Book Case Madhuri Santanam Sondhi
Prime Minister Manmohan Singh’s recent remarks to the Confederation of Indian Industries on the unacceptable gulf which separates India’s affluent class from the poor and immiserated and his suggestions for tackling it produced much media outrage. Critics suggested that he was hamstrung by his earlier doctrinaire views on the command economy with its accompanying ethic of distributive justice. He was almost accused of sabotaging India’s economic growth.
For the record, China, the envy of Indian capitalists and socialists alike, also faces environmental crises and a growing income gap between rich and poor: 70,000 cases of civil unrest were recorded last year, attributed to tensions arising from inequality (The Economist, June 2007). The Chinese Prime Minister, in no mood for another Maoist revolution, criticised the privileged for flaunting their wealth and threatening China’s "harmonious society." And in Europe and the United States, hard centres of capitalism and globalisation, industry itself has conducted an internal debate over the scale of CEO paycheques and the need for balance.It is worth recalling that one of the major planks of the national movement against foreign occupation arose out of the grinding misery of the Indian masses. For the privileged Gandhi advocated a socio-economic ethic of self-restraint, controlled consumerism and low-level production, to equilibrate a largely agricultural society without offensive income distances and to maintain the natural environment. He warned against the unsustainability of greed and profligacy. Nehru the modernist found Gandhi’s prescriptions archaic moralisms, attracted as he was by socialism which promised utopian gratification to all through state-controls, state-distribution and large-scale industrialisation. Added to democracy this promised social equality, basic human rights and freedoms. Still his government imposed certain sanctions against lavish displays of wealth, especially at public functions and weddings. His grandson Sanjay Gandhi, in contrast to other restrictions enforced during the Emergency, dispensed with these controls, and since then extravagant spending by the rich has kept pace with India’s economic development, especially after economic reforms. But it would be wrong to assume that economic growth depends on excessive spending by the rich.
Debates on conspicuous consumption have arisen at various periods in the history of capitalism, with a series of interlocutors: Marxists, Green crusaders or essentialists concerned with job satisfaction or "quality of life" (neither synonymous with sheer wealth). Both socialism and capitalism are indebted to the Enlightenment vision of egalitarianism, rooted in humanistic individualism. Their differences lie in their methodologies, state ownership and controls versus free markets, and both in their pristine forms failed to achieve full social equality. So the Prime Minister only sought to restore the rhetoric concerning the humanistic goals of modernity, which has faded in the glare of liberalism and globalisation.
Citigroup strategists Ajay Kapur and Niall Macleod used the term "plutonomy" for economies dominated by the spending power of elites, a relatively new phenomenon resulting from globalisation. They argue that twentieth century mass democracy was economically supported by the earnings of blue-collar workers, especially those massed in mining, manufacturing, and transport industries. With their decline and the rise of enterprises employing skilled white collar labour, the economic mass base of democracy weakened, opening the door to oligarchy if not political extremism. Such phenomena are disproportionately skewed in a multi-layered developing economy like India’s which ranges from pre-modern agriculture to internationally competitive IT.
The term "conspicuous consumption" was coined by late nineteenth century American sociologist, Thorstein Veblen, best remembered for his classic Theory of the Leisure Class. He criticised not capitalism as such but the capitalists of his time for seeking social importance through flamboyant displays of wealth. The term now has wider application, encompassing the nouveau riche with their ostentatious spending, ubiquitous in expanding economies such as those of Russia, India and China. There is no disagreement amongst right-thinking people that all have the right to a decent standard of living: it is the inverse relationship between those who have too much and those with next to nothing that is, when publicly flaunted, unacceptable and politically volatile.
As it happens, the Prime Minister’s commitment to economic growth was integral to his argument. "Unless workers feel they are cared for at work, we can never evolve a national consensus in favour of much needed more flexible laws aimed at ensuring that our firms remain globally competitive." In other words, primitive capitalist exploitation is bad business in a globalised world. Veblen himself attacked the leisure class for slowing the pace of economic development and immiserating the poor, and pointed to the invidious effects of conspicuous consumption in a democratic society. Although it is undoubtedly true that liberal reforms in India have helped pull a good number of the erstwhile poor into the middle class, the sheer numbers of their neighbours still outside the reach of the trickle are a tinder-box of anger and resentment.Interestingly, the economist Prime Minister did not suggest a luxury tax, but appealed, Gandhian fashion, to his audience’s moral conscience. The outraged media response suggested that the riche old or new no longer wish to be burdened with a conscience, which in itself is a challenge to any democracy. But the corporate heads to whom these admonitions were addressed made no demur, and some, like CII president Sunil Bharati Mittal, even responded: "The Prime Minister’s … concern was in view of the wealth inequality in the country ... in-your face spending hurts people. He meant ostentatious display of wealth should be avoided." Incidentally, in this regard, the Prime Minister, unlike many politicians, is himself an honourable exception
Patwant Singh is heir to traditions both of Sikh community service and enlightened modernity. In his Second Partition Fault-Lines in India’s Democracy (Hay House India 2007) he provides a detailed statistical examination of the abyss that separates India’s globalised elites and the 300 million marginalised and impoverished "rest," covering ill-health, malnourishment, unemployment, homelessness, lack of educational opportunities, which aggravate vulnerability to communalism, corruption et al. Also, for good measure, he criticises the "frenzied militarisation of the state" based on the popular belief that there is a "peace dividend" to be automatically harvested from disarmament, though history has not proven this to be a simple equation.
Disillusioned with state welfare, Patwant Singh concludes with faith in the possibilities of civic action, for which he has set a personal example with the founding of the Kabliji Hospital in rural India. It is also possible to cultivate a more compassionate capitalism with excess profits directed towards welfare: foundations such as those of Tatas, Mahindras or Bill Gates are exemplary. Humanising capitalism could initiate a virtuous circle of acceptable wealth creation and employment. If as Eugen Loebl defined it, an economy is "a system of thinking human beings," then hopefully India, with the best of her received ethos and her renowned economists can further explore the possibilities of combining economic growth with social responsibility.
Madhuri Santanam Sondhi can be contacted at mssondhi@hotmail.com
Source: The Asian Age
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