Commentary

Economic Reforms
in Political Space
If it is accepted that the contours of the possibility of state-supported
welfare are shaped by a continuous adjustment between capitals
profits and public welfare then it is only democratic politics that
can contribute significantly to the shape of that adjustment. In that
case, the fact that economic reforms are a contested arena within
the political space needs to be acknowledged, not denied.
SUPRIYA ROYCHOWDHURY

ollowing the victory of the Congress-led alliance in the Lok Sabha

elections, there has emerged a many
layered debate over the relationship between economic reforms and the recent
electoral verdict, more broadly between
marketisation and political democracy. The
first dramatic sounding of this debate came
perhaps from the historic market crash in
the immediate wake of the election results.
The lefts historic gains in this election,
followed by their (somewhat premature)
announcement that the disinvestment
commission would be dissolved, is supposed to have at least partly caused the
crash. Of course, anyone looking even
superficially at the CPM-led Left Fronts
liberalisation efforts in West Bengal, would
know that the left is not seriously opposed
to economic reforms. Nevertheless, it was
perhaps not this awareness, but the

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lefts subsequent decision not to join the

government, the ascendance of Manmohan
Singh, the original architect of reforms,
and so on, which calmed frayed market and
other nerves in the post-crash days.
Far more interesting than the market
crash, has in fact been the various layers
of responses, from the political and intellectual class, to the possible contradiction
between economic reforms and democratic
politics thrown up by this election. There
was great anxiety, almost a scurry, to protect
the sanctity of the reforms, as project, from
the tumultuous changes that had occurred
in the polity. This anxiety has been
reflected on the elections mostly in the
popular media. Thus Sunil Khilhani,
eminent political scientist, wrote in the
Hindu, (May 20, 2004) the electorate has
not voted against economic reforms; it has
voted for the extension of its benefits
beyond a narrow spectrum. Khilhani then
called upon the left not to derail the

reforms, to take to constructive pragmatism, not to doctrinaire obstructionism. In

the same issue of the Hindu, Pratap Mehta,
political scientist and well known commentator, wrote it would be a mistake to
interpret this as a vote against economic
reforms. It was, according to him, the
unevenness of the spread of the impressive
gains of the last five years that was voted
against. Khilhanis and Mehtas views have
been echoed and reechoed by others in the
popular press.
The Congress, of course, as the original
architect of reforms in India must appreciate such endeavours, which essentially
seek to free the reforms from any entanglement with electoral politics. With this intent,
Congress spokespersons like Jairam
Ramesh have also assured the public that
the lefts cooperation in this government
can mean no harm to the project of reforms. In his words, The Left is 90 per
cent in agreement with the Congress over
the logic of reforms (interview with Shekhar
Gupta, NDTV, May 22, 2004).
This entire approach points to several
interesting patterns in the ideology of the
elite class, whether political, economic or
intellectual. In the first place, we need to
note that there has been no definitive
analysis yet of the election results. In such
a context, to say that the vote was not (or
was) a verdict against the reforms, is not
only premature, but essentially undemocratic insofar as it represents a hurried
attempt by the intellectual elite to paint the
verdict in their preferred colour. In a
country with wide economic disparities, it
is surely highly presumptuous to say

Economic and Political Weekly June 26, 2004

that an entire policy package is something

that the electorate has not expressed
an opinion on.
Secondly, there is the conviction that reforms, representing technocratic rationality,
good sense and economic wisdom, must
be isolated from political changes. However dramatic and wide-ranging the
peoples verdict against a given government, it cannot or should not be interpreted
as a verdict against reforms. Thus somehow, the sanctity of the reforms must be
preserved against political arguments. This
in itself is a fundamentally undemocratic
approach insofar as it seeks to seal off
economic policies from the contested
terrain of politics.
Third, when our analysts comment that
it is the distributional effects of reforms
that the electorate has voted against, and
not the reforms themselves, this raises two
questions: first, does the average voter
analytically distinguish between reforms
and their impact? Second, is it not possible
that the unequal distributional effects, being
targeted for criticism, are intimately associated with the logic of marketisation
reforms? Thus the effort has been somehow to establish that, the distributional
inequalities can be a target of attack, but
not the reforms themselves. But, both in
popular perception and in actual fact, there
may well be a close connection between
the character and logic of marketisation
reforms and their distributional inequities.
To this point I return later.
The argument that has been used by
some analysts, for example, Pratap Mehta,
is that poverty is not a reason for voting
for and against political parties . Thus, his
example, that the rural poor of Bihar have
continued to vote for the RJD, which has
done nothing for them despite its pro-rural
poor stance. The poor, therefore, it is
suggested, do not vote on the issue of
poverty or economic interests. Thus, this
argument, applied to states like Andhra
Pradesh and Karnataka, where highly promarketisation governments have been
voted out of power, would mean that the
reforms or their distributional impact, could
not have been a factor in this electoral
verdict.
Indeed, it must be recognised that at
some level there is a disconnect between
poverty of the masses, non-performance
of governments, on the one hand, and
support for any political party in any given
election on the other hand. In other words,
there isnt a one to one direct relationship,
a quid pro quo. For, there is also of course
the fact that if indeed poverty and
misgovernance were the only factors in
voting, it would be difficult for the average, poverty stricken rural voter to vote for
any party. But from that to move to the
conclusion that the vote, in states like
Economic and Political Weekly

Andhra and Karnataka, did not register, at

least partially, the voters disenchantment
with the pro-market image of these governments, would surely be a fallacy of
interpretation. The average voter in Andhra
and Karnataka, may not have a clear concept
of economic reforms and its implications
for them. But it is also impossible to deny
the enormous, almost intuitive backlash
that has occurred in these states against the
pro-urban elite, market-oriented, IT-driven
growth models, which prevented these
governments from paying minimum attention to events like draughts, agrarian distress, and farmers suicides. The defeat of
these governments surely at least draws
attention to the obvious contradictions
between an elite-oriented growth model
and the imperatives of democratic politics
in a predominantly poor political economy.
But perhaps the more interesting pattern
thrown up in these debates is the reiteration of the well worn clich of reforms
with a human face by the political class,
and the reassertion by the intellectuals that
indeed reforms can be sustained by greater
attention to redistribution. The political
usefulness of this clich can hardly be
denied. But at another level, we need to
note that even this dramatic electoral verdict
has not pushed our political and intellectual elites to address the question: do market
reforms and distributive justice present
unresolvable conflicts? If so, what are those
areas? If not, what are the definitive institutional arrangements, which can address
the seeming contradictions between welfare and marketisation? And what kind of
politics can continually sustain the uneasy
balance?
But first of all we would need to be
aware of the sharp edges of the reformwelfare duality, and to ask, do we have the
institutional capacities to address these
tensions? It would be tiresome, but nevertheless necessary, to remind ourselves once
more of the structural nature of this duality
in a globalising economy, and the decreasing space of the state to initiate and implement welfare policies. Where capital is
free to move anywhere, most often in search
of cheap labour, where is the basis to enact
humane labour laws? Where states must
woo capital with lower taxes, the scope of
public spending on welfare necessarily
must shrink. Today, FDI has indeed become the mantra of economic growth. Yet,
when multinational firms come in, they
must surely recast many institutions to suit
their search for profits? The disappearance
of collective bargaining and its replacement by individualised wage contracts is
just one example of such recasting. The
growth of exports has been a widely noted
feature of the past decade. Yet, at the
ground level, high growth driven export
sones, such as the frequently cited ready-

June 26, 2004

made garments industry, cannot be dissociated from the image of thousands of

women who work in garment factories in
cities like Bangalore, Delhi and Mumbai,
with less than minimum pay, inhuman
working hours and the most appalling
working conditions. This growing
workforce exhibits a hopelessness that
gives a definitive lie to the optimism built
around export-oriented growth.
When the Indian political and intellectual class express the pious hope for a
human face to reforms, what they forget,
then, is that the growth model now is
premised on structures which render the
struggle for welfare lost even before it has
begun. For, it is not only the structure of
the globalising model that makes welfare
a myth, it is also that the space for welfare
politics shrinks in this particular context.
The shrinking of the organised workforce,
the weakening of unions, unemployment
and casualisation, are widely noted features of globalisation. It is less often noted,
that these emerging features of the political economy create a situation where the
politics of welfare is necessarily weakened.
The left can indeed act as consciencekeeper of the newly elected coalition
government. But the CPI(M)s very own
West Bengal is also attended similarly by
casualisation of the workforce, the disarray of unions, and declining public attention to issues of poverty and deprivation.
It bears remembering that in the postsecond world war situation, within advanced capitalist countries, the welfare
state evolved within a framework of
struggle enacted by strong trade unions
and social democratic parties. It is, then,
politics, that domain of turbulence, of
seeming irrationality, inadequately comprehended, unyielding to economic reformers models and formulaes, it is that domain, driven by competing interests, ideologies, visions and imagination, that had
carved out the necessary institutional space
for redistributive welfarism within advanced capitalism
Therefore, the sharp edge of the question
is not the Congresss verbal commitment
to human face, nor whether the left can
prevent this or that privatisation project,
but, is state-supported welfare indeed
possible in the present context? If the
contours of that possibility are shaped by
a continuous adjustment between capitals
profits, and public welfare, then governments, and academics, need to be conscious that it is only democratic politics
which can definitively contribute to the
shape of that adjustment. If that be the
case, the fact that economic reforms are,
and should be, ensconced in political
arguments, and are indeed, a contested
arena within the political space, needs to
be acknowledged, not denied. EPW

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