Looking at the ongoing world-wide economic crisis and serious attempts at exploring ways and means to overcome it now and prevent it from recurring in the future, the return of Nehruvian approach seems to be a strong probability. Jawaharlal Nehru’s return from exile after more than a quarter of a century has been forecast by none other than the greatest living historian Eric J. Hobsbawm in an article ‘Socialism has failed. Now capitalism is bankrupt. So what comes next?’ (The Guardian, April 10).
It will be interesting to note that it is the same Jawaharlal Nehru, the process of whose banishment was begun by the first non-Congress government, headed by Morarji Desai and joined by Charan Singh, the self-appointed guardian of Indian peasantry besides all sorts of Nehru baiters from the followers of Dr. Lohia to the RSS, in addition to some frustrated ex-Congressmen. This process got accelerated during the regime of P. V. Narasimha Rao when India embarked on economic reforms, inspired by the ten points of the Washington consensus, reached between the 15th and 19th streets of Washington, DC and formulated by John Williamson. A horde of economists and propagandists descended from America on India, especially New Delhi and Mumbai with their baggage of received wisdom. Some could manage entry into the corridors of policy-making process while others began spreading their wisdom through the media.
The collapse and disintegration of the Soviet Union, the virtual death of NAM and withering away of Congress Socialist Forum besides financial bankruptcy of the country, brought about by the V.P. Singh-Chandrashekhar governments had so demoralized the intelligentsia that, rightly or wrongly, it came to believe that there was no alternative to what was being done in the name of reforms. People like Gurcharan Das, a former sales executive of the US multinational, Procter and Gamble, arrived with his book India Unbound, blaming Nehru and his policies for all the economic ills of India. The book was showered with praises by protagonists of the Washington consensus, but eminent economists like Amartya Sen and Dani Rodrik pointed out the absurdities in Das’s claims. Sociologist Dipankar Gupta logically countered the formulations and conclusions of Das by publishing his forceful book Mistaken Modernity. Yet the corporate-controlled media went on applauding him. The grapevine has it that he is soon coming up with a new book which is said to have traced the roots of the Washington consensus to the Mahabharata. One may recall that a former chief of the RSS had written a piece that was included by the then BJP government of Rajasthan in a school text book. It had asserted that nuclear weapons existed in ancient times in India and there was a non-proliferation treaty whereby only Brahmins and Kshatriyas were allowed to use them. As ill luck would have it, there was a big uproar in Parliament and this "great discovery" was deleted.
Let us turn our attention to Eric Hobsbawm. He says, even though we are living in the 21st century, we are still in the grip of the basic ideas that are no longer credible. In fact they have "patently disappeared down the plughole of history." We have made two practical attempts to realize our ideal socio-economic formation in their pure forms. They were "the centrally state-planned economies of the Soviet type and the totally unrestricted and uncontrolled free-market capitalist economy. The first broke down in the 1980s, and the European communist political systems with it. The second is breaking down before our eyes in the greatest crisis of global capitalism since the 1930s. In some ways it is a greater crisis than in the 1930s, because the globalization of the economy was then not as far advanced as it is today, and the crisis did not affect the planned economy of the Soviet Union. We don’t yet know how grave and lasting the consequences of the present world crisis will be, but they certainly mark the end of the sort of free-market capitalism that captured the world and its governments in the years since Margaret Thatcher and President Reagan.
"Impotence therefore faces both those who believe in what amounts to a pure, stateless, market capitalism, a sort of international bourgeois anarchism, and those who believe in a planned socialism uncontaminated by private profit-seeking. Both are bankrupt. The future, like the present and the past, belongs to mixed economies in which public and private are braided together in one way or another. But how? That is the problem for everybody today, but especially for people on the left."
The "pure, stateless, market capitalism" had different names in different countries. New Labour in Britain believed that socialism was irrelevant because the new strategy would generate more wealth and social-democrats had to see that it was equitably distributed. In India, the 10 points of the Washington consensus were dished out in the garb of economic reforms. Consequently, jobless growth became prominent, regional disparities and social inequalities increased rapidly. Vulgar display of wealth and ostentatious living styles became the norm. All these led to increase in corruption, crimes, kidnappings for ransom, terrorist activities and regional chauvinism.
Anand Giridhardas in International Herald Tribune (April 10, 2009) observes in the context of the ongoing economic crisis: "I worry far more for the developing world, for places like India, which has been mimicking the American superstructure without building an equivalent foundation, pursuing the effect without the cause.
"India seems, on the surface, to have arrived. There are the requisite global luxury boutiques; restaurants that serve sophisticated food in tiny portions with something called coulis drizzled across the plate; Indian firms that make multi-billion dollar acquisitions; software companies that write code for the world; songs that win Oscars and hearts many thousands of miles away.
"But perhaps it has all come too quickly, and served to crowd out the hard slog of constructing a modern society in more than name alone. Yes, India has Louis Vuitton, but how easy is it to be gay there? Yes, its companies have dazzled the world, but why do their workers complain still about the hierarchical, soul-draining work culture? Yes, it won an Olympic gold medal last year, but why has it been so hard to recast servants as people paid, not born, to serve?"
We have to ponder over the economic strategy we have pursued since 1991, after banishing Nehru. If we want a prosperous India for all, we have no alternative but to give up the belief that private profit-making enterprise is always better, more efficient way of doing things. We have to, in the words of Hobsbawm, "return to the conviction that economic growth and the affluence it brings is a means and not an end. The end is what it does to the lives, life-chances and hopes of people…. The test of a progressive policy is not private but public, not just rising income and consumption for individuals, but widening the opportunities and what Amartya Sen calls the "capabilities" of all through collective action. But that means, it must mean, public non-profit initiative, even if only in redistributing public accumulation. Public decisions aimed at collective social improvement from which all human lives should gain. That is the basis of progressive policy – not maximizing economic growth and personal incomes."
Prof. Amit Bhaduri in a recent article "A Failed World View" in Economic and Political Weekly (January 31, 2009) has very convincingly argued that the very basis – the Washington consensus – of our economic reforms and strategy is flawed and is not going to satisfy the masses of this country who look towards the Congress-led UPA for eradication of poverty, rapid increase in job-opportunities, lessening of regional imbalances and inequalities in the distribution of income and wealth. Liberalisation, privatization and unbridled profit motive cannot fulfill their aspirations. Planning and public sector have to be revived and state has to intervene effectively in the removal of regional disparities in development.
It is high time that Nehru is brought back and the Washington consensus and their votaries are given a goodbye. All those experts roaming in the corridors of power and advocating full convertibility of rupee on capital account and privatization of public sector commercial banks should be politely told to go back. The G-20 summit on April 2 in so many words underlined the irrelevance of the Washington consensus and asserted the increased role of state in economic affairs. Now with elections over and a popular government in the saddle one expects a statement that Nehruvian strategy is indispensable in the present circumstances.