India's assault on democracy

In response to a series of corruption scandals, the country's citizens are mounting a revolution for

An unusual revolution is underway in India. Over the past 10 days a 74-year-old former soldier and social activist called Kisan Baburao Hazare has been on hunger strike, threatening to starve to death if an anti-corruption bill drafted by his team is not voted into law by parliament. The law would create an anti-corruption agency, Jan Lokpal - a constitution-subverting supercommittee of 11 citizens vested with sweeping powers over the executive, legislature and judiciary. India's new middle class, exhausted by the contrast between its own rapid economic rise and the slow moving democratic politics of the country at large, passionately backs it. The mainstream television and print media, which cater primarily to the middle class, bestow endless coverage on it. And India is declared to be rallying behind Anna - an honorary title used for Hazare by his admirers that can also mean big brother.

Corruption has a hoary history in India. As early as 1964, a mere 17 years into India's independence, the ministry of home affairs reported that corruption had "increased to such an extent that people have started losing faith in the integrity of public administration". In the decades since, graft has become a quotidian fact of life: in an ordinary citizen's interaction with the state, there are few transactions unaccompanied by a demand of bribe. India's Soviet-inspired command economy served as a catalyst for malfeasance in the state's high offices. It spawned a culture of patronage in which senior politicians and bureaucrats showered favoured individuals with lucrative business permits and licences.

But the scams of the time seem almost trivial in comparison to the scandals that have come to light this year, the 20th anniversary of India's enactment of market reforms. One senior politician, Suresh Kalmadi, is in judicial custody at Delhi's notorious Tihar prison on charges of pocketing millions in the run up to last year's Commonwealth Games. Another inmate at the same prison is former communications minister Andimuthu Raja, who stands accused of defrauding the national treasury of $40bn by selling bandwidth-spectrum at grossly undervalued rates.

And yet, despite the pervasiveness of graft, questions abound over the wisdom of Hazare's demand. Is it, for a start, a smart idea to create a bureaucratic colossus to take on corruption caused in large part by a colossal bureaucracy? Why must we presume that the Jan Lokpal would be incorruptible? Hazare and his associates - who have branded themselves Team Anna - are easily exasperated by questions. Invited by the government to talk, their side of the negotiation ends up amounting to a reiteration of their demand: if you don't pass the bill, Anna Hazare will kill himself. How about we get the parliamentary standing committee to scrutinise it, asks the government. Hazare will die if you do, replies Team Anna. In desperation the government makes an offer: we'll try to pass the bill, but how about we make some changes - keep parliament, which is the elected sovereign of India, outside the scope of the Jan Lokpal? Anna will die, comes the answer.

Unanswerable to parliament, above the constitution, beyond the traditional checks and balances of democracy, and its incorruptibility apparently secure because its functionaries would be drawn primarily from a pool of distinguished prizewinners, the Jan Lokpal is a crystallisation of the emergent Indian middle class's yearning for a benign dictatorship.

Coming on the heels of the pro-democracy revolutions in the Arab world, this may seem a strange moment for an assault on democracy. But theIndian middle class has experienced democracy primarily as an impediment to its progress. It spared them the ignominy endured by people in nearby dictatorships, but it did not enhance their lives. They worked hard, eschewed politics and retreated into a private world. Their emergence as a globally potent consumer class occurred despite, not because of, the government. Now they have money, influence and power. They matter - and this agitation is the first major national platform that has brought them together, and its purpose, unsurprisingly, is to divorce governance from politics. In return for expediency, they are prepared to brook every ill, however extreme.

The politician who typifies the style of governance Team Anna longs for is Narendra Modi, the chief minister of Gujarat. The fact that Modi may have abetted an anti-Muslim pogrom in 2002, in which more 1,000 people were slaughtered by Hindu supremacists, has not prevented him from securing handsome mandates in India's most rapidly embourgeoising state - and earning praise from the cheerleaders of "new India. In 2008, Suhel Seth, an influential commentator, published a paean to Modi in the Financial Express. Visiting Modi at his home, Seth was struck by the frugality and childlike enthusiasm of India's most notorious admirer of Adolf Hitler. "Narendra Modi is clearly a man in a hurry... There is a clear intolerance of terrorism and terrorists which is evident in the way the man functions; now there are many cynics who call it minority-bashing but the truth of the matter is that Modi genuinely means business as far as law and order is concerned". He then quoted, very approvingly, his own driver's opinion of Modi - "He is god" - before concluding: "if India has just five Narendra Modis, we would be a great country".

There is now a discernible craving for a benign dictatorship in India. The urge to replicate the "Gujarat model" at the centre is a strong one. Unsurprisingly, Hazare himself is quite a fan of Modi. And Modi has written an open letter to Hazare, telling him that "a prayer to Ma Kamakhya [a Hindu deity] came quiet [sic] naturally" when he learnt of the old man's fast, and revealing that "my respect for you is decades old" - going back to the days when Hazare's work in a village served as an inspiration to Modi and his colleagues at the RSS, a Hindu radical organisation whose members have carried out terrorist attacks against Indian Muslims and Pakistani nationals. As a social campaigner in his village, Hazare displayed a remarkable intolerance of his own: those who flouted his strict rules against the consumption of alcohol were tied up with barbed wire and flogged publicly.

Hazare's coterie of supporters in Delhi includes Arvind Kejriwal, a recipient of hundreds of thousands of dollars in corporate cash who campaigns against affirmative action for members of India's formerly untouchable castes. There are still millions of Indians whose occupation - clearing out garbage and cleaning latrines - is dictated by their caste. But in the world inhabited by Kejriwal - a world whose difficulties are doubtless eased by contributions from private corporations terrified by the prospect of affirmative action encroaching on their turf - affirmative action is a cause of inequality. Then there is Kiran Bedi, a former tough cop who has been encouraging Indians not to participate in elections, and an assortment of self-canonising civil society activists who, emboldened by the government's entreaties to persuade Hazare to give up his fast, now cast themselves as an alternative to parliament.

The appallingly incompetent manner in which the government has handled Hazare's blackmail, has reaffirmed the old adage that a robot, however intelligent, cannot function without instructions. And the giver of those instructions, Sonia Gandhi, is away in New York, marooned in secrecy, receiving treatment in a cancer institute for an unrevealed ailment. In her absence, prime minister Manmohan Singh mumbles along inaudibly, a man who has never had to win an election to acquire office, who knows power only as a gift bestowed, not a responsibility earned. His admirers have long claimed that he is indifferent to power, even that he brings some kind of a dignity to the office of prime minister. If anything, the opposite is true: you have to love power desperately to want to accept it merely to be proximate to it. The office of the prime minister is political. The experiment unveiled by Sonia Gandhi - in which she would handle politics while Singh oversaw administration - has undermined the health of Indian democracy. Singh's service is to a family, not a nation, and the fact that that family displayed no hesitation in depoliticising India's highest political office and turning it into a personal kennel is evidence of their own contempt for Indian democracy.

The most effective solution to corruption - and to a myriad other problems - is to break up the central authority in Delhi and devolve its powers to local governments. A blueprint for this already exists in Schedule 11 of the Indian constitution. But this agitation is not really about corruption. It is an odd spectacle in which the prosperous inhabitants of the world's largest - and most unequal - democracy are mounting a revolution for dictatorship.

Kapil Komireddi is an Indian freelance writer; he writes principally about foreign affairs, particularly Indian foreign policy, and his work has appeared in the Boston Globe, the Chicago Tribune, Foreign Policy, and the Los Angeles Times.

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The Future of the Left: A new start requires a new economy

Creating a "sharing economy" can get the left out of its post-crunch malaise, says Stewart Lansley.

Despite the opportunity created by the 2008 crisis, British social democracy is today largely directionless. Post-2010 governments have filled this political void by imposing policies – from austerity to a shrinking state - that have been as economically damaging as they have been socially divisive.

Excessive freedom for markets has brought a society ever more divided between super-affluence and impoverishment, but also an increasingly fragile economy, and too often, as in housing, complete dysfunction.   Productivity is stagnating, undermined by a model of capitalism that can make big money for its owners and managers without the wealth creation essential for future economic health. The lessons of the meltdown have too often been ignored, with the balance of power – economic and political – even more entrenched in favour of a small, unaccountable and self-serving financial elite.

In response, the left should be building an alliance for a new political economy, with new goals and instruments that provide an alternative to austerity, that tackle the root causes of ever-growing inequality and poverty and strengthen a weakening productive base. Central to this strategy should be the idea of a “sharing economy”, one that disperses capital ownership, power and wealth, and ensures that the fruits of growth are more equally divided. This is not just a matter of fairness, it is an economic imperative. The evidence is clear: allowing the fruits of growth to be colonised by the few has weakened growth and made the economy much more prone to crisis.

To deliver a new sharing political economy, major shifts in direction are needed. First, with measures that tackle, directly, the over-dominance of private capital. This could best be achieved by the creation of one or more social wealth funds, collectively held financial funds, created from the pooling of existing resources and fully owned by the public. Such funds are a potentially powerful new tool in the progressive policy armoury and would ensure that a higher proportion of the national wealth is held in common and used for public benefit and not for the interests of the few.

Britain’s first social wealth fund should be created by pooling all publicly owned assets,  including land and property , estimated to be worth some £1.2 trillion, into a single ring-fenced fund to form a giant pool of commonly held wealth. This move - offering a compromise between nationalisation and privatization - would bring an end to today’s politically expedient sell-off of public assets, preserve what remains of the family silver and ensure that the revenue from the better management of such assets is used to boost essential economic and social investment.

A new book, A Sharing Economy, shows how such funds could reduce inequality, tackle austerity and, by strengthening the public asset base, rebalance the public finances.

Secondly, we need a new fail safe system of social security with a guaranteed income floor in an age of deepening economic and job insecurity. A universal basic income, a guaranteed weekly, unconditional income for all as a right of citizenship, would replace much of the existing and increasingly means-tested, punitive and authoritarian model of income support. . By restoring universality as a core principle, such a scheme would offer much greater security in what is set to become an increasingly fragile labour market. A basic income, buttressed by a social wealth fund, would be key instruments for ensuring that the potential productivity gains from the gathering automation revolution, with machines displacing jobs, are shared by all.  

Thirdly, a new political economy needs a radical shift in wider economic management. The mix of monetary expansion and fiscal contraction has proved a blunderbuss strategy that has missed its target while benefitting the rich and affluent at the expense of the poor. By failing to tackle the central problem  – a gaping deficit of demand (one inflamed by the long wage squeeze and sliding investment)  - the strategy has slowed recovery.  The mass printing of money (quantitative easing) may have helped prevent a second great depression, but has also  created new and unsustainable asset bubbles, while austerity has added to the drag on the economy. Meanwhile, record low interest rates have failed to boost private investment and productivity, but by hiking house prices, have handed a great bonanza to home owners at the expense of renters.

Building economic resilience will require a more central role for the state in boosting and steering investment programmes, in part through the creation of a state investment bank (which could be partially financed from the proposed new social wealth fund) aimed at steering more resources into the wealth creating activities private capital has failed to fund.

With too much private credit used for financial speculation and property, and too little to small companies and infrastructure, government needs to play a much more direct role in creating credit, while restricting the almost total freedom currently handed to private banks.  Tackling the next downturn, widely predicted to land within the next 2-3 years, will need a very different approach, including a more active fiscal policy. To ensure a speedier recovery from recessions, future rounds of quantitative easing should, within clear constraints, boost the economy directly by financing public investment programmes and cash handouts (‘helicopter money’).  Such a police mix – on investment, credit and stimulus - would be more effective in boosting the real economic base, and would be much less pro-rich and anti-poor in its consequences.

These core changes would greatly reform the existing Anglo-Saxon model of capitalism and provide the foundations for building support for a new direction for progressive politics. They would pioneer new tools for building a fairer, more dynamic and more stable economy. They could draw on experience elsewhere such as the Alaskan annual citizen’s dividend (financed by a sovereign wealth fund) and the pilot basic income schemes launching in the Netherlands, Finland and France.  Even mainstream economists, including Adair Turner, former chairman of the Financial Services Authority, are now talking up the principle of ‘helicopter money’. For these reasons, parts of the package are likely to prove publicly popular and command support across the political divide. Together they would contribute to a more stable economy, less inequality, and a more even balance of power and opportunity.

 

Stewart Lansley is the author of A Sharing Economy, published in March by Policy Press and of Breadline Britain, The Rise of Mass Impoverishment (with Joanna Mack).