August 24, 2014

Eliminating the Planning Commission

Prabhat Patnaik

NARENDRA Modi has not only announced the end of the Planning Commission, but, in the style of the Aam Aadmi Party, has decided to consult the people on what should replace it. This latter move is indicative of either intellectual bankruptcy or dishonesty: if he really does not know what to replace it with, and is consulting the people for ideas, then that is a symptom of intellectual bankruptcy; but if he already knows what to replace it with (after all why did he not consult the people before announcing the end of the Planning Commission?) and is simply going through a charade, then that is a symptom of dishonesty. But no matter how one sees this drama of consulting the people, the question that arises is: what does the end of the Planning Commission signify? To believe that a Planning Commission has a role only in an economy where there is significant State ownership of the means of production, which makes Soviet-style planning meaningful, is fallacious. “Planning” itself is of different varieties: there can be Soviet-style comprehensive central planning, French-style social democratic planning, Indian-style dirigiste planning of the Nehru-Mahalanobis kind, and even fascist-planning of the sort that Albert Speer presided over in Nazi Germany in order to co-ordinate production for the war effort. In fact in India, even in the heyday of planning, the magnitude of public ownership of the means of production was limited, a fact that the intellectual banality of the Hindu Right, which sees Nehru’s India as being no different from the Soviet Union (just as it sees liberalism as being identical with Marxism), misses. Planning in short is not necessarily concerned exclusively with the production of a document called the Five Year Plan; it involves any kind of strategising by the nation-State regarding how to cope with socio-economic challenges it confronts. Even in a neo-liberal economy where peasants and petty producers are squeezed and dispossessed, where the magnitude of hunger and poverty increases in absolute terms, and where the financial oligarchy exerts tremendous pressure to appropriate State and common property resources “for a song”, strategising on the part of the nation-State to cope with these challenges would constitute “planning”. And for this the nation-State does not have to be a class State of workers and peasants; even a bourgeois nation-State can, in principle, do such strategising, just as it actually had done when it had decided to nationalise banks in India. CONSOLIDATION OF THE NEO-LIBERAL STATE Planning in short is not concerned with plan documents; it is an indication of the predilection of the nation-State. The end of the Planning Commission in India accordingly is reflective of a change in the nature of the nation-State in India, not in its overall class character but in keeping with the change in the nature of the ruling classes themselves. It is a shift, if one may put it so, from a Nehruvian State to a neo-liberal State. To be sure, this shift has been occurring for some time, indeed with the introduction of neo-liberal policies themselves; but we are now seeing a consolidation of the neo-liberal State. Unlike the post-independence Nehruvian State, which, even while developing capitalism, did not exclusively identify itself with the interests of the capitalists, but rather appeared to stand above classes, mediating between them, imposing, when necessary, restrictions on the capitalists, and providing support to other classes, and even, to a degree, defending their rights, the neo-liberal State is much more concerned with the exclusive promotion of the interests of the corporate-financial oligarchy that is closely integrated with international finance capital. Its ideological justification for doing so is that whatever is good for the corporate-financial oligarchy is ipso facto good for the nation, since any benefit provided to the former boosts its “state of confidence” and hence stimulates “development” which is good for all. And since the corporate-financial oligarchy is integrated with international finance capital, it is in the “nation’s interest” to adopt measures that are demanded by such capital. This argument must be distinguished from another argument. One may argue that in a regime of globalisation the country is compelled to adopt measures to the liking of globalised capital, for otherwise it would leave the country en masse, causing an acute crisis. Implicit in this latter argument is the acceptance that these measures are not in the “nation’s” best interest, in which case delinking from globalisation to adopt a set of different measures that are supposed to be in the “nation’s interest” becomes necessary; and a Planning Commission to negotiate such delinking, or at the very least to plan how to cope with this “compulsion” imposed on the nation-State in a regime of globalisation, becomes relevant. But the ideological argument justifying a neo-liberal State is altogether different: it is not that the State is compelled by globalised capital to adopt measures that are inoptimal for the “nation”, but that the measures the State adopts in accordance with the wishes of globalised capital are indeed optimal for the “nation”. The neo-liberal State therefore has no room for a Planning Commission whose basic premise is a nation-State that is distinct from globalised capital, that does not identify itself completely with the interests of globalised capital. Indeed such a neo-liberal State is characterised not just by a set of specific policies but also by a set of specific institutional features which preclude a Planning Commission. These institutional features include: the ‘autonomy’ of the central bank; the elevation of the finance ministry to the status of a super ministry dominating all others; the manning of the central bank and of the finance ministry by ex-employees of the IMF and the World Bank, or of certain other global financial institutions (who usually go back to their parent bodies at the end of their tenures with the government); the organisation of “training” programmes for the bureaucracy, especially of the home-grown segment of the financial bureaucracy, by these multinational institutions or by universities in the metropolis acting on their behalf; and a general increase in the power of the bureaucracy over the elected political representatives of the people on the grounds that the latter are “corrupt” and cannot be trusted with key economic decision making (which is often enough true, except that the “corruption” itself is usually a consequence of the privatisation spree unleashed by the neo-liberal regime, and tacitly acquiesced in by the very members of the “global financial community” manning the government, who then use it to discredit the “politicians”). India still has not erected such a full-fledged neo-liberal State; indeed many other third world countries have proceeded further down this road than India has. But the Modi government is clearly keen to hasten progress in this direction. Its other proposed measures, such as introducing “labour market flexibility”, a euphemism for smashing trade unions, which the Vasundhara Raje government is doing and the centre is keen to emulate; and the privatisation of banks and the opening up of insurance to FDI; are very much in line with its desire to end the Planning Commission. All of these measures are indicative of a shift to a neo-liberal State. To be sure, the UPA-II government had wanted to do exactly what the Modi government is doing; and even though it had not abolished the Planning Commission it had enfeebled it by inducting into it persons belonging to the “global financial community” who had used their position to push public-private partnerships and other such measures. But given the divisions within the UPA-II it had not succeeded in pushing these measures beyond a point. The Modi government is ruthlessly moving ahead in that direction. NURTURING OF “COMMUNAL-FASCISM” There is an important enabling factor behind this thrust. The transition from a post-colonial “Nehruvian State” to a “neo-liberal State” is not easy to effect within a political framework characterised by universal adult franchise. It is not enough for a neo-liberal polity to put in place an institutional framework that prevents any threat to the pursuit of pro-corporate economic policies. Popular mass mobilisation, of a kind that thwarts the possibility of any alternative mobilisation aimed against such policies, also becomes necessary. This is why such a transition is typically negotiated through the nurturing of fascism, or, in our particular context, “communal-fascism”. The neo-liberal State that is being sought to be consolidated is based on a Faustian bargain between the corporate-financial oligarchy and the communal-fascist Hindu Right. It is a Faustian bargain on both sides: the corporate-financial oligarchy, which could never fully have its way in imposing the policies and institutions demanded by a neo-liberal State, now finds a “movement” with a mass following that is willing to support its plans. And in the context of the current economic crisis when it cannot even “deliver” the growth rates it did earlier, which, even though they brought immiserisation to the working people, garnered for it a degree of support among the urban middle classes, the need for such a Faustian bargain with the Hindu Right is all the more pressing. On the other hand as regards the Hindu Right, which has been on the fringes all along, and which, even when it came to power at the centre, could not carry through its agenda because it was hamstrung by the compulsions of coalition politics, a Faustian bargain with the corporate-financial oligarchy whose coffers are opened up for its drive to power, suddenly helps to bring it centre-stage. And now it can even dream of implementing its pet projects like abrogating Article 370. This Faustian bargain between the Hindu Right, which represents the most reactionary social force in the country, and the corporate-financial oligarchy, which represents the most rapacious force in the country, this alliance between reaction and rapacity, bodes ill for the future. The elimination of the Planning Commission itself may appear a small thing, but it signifies something much larger, namely, the coming into being of a neo-liberal State that consciously seeks to break its link with what is called the “Nehruvian past”, with the term “Nehru” being used here to denote all the progressive and egalitarian impulses of the anti-colonial struggle. This Faustian bargain between the financial oligarchy and the Hindu Right should dispel any notion about capitalism playing a “progressive role” in societies like ours. Lenin had seen clearly the fact that in societies where capitalism came late into historical reckoning, it allied itself with feudal elements and hence could not carry forward the democratic revolution which had been its historical task in its heyday; he had reposed his faith in the worker-peasant alliance for carrying forward the democratic revolution. Ironically, Nehru, who has emerged as the hate figure for the Hindu Right, and is denounced as the standard-bearer of “socialism” in India, had been too diffident to admit this fact.