The family car cannot drive the poor into the jet age.Ivan Illich, Energy and Equity (1974)
Prophesy now involves a geographical rather than historical projection; it is space not time that hides consequences from us.John Berger, The Look of Things (1974)
Time was when it took a prophet to know the future of the world. Today, we only need to travel to those parts of the earth which have already suffered the onslaught of capitalist modernity – which have lost their water, soil, forests, birds, animals, ecological balance, people – to know what might await the rest of us whose privileged lifestyles are founded on systematic extraction of resources from “colonized” hinterlands normally invisible to us. It is as though time has spawned spatial dimensions, revealing the contours of the future – if only we know where to look.
Since the very dawn of the industrial revolution, such has been the nature of exploitation and unequal exchanges between town and country, in nations both capitalist and communist, that today city-dwellers can no longer know the true cost of anything that they consume. The countryside subsidizes life in the cities by being forced to pay much of the ecological cost of goods and services whose full social cost of production is never reckoned in market transactions, especially in an era when governments are busy deregulating and promoting corporations. Thanks to the “veil of money” and the market economy; in this whole matter of ecological costs, we are besieged by great ignorance, leading a famous establishment economist to remark recently that:
The problem of climate change involves a fundamental failure of markets: those who damage others by emitting greenhouse gases generally do not pay…Climate change is a result of the greatest market failure the world has seen…
The frontier of environmental devastation, hitherto quite far from pockets of urban privilege, is moving in the direction of the cities. The evidence is too vast to deny. What we have done to villages may soon come to haunt city-dwellers. In many cases, such as we saw in Mumbai during the flash floods in July 2005, cities are already under severe ecological pressure. We find ourselves today struggling to slow down the closing movement of the two deadly blades of the global ecological scissors: resource depletion on the one hand, and climate change and pollution on the other. Matters are yet more troubling when one recognises the many smaller ecological scissors which occupy the space between the two gigantic blades, their blades moving ceaselessly towards each other.
The ecological – and social – impact of growth has been such that one is immediately led to ask what its relationship with economic development and human well-being is. Consider a country which has built impressive expressways, airports, shopping plazas and luxury homes at the cost of precipitating ecological havoc either within or beyond its own borders, and having a substantial proportion of its population living in poverty, without access to adequate nutrition, clean drinking water, sanitation, affordable health, housing and education. Now compare it with one in which everyone’s basic needs, as listed above, are met, and its natural environment is well-preserved, but it has only modest roads, airports and other infrastructure. Which of the two nations is more developed?
If one uses standard measures, such as HDI, it may be ambiguous on the issue. While the second country will have better numbers for education and health, it may or may not have a higher per capita income compared to the first country. If one asks experts and common people, they both might answer that the first country is the more developed one – if only because it appears to have a more advanced level of technological development (although this may not be the case in all areas: a country can be advanced in construction technology while being relatively backward in the provision of public health and education).
The question needs to be asked, however, whether it is more important for everyone’s basic needs to be met, or for a small minority to enjoy access to great luxuries even as the majority starves and survives at a poor material standard? The question goes to the heart of the issue of what economic development is.
As we know all too well, the dominant view everywhere nowadays is that overall affluence per se is equivalent to development, and this is best achieved via rapid growth in the GDP of a country. It is taken for granted under such a view that poverty will decline over time and ultimately vanish as long as economic growth continues. We call such a way of looking at things “developmentality”.
Before we outline the key features of the reigning paradigm of “developmentality”, it is necessary to excavate the historical and political origins of the concept of development itself. Where was it created, for what purposes and for whom?
The Historical Origins of the “Development” Doctrine
We had no right…to assume that people everywhere around the world wanted to be like ourselves…we ought to preserve native customs, for the binding cement of native society lies in such customs and institutions…rather than in the tin-can borrowings and the acquisitions of the white man’s outlook.Isaiah Bowman, Advisor to President Theodore Roosevelt
Bowman went on to add that all such people from the so-called underdeveloped regions of the world enjoyed a form of freedom alien to the modern world: “the freedom to be left alone!”
If we are not to read history with a biased, retrospective eye, it should be quite clear that “development” is a notion of quite recent vintage. It first arose in America. Of course, the word has existed for long (and first emerged from 19th century evolutionary biology), but before the 1940s it was never applied conceptually to describe the needs of poor countries. Importantly, so far as we are aware, India’s freedom fighters and men like Gandhi did not use the term.
As a matter of fact, prophets like Tagore mocked at the idea of “progress” and warned against imitating the ways of the West. And most certainly, the poor of the world did not themselves come up with the concept of development. The word itself just makes a few shy appearances in the Indian Constitution. It was always a “top-down” idea, not one emerging from democratic practice.
So where was the concept of “development” forged? It can be dated to the 1940s, when Washington began a reordering of the world to meet the interests of its corporations and the consolidation of state power. It starts appearing frequently in official documents in the US after President Roosevelt and British Prime Minister Churchill signed the Atlantic Charter in 1941.
History reveals its secrets with the passage of time. Intentions held in secret by men in power produce consequences that unfold over the decades and the centuries. Taking a bird’s eye view of the whole development experience since World War II, one can’t escape the conclusion that the whole ideology of development was spawned by the US policy elite in the 1940s to ensure that after the war was over, American corporations would have a pretext to gain access to cheap resources, labour, investment opportunities and markets across the ex-colonized world, hitherto controlled by Europe. Institutions like the IMF, the World Bank and GATT were created to ensure that corporate goals were met. They have succeeded in that purpose, even as they have understandably failed to meet many of their stated goals. Not surprisingly, while we have seen plenty of corporate growth, development by any reasonable criteria is conspicuous by its absence in most areas of the world for which the concept was intended. The beauty of the concept of development – premised as it is on economic growth led by private corporations – is that it panders to the aspirations of Third World elites and middle classes even as it caters to the interests of the elites in the rich countries. In doing so, it usually neglects the needs of the poor majorities.
Decolonization began after World War II, and Europe was forced by wars of liberation and independence movements in the colonies to retreat to its own shores in the decades after the war. Continued domination of the countries emerging from colonialism had to be justified by other means. The new emerging world powers were the USSR and the US, though the latter was miles ahead by any reckoning. The Atlantic Charter, signed by Churchill and Roosevelt aboard a warship on the ocean in the midst of the war, had taken an open stance against European colonialism, “affirming the right of all peoples to choose the form of government under which they will live”. The Charter expressed the “wish to see sovereign rights and self-government restored to those who have been forcibly deprived of them.” It also offered nations “access on equal terms, to the trade and to the raw materials of the world which are needed for their economic prosperity”, something that sounds laughable today, after decades of experience with unfair trade and wars over resources.
At the same time, Roosevelt, arguably the greatest American President of the past century, proposed that “minor children among the peoples of the world” be placed under the “trusteeship” of the “adult nations”. He had apparently inherited the paternalism of his British allies during the war. Small wonder that Washington planners came up with a new moral idea to exercise influence and control in the resource-rich countries emerging from European colonialism: “development”.
It now becomes clear what really happened on USS Augusta on August 14, 1941: the imperial baton was passed on from Churchill (as he realized Britain’s economic limitations and desperate need to get US support on the side of the Allies) to Roosevelt (who, in turn, realized America’s historic opportunity). To the leaders themselves it was already quite clear who was going to be the paramount power in the world at the end of the war.
The era of European colonialism reached the beginning of the end by the end of World War II. The hidden imperial motives behind the various defensive ideologies – from the “Christian Mission” to the “White Man’s Burden” – which had supported the colonial enterprise at different points of time in history were by then abundantly transparent not only to people in the colonies, but even to the citizens of metropolitan countries. A new idea was needed to continue privileged access and plunder of resources around the world. This is when opportunistic American planners came up with the idea of “development”.
“Development” was needed as a persuasive ideology to inveigle and integrate the large areas in Asia, Africa and Latin America newly liberated from European dominance into a post-war world economic order founded and designed by Washington. Even a casual perusal of the documents of the era leave little doubt that US planners made very conscious and concerted efforts to ensure that American corporations would be in a position to access the vast resources and investment opportunities of the decolonized world. The post-war “global” institutions – the IMF, the IBRD (later, The World Bank), GATT (now WTO) and, for that matter, the UN – all ostensibly multilateral in nature, were in fact designed largely by Washington planners to ensure favourable terms for American transnational corporations and to expand American influence and power in the world.
All this took executive shape and form in President Truman’s Second Inaugural Address in 1949:
We must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas. The old imperialism – exploitation for foreign profit – has no place in our plans. What we envisage is a program of development based on the concept of democratic fair dealing.
It is noteworthy that we hardly hear of poverty and underdevelopment in the decades preceding World War II. After the war, once the World Bank was set up, “development” arrived in the economics profession as a new field. Funds were allocated to expand economics departments in universities; seminars and conferences were organized; and books and papers were published. Nobel Prizes were also awarded (to Gunnar Myrdal, Arthur Lewis and Theodore Schultz, and much later to Amartya Sen and Joseph Stiglitz).
A good statement of the founding goals of the World Bank can be found in Article 1 of its statutes, a document adopted at the 1944 Bretton Woods conference. The institution, which claims to work today for “a world without poverty” (if you visit its website), failed to mention the “basic needs” of people or the need to end poverty across large areas of the world. Instead its aims, according to the document, was to “promote private foreign investment”, the “growth of international trade” and various related goals.
Powerful Western elites had succeeded in forging a set of arrangements with which continued economic domination of the rest of the planet could be ensured. A new kind of “empire”, in which “development” was promised to the recently decolonised poor countries, had come into being to take the place of declining European powers. Such a development had been foreseen decades earlier by men who had fought for India’s freedom from Britain:
Most of us think of empires… like the British in India, and we imagine that if the British were not in actual political control of India, India would be free. But this type of empire is already passing away, and giving way to a more advanced and perfected type. This latest kind of empire does not annex even the land; it only annexes the wealth or the wealth-producing elements in the country. By doing so it can exploit the country fully to its own advantage and can largely control it, and at the same time has to shoulder no responsibility for governing and repressing that country. In effect both the land and the people living there are dominated and largely controlled with the least amount of trouble…It is quite possible that Britain’s visible hold over India might go before long, and yet the economic control might remain as an invisible empire. If that happens, it means that the exploitation of India…continues…
Economic imperialism is the least troublesome form of domination for the dominating power. It does not give rise to so much resentment as political domination because many people do not notice it.
This is how Jawaharlal Nehru prophetically foresaw the future from Ahmednagar Jail in 1933. It was published as an essay called “The Invisible Empire of America” in his scholarly classic, Glimpses of World History. After decades of experience with developmental imperialism, now increasingly debt-leveraged via the mediation of the World Bank and the IMF, we have evidence of the sophistication of exploitative arrangements that have been put in place to allow ever more privileged elites to continue a predatory way of life.
The “development” rage survived till the 1970s, when the oil crisis and stagflation hit the West. As political conservatism rose to ascendancy in Britain and the US, conservative paradigms of thought made a resurgence within the economics profession. Keynesianism receded and the monetarism of Milton Friedman won the day with Thatcher and Reagan.
By the mid-1980s, when (as we shall see) the enormous failure of the “development” project was obvious, the US government actually pronounced the death of “development economics”. Newsweek reported the US representative to the Asian Development Bank as saying that “the United States completely rejects the idea that there is such a thing as ‘development economics’. In the words of economist John Toye, development had become the “Orwellian un-thing”. So much for the holy words signed by Churchill and Roosevelt in the Atlantic Charter in 1941. The era of using development as an ideology for domination of the Third World was over. It was no longer necessary. Development aid was now seen as a redundant expense once Western capitalism was seen to have won the ideological war with Soviet communism. It was no longer forced to perform well on social indicators in comparison with its former rival.
Since the collapse of the Berlin Wall and the end of the Cold War in 1990, Washington’s rhetoric for intervention in the affairs of other countries shifted to spreading “democracy”, “human rights” and, more honestly, “free markets” (for the corporations). The rhetoric masks the unfolding truths of growing poverty, malnutrition and hunger that capitalism in the era of accelerated globalization continues to bring to much of the underprivileged world.
It is important to note here that a more obvious form of neo-colonialism has resumed after the end of the Cold War and the launch of the “New World Order” by Bush Sr. American global power has (quite literally) returned with a “bang” since the first invasion of Iraq in 1991 and has really accelerated its military assaults upon the world since 9/11. We live in a time of renewed imperialism. Resource and energy wars are being launched under transparently false pretexts to ensure the continuance of the fossil-fuel-based global economy. “Water wars” also lurk on the horizon.
In the bargain, the ideology of development has also made a strong comeback. On the one hand, global financial elites have realised that they can make a far greater killing by investing in poor, but rapidly growing, economies, as against their own saturated markets with stagnant growth rates. On the other, wealthy elites in Third World countries have also jumped on the global bandwagon and have come to see the enormous gains that they could make. This is a winning combination as far as the policy-making offices of the world are concerned. The rise of what may be called “corpocracy” – euphemistically understood widely as “neo-liberalism” – can be traced to economic and political events that date back to the 1970s (such as the breakdown of the Bretton Woods system). But its real consolidation has happened after the end of the Cold War, and its accelerated impact on human affairs has followed 9/11 and the age of terror.
It is only in the light of such a historical and ideological background that one can understand the obsession with economic growth (and the purported “development” that follows from it) in recent times. So long as globally powerful TNCs and financial firms need resources and investment opportunities beyond their shores, no one is allowed to opt out of the world capitalist system. This is the meaning of “opening up” and “liberalization” of economies. Attempting a path of economic independence (such as Cuba or Venezuela have been attempting, howsoever imperfectly) would immediately invite sanctions, if not bombardment, especially if the country is resource-rich. You must “freely” opt for integration into the globalized economy on the terms suitable to the great powers.
Thus, the concept of “development” has constituted the core of the economic relationship between rich and poor nations since World War II. It lies at the very heart of contemporary imperialism. It is obligatory for poor countries to want to develop along the lines of the West. There can be no two ways about it. If we normally don’t manage to see this fact with clarity, it is because of the persuasive corporate propaganda with which virtually everyone is soaked. Disturbing data on malnutrition or farmer suicides is kept at bay by keeping the public imagination fastened to flattering growth statistics, as if the poor were obvious beneficiaries of the growth process.
Development As War
The rosy-eyed textbook conception of development is that over a period of time it improves the life-chances and well-being of the majority of the people in a poor country and thereby brings them a greater measure of freedom. “Development as freedom” has actually become the mainstream orthodox view, championed not just by so many Third World governments but even by someone as widely regarded as Nobel Laureate Amartya Sen.
However, the way “development” is actually happening under conditions of rapid globalization, the metaphor of war (rather than freedom) in fact captures its realities much better. There are, in fact, many wars taking place. The most important one is the cut-throat competition between giant global TNCs trying to capture markets, resources and investment opportunities everywhere. Other wars, such as Operation Green Hunt currently underway in Central India, are being waged by governments against their own people in order to ultimately clear the land and its resources for the corporations. Land acquisition and the resulting displacement are other facets of the same war. Yet other wars are being caused by the vanishing resource-base for the traditional livelihoods of the poor, as a consequence of the expansion of the globally networked mainstream economy. This leads the poor to fight among themselves over a shrinking pie. All of this can be considered the “collateral damage” of “economic development”.
In the light of the historical facts about the origins of the modern conception of development, the question that begs to be asked is: is this imported model of economic development not a war in disguise? The battles in this war are fought both in the negotiating rooms of the IMF, the World Bank and the WTO, where Indian policy-makers often “hide behind the poor”, and on the ground, where women farmers, landless labourers, fisherfolk, forest-dwellers and artisans fight desperately but tenaciously to defend the nature on whose ample back their livelihoods are spread out. If a government is voted to office, per chance, that resists the TINA alternative and seeks to implement a different vision, surely our wealthy elites will protest and if that is not enough, sanctions will be made against us by the imperial guardians of the world for “closing” up our economy. In the limiting case, greater aggression will be argued to “free” the country.
The problem with our times is that we have all been misled into believing that “growth” is the same as “development”. As a result, the latter serves as a convenient rhetorical mask for the former. There is an army of economists today willing to defend economic growth at any cost. Little do they realize, as the quotation from Abba Lerner above hints, their own political prejudice, even as they cast a disgruntled eye towards what they call “the politicization of development”.
It is obvious that technologically driven economic growth based on heavy industrialization is a source of national power in a world made ever insecure by the greatest human failing of all: the persistent search for power. Today, more than ever before, when we live in the age of corporate empires, wealth alone confers power. If development could actually happen and give genuine physical economic security to each citizen, it may not make the nation’s elites feel strong and proud before their counterparts in the high offices and conference halls of the world. It is not enough there to say that we are able to feed, clothe, house, care for and educate our people. (So is Cuba.) One has to demonstrate with credibility how much one commands and controls (by way of men and materials) and what harm can be brought upon those who try to challenge or threaten that. This is the age-old logic of power in the world of men. Today it takes the form of announcing and anticipating the arrival of India and Asia as forces for the world to reckon with.
Bargaining on such a hunger for power among our still mentally colonized elite, the ultimate rulers of the world – in Washington and London, Geneva and Hong Kong – have laid out a baiting strategy that suits both them and their junior partners.
Growth serves the needs of power. It is doubtful if in a modernity so obsessed with appearances, mere development can ever serve the cause of national pride. This is the nub of the difficulty. In the name of the nation we, the elite of this beleaguered country, want economic growth no matter what the consequences. The problem is with a national heart which is turned towards a gluttony for power learnt from our imperial masters.
It is commonplace that every economics undergraduate gets acquainted with that development is not reducible to economic growth. Minimally, it involves, apart from a rise in purchasing power across all income groups (for which an aggregate measure like per capita income is a very poor summary measure), significant improvements in the health and educational levels of the population. Some have rightly pointed out that even this is actually very inadequate, that development should actually involve a transformation in ordinary people’s lives, not merely in a few quantitative, measurable indices of economic change.
However, if one scans the horizon of policies and their consequences today, especially as they are reported in the print and electronic media, it is quite clear that the overwhelming obsession is not with development taken in its widest sense, but with a narrow concern with economic growth. The numbers on economic growth have become all-important. While the tiny, increasingly pampered corporate minority breathes the air of private jets, luxury hotels, and African safaris, dreams of creating “world-class cities” are launched by pushing the urban poor out of their modest homes in the tens of millions, many among them previously uprooted in the countryside to make way for power plants and industries to service the needs of the globalized urban elite.
The reason for this state of affairs is quite obvious. The media has to report a booming economy which is giving birth to more billionaires every week, because the perception of prosperity and future growth is essential to attract foreign investors and global financial markets and maintain India’s creditworthiness with the world’s bankers and underwriters. In the business pages they make a clear distinction between “the markets” and “the economy”, using the former only with respect to finance. The latter term is used only when “fundamentals” are under the scanner in the event of “bearish investor sentiment”. This, more than any other single factor, lies behind the phenomenon of media spin and hype. It is necessary to hold aloft “investor confidence”. Hence the chorus of lies and half-truths. And if the habit of dreadfully transparent exaggerations carries over into other domains of reportage, converting the most serious events into excuses for generating sensations, is it any surprise?
Again the question has to be raised: is this state of affairs a coincidence? Or is the almost exclusively external orientation of the Indian economy one more of the consequences of the Bank-Fund grip on Indian policy-making? Has India not been invited to the club of “emerging markets” (the famous BRICS group) to help tackle the crises that capitalism faces in its native hinterlands, where growth rates and returns have been low for decades now?
The truth is that India Inc. is now an outsourced project of global finance. Markets in the West have been saturated for some decades now and, as plain arithmetic shows, it is harder to grow faster when you are already very large. But financial investors look for quick and high returns. Why invest too much in manufacturing industry and have to wait for years to earn modest returns when you can make several times that much, and much quicker, by playing with the inevitable uncertainties of the financial markets? That is why the drive for portfolios is strong on financial investments.
The Indian corporate elite, junior partners in the gigantic capitalist enterprise led by global finance, is enriching itself like never before in the name of the growth that will ultimately trickle down to the poor. Consider just a few numbers from our media headlines. On October 8, 2007 The Times of India reported on its front page that in the three months between July and September 2007, the collective wealth of India’s top 10 billionaires grew 27%, by $65 billion. The average Indian billionaire in the top 10, in other words, saw his wealth grow at $3 million every hour! To get a flavour of just how much money this is, it would take 60 Indians earning at the present per capita income of the country a lifetime each of labour to earn so much money! Little wonder that such people of affluence are normally unaware of the size of their wealth and have to hire teams of companies to handle their assets. The money does not look after them so much as them having to look after the money. This explains the growing number and size of billboards in our metros, announcing the arrival of reliable fund managers from abroad.
As far as foreign investors are concerned, they would not be here unless they were able to take away huge returns. It is normal for global funds in India to multiply their investments by a factor of 4 or 5 in as many years. As we have seen, there are few stock markets in the world which are fetching returns like the ones possible on Dalal Street.
Who, other than the large population of this country, bears the cost of such loot and plunder? The shift in income distribution towards the corporate classes has been quite dramatic.
Is it any surprise that “development” in India is anything other than a constant war on the poor? Since the days of Nehru, tens of millions of the vulnerable poor have been displaced from their homes, fields and forests to make way for “development” projects in the countryside. What is “development” to some has been displacement to many India’s tribals, Dalits and women have paid a disproportionately large price for what we in our confident delusion have come to see as “modernization” and “progress”. Estimates of the displaced population since 1947 vary between 30 and 60 million people. But today, such displacement for “development” projects has become so routine that up until the time of the Narmada movement and later, the beginning of land acquisition for SEZs a few years ago, there was barely a whisper in our media about the matter. As far as this writer is aware, the textbooks still leave the topic unmentioned.
It is time that we called displacement by its proper name: uprooting of peoples and cultures. We should recognize what we do to our subject populations as a form of “internal colonialism”. (While tribals are only 8% of India’s population, they have suffered 55% of the displacement, according to a recent study.) It is also time that “development” projects were called “growth” projects. The experience since 1947, and especially since 1991, has made it abundantly clear that while development may sometimes involve economic growth, the latter by no means leads in any direct way to the former. If it did, our health, education and other social indicators would look very different by now. No one looks any more at the content and character of the growth process.
It should be obvious that globally benchmarked corporate elites (even though they may be Indian passport-holders) are not in a position to make credible promises to the Indian poor. The competitive pressures, norms and rules of capital in a globalized world are such that they cannot possibly afford patriotism, unless it is also commercially attractive. Under such circumstances, corporate growth does not translate in any direct way into “trickle-down” for Indian masses. Indian big business is increasingly a global player, not just running concerns of merely national scope. Tatas may invest in China to sell $800 million worth of shoes in Europe. Its implications for Indians and linkages with the Indian economy are minimal in such cases; likewise, if someone from Bangalore is setting up an IT Park in Serbia. This is the reason that economic accounting makes a distinction between GDP and GNP, and why the former is the more relevant for a country’s well-being. The truly ironical paradox is that corporate nationalists are making acquisitions abroad under the Indian flag!
Global competitive pressures also imply that everything today has a “China price”, which is based on ruthless exploitation of labour under a totalitarian system. Thus, market fundamentalism readily translates into corporate totalitarianism in practice. Sub-contracting and outsourcing to the informal, unorganized sector by the big corporations of the Indian economy is not new. But it has assumed truly super-exploitative dimensions under the IMF-World Bank dictates of flexible labour markets. Faced with labour demands in the organized sector, companies are readily able to downsize their workforces and let the sub-contractors in the informal sector do the dirty work. Workers here put in long hours, without overtime. They enjoy no benefits, job security or retirement plans. There is also the phenomenon of growing self-exploitation by a growing mass of people (the number of enterprises in India has risen dramatically according to the Fifth Economic Census in 2005, mostly not because of more free market entrepreneurship, but on account of greater displacement and migration) who supply the corporate sector. The number of self-employed is estimated at 260 million!
The growth that we have in India today is a cancerous pathology. It is anything but the balanced growth that undergraduate students of development economics used to be tutored in. It is happening at the cost of nature and people in a way which shall prove quite unsustainable in the future.
In one of his lectures in China during the first quarter of the last century, Tagore had quoted Plato: “An intelligent and socialized community will continue to grow only as long as it can remain a unit; beyond that growth must cease or the community will disintegrate and cease to remain an organic being.” I think that the caution applies urgently to India at this perilous juncture of its history. Delaying the recognition of this truth will make the damage well-nigh irreversible before too long.
Without further ado, we can outline the key features of developmentality:
The Hallmarks of Developmentality: A Catalogue of Cognitive Disorders
What rules India today is the hegemony of what can be called “developmentality”. Let us briefly consider some of its key features and see why it constitutes a cognitive disorder which is proving pathologically destructive.
- Developmentality draws theoretically upon a tradition of abstract economic theorizing (neo-classical economics) which aims to demonstrate the ultimate superiority of free markets as a way to organize the economy. Its finest practitioners (Frank Hahn, for instance) have long ago warned against its applicability even to understand, let alone prescribe policies, in countries of advanced capitalism. How much more the theoretical tradition has to be suspected before being borrowed to make policies for a country like India! And yet contemporary market fundamentalism, pushed by the IMF and the World Bank, and implemented by our policy elites, advocates and practices just such an approach, leaving deeper questions of the distribution of property or the specificity of local institutions and culture largely untouched.
- In brief, this (mainstream) tradition of economic theorizing emphasizes the idea of optimal allocation of resources through the functioning of free markets based on voluntary exchange. With certain exceptions (externalities – which involve unpaid costs to third parties from a transaction between two agents, public goods – which entail the provision of goods or services to people who can get away without paying for them, and market power – which involves distortions in resource allocation on account of monopolies or oligopolies) it argues against any sort of government intervention in economic affairs. The truth is that in the real world – especially in a context like India –these exceptions come quite close to constituting the rule! The core idea of the efficacy of “the invisible hand” is as old as Adam Smith. It has been challenged both within and outside the economics profession, including by such seminal thinkers as John Maynard Keynes. But the tradition holds sway over the vast majority of mainstream economists, advisers and policy-makers around the world today – even after such irrefutable proof against it as the 2008 global financial crisis. The problems with “free” markets are discussed below (see Sl. No. 6).
- In keeping with the traditions of mainstream economics, “developmentality” is premised on the goal of economic growth, as though trickle-down is a matter of near-term inevitability. Faith in trickle-down economics, as John Kenneth Galbraith once said, is a bit like feeding race horses golden oats in the hope that the sparrows can forage in the dung. Given the resource scarcities and other ecological constraints the expanding economies are running into, all countries cannot become developed by the standards of the nations presently regarded so. This obviously means that we change our notion of what constitutes development or risk widespread ecocide.
- Dominant mainstream economics, in its mathematically sophisticated analysis of the market economy, focuses on the relative scarcity of resources. It is deeply ironical that it never really takes into account the absolute scarcity of resources, since this would imply in one way or another putting limits on growth. It would mean discussing the controversial matter of the distribution of a pie which cannot keep growing without limit. It would imply discussing how we produce things since it is this that shapes how what is produced is distributed.
- Also in keeping with the neo-classical tradition, “developmentality” is unable to take a holistic view of economic matters. It is necessarily reductionist, one-dimensional in its approach. Thus, growth at any cost seems reasonable to it. Ecology, biodiversity and the limits placed by nature mean little to people who have put all their faith in technologies for “remodelling” nature to create a viable hardware for modernity. “Let’s build a smarter planet”, as the hubristic IBM ad has it. Also irrelevant to such reductionist thought are the burdens and hardships placed upon the hundreds of millions who are vulnerable to predatory growth for the rich classes. Economics in such a perspective is seen as independent of politics (hence the talk on “politicization of development” must be avoided), culture, society and history.
- It is thus no surprise that developmentality is singularly focused on one particular goal, shaped by a very narrow-minded conception of rationality. The goal is the economic growth that results from the familiar profit-maximizing calculus which is justified by mainstream economic theory. Too long has economics pretended that nature is just a resource to be extracted and allocated “efficiently” according to the impeccable logic of the marketplace. It has been prey to a narrow notion of rationality driven by consumer greed and corporate avarice, organized by the forces of competition. It is as though considerations other than greed can play no part in a rational mind! If social and ecological irrationalities – such as the fact that the costs of growth and development are almost never justly and equitably distributed across or within countries – routinely arise from rapid growth under such market fundamentalism, it is surely no coincidence. When governments far and near have been forced or led to adopt policies prescribed by the imperial high priests of market theology, allowing free play to the forces of corporate and consumer “rationality”, a necessary consequence must surely be the social and ecological irrationalities that we find surrounding us today. Whether it is the destruction of pristine mangrove forests for an SEZ in Gujarat or the recent launching of “the world’s most irresponsible car”, the Nano, the results are a direct consequence of the deregulation of corporations in order to generate higher growth in a “free” market economy. The fact that the not so invisible hand of corporations lies behind what is euphemistically described as “the invisible hand” of the “free” market is a convenient blind spot for believers in developmentality.
- All that matters to developmentality are the numbers – on growth of GDP, per capita income, returns on investments and suchlike. The precise content, qualitative character and spread of growth are entirely secondary, if taken into account at all. After two decades of aggressive propaganda, quantity has outstripped quality in the consciousness of the educated Indian public. Our media has taken matters to a new depth whereby numbers and shallow quantitative reasoning have taken the place of imaginative approaches to economic problems, consistent with ecological necessities and social justice. We are letting numbers do our thinking for us.
- Even the data being used for policy-making is often horribly inaccurate. The poverty data, for instance, is still based on a consumption basket from 1973-74, when so much of the material needs of the rural poor could actually be met by circumventing market transactions, through such means as access to the village commons. There is little recognition of the fact that the living environment of the rural poor has undergone a dramatic change in recent times. Small wonder that the poverty line in rural areas comes out to be Rs.12 (30 cents) a day: it is not even a starvation line! Similarly, inflation figures avoid any reckoning with the rising cost of what used to be public services till recently. The rise in the price of (increasingly privatized) health services and medicines, for instance, is not reflected in the reported inflation rates. (This factor has worsened after the introduction of the new patents regime under WTO.) Using such ridiculously poor data as the government releases, the World Bank realized recently that it had been overestimating the GDP of India in real (purchasing power parity) terms by as much as 65%! The numbers on key matters like poverty, unemployment and inflation are undeserving of a reasonable democracy.
- Needless to point out, “developmentality” postpones any reckoning with the ecological crises that beset us. This again is consistent with the growth fetish driven by global financial markets via the multilateral institutions. A particularly perilous line of thought argues that with greater economic growth society will have more resources to tackle environmental challenges. (Perhaps a lapse of memory allows policy-makers to forget that the Rio conference on the environment in 1992 had advocated a “precautionary principle” to safeguard nature and ecological balance in a great many cases where scientific knowledge was not adequate to ascertain the facts about ecological losses.) If ecological costs, losses and risks were valued and reckoned, a lot more environmental data would have to be gathered than the market (to the mutual convenience of the producer and the consumer, not to forget the government) ordinarily generates. This would perhaps require a participatory environmental democracy in which not merely scientists and experts but also ordinary women and men – losers from “developmental” projects – would have to be consulted to learn of the extent of potential damage from a certain growth project.
- The mood in which Indian ruling elites (Chief Ministers of all political hues, in addition to policy-makers in New Delhi) find themselves today suggests that for “developmentalists” there is no limit to such universal goods as economic growth. There is no recognition of the intrinsic value of balance, both ecological and socio-economic. Too much of a good thing is usually a bad thing. But for those who take their lessons from economists who have a deeply rooted microeconomic prejudice that for anything worthy of being called a “good” or a “service”, “more is preferred to less”, such caution is anathema. In the long run, such prejudice can’t be anything but ecologically and socially destructive. A 15% growth rate along the present lines, if it could be achieved, will destroy India.
- Developmentality does not dare to measure the true costs of growth. If it did, the numbers may come out looking unfavourable to India Inc. and make the government’s economic achievements look somewhat embarrassing. It would have to gather and release data on livelihoods and agricultural production lost to “development” projects. It would have to do systematic cost-benefit analyses of projects like SEZs (which may often turn out to be adverse from the public point of view), and so on. By not measuring accurately what is of importance to the public successive governments are merely indicating the low priority accorded to such matters. Imagine the hoopla if industrial production, exports or foreign exchange reserves were severely mismeasured!
- It is obvious that GDP (or even HDI) is a poor index of sustainable development. They pay no attention to environmental costs and risks. GDP stands for gross domestic product. The letter “G” represents the fact that the depreciation of the economy’s productive base is not taken into account by today’s pre-eminent measure of economic activity in a country. It is hardly obvious – especially in a time of rapid ecological degradation – that an economy’s productive base is growing along side its GDP. The loss of climatic balance, biodiversity, top soil, arable land, forests, water bodies, minerals and energy sources is never reckoned in the GDP data that is presented to the public. No one notices the shrinking of the resource base if all eyes are on the growth of GDP and stock values. If the productive resource base continues to shrink, (unless there are large compensating increases in the productivity of the resource base) at some point economic growth will turn negative, causing unexpected falls in the standard of living. All may appear to be well when in fact it is not. If we have already crossed critical tipping points, there is no way of knowing it! Research carried out by Cambridge economist Partha Dasgupta on the extent of sustainability of the growth process in the developing world reveals disturbing insights. Using World Bank data on natural resource losses (excluding losses in many areas such as water resources, soil, fisheries, air and water pollutants, etc.) he finds that economic growth in the South Asian sub-continent was probably “unsustainable” between 1970 and 2000. In the case of Pakistan, the productive base may have shrunk as much as 20% since 1970. Given the acceleration of ecologically destructive growth in India after 2000, one can imagine that things have grown far more grave since then.
- The argument is often heard that poor countries – unlike rich ones – cannot afford to prioritise environmental protection over development. The eradication of poverty ought to take precedence over making the landscape aesthetically pretty, believed to be an unaffordable luxury for a poor country. It is said that as incomes rise with greater international trade, people will get richer and be willing to devote a greater fraction of their resources to environmental protection. There are many problems with this view. Firstly, it misses the fact noted earlier that the productive resource base of an economy may be declining faster than the growth of incomes, but we will not know it because we hardly care to measure it. It’s not as though other things in nature are stationary while measured incomes rise. Secondly, there is plenty of evidence to suggest that the economic fate of the poor – especially in rural areas, as well as in cities – is more directly dependent on the quality of the natural environment than that of the rich. When dams are built, or mining is allowed in a rainforest, or a common property resource is seized for an industrial project, it is the poor who directly stand to lose, not the rich. The poor are also far more dependent on what are called nowadays “ecosystem services” (biodiversity, clean air, common water, etc.). They will never get rich enough to demand better environmental quality. The rich (including the government), in the meantime, have no incentive to demand a better environment if they don’t suffer the consequences of their actions and can let the poor carry the burden of their consumption excesses. They always have alternatives which the poor don’t. In other words, economic growth, which is premised on and generates great inequalities, has a perverse built-in mechanism which leads to ecological deterioration. Besides, if our goal is the eradication of poverty, we ought to be strengthening, rather than weakening, the poor’s access to their resource base. Ecological capital is not just an amenity in poor countries. It also constitutes the resource base of the poor. There is no reference to ecological capital in the most influential texts of development economics, or in development policy.
- As students of national income accounting know all too well, there are serious problems with using growth of GDP or per capita income as measures of material well-being. This is especially problematic in an economy which is supposed to be expanding on the back of growth in services. When pollution rises and medical expenses go up, we are supposed to believe that the nation is doing better. When divorces happen, it is a known fact that consumption levels rise, even if they don’t double. If old people are looked after in homes for senior citizens rather than by their families, a similar misunderstanding can arise. The same applies to the situation when mental illness grows in society and the clients of psychiatrists grow in number. Likewise, for a thousand other instances in which a hitherto unmonetized part of social life (which a lot of people value for the enormous contribution it makes to human happiness, precisely because it is priceless) gets converted into a paid service. It is absolutely vital to recognize that in a society like India, where communities have been traditionally strong, a breakdown of community life will all too often express itself precisely in the form of a spurt in growth led by the service sector. The perversity of such a measure of human well-being as GDP, or per capita income (or even HDI), then becomes all too obvious.
- It is of the nature of developmentality to name things wrongly. Growth in GDP, a purely quantitative phenomenon, is mechanically equated with development, which is meant to be a qualitative transformation in people’s well-being. The ruling form of globalization does not distinguish between growth and development anymore. As a result, growth projects for the affluent classes are described as “development” projects for the nation. Along the same lines, outright uprooting of peoples and cultures is described euphemistically as “displacement”. Easy entry of foreign goods, services and investments into the country is called “liberalization”. If a country’s government does not allow all this to happen, it is not regarded “open”, and so on.
- Developmentality takes globalization in its current form as an inevitability that India has no choice about. It is assumed that India will industrialize along the same lines as the West, using up energy, water and other resources with the same intensity, because we will use the same (fossil-fuel-based) technologies. That the use of such ecologically destructive technologies involves implicit choices, which will ultimately jeopardise development itself, is not considered.
- Central to globalizing, developmentality is the abandonment of any remaining concern with national, regional or local self-reliance or self-sufficiency. With the current form of development comes great dependency – on imports of essential goods (such as food) and services, capital and technology, even skilled personnel and enterprise. Most of the “development” we have seen during the last two decades is “dependent development”. (For related reasons, it is also extremely uneven in the degree to which it enables access to its benefits.) It is as though global economic interdependence, howsoever undesirable, risky and perilous in some respects (such as finance), is an end in itself. While it is undoubtedly true that countries can benefit (and have benefited) from exchanges of know-how and technology (not to forget culture and education), it is also the case that so much of it (such as technology transfer of certain varieties) comes at high cost (such as permanent loss of jobs because of automated machinery or high patent fees). In a time when we are besieged by environmental threats, there are clear merits to evolving local and regional economies which can plan the use of resources and the management of pollution in a democratic manner sensitive to ecological considerations. But such alternatives are not on the radar of our policy-makers, perhaps because they do not involve big markets (in monetary terms), which alone interest the giant corporations.
- A definite teleology (belief in a pre-determined future) informs the developmentalist world-view. According to this view, all nations are pre-destined to follow the same development path to endless prosperity that the affluent nations of the developed world have followed. The main features of this path of “progress” are:
- Rapid, labour-substituting technological change.
- The shift of large numbers of the working population from agriculture and related activities towards industry and the modern service sector over time.
- As a result of these factors, rapid urbanization.
These, in and of themselves, are nowadays taken as indices of prosperity. We have already seen why the Western experience is unlikely to be repeated in India.
- With “globalized developmentality” – and especially with the enormous growth of traffic between India and the Western world – Indian elite and middle classes (the top 10-15% of the population) have begun measuring their consumer lifestyles against the affluent culture of the West. The demand for products nowhere on the consumer’s horizon just a few decades ago, has grown dramatically. The demand for perceived needs has outpaced necessities. Mass needs have been forgotten or postponed as the demand from privileged classes for new brands of packaged solutions forever beyond the pockets of the majority has grown. Underdevelopment, when juxtaposed with the affluent world, also becomes a state of mind. The “development gap” then has to be filled, and so a teleological view of the future – howsoever unrealistic – becomes imperative to embrace. Understood thus, “underdevelopment” (as a mental condition) is growing even if the overall availability of cars and gadgets is rising.
- “Developmentality” also fails to distinguish between public and private interest, readily confusing the latter with the former. Thus, under the “public purpose” clause of the 1894 Land Acquisition Act, land has frequently been acquired by the state and handed over to private corporations. Especially after the passing of the SEZ Act of 2005, there is virtually no distinction in practice between public and private interest.
- “Development” is a profoundly political process, involving choices made by the powerful. It is not primarily technocratic. Logically and morally, prior to any choice of means, is the question of goals and criteria for balancing the different needs and interests at play. No development strategy can avoid the fundamental question: what/who is to be “developed” and for whom? Yet, in the many decisions that are taken routinely by state and central governments across the country, these questions are rarely asked. A super thermal power plant is not a necessity to light up India’s villages, which can perhaps do much better with micro-hydels. But it is taken as an article of faith that they are necessary for the country’s “development”. That they feed exclusively into powerful industrial interests is thus ignored.
- Industrialization must be led by corporations for development to come about. This is another article of faith for the reigning world-view. But corporations are in a global race to maximize profits and grow bigger than their competitors – it is not their aim to transform people’s lives, except incidentally! As the American ecologist Wendell Berry says, “A corporation, essentially, is a pile of money to which a number of persons have sold their moral allegiance…It goes about its business as if it were immortal, with the single purpose of becoming a bigger pile of money.”
- Corporate nationalism is one of the pillars of developmentality. It is assumed by the corporations and their patrons abroad and in the government that “what’s good for us is good for the country and its people.” It matters little that Indian capital is investing in mines in Bolivia or Australia. What’s important to the reigning ideology is that an Indian is calling the shots, even if the implications are irrelevant to India’s toiling millions. The fantasy of making India into a superpower has been accepted widely as credible, even if the country continues to slip from an already shameful ranking on the HDI.
- Developmentality aims at democratising consumption, but not production. “Let every Indian fly!” goes the cry of India Inc. Neither is there ever any discussion of whether this is possible or desirable, given severe resource constraints, nor is there ever talk of letting ordinary citizens participate in key decisions to do with the running of the economy.
- Exclusion under developmental rule happens quite normally through the very failure of cognition. For all the tall talk about the aam aadmi/aurat, the truth is that s/he is thought of only in the months preceding an election. For the most part, our leaders and policy elites feel quite at ease to busy their heads over the problems of global financial markets and their consequences for Dalal Street and India’s growth prospects. Exclusion is also built into the system when customary rights to land and other resources remain largely unrecognised by the state despite the passage of such legislation as the 2006 Forest Rights Act. The British decided to overlook such rights when they took control of non-agricultural lands and forests in India in the 19th century. Their successors in independent India, especially since 1991, are opting to do the same.
- Most of all, developmentality takes it for granted that all values are ultimately reducible to money. On this view, human health, irreversible damage to rainforests, biodiversity and soils, loss of physical security and social peace, human life itself – to name just a few intangibles at stake today – can ultimately be valued in terms of money. The belief in consumer society reduces human needs to purely individualistic ones, which can be materially serviced at supermarkets and e-bays. However, human needs are far more varied and complex and require attention well beyond what people can find with their money in the marketplace. Even within the material realm, money is often the wrong index of needs. It has been noted by many observers that women are far less inclined to accept compensation for loss of cultivated land to industry. They are keen on real economic security, instead of money whose value can fluctuate. Actually faced sometime back with an Andhra farmer’s query as to why she should give up a certain benefit (meagre as it is), for a very uncertain future gain (unwritten promise of job in an SEZ), we had no answer for her.
- The most lethal illusion that the advocates of developmentality have is: that which is not measured, or often cannot be, does not exist, or is secondary or unimportant. It is just such a cognitive lapse which enables some of our most learned economists to write off the huge subsistence economy in this country because it is outside the measurable sphere of the market. Today’s planners live in a world of measurable abstractions. But their decisions have concrete consequences which are often not so. The latter are thus readily ignored without anything like a transparent cost-benefit analysis even being attempted. This is quite typical in so many areas of the country which suffer social and ecological losses from industrial projects meant for the city-dwellers. Policy haste is making plenty of waste not visible to the decision-makers.
First Published in Ecological democracy