exploitation occurs through brute force employed by private goons of big businesses as well as the legal force of state authorities. • Space is a commodity so infrastructure is a big business. With a need for large amounts of money for infrastructure, the state justifies welfare expenditure cuts and measures to accrue private capital through incentives.

7. NEP as a Geographical Project (cont) • Neo-liberal investment is geographically concentrated. Only some cities/states are developed while most places are not. • Urban areas growing five times faster than rural areas. • Regionally based elite compete with each other for external loans and domestic/foreign capital. • Competition between states is a means for punishment by which neo-liberalism is implemented. A state/city must give enough concessions to big business in order to attract investment.

8. NEP and Imperialism • Neoliberalism in peripheral countries is a part of global neo-liberalism. • Capitalism under rule of financial capital wants to withdraw many concessions such as welfare benefits and global business no longer wants to concede autonomy to peripheral states or bourgeoisie of poorer countries. • Neoliberalism is imposed by various international institutions under the name of conditionalities for loans. Some Indian states are run under budgetary guidelines formulated by the IMF, the World Bank, and etc. • Benefits a tiny minority but is detriment to the majority.

9. The NEP, Class Struggle, and the Left • Many strikes since the 1990’s. Resistance against crony capitalism and a huge focus on privatisation, liberalisation, globalisation, and less state support for farmers and workers. Sometimes a slower implementation of reforms. • The non-implementation of a living wage leads to wages falling below the cost of maintenance. The state supresses the right to strike and Factory Acts regarding worker safety remain unimplemented. The ease with which capital can hire and fire labour creates an environment for a heightened level of accumulation by exploitation. • State aim is to remove any barriers to the two methods of accumulation: accumulation by dispossession and accumulation by exploitation.

10. The NEP, Class Struggle, and the Left (cont) • Resistance considered biggest threat to nation.State repression justified as a crusade against anti-development struggles. • Capital represses workers by hiring goons to hurt/kill them, bribing union leaders, and by locking employees out. Capital strikes more prominent than labour strikes. • Left has put pressure on government to implement some pro-poor measures such as opening sectors of economy to international capital. • The Left does not truly support a mass movement against capitalism by the working class but rather supports the less powerful sections of the entrepreneurial class in order to help the bourgeois state maintain leverage to offset the pressure from foreign capital. • Left is not effective because it assumes issues with NEP can be solved simply with government regulations.

11. Conclusion • “The idea that there is such a thing as neo-liberalism (or capitalism) with a human face is based on the lie that the basic interests of capital are fundamentally compatible with the basic interests of the toiling masses in a sustainable, contradiction-free manner. Unregulated growth, control of society’s resources by big business, the exploitation of labour, income inequality and ecological devastation cannot be compatible with socially coordinated wealth creation, equality, solidarity, popular democracy and satisfaction of human needs. If this critique is right, then the intellectual and political project must have the larger goal of theoretically and practically transcending the very conditions that produce the neo-liberalism model itself."