February 5, 2009 — drsubrotoroy
Someone once wondered if you can play chess without the Queen; I wonder, can a poem be written without words?
Certainly no country other than the United States might have its modern history sought to be told of in a medley such as this.
July 31, 2007 — drsubrotoroy
A letter to Prof. Sen
First published in The Statesman 31 July 2007, Editorial Page Special Article
Professor Amartya Sen, Harvard University
Dear Professor Sen,
Everyone will be delighted that someone of your worldwide stature has joined the debate on Singur and Nandigram; The Telegraph deserves congratulations for having made it possible on July 23.
I was sorry to find though that you may have missed the wood for the trees and also some of the trees themselves. Perhaps you have relied on Government statements for the facts. But the Government party in West Bengal represents official Indian communism and has been in power for 30 years at a stretch. It may be unwise to take at face-value what they say about their own deeds on this very grave issue! Power corrupts and absolute power corrupts absolutely, and there are many candid communists who privately recognise this dismal truth about themselves. To say this is not to be praising those whom you call the “Opposition” ~ after all, Bengal’s politics has seen emasculation of the Congress as an opposition because the Congress and communists are allies in Delhi. It is the Government party that must reform itself from within sua sponte for the good of everyone in the State.
The comparisons and mentions of history you have made seem to me surprising. Bengal’s economy now or in the past has little or nothing similar to the economy of Northern England or the whole of England or Britain itself, and certainly Indian agriculture has little to do with agriculture in the new lands of Australia or North America. British economic history was marked by rapid technological innovations in manufacturing and rapid development of social and political institutions in context of being a major naval, maritime and mercantile power for centuries. Britain’s geography and history hardly ever permitted it to be an agricultural country of any importance whereas Bengal, to the contrary, has been among the most agriculturally fertile and hence densely populated regions of the world for millennia.
Om Prakash’s brilliant pioneering book The Dutch East India Company and the Economy of Bengal 1630-1720 (Princeton 1985) records all this clearly. He reports the French traveller François Bernier saying in the 1660s “Bengal abounds with every necessary of life”, and a century before him the Italian traveller Verthema saying Bengal “abounds more in grain, flesh of every kind, in great quantity of sugar, also of ginger, and of great abundance of cotton, than any country in the world”. Om Prakash says “The premier industry in the region was the textile industry comprising manufacture from cotton, silk and mixed yarns”. Bengal’s major exports were foodstuffs, textiles, raw silk, opium, sugar and saltpetre; imports notably included metals (as Montesquieu had said would always be the case).
Bengal did, as you say, have industries at the time the Europeans came but you have failed to mention these were mostly “agro-based” and, if anything, a clear indicator of our agricultural fecundity and comparative advantage. If “deindustrialization” occurred in 19th Century India, that had nothing to do with the “deindustrialization” in West Bengal from the 1960s onwards due to the influence of official communism.
You remind us Fa Hiaen left from Tamralipta which is modern day Tamluk, though he went not to China but to Ceylon. You suggest that because he did so Tamluk effectively “was greater Calcutta”. I cannot see how this can be said of the 5th Century AD when no notion of Calcutta existed. Besides, modern Tamluk at 22º18’N, 87º56’E is more than 50 miles inland from the ancient port due to land-making that has occurred at the mouth of the Hooghly. I am afraid the relevance of the mention of Fa Hiaen to today’s Singur and Nandigram has thus escaped me.
You say “In countries like Australia, the US or Canada where agriculture has prospered, only a very tiny population is involved in agriculture. Most people move out to industry. Industry has to be convenient, has to be absorbing”. Last January, a national daily published a similar view: “For India to become a developed country, the area under agriculture has to shrink, urban and industrial land development has to take place, and about 100 million workers have to move out from agriculture into industry and services. This is the only way forward for bringing prosperity to the rural population”.
Rice is indeed grown in Arkansas or Texas as it is in Bengal but there is a world of difference between the technological and geographical situation here and that in the vast, sparsely populated New World areas with mechanized farming! Like shoe-making or a hundred other crafts, agriculture can be capital-intensive or labour-intensive ~ ours is relatively labour-intensive, theirs is relatively capital-intensive. Our economy is relatively labour-abundant and capital-scarce; their economies are relatively labour-scarce and capital-abundant (and also land-abundant). Indeed, if anything, the apt comparison is with China, and you doubtless know of the horror stories and civil war conditions erupting across China in recent years as the Communist Party and their businessman friends forcibly take over the land of peasants and agricultural workers, e.g. in Dongzhou.
All plans of long-distance social engineering to “move out” 40 per cent of India’s population (at 4 persons per “worker”) from the rural hinterlands must also face FA Hayek’s fundamental question in The Road to Serfdom: “Who plans whom, who directs whom, who assigns to other people their station in life, and who is to have his due allotted by others?”
Your late Harvard colleague, Robert Nozick, opened his brilliant 1974 book Anarchy, State and Utopia saying: “Individuals have rights, and there are things no person or group may do to them (without violating their rights)”. You have rightly deplored the violence seen at Singur and Nandigram. But you will agree it is a gross error to equate violence perpetrated by the Government which is supposed to be protecting all people regardless of political affiliation, and the self-defence of poor unorganised peasants seeking to protect their meagre lands and livelihoods from state-sponsored pogroms. Kitchen utensils, pitchforks or rural implements and flintlock guns can hardly match the organised firepower controlled by a modern Government.
Fortunately, India is not China and the press, media and civil institutions are not totally in the hands of the ruling party alone. In China, no amount of hue and cry among the peasants could save them from the power of organised big business and the Communist Party. In India, a handful of brave women have managed to single-handedly organise mass movements of protest which the press and media have then broadcast that has shocked the whole nation to its senses.
You rightly say the land pricing process has been faulty. Irrelevant historical prices have been averaged when the sum of discounted expected future values in an inflationary economy should have been used. Matters are even worse. “The fear of famine can itself cause famine. The people of Bengal are afraid of a famine. It was repeatedly charged that the famine (of 1943) was man-made.” That is what T. W. Schultz said in 1946 in the India Famine Emergency Committee led by Pearl Buck, concerned that the 1943 Bengal famine should not be repeated following dislocations after World War II. Of course since that time our agriculture has undergone a Green Revolution, at least in wheat if not in rice, and a White Revolution in milk and many other agricultural products. But catastrophic collapses in agricultural incentives may still occur as functioning farmland comes to be taken by government and industry from India’s peasantry using force, fraud or even means nominally sanctioned by law. If new famines come to be provoked because farmers’ incentives collapse, let future historians know where responsibility lay.
West Bengal’s real economic problems have to do with its dismal macroeconomic and fiscal position which is what Government economists should be addressing candidly. As for land, the Government’s first task remains improving grossly inadequate systems of land-description and definition, as well as the implementation and recording of property rights.
With my most respectful personal regards, I remain
June 18, 2007 — drsubrotoroy
American Turmoil: A Vice-Presidential Coup – And Now a Grassroots CounterRevolution?
First published in
The Statesman, Editorial Page, Special Article June 18 2007
The Cold War was lost by Soviet and East European communism, and the laurelled victor was the USA along with its loyal allies. Russia and East Europe then transformed themselves. Once there had been Dubcek in the Prague Spring and Sakharov in his apartment. Then there was Lech Walesa the electrician, who, on 14 August 1980, climbed over a fence and led an 18-day strike from which arose the first independent trade union ~ Walesa said “the very basic things: he stood on the shipyard gate and called things by their real names”. Then came Gorbachov and Yeltsin. The despised Berlin Wall was smashed into small saleable bits in November 1989 and people just walked across. That was the end of communism. An unknown student stood down the tanks in Tiananmen Square — though a dozen years earlier the death-watch of Chinese communism had begun with Wei Jingsheng’s “Democracy Wall”. Communist apparatchiks everywhere (except New Delhi and Kolkata) started to unlearn communism; communist societies and economies began to be placed on a road to health and taken off the road to misery.
What happened to the victors? Germany quietly unified. Italy’s politics stabilised a little. France achieved its wish of being undominated in Europe. Britain, already forlorn from loss of empire, was left trying to arbitrage between Europe and America (though there too there was new competition from the Irish Republic).
Some political learning, reconciliation and growth took place in Europe but there was none in America ~ the biggest victor of all, the one country but for whose efforts all of Europe might have become and remained communist. Instead, the USA chose to gorge itself on self-accolades, bloated, then started to choke on its own hubris.
The result is that as the 2008 Presidential election campaign gets underway, and the Second Iraq War is at its peak, America’s polity at its highest level may be in turmoil of a sort not seen since the student revolts at the peak of the Vietnam War.
Gerald Ford and Jimmy Carter were an interregnum after the Vietnam and Watergate traumas. It was during the Reagan “restoration” that communism collapsed and Osama bin Laden was befriended. Carter’s military mission to rescue American hostages in Iran notoriously failed; Reagan restored American pride by sending in the US Army’s crack Rangers to defeat an almost non-existent enemy ~ in Grenada. It was the first successful American military action in a long time. But there was also failure in Beirut where Reagan withdrew after 241 US soldiers were killed by a suicide-bomber.
George Bush Sr glided into the Presidency in Reagan’s wake. He felt sure of being re-elected when Saddam’s 1990 invasion of Kuwait gave him a war with which to seal his chances. For his part, Saddam had primly and properly called in the US Ambassador to Iraq, the top career diplomat April Glaspie, and told her he had accounts to settle with Kuwait over the Iran-Iraq war. Glaspie, under instructions of the Bush-Baker State Department, famously told him the USA had no opinion on inter-Arab conflicts. Saddam took this to be a green signal, or at least not a red signal, from America and went ahead with his attack on Kuwait.
The American President worked himself into an angry indignation ~ and soon there were large numbers of American troops in Saudi Arabia, soon Iraq was forced to retreat with thousands slaughtered in a turkey-shoot from the air, soon there would be severe sanctions and bombings by the USA and UK. Bush was sure he would be re-elected in 1992, and indeed he led all the polls ~ except an oddball surprise Ross Perot pulled away his votes, and caused the third man running, a young governor of a minor State, to push through to victory instead. Bill Clinton was as surprised as anyone that he was President of the USA in 1992. Dissimulation and mendacity reached new heights during his time yet he came to be re-elected in 1996.
Osama bin Laden started to rant against his former ally. Remove your troops from our holy land, he said. Clinton and Madelaine (“It’s worth it”) Albright continued to bomb Saddam instead ~ who after all had launched a few backward Scuds at Israel during the First Iraq War of 1991. Somehow or other, Osama and/or someone else then designed the destruction of Manhattan’s tallest buildings on September 11 2001; it remains unclear what projectile hit the Pentagon or exactly what happened over a field in Pennsylvania the same morning. The mass murder of thousands remains unsolved.
America, under Bush’s elder son, attacked Osama’s hosts in Afghanistan (but not so as to upset their common Pakistani friends too much), then turned their really motivated firepower against their old foe, Saddam Hussein. Iraq by the summer of 2003 was destroyed as a nation-state, and today in 2007 under American occupation has been almost wholly destroyed as a culture and a society. The new US Embassy in Baghdad is as large as the Vatican. Fourteen permanent American military bases have been built. The US Government has spoken of moving troops from Saudi Arabia to Iraq, and of being in Iraq for ever on the Korean pattern.
United States history and political culture had never seen a Vice President as being anything more than an invisible silent shadow of the President of the land. That has changed drastically. Indeed in recent months there has been much serious Washington talk of the incumbent Vice President having unlawfully usurped political power from the President himself. Cheney’s people throughout the Bush Administration have been in almost open battle against the official foreign and diplomatic policy of Condoleeza Rice and the professional military represented by the Joint Chiefs of Staff. Before the attack on Iraq they had overturned the CIA’s official intelligence assessments. There is a general perception that Cheney’s people have been far shrewder and more experienced of the Washington Beltway than Bush’s.
Attack on Iran?
Now the central issue has been whether to attack Iran, and if so how and when. Cheney’s people and their think-tank friends are determined America must do so, perhaps with a new Netanyahu Government in Israel early in 2008 or sooner. The President was apparently warned by his generals in December 2006 that such an attack would gravely endanger the supply lines of US troops who would face a Shia insurrection in Iraq; that may have been the sole reason no attack occurred, and also one reason for the present infantry “surge”. Three aircraft carrier battle groups in the Persian Gulf indicate a potential strike, and that level of force has been coming and going from there for months.
The main Democratic Presidential candidates, especially Mrs Clinton, have said nuclear weapons are “not off the table” in reference to striking Iran without provocation. Nine out of ten of the Republican Presidential candidates agree. The exception is Ron Paul who has recognised the United States was not intended by its founders to be launching aggressive nuclear war against non-nuclear countries in the 21st Century. The Reagan-era economist Paul Craig Roberts has said such war will leave America more reviled than Hitler’s Third Reich.
A grassroots democratic counter-revolution could be starting to overturn the elitist coup d’etat that may have occurred in Washington. “People power” beat organised State power in many times and places. Can it win here? Or could there be tanks in Dupont Circle forty years after the tanks in Wenceslas Square?
January 14, 2007 — drsubrotoroy
Dr Singh’s India, Buddhadeb’s Bengal, Modi’s Gujarat have notorious US, Soviet and Chinese examples to follow ~ distracting from the country’s real economic problems
By SUBROTO ROY
First published in The Sunday Statesman, Editorial Page Special Article, Jan 14 2007
AT a business meet on 12 January 2005, Dr Manmohan Singh showered fulsome praise on Buddhadeb Bhattacharjee as “dynamic”, “the Nation’s Best Chief Minister”, whose “wit and wisdom”, “qualities of head and heart”, “courage of conviction and passionate commitment to the cause of the working people of India” he admired, saying “with Buddhadeb Babu at the helm of affairs it appears Bengal is once again forging ahead… If today there is a meeting of minds between Delhi and Kolkata, it is because the ideas that I and Buddhadebji represent have captured the minds of the people of India. This is the idea of growth with equity and social justice, the idea that economic liberalization and modernization have to be mindful of the needs of the poor and the marginalized.”
With such support of a Congress Prime Minister (as well as proximity to Pranab Mukherjee), Mr Bhattacharjee could hardly have feared the local Congress and Trinamul would pose any threat in the 2006 Assembly Elections despite having more potential voters between them than the CPI-M.
Dr Singh returned to the “needs of the poor and the marginalized” at another business meet on 8 January 2007 promising to “unveil a new Rehabilitation Policy in three months to increase the pace of industrialisation” which would be “more progressive, humane and conducive to the long-term welfare of all stakeholders”, while his businessman host pointedly stated about Singur “land for industry must be made available to move the Indian manufacturing sector ahead”.
The “meeting of minds between Delhi and Kolkata” seems to be that agriculture allegedly has become a relatively backward slow-growing sector deserving to yield in the purported larger national interest to industry and services: what the PM means by “long-term welfare of all stakeholders” is the same as the new CPI-M party-line that the sons of farmers should not remain farmers (but become automobile technicians or IT workers or restaurant waiters instead).
It is a political viewpoint coinciding with interests of organised capital and industrial labour in India today, as represented by business lobbies like CII, FICCI and Assocham on one hand, and unions like CITU and INTUC on the other. Business Standard succinctly (and ominously) advocated this point of view in its lead editorial of 9 January as follows: “it has to be recognised that the world over capitalism has progressed only with the landed becoming landless and getting absorbed in the industrial/service sector labour force ~ indeed it is obvious that if people don’t get off the land, their incomes will rise only slowly”.
Land is the first and ultimate means of production, and the attack of the powerful on land-holdings or land-rights of the unorganised or powerless has been a worldwide phenomenon ~ across both capitalism and communism.
In the mid-19th Century, white North America decimated hundreds of thousands of natives in the most gargantuan land-grab of history. Defeated, Chief Red Cloud of the Sioux spoke in 1868 for the Apache, Navajo, Comanche, Cheyenne, Iroquois and hundreds of other tribes: “They made us many promises, more than I can remember, but they never kept any except one: they promised to take our land, and they took it.”
Half a century later, while the collapse of grain prices contributed to the Great Depression and pauperisation of thousands of small farmers in capitalist America in the same lands that had been taken from the native tribes, Stalin’s Russia embarked on the most infamous state-sponsored land-grab in modern history: “The mass collectivisation of Soviet agriculture (was) probably the most warlike operation ever conducted by a state against its own citizens…. Hundreds of thousands and finally millions of peasants… were deported… desperate revolts in the villages were bloodily suppressed by the army and police, and the country sank into chaos, starvation and misery… The object of destroying the peasants’ independence…was to create a population of slaves, the benefit of whose labour would accrue to industry. The immediate effect was to reduce Soviet agriculture to a state of decline from which it has not yet recovered… The destruction of the Soviet peasantry, who formed three quarters of the population, was not only an economic but a moral disaster for the entire country. Tens of millions were driven into semi-servitude, and millions more were employed as executants…” (Kolakowski, Main Currents of Marxism).
Why did Stalin destroy the peasants? Lenin’s wishful “alliance between the proletariat and the peasantry” in reality could lead only to the peasants being pauperised into proletarians. At least five million peasants died and (Stalin told Churchill at Yalta) another ten million in the resultant famine of 1932-1933. “Certainly it involved a struggle ~ but chiefly one between urban Communists and villagers… it enabled the regime to obtain much of the capital desired for industrialization from the defeated village… it was the decisive step in the building of Soviet totalitarianism, for it imposed on the majority of the people a subjection which only force could maintain” (Treadgold, 20th Century Russia).
Mr Bhattacharjee’s CPI-M is fond of extolling Chinese communism, and the current New Delhi establishment have made Beijing and Shanghai holiday destinations of choice. Dr Singh’s Government has been eager to create hundreds of “Special Economic Zones” run by organised capital and unionised labour, and economically privileged by the State. In fact, the Singur and Nandigram experiences of police sealing off villages where protests occur are modelled on creation of “Special Economic Zones” in China in recent years.
For example, Chinese police on 6 December 2005 cracked down on farmers and fishermen in the seaside village of Dongzhou, 125 miles North East of Hong Kong. Thousands of Dongzhou villagers clashed with troops and armed police protesting confiscation of their lands and corruption among officials. The police immediately sealed off the village and arrested protesters. China’s Public Security Ministry admitted the number of riots over land had risen sharply, reaching more than seventy thousand across China in 2004; police usually suppressed peasant riots without resort to firing but in Dongzhou, police firing killed 20 protesters. Such is the reality of the “emergence” of China, a totalitarian police-state since the Communist takeover in 1949, from its period of mad tyranny until Mao’s death in 1976, followed by its ideological confusion ever since.
Modern India’s political economy today remains in the tight grip of metropolitan “Big Business” and “Big Labour”. Ordinary anonymous individual citizens ~ whether housewife, consumer, student, peasant, non-union worker or small businessman ~ have no real voice or representation in Indian politics. We have no normal conservative, liberal or social democratic party in this country, as found in West European democracies where the era of land-grabbing has long-ceased. If our polity had been normal, it would have known that economic development does not require business or government to pauperise the peasantry but instead to define and secure individual property rights and the Rule of Law, and establish proper conditions for the market economy. The Congress and BJP in Delhi and CPI-M in Kolkata would not have been able to distract attention from their macroeconomic misdeeds over the decades ~ indicated, for example, by increasing interest-expenditure paid annually on Government debt as a fraction of tax revenues (see Table). This macroeconomic rot originated with the Indira Gandhi-PN Haksar capriciousness and mismanagement, which coincided with the start of Dr Singh’s career as India’s best known economic bureaucrat.
January 9, 2007 — drsubrotoroy
Hypocrisy of the CPI-M
Political Collapse In Bengal: A Mid-Term Election/Referendum Is Necessary
First published in The Statesman, Editorial Page Special Article, January 9 2007,
By Subroto Roy
For the 1991 Assembly elections, I happened to draft the West Bengal Congress’s election manifesto although I was not then or ever a member of that or any other party. There was no Trinamul but its future leader had made her jibe of there being watermelons who were red inside and green outside, aptly in case of a few senior leaders. The manifesto quoted George Orwell’s denunciation of communist ruling classes, and was so hard-hitting that the CPI-M’s Sailen Dasgupta came out with a statement he had never read a Congress manifesto that had been so harsh on them; privately, I took that to be a compliment though the Congress of course lost the election. There is no one in Bengal who does not want to see Bengal prosper, and the most candid vigorous political conversation is necessary to discover what in fact is true and what ought or not to be done.
The functioning of the Basu-Bhattacharjee CPI-M is quite utterly amazing. It deserves to be called such because of the seamless transfer of power that occurred between the two men in November 2000. The Chief Minister in a parliamentary democracy is supposed to have the confidence of the House, yet when Jyoti Basu stopped being CM and anointed Buddhadeb Bhattacharjee to succeed him, not even a perfunctory vote of confidence was asked for in the House ~ a fact I brought to the attention of the-then editor of The Statesman who agreed with me it signified the CPI-M’s contempt for the parliamentary institution they have been ruling over for decades. By contrast, there is already talk in Britain of an early general election as soon as Gordon Brown takes over from Tony Blair.
It is the same contempt for democratic parliamentary norms that Mr Bhattacharjee and company reveal today in pushing through their diabolical plan to acquire farmers’ lands on behalf of their businessmen friends.
All of 37% of those voting in the 2006 Assembly Elections voted for the CPI-M. By contrast, 41.2% voted for Trinamul and Congress together. Add also the 11.4% of those who voted for the Forward Bloc, RSP and CPI all of whom though part of the Left Front have been opposing the CPI-M on this cardinal issue. That constitutes prima facie evidence that a majority of 52.6% vs. 37% of voters may oppose the CPI-M’s present course of action. Mr Bhattacharjee heads a Government that is supposed to act not merely in the interest of members or groups of his own party or those who have flattered or financed it, but everyone in West Bengal including those who voted against the CPI-M as well as those who did not vote at all.
Gerhard Schröder dissolved the German Bundestag in 2005 though his own party held a majority there. He did so merely because his party lost a provincial election and he felt that indicated loss of confidence in it at the federal level also. Such is how genuine modern democracies work. In India to the contrary, we have had notorious misuse of the Constitution when State Governments were dissolved merely because they were ruled by parties opposed to that which had won a Union-level General Election. Even so, India remains a Parliamentary democracy at Union and State levels, and the Government of the day may advise the Head of State to dissolve the House and call for new elections to be held. It may do so even when there is no legal necessity to do so, i.e., even when it is secure with a majority of seats. It may do so because a political necessity has arisen for doing so.
If Mr Bhattacharjee is a genuine democrat, as he wishes to convey an impression of being, he should advise the Governor to dissolve the Assembly because the CPI-M wishes to go to the people to seek a mandate for its plans for the State’s industrialisation and forced acquisition of farm lands towards that end. The Trinamul, Congress, SUCI, Maoists and others including perhaps the CPI, FB, RSP and others will state their opposition, while he, Mr Nirupam Sen and their party will be able to articulate for West Bengal’s voters exactly what they propose to do and why. The CPI-M is adamant its cause is right while the Opposition have been agitating in the streets for months, and miniature civil war conditions now prevail in parts of rural Bengal; worse may be yet to come. There is only one way in a supposedly democratic society like ours to discover what should be done, and that is to dissolve the Assembly and call an election. Both sides will have a chance to articulate their positions to the public, and a vote will be held. There the matter would end. It is the one constructive way forward for the State, and indeed for the nation as a whole. (Alternatively, the Governor could be advised to request the Election Commission to administer India’s first referendum on a single agreed-upon question like “The West Bengal Government’s industrialisation and land-acquisition plan deserves citizens’ support: Yes/No”.)
If an Assembly election comes to be called and the CPI-M falls below a pre-set target of the vote-share, say 33%, or the Left Front below, say, 45%, then Mr Bhattacharjee, even if he commands a majority of seats again, will know he has no mandate and that he must stop and reconsider what he is doing. As I have said in these columns, West Bengal’s main economic problems are financial, having to do with Rs. 92 billion (Rs 9,200 crore) being paid as annual interest on the State Public Debt in 2004, and this may reach Rs 200 billion shortly. Economic development of the State has precious little to do with private businessmen making small cars or motorcycles or putting up buildings for information technology institutes, as Mr Bhattacharjee and his Government have deluded themselves into believing.
CPI-M 2003 statement
Besides its lack of democratic mandate, what surprises most about the modern CPI-M is its sheer hypocrisy. This is a party whose “Central Committee” in June 2003 in Kolkata condemned “non-Left State Governments” for allegedly “giving away thousands of hectares of land either on sale or on lease at throw-away prices to multinational companies and domestic monopolists”, and the Union Government for allegedly issuing “a circular calling for forcible eviction of lakhs of adivasis from the land”. The Basu-Bhattacharjee CPI-M is now clearly hoist with its own petard. Tilak said that what Bengal thinks today, India will think tomorrow. It was not for nothing that he said it. If the CPI-M refers the land-acquisition question to the people in a free and fair election or referendum today, it will set a positive precedent for other States and parties in the country. If instead it pushes forward its current diabolical plans, the example it will have set will be one of initiating a class war in reverse, where the poor shall become poorer and the rich richer. India’s poorest consist of those rural inhabitants without land, and Government would have deliberately contributed to their numbers swelling.
(Author’s Note March 2007: The original article in its first paragraph referred mistakenly to Promode Dasgupta when Sailen Dasgupta had been meant, an error corrected in the next day’s paper.)
December 31, 2006 — drsubrotoroy
LAND, LIBERTY & VALUE
Government must act in good faith treating all citizens equally ~ not favouring organised business lobbies and organised labour over an unorganised peasantry
By SUBROTO ROY
First published in The Sunday Statesman Editorial Page Special Article, December 31 2006,
EVERY farmer knows that two adjacent plots of land which look identical to the outsider may be very different in character, as different as two siblings of the same family. Adjacent plots may differ in access to groundwater and sunlight, in minerals and salts, in soil, fertilisers, parasites, weeds or a dozen other agronomic factors. Most of all, they will differ in the quality and ingenuity of thought and labour that has gone into their care and cultivation over the years, perhaps over generations.
John Locke said: “Whatsoever that (a man) removes out of the state that Nature hath provided and left it in, he hath mixed his labour with and joined to it something that is his own, and thereby makes it his property… For this labour being the unquestionable property of the labourer, no one but he can have a right to what that once joined to, at least where there is enough and as good left in common for others” (Second Treatise of Government). Plots of land are as specific as the families that have “mixed” their labour with them. Locke wrote of labour being something “unquestionably” the labourer’s own property; in the same libertarian vein, Robert Nozick opened Anarchy, State and Utopia saying “Individuals have rights, and there are things no person or group may do to them (without violating their rights)”.
But as we recognise the universal sanctity of the individual person and his/her private property, we have to start qualifying it. If you purchase a field, forest or estate through which runs a pathway traditionally used by the public to get from one side to the other then even as the new owner you may not have a right to forbid the public’s use of the pathway. By extension, it is clear the State, the community of which you are a citizen, may approach you and demand there should be and will be a public road or thoroughfare through your property in the common interest. Such is the sovereign’s right of “eminent domain” recognised throughout the world, not only in times of war or natural disaster but also in normal times where private property may be taken for public use. The individual’s right to free use of his/her property is circumscribed as a result.
What may be certainly expected though in all matters is that the State will act in good faith, i.e., that it has conducted proper technical surveys and cost-benefit analyses as well as transparent public hearings, and has honestly decided that the road must be constructed using this route and no other. The doctrine of eminent domain implies that while the right to private property may be basic, it is not absolute, as indeed no right is, not even the right to one’s own life. In India, one key difference between the landmark Golaknath (AIR 1967 SC 1643) and Kesavananda Bharati (AIR 1973 SC 1461) rulings had to do precisely with the former recognising the right to property being fundamental as in our original 1950 Constitution, while the latter consented to the Indira Parliament’s denial of this.
When private property is taken, fair compensation must be paid. For example, the American Constitution says “no private property may be taken for public use without just compensation”. What is just compensation? Typically it would be the “fair market value” — but that must be properly adjudged accounting for the best future use of the land, not merely the historical or traditional past use of the land.
Consider, in a mature urban real-estate market, a plot made vacant because a warehouse located on it has accidentally burned down. What is the value of the plot now? Another warehouse could be built, but other bids could come in too for construction of offices or residential flats or a multi-storey garage. The plot’s value would differ depending on which use it is ultimately put to. And this value would be ascertained by calculating the expected cash flows into the future from each of these possibilities, discounted appropriately to account for the fact the future is less valuable than the present, with the highest value alternative being chosen. That is how a mature private real-estate market works in theory, though in practice there would be zoning and environmental restrictions to account for the traditional nature of the neighbourhood as well as possible pollution by effluent waste etc.
In India, Government departments and ministries have inherited prime urban real estate from British times. Amidst the highest value real estate in Kolkata, Bangalore, Delhi etc. will be found a military camp or flats built for military personnel, having nothing whatsoever to do with furtherance of the nation’s defences today. The appalling state of government accounting and audit of our public property and institutions includes the fact that neither the Union nor State Governments and municipalities have the faintest idea of assets, including real estate, that they own. These public assets are frequently open to abuse by managerially uncontrolled government employees.
Fallacies even more curious seem to be currently at work in Indian policy-making, whether by this or that political party. The “eminent domain” doctrine requires a public purpose to exist for acquisition of private property by the State: e.g. construction of a road, bridge, dam, airport or some other traditional public good which is going to be used by the public. In India as elsewhere, “land reform” did involve taking an absentee landlord A’s land and distributing it to B, C, D and E who worked as peasants on it. But nowhere else outside formerly communist China has land been forcibly taken from peasants B, C, D and E and handed over to this or that private capitalist in name of economic development (in a reverse class war)!
Eminent domain doctrine requires good faith on part of the State with respect to its citizens and that implies treating all citizens’ interests equally – not e.g. favouring an organised business lobby or organised industrial labour over the unorganised peasantry uneducated in the wiles of city people.
Also, there is no reason why Government should be interested in a particular product-mix emerging out of a given private factory (such as the so-called inflation-unadjusted “Rs one lakh car” instead of telecom equipment or garments or textiles). Dr Manmohan Singh’s statement last week that he wishes to see “employment-intensive” industries merely added to Government confusion: from Henry Ford to Japanese “lean business” today, everyone knows the direction of change of technology in the automobile industry has been towards robotics, making modern manufacturing less and less manpower-intensive! The Tatas themselves underwent a major downsizing and restructuring in the last decade, hiving off industries not considered part of their “core competence”.
Traditional agriculture of Singur’s sort represents the most labour-intensive employment-generating kind of rural economy. While such rural life may appear unsatisfying to the urban outsider, there is, as Tolstoy, Rabindranath, Gandhi and others knew, subtle happiness, contentment and tranquility there absent in alienated industrial sprawls. “Surplus” labour occurs in agriculture because of technological improvements in quality and delivery of agricultural inputs as well as new education and awareness (Theodore W. Schultz,Transforming Traditional Agriculture). It is mostly seasonal and all hands are used during the harvest when even urban migrants flock back to help. Industry did not leave Bengal in the 1960s and 1970s because of Mamata Banerjee but because of urban unrest, the culture of gheraos and lockouts, and bad regulations of the labour and capital markets associated largely with Ms Banerjee’s Left Front adversaries.
The basic fiction the Union and State Governments have made themselves believe is that their idea of an industrialisation plan is necessary for economic development. It is not. Real economic problems in West Bengal and elsewhere are financial to do with State budgets. “Debt overhang is there” is how the RBI Governor apologetically put it last week. Interest payments on the West Bengal State public debt consume larger and larger fractions of the revenue: these payments were at Rs 13 Bn in 1995 but grew to Rs. 92 Bn by 2004, and may jump to Rs 200 Bn in the next decade. The communists have been in power thirty years and no one but they are responsible. Making the State’s budget healthy would require tackling the gargantuan bureaucracy, slashing ministerial extravagance (foreign trips, VIP security) etc. It is much easier to hobnob with the rich and powerful while tear-gassing the peasants.