(FROM Crisis of Neoliberalism and challenges before Popular Movements)
Behind periodic crises, said Marx more than 160 years ago, lurks a complex interplay of myriad forces, the most important being “the epidemic of overproduction” or overaccumulation of capital going hand in hand with increasingly skewed distribution of income and wealth.
Marx showed that capital’s frantic endeavour to overcome inherent constraints like mass poverty and inadequate demand leads to artificial credit-induced “forced expansion” or bubbles, which get deflated sooner rather than later. But this false prosperity built on debt always bounces back in the shape of sudden crisis – much like a rubber band getting stretched and snapping back – resulting in a recession/depression. Essentially, that is what has been happening with remorseless regularity, especially since the onset of the neoliberal policy regime.
Marx developed a perfectly dialectical approach to crises. On one hand, they constitute capitalism’s inbuilt mechanism for spontaneously and ruthlessly eliminating excess or over-accumulated capital, ‘so that the cycle would run its course anew’ (Capital). On the other hand, they achieve this in a manner that ‘paves the way for more extensive and more destructive crises, and diminishes the means whereby crises are prevented’ (Communist Manifesto) and leads finally to the ‘violent overthrow’ of the rule of capital (Grundrisse). It is from this approach that we have tried to comprehend the crisis of neoliberalism.
The central message emanating from the latest financial catastrophe and its aftermath is that global capitalism’s strategic response to the crisis of 1970s has failed. That was a three-pronged strategy comprising deregulation or market fundamentalism, globalisation and financialisation. Since these were the three pillars on which post-1970s capitalism stood – and, in certain parts of the world, flourished – the extensive damage they have suffered have left the whole imposing edifice tottering. This is why there is no end to aftershocks like the European Sovereign Debt Crisis. This is why, full five years after the onset of the crisis, the world economy is still in the doldrums.
But even a systemic crisis like the present one does not necessarily mean that the system is going to collapse anytime soon. The question is, who will bear the burden of the stubborn recession into which the financial catastrophe of 2008 metamorphosed? The common people? Or the big banks and corporate honchos – responsible for the breakdown yet bailed out by governments? An intense struggle to decide this all-important question is now going on across the world in multiple forms – intellectual debates, street battles and parliamentary struggles.
All of us must join the fight with all our might, for a rollback of the neoliberal policy regime and progressive reform now and ultimately for revolutionary transformation of this irrational, oppressive, inhuman social order.”
Did you think India will ‘shine’ again if somehow – say by wooing FDI, cutting subsidies and further opening up of the economy – the yesteryears’ high GDP growth could be brought back? And that will make us a happier people?
Think again. And get the basic facts right.
The current crisis notwithstanding, our country is considered an IT superpower with one of the world’s highest rates of growth in the number of dollar millionaires and billionaires, and Indian corporates spreading their wings in global skies. Affluent India revels in conspicuous consumption and unbridled accumulation. But the massive foundation that produces all the wealth remains mired in the dark depths of deprivation. Such cruel contrast, it is necessary to note, is a direct result of our highly skewed development strategy. As the Global Hunger Index 2012 Report says, “Between 1990 and 1996, GHI score [a lower score indicates lower incidence of hunger, and vice versa – A Sen] was falling commensurate with economic growth. After 1996, however, the disparity between economic development and progress in the fight against hunger widened... In two other South Asian countries – Bangladesh and Sri Lanka – GHI scores were also higher than expected but decreased almost proportionally with GNI per capita growth.... China has lower GHI scores than predicted from its level of economic development. It lowered its levels of hunger and under-nutrition through a strong commitment to poverty reduction, nutrition and health interventions, and improved access to safe water, sanitation, and education. ... India ranked second to last on child underweight out of 129 countries— below Ethiopia, Niger, Nepal, and Bangladesh. ... [W]omen’s poor nutritional status, low education, and low social status undermine their ability to give birth to well-nourished babies and to adequately feed and care for their children .... According to surveys during 2000–06, 36 percent of Indian women of childbearing age were underweight, compared with only 16 percent in 23 Sub-Saharan African countries...”
Well, such are the consequences of two decades of economic reform carried out by successive governments at central and state levels. So nothing short of a total rollback of the neoliberal policies imposed on us in the name of reform and development will lift India out of the morass. That, of course, should not mean a return to the bad old days, a new opening is always possible. An inclusive, egalitarian, gender-just, environment-friendly policy framework must replace the current devastating policy regime, which pushed the advanced capitalist countries into a severe crisis a few years ago (the recession and other problems are far from over) and is now doing the same to India.
Obviously, such a fundamental change can only be achieved through a hard, protracted struggle. Let us rise to the occasion, let us join this urgent battle.