Friday, June 26, 2015

Neoliberalism and Neofascism in India

Chirashree Das Gupta[i]

1.  Religious right and Neofascism

The rise of the Sangh Parivar and with it the BJP in its present form from the 1980s had initially led to a debate among the liberal intelligentsia as to whether they could be characterised as ‘fascist’. The BJP along with the other constituents of the Sangh Parivar in little more than a decade, from the demolition of the Babri Masjid to the Gujarat pogrom, resolved that question. On a more serious note, the debate within the Left about the nature of fascism in India led to a wide spectrum of writings. One strand was based on either a political critique [ii]aimed at exposing the project of Hindutva in its pristine form as envisioned by Savarkar in 1923 and later by Golwalkar in 1939 or by tracing the history of the Sangh Parivar from its precursors to present times. The other strand was based on political economy interpretations of European fascism of the 1920s and 1930s and comparisons with the trajectory of the RSS led formation and expansion of the Sangh Parivar. The two strands of scholarship overlapped and together formed the basis of the political debate that was vital to the emergence of a progressive praxis of wide alliance with all anti-communal forces against the BJP – a strategy that had worked periodically in terms of checking its meteoric rise but broke down under the contradictions of neoliberalism.

The connections, similarities and disjunctures of the historical origins of the present day Sangh Parivar with European fascism is important in understanding the continuities of the fascist project of ‘Hindutva’ since its inception. However, the emergence of the BJP since the 1980s as a major national party and the concomitant growth of the strength of the Sangh Parivar also needs to be contextualised as part of internationally resurgent neofascism. The rise of this wave of neofascism internationally through the decades of the 1980s and 1990s further needs to be put in context of wider political economy changes that have important implications, for example, in the construction of the ‘enemy’ from a fascist point of view. The proliferation of the organized god market which Meera Nanda[iii] calls the state-temple-corporate complex has been one manifestation of this with the most visible impact in education, tourism and urban public culture.  The other has been the focus on petty commodity production which has been argued to be the basis of commonality of socio-political agenda of Hindutva and neoliberalism in India[iv]. While these are informative, there is an analytical lacuna in the connection between monopoly capital, neofascism and neoliberalism in these readings.

2.  State and Fascism

Like fascism in the 1930s, Hindutva in its present form is part of a wider international resurgence of extreme right wing forces since the 1980s. Though varied in form and intensity, in their development in the last two decades, they manifest broad similarities in social basis (class support), political imperative, programme and method. In the last two decades, the coming together of the Christian fundamentalist right with the Zionist lobby in the USA is a potent example. The same period saw the strengthening of Likud in Israel, of Hyder in Austria, the revival of neo-Nazism in Germany and Britain, the rise of Berlusconi in Italy, the Danish People's Party in Denmark, Le Pen's National Front in France and the rise of the xenophobic right in Australia. What these neofascist forces have in common is a total commitment to neoliberalism articulated as the ‘market’ or ‘free market’ deriving from the domination of finance capital, just as much as the fascism of the 1930s, professed a commitment to the ‘state’ as the central institution for the reorganisation of society and the accumulation process.

As opposed to classical liberalism, which denied the state in the name of the individual, fascism reasserted the state as the supreme organisation. It was argued to stand for a principle which becomes the central motive of ‘man’ as a member of civilised society. The state in Mussolini’s masculinist reading dwells in the heart of the ‘man’ of action and of the thinker, of the artist and of the ‘man’ of science.

In terms of the role of the fascist state in the economy, Baker (2006) points out that fascist policies of the 1930s manifested a radical extension of state control over the economy. Fascist states nationalised key industries, managed their currencies and made large scale public investments. They also introduced price controls, wage controls and instituted state-regulated allocation of resources, especially in the financial and raw materials sector. Before the second World War in Nazi Germany, big business became increasingly organised around the Nazi state (finally running the concentration camps – the ultimate and most horrendous outcome of what is called privatization). The ties between the larger capitalists and the state in Italy became a mutually beneficial corporatist exercise[v].

3.  Fascist state and Monopoly Capital: Market and Neofascism

Based on the trajectories of the neofascist parties in Austria, Denmark, France, Germay, Italy, Norway and Britain, studies reveal that these forces couple a fierce commitment to neoliberalism glorified as the 'free market' with racist, supremacist messages that invoke the idea of the untermenschen in different ways. Tracing the connections between neofascism and neoliberalism, the continuity of the economic project of fascism in the consolidation of the power of monopoly capital has been emphasized [vi]. In this regard, big capital’s open consolidation around the BJP in the last few years is not very different in programme and method in India.

Contrary to popular belief, the construction of the enemy has not changed in the shift from fascism to neofascism. The list of enemies have merely been extended with a shift in emphasis from the Communist, the Jew, the homosexual and the physically or mentally challenged to primarily Muslims and working class immigrants in particular and 'Islam' in general. Thus the international dominance of finance capital and old and new cultural constructs of false indigenity have together given the BJP and its Parivar affiliates a universal ideology of neoliberalism and a particluar ideology of Hindutva in its present form, but the particular ideology has much in common with similar neo-fascist ideologies evolving in other countries. Very importantly, the spectre in the form of the ‘Muslim’ and the ‘Bangladeshi infiltrator’ has converged with the paranoid interpretations of neofascists and the religious right of the imperial world. Added to this, is the uneven but deliberate move in India to co-opt the Dalit agenda and the politics of social justice within a framework of ‘reforms’ (the euphemism for neoliberalism) and Hindutva[vii].

4.  Fascist government to class basis of the fascist state

The social basis of fascism has been strengthened gradually in the neoliberal era. The question now is whether the ‘take-over of the government’ by the BJP and its allies will transform over time into a ‘take-over of the state’ by the Sangh Parivar. In the period of the NDA’s earlier spell at the Centre, we saw the attempts at re-writing history and saffronisation of education by capturing institutions of the state, the total readiness to surrender to US imperialism and the zealous pursuit of asset stripping of the state. All of these have intensified under the present Modi government. The attempts to stifle dissent and the attempt to straight-jacket higher education along neoliberal and neofascist lines are manifest in the appointments being made at the top-level in higher education institutions, the move to implement CBCS and the clamp-down on organizations like the Ambedkar Periyar Study Circle.

In states where the BJP has been in government, it has facilitated through institutions of the state the re-assertion of the traditional ruling class (which switched its loyalties largely to the BJP after the implosion of the Congress) constituted by the upper-caste big land-owners along with the appeasement of the nouveau-rich urban upper class that derives its wealth from the financial market and real estate. Two examples would be relevant here: First, using the state for primary accumulation through ‘rentier’ means has accelerated. This is a familiar feature of accumulation under neoliberalism. Second, violence against women and especially rape, the traditional instrument of display of upper-caste misogyny and concomitant social subjugation of joru and jameen has exploded in the power of Khap panchayats and traditional dominant combines. This combination has always operated on the basis of fascist methods of breeding cultures of cruelty and fear[viii].

The institutionalization of this aspect of social domination on the one hand shows the reduction of the relative autonomy and narrowing of the class basis of the state, and on the other points to the convergence of the class basis of the state with that of Hindutva. It is this convergence that connects directly the relationship between neoliberalism and the rise of fascism in India and implicates both the Congress and the BJP along with their collaborators and junior partners.

5. Crisis of Imperialism and the conjoined twins of neoliberalism and fascism

Classical Fascism emerged at a time which was marked by three distinct and crucial characteristics.

It was a period of acute world capitalist crisis with all First World countries characterised by staggering levels of unemployment. Second, it was a period of intense inter-imperialist rivalry which was both a cause of the crisis and was in turn strengthened by it; Third, it was a period when there was a serious socialist challenge. The immediate post-First World War revolutionary upsurge had been stemmed. But in no capitalist country of the world, whether major or minor, was the bourgeoisie secure in power. (Patnaik 1993).

What was the Nazi response? The only economic restructuring that Nazi Germany did, after it came to power, was to annihilate the working class movement and to embark on war preparations. The Nazi boom between 1933 and 1939 was fuelled entirely by rearmament; the smashing of the trade unions to keep real wages down and inflationary pressures at bay[ix].

While the post war imperial order was an effort to emerge out of crisis and restore the circuits of capital nationally and internationally, the profound systemic crisis of capitalism kept manifesting since 1973. Very simply put, the ability of capitalism to innovate and expand by extending its frontiers had reached its limit leading to financialisation and rentier capitalism; with neoliberalism emerging as the ideology of managing this process. What is the neoliberal prescription globally? Keep real wages down, smash the labour movement and infinite war, expropriation of peoples and a scramble for natural resources.

It is this universal prescription which makes neoliberalism and neofascism conjoined twins in their common project of deploying the state towards this programme of narrowing the class basis of the state in favour of capital.

The extent of the crisis of the ruling class is determined by its capacity to pass on the outcomes to the working class and other constituent classes of society. The nature of what is being passed on and to what extent are specific to ‘balance of power’ in the specificities of social formations within nation-states and across nation-states.

6.  Capital, Labour and State in India

Contrary to dominant assertions, it was not so much the process of planning and Import Substituting Industrialisation (ISI) per se, but capital’s relationship with labour, that, defined the contours of the relation between the capitalist class and the state in the first two decades after independence in India. Since profitability was not raised through productivity growth, and wage depression was the only conduit to profitability, the maintenance of profitability through restrictions on labour acquired great importance.

The dependence of the Congress on its own trade union wing for legitimacy combined with the growth of rival political trade unions especially on the Left gave organised workers a new significance, even though the majority of workers in the economy remained outside the fold of the trade unions.

The Industrial Disputes Act 1947 had applied to all cases where one person was employed by another. Thus in the period between 1946 and 1955, an Act had actually envisaged the formalisation of all employer-employee relations in India. Indian capitalists wanted this to be changed and industry needed to be defined very specifically.

Opposition to the Industrial Disputes Act reverberated among capitalists as it entitled ‘any worker’ to raise ‘any industrial dispute’. Fear was expressed that,
…a university, a hospital, a restaurant, a boarding house, a shop, a circus, a theatre, a zoo, a charitable institution and even an educational institution have come within its scope. If a liberal interpretation is given to the definition, it will be within the law to include a church, a temple and a mosque or other places of worship and a private dwelling house. (All India Organisation of Industrial Employers 1954:7)

It is clear from the above that the adjudication machinery had made a serious effort to cover the entire area of labour exploitation encompassing the informal sector under the Industrial Disputes Act. However, resistance from capital, led to multiple amendments that significantly reduced the scope of adjudication based on a narrowing of the definition of industry to the formal factory sector.  This was the institutional basis of sustained informalisation of the labour force without any adequate legal option for taking retributive action in all sectors of the economy.

The first two decade after independence entailed two crucial victories for the capitalist class – first, the entrenchment of the Hindu family owned business group as the primary unit of organisation of capital (by legitimizing the Hindu Undivided Family as a tax and hence property holding entity) and the prevention of universalisation of labour rights in India. The capitalist class were also wary of the process of adjudication. The biggest resistance from capitalists came in addressing labour demands for wage standardisation and social benefits. The net result was the reinforcement of the capitalist dependence on the state for disciplining labour.

But from the late 1960s, cracks had begun to appear in these victories. The state’s ability to tax the rich shrank progressively through tax evasion and exemptions and failure to implement a policy based on direct taxation. The structural inability to maintain high levels of investment, and the inability to discipline capitalists to achieve high levels of productivity growth led to stop-go cycles in capital accumulation and these continuities both formed the context of the shift to neoliberalism and became more acute under neoliberalism.

State policies have directed a change towards deflationary policies since 1991. The neoliberal period has seen a reduction of labour’s bargaining power through the casualisation of the work force including in public sector undertakings. Rising land hunger, disproportionality crisis in the key sectors of the economy and ‘de-agriculturalisation’ have been the inevitable outcomes of this corporate-led growth process[x].

The evidence from the formal factory sector shows that for a product worth Rs 100, labour value was Rs 2.30 in 2011-12. In 1989-90, it was Rs 6.54. Profit to net value added increased from 19% to 54% in the same period. Gross capital formation as a proportion of output declined in the same period. So the neoliberal rhetoric of India’s labour laws being a reason for high labour cost in India is a complete figment of the imagination. Given the links between the formal factory sector and the large informal sector, the restructuring of the labour process under neoliberalism was the key to this achievement.

How was this achieved? The strategy was to repress wages, informalise formal sector employment, and resort to semi-feudal forms of labour on the pivot of patriarchy.

The state machinery has been crucial in facilitating this process by the executive not implementing labour laws and bypassing the legislature and democratic processes in subversion of labour laws, (the Rajasthan government’s changing of labour laws is the latest case in point), creating production zones where labour laws are not applicable, and the increasing class alliance of the judiciary with capital have been central to this process. Out of a sample of 100 landmark judgments on labour disputes in the last twenty years, ninety eight went in favour of employers.
The latest move in this regard and one of the many promises that the Modi government made to its corporate backers is to overhaul the entire system of labour laws in India through the new draft labour code of industrial relations in India. Legitimising child labour, bans on the right to strike and protest, total discretion of government to exempt employers, reducing the scope of applicability of labour regulation even further – the draft code is not only reminiscent of the fascism of the 1930s, but also goes further in the complete abrogation of all labour rights in terms of the time and jurisdiction of raising labour disputes and effective dilution of regulatory processes of inspection and monitoring.

7.  Labour, Patriarchy, Identity and Accumulation

Three decades of state-led capitalism preserved patriarchy in every sphere – through a process of mutating to remain immutable. Four decades of neoliberalism has brought in its wake newer forms of gender exploitation and new modes of gender disempowerment[xi]  leading to sharpening of both aspirations for emancipation from gendered dimensions of oppression and marked tendencies of intensifying patriarchal clout leading to increased intensity of violence against women. Hindutva is central to this project Market fundamentalism has bred religious and social fundamentalism as well, with disastrous consequences for many sections in society and especially women[xii].

The recent sectoral shifts in the economy have been on clear gender lines. Women were losing many of their earlier occupations, being crowded into less stable employment and were being pushed to the margins of the economy. The heterogeneous gender effects of neoliberal policies of the last few decades clearly point to a class dimension. The link between caste and class is established quite firmly in the link between the changes in the structure of production and the ‘driving out’ of Dalit occupations from the market without any substitute in terms of employment opportunities. So the status of Dalits in rural India is overwhelmingly that of landless, migrant workers[xiii].

All women are usually workers, whether or not they are defined or recognized as such. In all societies, there remain essential but usually unpaid activities which are largely seen as the responsibility of women. This pattern of unpaid work tends to exist even when women are engaged in outside work for an income, whether as wage workers or self-employed workers. Women from poor families who are engaged in outside work usually cannot afford to hire others to perform these tasks, so most often these are passed on to young girls and elderly women within the household, or become a “double burden” of work for such women. (Ghosh 2012)

These processes are integral to capitalism: the production of both use values and exchange values by women is essential for the accumulation process, and, if anything, this reliance has become more marked under neoliberalism because this is the easiest way to cheapen the value of labour.

In recognized work, women’s wage rates show very low or negative growth in Karnataka, Maharashtra and Tamil Nadu. Apart from ploughing and slowing, gender gaps in wages are persistent at their levels in all other agricultural occupations at the national level. Between 2008-09 and 2011-12, while real wages for non agricultural occupations like masonry (4%) and blacksmithing (4%) , have seen a modest increase in rural areas, most other occupations have registered either stagnating (carpentry and cobbling) or falling real wages (sweeping and unskilled labour).  Thus intensification of wage depression is the second significant feature of the current regime[xiv].

Lastly recent work on discrimination in the labour market provides evidence on levels and quantum of entry barriers and wage discrimination on the basis of caste, religion and gender demonstrating that the levels of discrimination are much higher in the private sector compared to the public sector[xv].

There is re-emergence of non-capitalist forms of labour in the fastest growing sites of accumulation – eg brick kilns, garment industry, construction sites  with increasing use of  family labour and bonded labour. According to Mazumdar, Neetha and Agnihotri (2013:62),

“…A case in point is the present labour law regime’s conceptual effacement of women workers’ individual entitlements where jodi based migratory labouring units are combined with piece  rate wages – as in brick kilns across the country and sugar cane harvesting in western and southern India. The significance of this issue, though noted in description, has been largely ignored in the literature... The findings show that a larger proportion of women of SC and ST backgrounds are concentrated in rural based circular migration marked by contractor driven debt/advance based tying of male female jodi labour. This in turn has interlocked semi-feudal bondage and semi-feudal patriarchal practices into recruitment and employment practices of a section of the developing modern industries, highlighting the primitive basis of their mode of accumulation…”.

Combining these with ways of controlling labour on the basis of gender, religion and caste identity, appeals to feudal patriarchy in the name of tradition and the bogey of denying security of citizenship rights to Muslims and Dalits (with both direct coercion, expropriation and violent pogroms; and using indirect modes of labour control), the system works to perfection in its ability to deliver labour virtually free to India’s capitalists – big and small.

It follows then that resistance to fascism cannot be confined to outrage over violence, pogroms and use of ultimate fascist methods, but has to be built into the democratic struggles against caste, patriarchy, neoliberalism, semi-feudalism and capitalism. So it is a question of how far and in what ways are we willing to take on these every day assaults by the conjoined twins of neofascism and neoliberalism?


[i] An earlier version of this note was presented at a seminar in Kolkata in July 2014. A shorter and earlier version of this note has been published in Punarnaba.
[ii] For an overview of the literature, see Basu 1993; Patnaik 1993; Sarkar 1993; Yechury 1993; Gondhalekar and Bhattacharya 1999; Noorani 2002; Puniyani 2004; Jaffrelot 2007.
[iii] The God Market, 2009
[iv] Shankar Gopalakrishnan 2011
[v]  Guerin 1975; Patnaik 1993
[vi] Kitschelt and Mcgaan 1995; Bigioni 2005
[vii] For an example, see Debroy and Shyam Babu 2005.
[viii]  See Aijaz Ahmad 2004 for a detailed exposition on the cultures of cruelty and fear.
[ix]Merson 1985; Patnaik op.cit.
[x]  For detailed discussion on each of these aspects, see Nagraj 2008; Patnaik 2006; Patnaik 1972; U Patnaik 2006
[xi] Elson 2002
[xii] Hirway 1999; Sen 2001
[xiii] Franco 2002
[xiv] Mahajan 2012; NSSO data , various years.
[xv] Thorat and Attewwell 2010; Papola 2012

Chirashree Dasgupta is Associate Professor at  Jawaharlal Nehru University, New Delhi.

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