L4 COLUMNS
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SATURDAY, FEBRUARY 13, 2010 ° WWW.LIVEMINT.COM
PUBLIC EYE
SUNIL KHILNANI
INDIA’S ECONOMIC REFORMS HAVE FREED IT FROM AN ERA OF PUNITIVE TAXATION AND STIFLING REGULATION. THE CHALLENGE NOW IS TO ESTABLISH AN INCLUSIVE SOCIAL CONTRACT THAT CUTS ACROSS DIVISIONS
social democracy? AN INDIAN
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peculiar outcome of what many have called the “crisis of capitalism” over the past two years is that it has left capitalism remarkably unscathed. Indeed if anything, the recent shocks to this, our least-bad economic system, have worked to reinforce many of its less good aspects. Here in India, much has been made of the fact that the economy has gracefully survived the recession. Both the Indian government and our corporate managements responded nimbly, and the companies are now well placed to take advantage of new opportunities. That is all to the good. Yet the language of crisis can also be a means of manipulation. Over the last two years, it’s been used to eliminate competition and consolidate sectors of the economy in the form of a few, massive players. After the global shake-out among investment banks, airlines and the automobile industry, the surviving players are not just big. They’re secure in the
knowledge that they’re far too big to fail. Meanwhile they’ve parlayed the uncertainty about the financial climate into a trumping argument against worker concerns. They’ve pared costs, shed labour, reduced employment security. And now the citizen as consumer has less choice, the citizen as worker has more uncertainty, and a paradox has been laid bare. The goal of governments and banks across the world has been to reduce financial risk: restraining both the Quixotic ventures with which the best-trained financial brains amused—and enriched—themselves this past decade, and also the Sancho Panza effects induced in their clients. So, lending ratios are upped, regulatory measures are unrolled, Credit Default Swaps now exist under the hex sign. All these financial haircuts have left the bankers as well-coiffed as ever. The workers, though, have come out skinned. Today, as government feels for the
optimum moment to take its foot off the stimulus pedal, it’s important to remember that risk in the modern world takes a variety of forms. As work is casualized and benefits eliminated, as capital becomes still more focused on profit opportunities, as the state semi-privatizes in its striving for fiscal efficiency, social risk for working populations has increased. Unemployment remains endemic and among those who do have some sort of job, worker protections fall by the wayside. Consider the migrant who leaves the coal-mining infernos of Jharia, a landscape literally aflame and collapsing. Travelling to the city to pursue new opportunities, he loses his family safety net while entering a new world of uncertainty and risk. As Mint documented in a brilliant series of articles last year, worker safety in India’s dynamic industrial sector is a black hole in our growth story. Medical costs persist as an immovable barrier to moving up the social and economic ladder, while rapid devel-
opment in urban areas creates laboratories for contagious disease. Other growing economies such as China, Brazil, and South Africa offer their citizens basic health and welfare protections. Here in India, we expect our migrants from Jharia, all our poor citizens, to go it alone in the brave new economic world. Ours is a leaner capitalism—and a meaner one. Historically, crises in the form of external shocks have spurred reforms that societies need but habitually resist. The British welfare state, for instance, came out of the jolt of World War II, while the oil price hike of the early 1970s forced European economies to sharpen their energy efficiency. Yet, this most recent crisis, global in scale, seems to have passed gently into the night. This has much to do with the lack of critical alternatives, and a Left that seems worn out. It’s telling that at this recent, vulnerable moment in the history of capitalism, Left parties MADHU KAPPARATH/MINT
Showpiece success: Villagers in Rajasthan build a water channel under the National Rural Employment Guarantee Scheme.