The New Wave is a Socialist newsletter reporting on issues of the working class, revolutionary politics, and world affairs
June 2023
www.litci.org/en
Workers and farmers protest in Delhi
Contents :
1) Foreword
2) Our criticism of Nehru
3) We support the protesting wrestlers
4) Understanding India’s neutrality on Ukraine
5) The crisis of the banking system and the possibility of a new recession
………pg 2
………pg 3
……,,,.pg 8
………pg 10
………pg 16
Tectonic shifts are taking place in the politics of India and the world. The resurgence of far right forces which began in the last decade has started to wane. In Brazil, the Bolsonaro government fell to the PT, in the USA the Republican Party lost to the Democrats, and saw Trump losing to Biden. In India, the right wing BJP is on the back foot with losses in important state elections, Rajasthan, Punjab, Delhi, and most recently Karnataka. These losses have weakened it to the point only a minority of states are today under the BJP government, or with a BJP led coalition. In 2018, a near majority of states had a BJP government or BJPled coalition government in India.At the heart of these setbacks are mass mobilizations, and public discontent over the misrule of the BJP and their economic policy. Even Modi and his ‘charisma’could not change this waning tide.
These changes did not just happen with a sudden random shift in consciousness, but were accompanied by mass mobilization and simmering discontent at the grassroots level. The social tensions and protests continue, with the wrestlers protest being the latest chink in Modi’s armour. The decline of Prime Minister Modi and the BJP’s power can be said to begin from the farmer’s agitation, the Trump presidency faced it’s first real challenge on the streets with BLM protests, and mobilizations and protest actions against the Bolsonaro regime played a critical role in bringing it down. However, in each of these cases, the defeats have only led to a final resolution, but to the ascendance of reformist bourgeois liberal
parties, or centrist social democrat parties. In India it is the Congress party that is gaining at the BJP’s expense, while in Brazil the workers party, the same party which had overseen the brutal slum evictions to prepare for the FIFA world cup, is back in power. In the USA, the Biden presidency is retaining many Trump era laws, especially in the realm of immigration control. It is important to understand the fraudulent nature of these leaderships, especially now as we are facing the possibility of another period of upheaval. Analyzing the Prime Ministership of Jawahar Lal Nehru in this context reveals the politics of reformism, and exposes a false idol of liberalism, and his true intentions.
The war in Ukraine has had a global impact, with food inflation growing everywhere, hurting especially weak economies in Asia and Africa. The impact on oil supplies is seeing skyrocketing energy prices, it has been enough to push the most important European economy, Germany, into recession. It is having it’s impact on India and South Asia as well, pushing the periphery into chaos, yesterday it was Sri Lanka, today it is Pakistan. India cannot be immune to these tensions. In the fourteenth edition of our newsletter, we explore India’s position on the Ukraine war, and explore it’s impact. The war has tipped the world economy into crisis, shown most clearly in the form of the banking crisis, the article by Comrade Eduardo Almeida from Brazil gives an overview of the impending financial crisis.
Introduction :
There are a few personalities in the world as divisive and impactful as India’s first Prime Minister Jawahar Lal Nehru. For the right wing, he is a figure who is reviled and hated, for many leftists and especially among Indian liberals, he is a celebrated figure who is lauded for his democratic ideals. The image of Nehru as a naïve idealist who compromised his nation’s interests for his moral principles is an image that is often conjured up when speaking of Nehru, particularly over the question of how he handled the accession
of the Kingdom of Kashmir. Less talked about is how he used military force decisively to annex Hyderabad and Goa to the Indian Republic, or how he presided over the mass incarceration of thousands of Indian Chinese, breaking the backbone of a two hundred year old community. It is important to understand the role of great people in history, as products of the material conditions and not simply as authors of history. Prime Minister Nehru’s decisive leadership was of great importance to the development of the Indian bourgeoisie, and of the Indian Republic itself. This
Nehru holding the ceremonial staff called Sengol
is a legacy, that is not as clean or celebratory as the Liberals and their Stalinist cheerleaders would like it to be, and that most right wing historians are either in denial of, or have no awareness about.
Among a large section of conservative and reactionary Hindus, Nehru has always been a hated figure, primarily for his policy on Kashmir, and being one of the figures blamed for compromising on the question of partition and the creation of Pakistan. In truth, their main grievance with Nehru is his secular stance on religious minorities, and the adoption of a mixed economic model, which relied on state capitalist enterprise, and five year plans.
Since the BJP came to power, propaganda against Nehru, and the old Congress leaders have acquired a new pitch. The popular conspiracy theory of blaming Nehru for Bose’s disappearance, had turned out false, and the entire movement to open the files on Bose fell apart. That did not stop them from attacking him however, shifting focus to ‘dynastic politics’, Nehru’s secularism and supposed ‘socialism’.
In reaction to right wing attacks, Indian liberals, who had always idealized Nehru, further entrenched in their support for him, and Indian Stalinists, having little to no critical understanding of the old Congress leaders, tailed the liberal’s position. The political context here, being the CPIM seeking an alliance with the Congress party at the national level, to regain it’s strength in the strategically important state of West Bengal, and oppose the BJP.
The Congress for its part, never abandoned Nehru as a central figure in it’s pantheon of leaders whose contributions are hyped up and glorified. Nehru is often cited with Gandhi as the central leadership of the Indian struggle, and in Congress inspired narratives of history, the Congress posits itself as the center of the Indian struggle for independence, and the ideas espoused by Nehru at the heart of the Indian republic. These ideas, being secularism, and socialism, and non alignment.
Nehru’s actions :
These hallmark policies of Nehru must be seen and understood in their specific material context, and not in a hazy idealistic manner.
The Indian bourgeoisie had managed to acquired three quarters of the territory of the British Raj, this included the bulk of India’s colonial industries, infrastructure, and coastline. However, world war two, the Bengal famine, and then partition left India in an impoverished state, not to mention the sustained exploitation under the British. The basis for the re-emergence of a powerful, sovereign Indian state was there, but offset by an economy where many vital sectors of the economy, such as banking, finance, industry, and certain agricultural sectors like tea, was still in foreign hands.
The Indian bourgeoisie entrusted the Congress party to work for it’s interests. First and foremost, this meant the consolidation of the boundaries of the Indian Republic, the annexation and integration of five hundred princely states, the largest of which were Kashmir, Junagadh, and Hyderabad. Secondly, it meant the creation of basic industries under state control, and a focus on industrialization, under protection from foreign capital, which was sought to be achieved through import substitution. Thirdly, it meant pacifying the threat of revolution, which first manifested itself in the naval uprising in 1946, and remained in the peasant uprisings in Hyderabad, Travancore, and worker’s strikes in Bombay and Calcutta. Fourthly, and lastly, it meant carving out a position for the Indian bourgeoisie in a world dominated by US imperialism and Stalinism, where it could be shielded from both.
On each of these counts, the Congress party under Nehru, succeeded.
Nehru’s prime ministership saw the territory of the Indian republic grow, with five hundred princely states, large and small, being annexed to the territory of the state. The right wing credits this achievement solely with Sardar Vallabhbhai Patel, and Nehru’s role is either denied or diminished. While Patel was the Home Minister, Nehru had been elected Prime Minister, and with the exception of Kashmir which was contested with Pakistan, most of these states were taken over by a combination of coercion and diplomacy. The only state to attempt to stand out and hold out the longest was the kingdom of Hyderabad ruled by the Nizam. This too would fall to Indian forces in 1948 with operation Polo. What would follow is a massacre of muslims and pro-communist peasants, designed to crush the peasant led revolutionary movement in Telangana. In most cases, for the rulers of these mini states, accession to India under the terms offered, ensured a privileged position, privy purses, and survival in the face of potential revolutionary terror at the hands of masses who have had enough of the exploitative and autocratic rule. Kashmir, Hyderabad and Travancore, each had uprisings of workers and peasants within their kingdom, and in each case, the rulers responded brutally.
On the economic front, Nehru and his cabinet implemented the Bombay plan, which put India on the path of statism. The largest foreign owned bank in India, the Imperial bank, was nationalized and turned into what is today the largest bank in India (still under state ownership), the State Bank of India. Several new state owned companies were established in the energy sector, primarily Oil and Natural Gas Corporation (ONGC) and Indian Oil Corporation (IOCL). The Steel Authority of India Limited (SAIL) was established in the steel sector and has today grown to be one of the largest steel manufacturers in the world. These steps did not constitute socialism, rather state capitalism of this type, only aided private capital, and the chief beneficiary was India’s rising indigenous capitalists based off Bombay. Protectionist measures helped preserve the large internal Indian
market for Indian capitalists, at the cost of innovativeness, but this did not hurt early on. Nehru’s mixed economy still had a place for private capital, with state enterprises propping up private capital like a tea plantation worker carrying her British boss, a dynamic which has not changed fundamentally till today.
On the point of pacifying the threat of revolution, is where perhaps Nehru’s Prime ministership shone the most. The adoption of socialist rhetoric, welfarism, abolition of zamindari and in some cases directly crushing peasant rebellions (such as in Telengana), all contributed to blunting the revolutionary fervor of the masses which had been building up since the end of the second world war. The Stalinists led by the CPIM had initially denounced Nehru and the Congress as comprador, running dogs of imperialism. They had played a leading role in organizing the peasantry in the Telengana uprising against the Nizam, they had also led many militant worker’s strikes in Bombay and Calcutta. In 1957, when the state of Kerala went to elections, it was Nehru’s Congress government that had jailed most of the Communist party leadership to try and ensure their failure. The effort did not bear fruit, and Kerala had it’s first elected Communist government. This government lasted only two years before being dismissed in 1959.
Three years later in 1962, India would go to war with China, an event that would split the CPI and the communist movement as a whole. India’s defeat in the war with China, was arguably the darkest period of Nehru’s prime ministership, and the beginning of the modern era of Stalinist collaboration with the Congress government. The pro-nationalist wing of the CPI won out, and became the mainstream CPIM, the Maoist movement in India which was at it’s infancy at this time, was hounded out and cornered. In the fallout of the war, the Chinese community, primarily living in Eastern India and in the city of Calcutta was scapegoated. About twenty thousand were rounded up and put into a prison camp in Deuli Rajasthan, which had been previously used to house Italian POWs in world war 2. This chapter of Indian history has been left out of the history books, and barely talked about outside of
the Chinese community, Nehru is never called out for this action, certainly not from anyone on the left, and liberals remain silent about it.
Despite the failure with China, Nehru had scored several foreign policy successes, ensuring the nascent Indian bourgeois republic would be shielded from cold war rivalries, while also extending it’s influence in a subtle and benign way. Under Nehru, India led the non-aligned movement, and became a leading player among newly decolonized nations, in this it acquired prestige among former colonial countries. During this period, India played a key role in diffusing tensions in the Korean peninsula towards the end of the Korean war, and played a decisive role in the Suez crisis, against British and French interests, aligning itself with both the Soviet Union and the United States, pursuing an anticolonial agenda. This would culminate in it’s seizure of Goa in 1961, without any political backlash from the leading powers of the world. The panchsheel (five principles of peaceful coexistence) between India and China, ensured the latter’s nullification as a revolutionary force against world capitalism. The Chinese Trotskyist Peng Shuzi had criticized the CCP on signing to the agreement, which was essentially a concession by revolutionary China to world capitalism. The war was a military defeat for India, but politically the Indian bourgeoisie consolidated, and drove the Communist Parties to capitulation before it.
Nehru today :
The vitriolic hatred of the Hindutva right against Nehru has blinded the present generation of Indians to Nehru’s legacy, and prevented a scientific Marxist understanding of the man from developing. To put Nehru in the context of Indian history, is to acknowledge his role in destroying the budding revolutionary consciousness of the Indian masses. He was the leader of the congress, when it colluded with the British government to destroy the naval uprising, where Sardar Patel, the so-called iron man of India, deceived the mutineering sailors into surrendering before the British. By crushing the Telengana uprising, and initiating the first large scale suppression of communists, he destroyed the second great
revolutionary wave in the country. His economic policies, while incidentally beneficial to the working class and peasants, were primarily geared to propping up Indian capitalists, for which they are still benefitting to this day. The darker aspects of his past, are glossed over by liberals and the Stalinist left, such as the mass incarceration of Chinese, hushing up the massacre of rebellious peasants and muslims after the annexation of Hyderabad, and the censorship and suppression of dissident communists in the 50s.
These do not figure in the right wing attacks on Nehru, for whom such actions would be more than welcome, perhaps even celebrated, but it is convenient for them to make a scapegoat out of Nehru, and blame him for ‘socialism’, something Nehru never did, and adopting a secular stance towards India’s minorities, something that the congress has still retained. Nehru’s secularism had it’s flaws as well. In allowing the fullest freedom of religion, both to practice and preach, it allowed religion to further entrench itself in society, without any serious attempt to challenge religion’s hold over India society. The fact that today, the Hindutva right wing is ascendant and free to propagate its divisive agenda, is nothing but a clear failure of the secularism of Nehru and Congress. It was akin to a band aid to treat an infection that lay within the body.
As ineffective as this was, it is still too much for the Hindutva movement to accept, which seeks to turn India into a Hindu supremacist country, where non-hindus would be second class citizens, if even allowed to live at all. In practice, much of this is already achieved through communal divisions, and majoritarianism, which continued on under the Congress despite its secular rhetoric. The Mandal commission report laid bare the marginalization of muslims and Dalits in India, something Nehru’s policies did not address. For the forces of Hindutva, this state of affairs is desirable, and they wish to take it further.
In addition to this, the right wing, pro-market neoliberals who are mostly aligned with the BJP and the Hindutva parties, hate Nehru for his supposed ‘socialism’. The emphasis on statism and protectionism did not come from Nehru alone,
but was a demand of the Indian bourgeoisie itself ! Private capital at the time, was not up to the task of large scale infrastructure projects, or financing, something which the state could handle better. Nehru’s implementation of five year plans, import substitution, and creation of large publicly owned corporations to spearhead India’s early industrialization had set it off on the course to develop a relatively independent capitalist economy. It was not alone in instituting such policies, EastAsian nations such as Taiwan, South Korea and Japan attempted such policies as well, in their post war reconstruction. Nehru was no maverick socialist nor an idealist, but a bourgeois leader responding to material conditions he faced. The critics of Nehru on the right have no conception of this, and are consequently blind to this reality.
From this reading, one conclusion is inescapable, that Nehru was a representative of Indian capitalism, and a leading defender of it. His credentials as a democrat are what liberals shine upon in this period of reaction, where India is ruled by the reactionary Bharatiya Janata Party, aggressively promoting it’s Hindu majoritarian agenda, but for the working masses of India, Nehru was the leading figure who ensured the emancipation of the workers and peasants under a socialist revolution would be delayed indefinitely. His so-called ‘secularism’ was just a veneer to hide the true dynamics of Hindu majoritarianism, and casteism, which remain endemic in Indian society.
Nehru’s ‘socialism’ while beneficial to the working masses to an extent, was primarily oriented towards strengthening Indian capitalism. The need to provide welfare to the public, was borne of the need to ward off any revolutionary threat to the rule of the bourgeois class. Those in the left, swayed by adopting Nehru as a counter idol to the BJP’s cynical and dishonest use of Subhash Bose and Bhagat Singh, must know that he was no revolutionary. Nehru was an agent of democratic reaction, and a very successful one at that. His rule saw the deaths of thousands of revolutionary peasants in the Telengana uprising, the massacre of thousands of innocent muslims, the subjugation of the revolutionary movement in India, and the consolidation of bourgeois power. None of which should be celebrated. The victories earned through struggle, such as the abolition of zamindari, labour rights, and land reforms, owe much more to the struggles of the peasants and workers of India, than the supposed magnanimity of Nehru.
Nehru is a model of a liberal bourgeois misleader, whose ‘socialism’ was merely a tool to pacify the Indian working class, and whose real face was revealed in the brutal suppression of the Telengana uprising, and when nearly a hundred people were killed in the attempted pacification of the Samyukt Maharashtra movement. The fraud of pretending to be the friend of the worker by day, and scheming against him by night is the hallmark of most liberal bourgeois leaderships today, especially those pretending to lean left.
Two significant events happened on the 28th of May 2023. Prime Minister Narendra Modi inaugurated the new Indian parliament building, and just a short distance away, Olympic prize winning women wrestles were manhandled and dragged away from their protest site by the Delhi police. Since the 4th of May, these women wrestlers are on the ground at Jantar Mantar protesting against the Wrestling Federation of India (WFI) chief Brij Bhushan Singh. The allegation being systematic harassment of female wrestlers, and corruption. The protests first started in January this year, and was withdrawn after assurances from the central government to investigate the allegations against Brij Bhushan Singh, however justice was not done. The oversight committee formed, did not make it’s report public, and though the WFI chief was stripped of administrative power, no charges were framed against him. The wrestlers were once more compelled to take to the streets to demand the immediate arrest of the WFI chief.
The protests highlight the entrenched sexism in the administration of the Modi government, as well as institutionalized corruption within the management of sports in India, that has always been a problem, and for which, India continues to lag behind. A nation of nearly a billion and a half, could not even compare to New Zeland, which is no bigger than an Indian state by area, and barely larger than the city of Mumbai by population, when it came to Olympic rankings. It is in this context that India’s prize winning athletes are now on the streets.
The BJPcame to power in 2014, in the three years leading to this tectonic shift in Indian politics, the country saw two major mobilizations. The first in 2011 against corruption, led by Arvind Kejriwal, and which would become the basis of the foundation of the Aam Admi Party, which presently rules Punjab and Delhi (NCT). The
Olympic wrestlers Sakshi Malik being dragged by Delhi policesecond, was the agitation against rape in Delhi in 2012 and 2013.
Both these mobilizations were pitted against the then incumbent Congress led UPA government. The BJP was quick to capitalize on both, with neither having any real alternative leadership, to turn the agenda into a political attack on the government of the time, which was neck deep in corruption and could not secure the safety of India’s women. The issues both these mobilizatiosn raised, remained unresolved. Today, under the BJP, institutionalized corruption is as bad, or worse than it was under the Congress. The condition of women, has not improved since the last year. On the contrary, with the BJP in power, has encouraged a cultural reaction which has seen toxic masculinity and sexism rise across the board. Among it’s many decisions, was to abolish women’s studies in universities. The exploitation of women workers is clear from the case of the still strugglingAnganwadi (healthcare) workers under theASHAscheme.
At the same time, it has made haste to take over every administrative office and institution of governance under it’s power, the realm of sports is not immune to this power grab. The combination of the BJP’s inherently reactionary culture towards women, combined with it’s greed for power and corruption, has brought us to this point, where the Wrestling Federation of India being administered by a corrupt and sexist BJP politician like Brij Bhushan Singh.
Aside from cricket and old accolades in Hockey, India has barely made a mark in the world of sports. When it comes to the Olympics India remains an underperforming country, barely figuring in the ranks, while neighboring China repeatedly shines in the games. The problem of India’s sports performance is not new, and is a direct result of bureaucratic control over India’s sporting institutions and the unique institutionalized corruption that exists in India. These have combined to create conditions where India is hobbled when it comes to shining in sports.
At the same time, India has always lacked a sporting culture, save certain exceptions, sports is not a part of the schooling curriculum, nor is a career in sports considered with respect. Beyond cricket, there is barely any investment in sporting, and whatever investment does come in to other sports, becomes bogged in commercial interests, which in turn feed the very corruption that has stymied the development of sports in India in the first place.
The condition of India’s athletes are highlighted by these protests. Wrestlers who have won India Olympic medals have to sleep on the street side to demand for justice, where the government has failed them.
Many opposition parties in India today have cynically extended their support to the wrestler’s protest. Regional parties and the Congress, all of whom are steeped in the same sexism and corruption which has caused this protest to happen in the first place, have suddenly found an issue to combat the BJP with. Their support is based on cynical political calculations, had it been a Congress government in power, and the roles were reversed with Brij Bhushan Singh as a Congress politician in charge of the Wrestling Federation of India, the BJP would have been on the streets pretending to support the wrestlers.
We don’t play such cynical political games, our support is founded in our principled stand against corruption, sexism and male chauvinism, all of which converge to victimize the wrestlers today.
We demand :
Many in the West are surprised, perhaps even shocked, that the “world’s largest democracy” did not stand alongside the “democratic” West on the question of Russia’s invasion of Ukraine. The truth however, is India’s neutrality, reflected by it’s vote to abstain in the United Nations is perhaps one of the least surprising developments during this war.
If one restricts themselves to the often exaggerated, sometimes celebratory news coverage of India-US ties on mainstream media, one can easily be led to believe that India and the USA would be ‘brother’ nations, united by the
common thread of formal bourgeois democracy. Such an understanding essentially denies the history of bourgeois democracy in both countries, forgetting just how fraudulent and full of contradictions they were.
The truth is, the only real consideration is that of class interest. In this case, the class interests of the American bourgeoisie do not align with that of the Indian bourgeoisie.
The first Prime Minister of India Jawahar Lal Nehru set the course for India’s foreign policy,
providing a vision for India’s future development as a capitalist power as well as rooting this vision in an understanding of Indian history. According to Nehru, “India must play a leading role in world affairs, or none at all”. However, there were challenges to implement this vision. The first challenge was obvious, India was a poor and fledgling capitalist economy that had only it’s colonial foundations to build up from.At the same time, India had to bear the burden of the aftermath of partition, when a chunk India’s agrarian resources and infrastructure went over to Pakistan. Both nations had to deal with a genocidal wave of violence against Hindus and Muslims, and the mass migration of tens of millions of people across the border.
India found itself in a world situation which was far from ideal. The cold war had started between the US led alliance of Western imperialists and the Soviet bloc led by a counter-revolutionary bureaucracy. Between these two, India found itself vulnerable, as just to it’s North China had finished it’s Communist revolution, albeit under the leadership of a militaristic dictatorship in the form of Mao’s People’s Liberation Army. The Indian bourgeoisie now had to deal with a direct threat to it’s existence. Within India, the fires of revolution still burned as a peasant’s revolt in Hyderabad led by Communists, threatened to spiral into something greater. To this must be added, the threat of nuclear warfare which had become very real after the bombing of Hiroshima and Nagasaki.
After independence India remained for several years, within the stirling zone, and during this era, British corporations like that of Indian Tobacco Company (ITC), wielded enormous influence. Foreign lenders, especially the IMF, accounted for much of India’s loans, the national budget relied heavily on borrowings. At one point, nearly half the budget was funded by borrowings. On the other hand, India was a large country which despite its relative poverty, remained ahead of many of it’s colonial peers. Over the last one hundred years of it’s rule in India, the British had focused on building up industry and infrastructure for the exploitation of India’s resources and it’s people. After independence, the new Indian republic took over most of this infrastructure,
including the very critical railway and military production infrastructure. This would allow India to develop its own industry far beyond the capabilities of it’s smaller neighbours.
Not far from India’s borders was the Soviet Union, whose revolution had inspired countless youth and workers in India to revolt against the British Raj, and which still continued to hold influence in the minds of radical youth within the country. Between India and the Soviet Union lay Pakistan and Afghanistan. To India’s South, lay Sri Lanka, and Diego Garcia, both of which at this time, were under the control of the UK. The Indian bourgeoisie had to maneuver in a manner that assured it’s survival and autonomy in the first instance, and in the next instance, help it achieve the ambition to acquire great power status. From this situation was born the politics of nonalignment. This has remained the basis of Indian ‘neutrality’ when it comes to global conflicts. The basis of this, was not moral high standing, or principle, but one founded on the basis of it’s own class interest.
The first major example of this policy can be seen during the Korean war, when India vocally supported the unification of the Korean peninsula but condemned the war. India had no role in any active combat, restricting itself to sending a medical mission. However, in the diplomatic sphere, India was trying to push an independent line which did not sink in either with what the United States led bloc or the Soviet led bloc wanted. Later in the war, India would play the leading role in founding the Neutral Nations Repatriation Committee which oversaw the care of prisoners of war who had not been repatriated. The move helped in easing tensions and played a part in ending the conflict between North and South Korea, and between the US and Soviet led blocs. It also established India as a neutral nation withinAsia.
The next major development in Indian foreign policy came in 1955 with the establishment of the Non-Aligned movement in the Bandung Conference. The Conference itself was organized
by five recently decolonized nations, india, Burma (now Myanmar), Ceylon (now Sri Lanka), Indonesia and Pakistan with the aim of fostering cooperation between nations of Asia and Africa which had only recently secured their independence. The key organizers of this event were Prime Minister Jawahar Lal Nehru of India, and Sukarno of Indonesia. The context behind the conference must be understood in terms of broader world events.
After the Korean war, India had established itself as capable of following an independent foreign policy, Nehru envisaged India as a natural leader of the movement against colonialism given it’s own history and it’s unique position in the world, which was neither with the Communist bloc, nor the capitalist alliance led by the United States. Indonesia had only recently won it’s independence after suffering Japanese occupation in the second world war and then a Dutch invasion, which lasted four years and costed tens of thousands of lives. Sukarno was no Communist, and did not wish to lead his country in that direction, nor was he willing to sell out Indonesia’s hard won independence, a middle path, similar to what India under Nehru was crafting, was best suited to him, and Indonesia’s rising bourgeois class, though Indonesia did so on a much weaker basis than India’s, having much of it’s colonial infrastructure and wealth destroyed by war, something India largely avoided.
The establishment of the Non-aligned movement, attracted not just Indonesia, but also Egypt and Yugoslavia. Though there was very little similarity in the class character of these nations, and their histories often contrasted, they were united by common set of interests. The common thread uniting the bourgeoisies of the newly independent nations, especially those which could yield some degree of power like Indonesia, India and Egypt, was a desire to secure their power and place in the world, independent of either the Soviet bloc, and the US imperial bloc. History would show that eventually they failed to accomplish this, as all eventually surrendered to some degree or the other to US hegemony.
However, this was not apparent in the 1950s. In the year 1956, Egypt under Nasser nationalized the Suez Canal. This was met with a harsh response by Britain and France, which held controlling stakes in the canal. Israel would join in to this war as well. The war would see Egypt failing on the military front but winning the diplomatically with the active involvement of the United States of America against the European imperialists. Less known, is the role played by India during this crisis. India was a member of the Commonwealth of nations, which was led by the United Kingdom. The United Kingdom went to war against Egypt. Despite it’s commonwealth ties, India would end up siding with Nasser and Egypt, though initially, it sought to play both sides. So when Nasser requested India to boycott the conference of users of the Suez Canal, India argued against it, and joined the conference. However, at the conference India’s position remained in contradiction to that of Britain’s. India upheld Egypt’s right to nationalize the Suez Canal, while Britain demanded the canal be run by an international agency of it’s users. The conference achieved nothing, eventually Britain, together with France and Israel would invade Egypt to force it’s hand. India’s position which had been to try and find a peaceful resolution to the “Suez Crisis”, now changed to active support for Egypt. India’s lobbying with the US and Nehru’s close relationship with Eisenhower would prove decisive in forcing Britain and France to halt it’s invasion and pull back. This was a diplomatic victory for India, achieved by playing both sides of a major conflict.
The ability to play off both sides of the cold war would prove valuable to India when it would be faced with war. Between 1958 and 1962, tensions were growing between India and China over the boundary along Ladakh and the modern state of Arunachal Pradesh in North Eastern India. Both these regions border Tibet, a nation China had taken in 1951. Rather than fight the much better armed and equipped People’s LiberationArmy, the Indian government decided instead to draw out a treaty of non-aggression, enshrined in the Panchsheel Agreement. This was rightly criticized by Chinese Trotskyist Peng Shuzhi as a reactionary foreign policy, which abandoned
spreading the socialist revolution out of China. The Panchsheel agreement was enshrined in five points which assured :
1. mutual respect for each other's territorial integrity and sovereignty,
2. mutual non-aggression,
3. mutual non-interference in each other's internal affairs,
4. equality and co-operation for mutual benefit, and
5. peaceful co-existence
Unfortunately, for the framers of this Agreement, there would be no peace, and in October of 1962, the Chinese attacked Indian positions along the entire border. The war lasted 2 weeks, and coincided with the Cuban missile crisis. Nehru’s friendship with President Kennedy meant very little when he was preoccupied with a potential nuclear war in Cuba.
The Chinese would unilaterally announce a ceasefire and pull back, having taken their main immediate territorial objectives. The US was unable to help India, and India for it’s part would reverse it’s long standing military pacifism. In this, India would not turn to the United States which had just abandoned it, in its hour of need, but to the Soviet Union, which Nehru greatly admired, and with whom India had already been building close economic cooperation. At the same time, India had been acquiring a greater degree of economic independence with the establishment of various public sector enterprises in core sectors, particularly oil and mining.
Indo-Soviet ties
Ideologically, India and the Soviet Union were distinct. Despite the socialist rhetoric of the Congress party, India was very firmly capitalist. The richest Indians in the two big business families maintained their economic hegemony over the economy, even during the period of state led development. However, this did not stop independent India and Stalinist Russia from becoming strategic partners. After the second world war, India needed to find for itself a unique and balanced position which avoided dragging it into international conflicts, at the same time, they needed an ally which could help combat India’s two belligerent neighbors, Pakistan and China.
Since the early 50s, Pakistan had joined a US led alliance, the CENTCOM and remained a strategic partner of US imperialism in the region, till recent years. This made it impossible for India to strike such an alliance with the United States, despite greater ideological affinity. The USSR was therefore the default choice for India to secure an international partnership. With Soviet assistance, came technical assistance, access to advanced
Indo-soviet friendship poster from the USSRindustrial technology and superior weaponry. The last of these three would acquire decisive importance as India found itself at war with Pakistan, just three years after its defeat to China. The 1965 Indo-Pakistan war arguably ended in a draw but India was able to put it’s modernizing efforts to test, and emerged successful. Over the course of the decade ending in 1975, Indo-Soviet ties would reach a peak, in the signing of the Indo-Soviet treaty of friendship, this relation has been so strong that the treaty outlived the Soviet Union, and now forms a key basis of India’s relationship with the Russian Federation. The consequences of India’s partnership with the Soviet Union was manifold, the most positive outcomes were the establishment of various technical institutes, the Indian Institutes of Technology (IITs), access to advanced heavy machinery and industrial equipment which helped boost it’s capitalist economy, the protection of a super power at the UN (thanks to the Soviet veto power), and access to advanced weaponry which helped India build up it’s capabilities to deter any potential imperialist attack or interference in sovereign matters.
On the political front, India and the Soviet Union never had any adverse political goals in the region. The Soviet Union found a good ally to cancel or outflank US influence in the region, while the Indians found a shield with which to protect it’s own political interest. The cornerstone of this relationship was pure geo-political expedience, it is why the Soviet Union turned away when the Indian bourgeoisie initiated a reign of terror in Hyderabad to destroy the communist revolutionaries who started a peasant uprising against the Nizam. Neither did the Soviet Union express any concern when the Communist Party was targeted.As far as the Soviet bureaucracy was concerned, the Indian bourgeoisie was an ally in it’s geo-political aims.
This relation reached a high point during the 1971 Bangladesh liberation war, where india intervened on the side of the Bengali nationalists fighting for independence from Pakistan. The United States under Nixon expressed full support to Pakistan during this period, including supplying arms and providing aid, as well as giving diplomatic
support. The Soviet Union supported India during this time. So, when the US navy threatened to bombard indian air fields in retaliation to India’s military operations in what was then East Pakistan (now Bangladesh) , the Soviet Union sent it’s fleet as a deterrence. The liberation war lasted about nine months, but India’s military operations ended in a few weeks, with the liberation of Bangladesh, and the surrender of 90,000 Pakistani soldiers.
The success of the intervention buoyed Prime Minister Indira Gandhi at a time when india was reeling from an economic crisis, and massive social unrest, fueled by student protests and worker uprisings. The masses of the country welcomed this victory, as it was a victory of the people of Bangladesh in a righteous struggle for independence. However, the military intervention wasn’t enough to pacify the workers of India, eventually the struggles would culminate in 1974 with the great railway strike. The Indian state responded to this harshly, and in 1975 a national state of emergency was declared. India practically ceased to be a democratic country, Indira Gandhi assumed de-facto dictatorial powers, fundamental rights were suspended, and massive political and social repression took place throughout the country. During this time, India’s ties with the United States and it’s allies fell to their lowest point, while it’s relations with the Soviet Union remained strong. The Soviet Union was willing to turn away, while India was throwing thousands of left wing activists in jail or killing them in fake ‘encounters’ with the police. The United States, hiding under the cover of human rights, only took this opportunity to try and pressurize India. After the emergency was lifted and elections took place, Indira Gandhi lost but the new government headed by the Social democratic J.P Narayan, did not last a full term. By 1980, Indira Gandhi returned with a strong majority, and India’s pro-soviet foreign policy was back on course.
With India’s last term in office, however, a shift came in place. The Soviet economy was stagnating, and India did not wish to maintain a permanent hostility with the United States, instead it assumed a policy of opening up, with proliberalizing reforms, though under Indira Gandhi these reforms were very limited. India remained
firmly allied with the Soviet Union during this period, and this showed when India refused to stand against the Soviet invasion of Afghanistan. On the contrary, it cooperated with the Soviet Union to help arm Baloch independence fighters. The two nations also cooperated to foil a coup in the Maldives and Mauritius. Russia helped India build it’s space programme which is today one of the largest in the world and is the second largest in Asia after Japan, and it helped build India’s nuclear technology. For the Soviet Union, India was a long term investment, which would pay even after it’s dissolution.
While the Soviet Union was collapsing, India was also experiencing the collapse of the Congress Party, and the Congress party system. This saw an end to state led development, and the aggressive turn towards neo-liberal development. The one party hegemony of the Congress era effectively came to an end. It seemed as though, the status quo of India’s foreign policy would also end, as the Soviet Union no longer existed as a viable partner to counter US influence in the region, and help shield against Pakistan and China. Post Soviet Russia underwent it’s worst economic and social contraction since the second world, war and the remaining states of the former Soviet Union were in no position to fulfil the power vacuum left by it. China was still a developing nation, though it had a large military it was nowhere nearly as capable as the Soviet Union at it’s peak, and worse still it was an adversary of India. Pakistan became more emboldened during this time, further encouraged by the Soviet defeat in Afghanistan, brought about in great part by Pakistani military assistance. During the entirety of the cold war, Pakistan remained allies with the US and China, even facilitating Nixon’s pivotal visit to China which cemented China on the US side during it’s competition with the Soviet Union. After the fall of the Soviet Union, India was left without any potential allies that could serve it’s purpose in dealing with the United States, and had only itself to rely on. It is in this context, that we must understand India’s turn towards nuclear proliferation, especially after 1998, when the Pokhran tests took place, much against the wishes
of the United States. A year later, nuclear armed India would go to war against nuclear armed Pakistan on Kargill, representing the final conflict between the two nations in the 20th century. It’s end was in part achieved with the intervention of the United States, and led to a thaw in Indo-US relations. The opening up of the Indian economy also drew it closer to US economic interests, despite this india kept away from any American military endeavours, and even condemned it’s invasion of Iraq in 2003.
India had been primarily reliant on Soviet military exports to equip it’s army for most of it’s post-independence history, after the turn towards neo-liberalism and opening up to the United States, India began importing more weapons systems from the United States and Europe, however it never stopped importing from Russia. In the post-soviet economy, Indian military imports from Russia played a critical role in the maintenance of Russia’s defense industry, as well as the expansion of India’s military power. Unlike the United States or European exporters, the Russians were willing to exchange intelligence, and designs, and were in essence easier to negotiate with than the Western suppliers, chiefly because the Russians were more dependent on this. Thus, one could say that between India and Russia there is a mutual dependence, the former relies on Russian weapons systems to keep it’s ever larger army equipped, and the latter relies on Indian imports to keep it’s defense industry funded. This cooperation is built on the basis of the earlier Indo-Soviet military cooperation, which now continues in changed form.
The long standing relation with the Soviet continued over into it’s relation with the Russian federation. As Russian power re-emerged after the 1990s , India began finding use for Russia once again, not only as a valuable defense partner, but also as a key diplomatic ally in defending it’s interest in international forums like the United Nations. Russia has always consistently voted in favour of India, and the latter has always consistently voted in favour of Russia, often the two nations would vote on the same line on key
issues, such as Kashmir. Both India and Russia stand on the same side when it comes to the Kashmir struggle, and ibid for the Chechen struggle.
While defense and political ties remain strong, Russia was nowhere near as significant as an economic partner, as the Soviet Union was. On the contrary, Russia today is dependent on finding stable export markets, that means being dependent on selling oil to Europe, China and India, three of the largest oil importers in the world. This has shaped it’s political vision and strategic planning, Russia does not wish to be too dependent on any one market, so in order to counter it’s dependence on Europe, it has China, and in order to counter it’s dependence on China, it has a partnership with India. Likewise, India is wary of Russian dependence on China, and is doubtful of it’s ability to take a stand against China should it have to choose, so India is building up it’s relation with the United States, and Europe, while also keeping it’s relations with Russia intact.
This tightrope was put to the test, when Russia invaded Ukraine for the first time in 2014. India took no stance against Russia then, and the two continued to keep healthy political and economic relations, despite having grown closer to the United States, especially so after the right wing BJP (Bharaitya Janata Party) under Narendra Modi took power in 2014. India today is the largest importer of weapons in the world, and most of it continues to come from Russia. Even after the imposition of sanctions by western nations, Indian defense procurements have not changed, even though india is in the process of indigenizing it’s weapons systems, and procuring
more from Europe, particularly France. India has also remained one of the key purchasers of Russian oil, and Russia in turn has given India the privilege to buy oil at discounted prices. The United States has so far failed to convince India against these oil and military purchases, nor has it succeeded in convincing India to condemn the Russian invasion of Ukraine. Much like India’s stance on the Soviet invasion of Afghanistan in 1979, India has been quiet and tacitly supported Russia’s endeavors. India is not likely to change this position any time soon, unless it becomes prohibitively costly for it to keep supporting it.
Conclusion
The Indian state represents the interests of the Indian bourgeoisie, and the Indian bourgeoisie does not wish to lose the flexibility of foreign policy which has been a legacy of the non-aligned movement. It is not founded on solidarity between oppressed nations, but on the material interests of the Indian bourgeoisie. India under the leadership of it’s bourgeoisie, would happily throw the workers and peasants of oppressed nations under the bus to achieve it’s geo-political objectives, they did so in Afghanistan, and are doing so presently with Palestinians as India improves it’s ties with Israel. It should not surprise us Marxists that India would take a stance that ends up being supportive of Russia.
Against the cynical self-serving politics of the bourgeoisie we must posit a policy of solidarity that places the interest of the working class everywhere ahead of all.
The world is watching with great concern as the crisis in the banking system of imperialist countries evolves. The bankruptcy of Silicon Valley Bank followed a few days later by that of Signature Bank in the U.S.A. set off alarm bells. Shortly thereafter, a multi-million-dollar recapitalization by major banks prevented the bankruptcy of First Republic. In Europe, Credite Suisse failed and had to be bought by UBS, another large Swiss bank.
Where is this banking crisis heading? What is this crisis signaling in relation to the evolution of the world economy as a whole?
their money, the bank lacked liquidity, i.e. they had no money to pay them back. And new loans were only available at higher interest rates, due to the increase in rates. This was followed by a run on the bank, which led to its failure.
Credite Suisse was Switzerland’s second-largest bank, and with it went much of that country’s international credibility.
These failures impacted the banking system as a whole.According to the Financial Times, banks in the United States, Europe, and Japan lost $459 billion in market value in March.
Bank failures of these dimensions set off alarms in the world economy. Silicon Valley was the 16th largest bank in the U.S., the financial base for many technology startups, and was the largest bank failure since the 2008 recession.
This bank had taken advantage of the previous very low-interest rates in order to put its clients’ money into long-term U.S. Treasury securities. These securities yield more but cannot be redeemed immediately, at the risk of losing yields. However, rising U.S. interest rates have affected the economy as a whole. When customers needed
The imperialist governments reacted quickly, investing billions in the banks to prevent an uncontrollable expansion of the crisis. Biden guaranteed all deposits below $250,000 in Silicon Valley, and then also guaranteed those above that amount. The Swiss government provided a $54 billion emergency loan to Credite Suisse and then stood behind the operation of that bank by UBS.
In the following days, the situation apparently returned to normal. Stock markets began to rise again and government messages were reassuring.
But it all blew up again when Deutsch Bank’s shares fell 14.5%. Despite a partial recovery
Silicon Valley Bank was the first to collapse in this recent wave of bankruptcysthereafter, the strength of Germany’s largest bank has taken a hit.
A similar process, with some differences in the type of investments and leverages of banks, is occurring in the global banking system. “Weaker U.S. banks have been losing deposits to stronger banks for more than two years – more than $500 billion has been withdrawn since the collapse of SVB on March 10 and $600 billion since the Fed [U.S. central bank] began raising interest rates,” as economist Michael Roberts explained, which “is a record.”
Now, the imperialist governments and the IMF, the spokesmen of finance capital, claim that stability has been preserved. This seems more like self-serving propaganda than a realistic diagnosis. In reality, the crisis has just begun.
It is not possible to understand what is happening by looking only to the financial system for explanations. It is necessary to relate this process to the whole imperialist economy and its downward trend after the recession of 2007-2009.
The capitalist economy develops in cycles. There are short cycles of growth, boom, and crisis, lasting between eight and ten years, marked by the evolution of the average rate of profit. When the rate of profit rises, there is a new cycle of investment and the economy grows. After the boom, when profits fall, investment declines, and crisis ensues, until an increase in profits allows a new period of growth.
There are also longer trends in the economy, spanning several short cycles, generated or influenced by economic and extra-economic events such as new technologies, new markets, wars, and class struggle events.
The last upward trend in the economy was the period of so-called globalization in the 1980s and 1990s, based on neoliberal plans, the restoration
of capitalism in the former workers’ states (particularly in China, transformed into the “factory of the world”) and the incorporation of computers into production.
The current downward trend began with the recession of 2007-2009. There was another major international recession in 2020, which coincided with and was exacerbated by the Covid 19 pandemic but was not limited to it.
As is characteristic of these downward phases, we have short cycles with the anemic growth of the imperialist economy.
In this downward phase of the capitalist economy, China’s capitalist growth led to the questioning of its place in the world division of labor, which led to a confrontation between it and the United States.
The policy of the imperialist governments, to prevent the international recessions of 2008 and 2020 from turning into depressions, was to inject massive sums of public money to save big business and in particular the banks. Never in history has so much public money been spent to save big capital.
This had two major consequences, which are still present and which condition the evolution of the world economy.
The first is the gigantic indebtedness of governments, companies, and individuals. Global debt has risen from 278% of global GDP in 2007 to a record 349% of GDP in 2022. That means $300 trillion in global debt, about $37,500 for every person in the world.
Government indebtedness is enormous, with the global average rising from 76% of GDPin 2007 to 102% in 2022. As always, workers will bear the brunt of this massive debt in the form of lower wages and precarious jobs and public services. Several semi-colonial countries are on the verge of explosion, such as Egypt, Zambia, and Turkey.
The second issue is that the destruction of old capital did not take place through the bankruptcy of enterprises with a lower rate of profit, which is typical of great crises. With the gigantic bailouts of companies, in addition to the very low interest rates in the imperialist countries, a great number of “zombie companies” are kept artificially on the verge of bankruptcy.
This situation has become less tenable with the increase in interest rates in imperialist countries.
The policy of the big bourgeoisie to restore profit rates
Even within the framework of the downward trend of the world economy, the bourgeoisie is seeking to re-establish a new upward phase. It must be recognized that it has achieved some victories in this regard.
It is a fact that there are technological advances that are already being incorporated into production, such as Industry 4.0, artificial intelligence, the 5G network, and electric cars.
It is also very significant that the world bourgeoisie took advantage of the pandemic to impose a setback in the living conditions of workers. There has been a decrease in wages and precarity in labor relations (with outsourcing and “uberization”) and a sharp increase in unemployment. There is a huge industrial reserve army, and even employed workers often live in misery.
These two conditions (progress in technology and reduction of workers’ wages) favor the bourgeoisie in its attempt to reach a new upward phase of the world economy.
However, two other elements remain major obstacles.
The first is the average rate of profit, which remains low, below the needs of the bourgeoisie for a new upward phase. Despite the fact that the leading sectors are achieving super profits, this is
not enough to raise the average profits of the imperialist economy as a whole and thus relaunch the economy.
The second is the reality of the class struggle. The bourgeoisie needs to impose new defeats on the workers to guarantee sufficient stability that will allow for this new upward phase. And there are problems with that, including important divisions within the bourgeoisie itself, present in both imperialist and semi-colonial countries. From Biden to Trump, from Macron to Le Pen, passing through Lula and Bolsonaro, Petros and Uribe, Boric and Piñera, etc.
The consequences of the combination of these trends and counter-trends are manifested in the current instability of the global economy and class struggle. The current crisis in France following Macron’s imposition of pension reform and the recurrent political crises in Latin America are expressions of this reality.
As we have said, periods of economic growth in the short cycles of the broader downward curve are anemic. But in the last quarter of 2022, there was a significant slowdown in imperialist countries.
GDP in the U.S. grew only 0.7%, compared to 5.4% in the last quarter of 2021. The Eurozone posted 0 %, including -0.4 % in Germany, -0.1 % in Italy, 0.1 % in England, and 0.1 % in France.
Underlying this is the fact that the rate of profit of big imperialist corporations is declining. According to Michael Roberts, the rate of profit in the U.S. has been falling since the third quarter of 2022.
A particularly significant fact is that “Big Tech,” the big five U.S. technology companies (Apple, Microsoft, Alphabet, Meta, Amazon), are showing a drop in their profit rates and are laying off employees on a large scale. The leading sector, which achieves super profits in the upswing, is showing a drop in profits.
This signals the possibility of a new recession in the world economy.
We can now turn to an analysis of the world financial crisis. Imperialism currently has a rampant level of parasitism, with huge financial bubbles in all countries of the world.
Huge mountains of fictitious capital (which has no direct origin in production) suck the surplus value extracted from the workers and pass it into the hands of a few imperialist financial funds. This functions as a gigantic financial pyramid that magnifies profits in times of capital’s ascendancy.
But when the rate of profit falls in the base of the economy, a financial crisis can be precipitated, which also magnifies the losses, thus deepening the crises. This is the possibility that looms on the horizon if a new world recession materializes.
After the last world recession and, in particular, after the outbreak of the war in Ukraine, persistent inflation set in in the imperialist countries.
This ended up provoking a very important change in the policy of imperialist governments. Until then, the central banks had been applying a negative interest rate (below inflation) to combat the effects of recessions. As of 2022, to face inflation, they began to use the classic recipe of bourgeois economics, which is to increase the interest rate.
In the U.S., the rate increased from 0.25% in 2022 to 5% today. The European Central Bank raised rates from -0.5% in 2022 to 3% today.
The combination of rising interest rates and falling profit rates was the trigger for the current banking
crisis. It is symbolic that the first failure was that of Silicon Valley, a mid-sized U.S. bank closely linked to technology companies.
The reaction of the governments, pouring billions of public dollars into saving the big banks, expresses the continuity of imperialist world policy. However, there is a huge contradiction between the increase in interest rates and the current banking crisis. The Federal Reserve (US Central Bank) and the European Central Bank maintained the trend of rising interest rates this March, even in the midst of the banking crisis. Will they continue on this path, even in the case of new bankruptcies?
Nothing ensures that the banking crisis will be halted, even if the rise in interest rates is reversed. There is an underlying problem at the base of the economy, which is the fall in the rate of profit of large companies. The financial pyramid is being shaken.
The fall in the rate of profit points to the possibility of a new recession on the horizon. It would be the third global recession, after those of 2007-2009 and 2020. But this is a possibility, not a certainty.
The most probable tendency is that the contradictions will deepen, even in the absence of an international recession. There are already crises in place in the governments of semi-colonial countries due to the current levels of debt. Which countries will explode with these interest rates? What are the consequences in the class struggle, similar to what is already happening in France?
As we said at the beginning of the article, it seems that the crisis has just begun.
