The Political Economy of a Crisis

and VIJAY PRASHAD

Isn’t our life a tunnel
between two clarities?

Pablo Neruda, Libros de las preguntas, 1974.

In August 2006, Mamata Banerjee traveled to Singur, home to around 20,000 people in the state of West Bengal. Banerjee, who was once an activist in the Congress Party, floated her own front in 1997 (the Trinamul Congress Party — TMC), formed an alliance with the far right BJP two years later, and has since floundered to gain a footing in the state. Meanwhile, the Left had recently consolidated its political hold on the West Bengal, having ruled the state government since 1977 in a united front. The Left Front has won every election since 1977 with a two-thirds majority in the Legislative Assembly. In the last election, earlier in 2006, the Left Front increased its tally to three-fourths of the Assembly (the TMC lost half its sitting members). Nothing that Banerjee could do seemed to dislodge the robust alliance built by the Left. Her best chance was in the 2001 election, which was preceded by months of violence in Midnapur district, particularly along the Pingla-Garbeta-Keshpur belt. Banerjee claimed this was violence unleashed by the Communist Party of India (Marxist) [CPM], the largest component of the Left Front. She hoped to get a sympathetic central government (led by the BJP) to dismiss the state government on the eve of the elections. In fact, TMC cadres had begun the violence, in a brutal attempt to reverse the land reforms initiated by the Left in the 1970s.

Banerjee came to Singur, just north of West Bengal’s capital Kolkata, to squelch the government’s attempt to reinvigorate industrialization in the state. Descending from their three jeeps, TMC party members and Banerjee were joined by a handful of locals as she proceeded to plant rice on a small plot of land. Such political theatre was designed to lay bare her protest: that the government was in the process of acquiring land from the farmers on behalf of an Indian car manufacturing firm, the Tatas. The kisans of Bengal, she told the assembled media, would “shed blood.” This was a harbinger of what was to come, given the recent history of Midnapur.

By December 2006, the TMC, joined by reformed Maoists and anarcho-syndicalists, offered leadership to the minority of disgruntled farmers who refused to give consent for land acquisition (farmers who owned 952 acres of the 997 acres needed had signed consent letters by then). The Krishi Jami Raksha Samiti (KJRS), led by the TMC, began to harass those who signed consent letters (by damaging houses, for instance), and they went on a rampage against those who had come to fence the acquired land. In this vise, the state government sent in the police, who fired tear gas at demonstrators and arrested several dozen people. The government has since begun an investigation of the excessive police action (the police alleges that the KJRS threw “country bombs” at them).

Singur was the dress rehearsal for the next phase.

Singur spilled over across the Hooghly River, into East Midnapur district, to the area of Nandigram. Nandigram is an economically weak region, but it is within sight of major industrial growth, exemplified by the Haldia Petrochemical refinery and by a Mitsubishi chemical factory. The government was eager to develop Nandigram, using the area as the site of a mega chemical hub. The estimate is that this hub would employ about 100,000 people. This part of the project remained dormant, at a proposal stage. The Chief Minister of West Bengal, Buddhadev Bhattacharya, made a public statement to the effect that there would be no land acquisition without the widest political consultation. However, a document circulated by the Haldia Development Authority sowed the seeds of doubt. Bhattacharya dismissed the document.

Banerjee’s TMC, for the first time in years, saw the making of a political campaign against the Left Front government. Her party now pushed from Singur to Nandigram. When activist Medha Patkar came to visit Singur (a trip denied by the state government), she went to Nandigram, where the struggle, at that point, was muted. It came to a boil after Singur, as the TMC and its allies tried to build on the momentum achieved at Singur. In early January 2007, in two incidents, the police were assaulted, police jeeps were set on fire, and the state personnel was forced to withdraw from the area. CPM offices were destroyed, four thousand CPM supporters were removed from the region and roads into Nandigram were dug-up. In February, Chief Minister Bhattacharya held a public meeting near Nandigram, where he reiterated his commitment that no land would be used for the chemical hub and that the area would not be a Special Economic Zone (SEZ) if the people there opposed it. The violence against the CPM supporters continued, and Nandigram remained isolated. On March 14, 2007, the state government sent in the police to reclaim the area. In an armed action, the police killed eight people (six others were killed in the melee). This was the most damaging incident in the Left Front’s thirty years of government.

Thirty years ago, in 1977, the two major Communist Parties joined with other socialist allies to take power over West Bengal’s state government. With a great deal of promise, the Left Front alliance inherited control over a state government. The bourgeois-nationalist Congress Party failed to conduct elementary land reforms, and it had presided over the attrition of the state’s industrial base (to be fair, one of the main industries was jute, which had entered a terminal decline after World War 2). The Left went to work with a modest mandate, keeping the land question at the forefront. In 1971, Communist leader P. Sundarayya wrote, “It is only by developing a powerful mass movement culminating in land seizure that we will ultimately get ‘the land to the tiller,'” which is exactly what the Left did. The gains were substantial: today, 78% of agricultural land in West Bengal is in the hands of small and middle farmers, and agricultural productivity is higher there than in any other Indian state. Land reform, given the allowances for it in the Indian Constitution, was not a radical demand, but it was a radical step toward the structural transformation of the countryside. Land reforms were followed by a movement through which landless tenant farmers registered their rights to the land (Operation Bargha), a periodic campaign led by agricultural workers through their trade union to ensure a universal wage rate, and finally, the revival of village-level institutions (panchayats) for local self-government. The Left Front government implemented what is already legally allowed by the Constitution; it did not go beyond the right to property enshrined in the Constitution. As a government of a state within the federal republic of India, the Left has done what can be done in the countryside: anything else requires a revision of the Constitution, and that can only come with wider political strength.

The Left Front’s first Chief Minister, Jyoti Basu was cautious as his government took office in 1977, telling the press, “We must be content to make whatever small improvements we can in the lives of the poor people, to make life more liveable.” Two decades later, poverty levels in Bengal declined significantly (according to the Planning Commission).

But, by the mid-1990s, new contradictions emerged in the Bengali countryside. Neo-liberal agricultural polices on the global stage decreased the prices for agricultural goods, at the same time as neo-liberal economic polices of the Indian government has worn out the ability of the state to intervene on behalf of small and middle farmers who face an across the board crisis. The rate of poverty eradication began to slow down as agricultural production itself declined (it was 5.4% in the early 1980s and only 2.99% a decade later). In 1993, a committee set up the West Bengal government reported that agricultural stagnation was inevitable, as the land reform agenda had been exhausted. Distress in the countryside provided an opportunity for those rich farmers (many of them absentee landlords) who had lost their land in the reforms. They, along with the rural neo-rich, form a bloc in the countryside who are ready to join any counter-revolutionary, even counter-liberal, dynamic. The TMC had fronted for these forces in Midnapur in 2000-01, and the TMC’s campaigns in Singur and Nandigram have afforded them a chance to strike back against the Left Front government.

In state after state in India, which had embraced neo-liberalism with missionary zeal, the price is being paid by farmers, particularly small farmers. In some places, like the Vidharba region of Maharasthra (as journalist P. Sainath continues to document), farmers’ suicides have assumed near epidemic proportions. These farmers are the casualties of the global offensive of neo-liberalism on petty production in the agrarian sector. It is, therefore, no coincidence that in country after country in Latin America, the Left in some form or another has made a resurgence through the struggles of the small farmers’ discontent and aspirations. In countries where the Left is virtually absent, that political space has been filled by other forces ­ in Iran, for instance, one factor behind Mahmud Ahmadinejad’s electoral victory was his championing of the cause of the small peasantry. Given this global context, it seems remarkable that West Bengal has been able to ward off the political symptoms of the agrarian crisis. At some point though, global trends were bound to catch up. In addition, new problems, with their root in the land reforms, have cropped up: a report that the West Bengal state government had commissioned on the eve of the last election pointed to the fragmentation of land among the successor of the original beneficiaries of the land reforms.

Aware of the need to stem the economic distress of the working-class and the peasantry, and the political problems this would entail, the Left Front moved an industrial agenda from the 1970s itself. Of its seven goals (in its 1978 “Industrial Policy for West Bengal”), the CPM, the largest partner in the Left Front, called for a “reversal of the trend toward industrial stagnation” by constraining monopoly capital, encouraging small-scale industry, promoting worker self-management and an expansion of the state sector. Corporate industrialization was to be minimized in favor of industrial cooperatives and the public sector. The demise of the Jute industry (manufacturing output fell from 15% in 1979-80 to 7% in 1997-98) was a hallmark of the cataclysmic decline of Bengal’s industrial base. Include in this a deeply hostile role played by the Congress-led Central Government (industrial licenses allowed by New Delhi declined in this period, as did financial resources for industrial development), and you can understand how registered factory production in West Bengal declined from about 10% in 1977 to 6% in 1990 (in 1947, West Bengal accounted for 30% of all industrial production). By the late 1980s, the industrial working class, it seemed, had begun to shift its allegiance from the Left to the Congress (in 1987, the Congress won 41% of the vote, whereas the CPM only 39%). There was no serious electoral challenge because the Congress could not confront the entire alliance, but there was the question of disaffection among an industrial working class faced with chronic unemployment or under-employment.

In 1992, the Central Government ended the freight equalization policy on steel that hampered the ability of the state to attract industrial capital. This reversal made the state attractive to investment, which started to flow in slowly. In 1994, the Left Front produced a new industrial policy document, which grew out of this problem of industrial decline, working-class unemployment and a general inability to create jobs for a rural population whose opportunities had been greatly improved by the land reforms and by the tenant registrations. The 1994 document argued, “The State Government welcomes foreign technology and investments, as may be appropriate, or mutually advantageous. It recognizes the importance and key role of the private sector in providing accelerated growth. While continuing to advocate a change in some important aspects of this New Economic Policy [of the Central Government], we must take the fullest advantage of the withdrawal of the freight equalization policy on steel and the delicensing in respect of many industries.” The new industrial policy no longer puts industrialization by cooperatives or by the public sector at centerstage (although it continues to push for the revival of “sick” public sector units, to rehabilitate commodity production, such as tea and jute, that remains in decline, as well as to push for the small and cottage industry). Neo-liberal pressures from the central government and from trends in the world impinge on the document, which now accommodates corporate industrialization.

But how does a government take “fullest advantage” of a global situation where the short-term interests of finance capital utterly eclipse the longer-term commitments of industrial capital? The spatial and temporal barriers that held industrial capital to its obligations no longer applies, and now states feel obliged, as economist Prabhat Patnaik puts it, to pay a “social bribe” to corporations for their investments. Because these bribes (tax concessions and other giveaways) impact on the finances of state governments, they adversely impact the working class and the poor. Within the Left Front there has not been the kind of robust discussion on this theme that there should have been. One of the beneficial outcomes of Nandigram has been that there is now a discussion of the problems of corporate industrialization, and whether other, alternative strategies are possible.

The principle debate has to be around the question of whether corporate industrialization, and the SEZ strategy in particular, generates employment. An 8% growth rate in India since 1991 has created no absolute increase in manufacturing jobs. As Patnaik recently pointed out, corporate industry “not only generates little additional employment; but in addition it uses its monopoly position to carry out primitive accumulation of capital (or more generally, what I would call ‘accumulation through encroachment’): by demanding concessions from the state exchequer; by imposing ‘conditionalities’ on the state government to the detriment of the people, including dispossession from their land and displacement from their habitat; and by engaging in land speculation.” The Left parties have been very critical of the way the SEZ policy has been framed. Across India, SEZs have become a prime policy for real estate speculation. Because of this distortion, the share of SEZs in exports was only 5% in 2004-05 (in the same year, only 1% of factory employment and 0.32% in factory investment came through SEZs). Of the new SEZs in the pipeline, 61% are in the IT sector, which is hardly a promising way to strengthen the manufacturing sector. The Left Front, on the other hand, is not given to either eviction for real estate speculation or for IT boondoggles. It wants to use the policy not for speculation on land, but for industrial development (more Shenzhen than Shanghai). Furthermore, to leave the State outside the process of land acquisition will allow land speculators to bilk the peasants and farmers of their land in the service of corporate industry. The question of the SEZ is important to discuss, but it is not the principle problem: the question of employment generation by corporate industrialization.

Instead of corporate industrialization, Patnaik argues for industrialization by cooperatives or the public sector, “where the peasants themselves could collectively own industry by organizing themselves into cooperatives, then these costs to the people could be minimized or even avoided.” The problem for these alternatives thus far has been lack of access to finance. It is true that the state governments cannot rely upon their savings, but neither do private industrialists. Both turn to banks and to “institutional lenders” for finance, but it should be pointed out that these commercial and “aid” lenders, and even the Indian central bank, are averse to finance any project that does not reek of neo-liberalism. Projects must have a private side to them (public-private partnerships are acceptable). This situation increases the confidence of the bourgeoisie, who have fashioned, as political scientist Jorgen Dige Pedersen wrote, “an employer’s militancy,” where the bourgeoisie feels emboldened on the world stage to act as if its bottom line is far more important than anything else. This patriotism of the bottom line is quite different from the enforced national patriotism of the import-substitution era. But this does not mean that public sector units cannot be financed. The Haldia plant is a Central Government project; and the Indian Oil Company, a public sector unit, is the anchor investor in the proposed chemical hub. In other words, sufficient leverage from the Left and from its allies might be able to produce a “people’s militancy,” to wrest finance from the public exchequer toward the people’s good.

The crises at Singur and at Nandigram do not only derive from the agitations of the neo-rural rich and their main political party, the TMC (as well as some of their allies of the Left). A singular failure in both cases has been a clumsy implementation that led to a political crisis, which was, in both cases, attempted to be solved by recourse to police action. All components of the Left Front are critical of the implementation, even if some are more vocal than others. Even the Chief Minister, whose cabinet set the tempo for the implementation, has been forthright about the lack of a political campaign to explain the problems to the people and seek their views on both land acquisition and the rehabilitation. Only after the fracas, did the Left Front explain that the success of the land reform hampers the attempt to find land for industrialization (less than 1% of agricultural land lies fallow in the state, whereas the figure for the rest of India is 17.6%). The Land Reform Minister Abdur Rezzak Molla once said of the problem of land acquisition, “We are taking away from the farmers by the left hand what we once gave them with the right hand.” The tussle at Singur was a red herring: the compensation package offered to the agricultural workers and to the land owners is widely accepted as generous, and most have accepted it. The government has set up training facilities to move some of the workforce from agricultural work to industrial work, although there are reasonable questions about how many people will find employment and at what level.

The shabby implementation at Singur and the problem of corporate industrialization at Nandigram are both significant matters that require discussion and deliberation. But the capitalist media and the tablogoids concentrated on the mal-implementation and the industrialization strategy and took this as a sign of the total failure of the Left Front. When the cadre of the Left acted, they were being “social fascist,” with even some making the connection between the communal fascism of Gujarat (thousands killed in the pogrom of 2002) with the events of 2006-07 in Bengal. Stories were blown out of context, and allegations flew around (sexual assaults, murders) that have since been shown to be false. The most sensational was the murder of a young woman, Tapasi Malik, who had been a leader in the Singur struggle against the land acquisition. The blogs and the capitalist media blamed this death on the CPM. The Central Bureau of Investigation is now of the view that she was killed by her father and brother. Whatever the outcome, this is a criminal matter that was cavalierly taken as evidence of the decadence of the Left. Equally remarkable was the story of the “burnt remains of a child,” purportedly killed by the CPM. It turned out that the remains were of a burnt synthetic pipe.

Furthermore, the capitalist media and the tablogoids ignored the murders of Left activists, and of the dispossession of the thousands of CPM supporters from the Nandigram area. Reading between the lies of these types of periodicals is a full-time job. The in toto rejection of the Party Left, particularly by the non-Party Left, forgets the crucial role the Left Front and the CPM plays in West Bengal and across the nation in the fight against Hindutva fascism; it also underestimates the central role played by the Left Front and the CPM in the fight against neo-liberal laws, and in defense of the interests of the working-class and the peasantry. Centrally, it omits the structural limitations face by the Left Front, who have to make the Indian road as they dream it.

When the police open fire in the name of a Left-wing government, it should always give us pause. There is no question that it is a symptom of a political problem, which requires a political solution. But, it is in this juncture that cooler heads need to prevail. One expects nothing more from the TMC, who not only egged on the situation, but has also, unsuccessfully attempted to collect political capital on it. Nor can one expect much from the Naxalites, the unreconstructed Maoists, who have largely lost control of their political strategy in favor of what was once called the “propaganda of the deed.” Acts of violence against their major political enemy, the Left Front, is their raison d’etre. One does, however, expect more from the reformed Maoists, the anarcho-syndicalists and the non-Party Left. They, after all, could play a good, critical role in West Bengal, pushing from the Left, criticizing and learning. Instead, they have joined with the Trojan Horse of the far right, by an elementary error: to care only for short-term tactics and be blind to long-term strategy. If the TMC had succeeded in breaking the back of the Left, where would this leave the non-Left Front Left? What is their revolutionary strategy in that case?

West Bengal’s Left Front has some space to maneuver on behalf of the people, but insufficient power to transform the institutions of the state and civil society. When Left regimes came to power in Venezuela, Bolivia and Ecuador, each started a process of revising the Constitution to enable the people’s movements to move a radical agenda. They were also helped along by the oil and gas profits generated by Venezuela and by Bolivia. In other words, that they won state power and that they had some investment capital gave them the ability to forge a post-neoliberal agenda. West Bengal’s Left Front is not in that league, although it is being judged on that basis.

But the Left Front must be judged, and it must face as much materialist critique as possible. Creative solutions to seemingly intractable problems are necessary. These can only come when the totality of the Left offers the best ideas to break the Gordian Knot of underdevelopment and development.

SUDHANVA DESHPANDE is an actor and director with Jana Natya Manch. He is the Editor of Leftword Books (New Delhi).

Vijay Prashad is the George and Martha Kellner Chair of South Asian History and Director of International Studies at Trinity College, Hartford, CT His new book is The Darker Nations: A People’s History of the Third World, New York: The New Press, 2007. He can be reached at: vijay.prashad@trincoll.edu