Political Economy of Land Grab

Economic and Political Weekly April 7, 2007 1281

A new phase of capitalist expansion led by “global capital”
is driving governments, including those of the left, to dispossess
and displace peasants from agricultural land, even using
force to break up peasant resistance. The article offers an
understanding of this new phase, with a focus on the role and
compulsions of governments. The analysis is in the tradition
of radical political economy, and is based on a revaluation
and expansion of Marx’s conceptualisation of rent and the
primitive accumulation of capital.
The peasants are resisting such virtual
eviction in many places, but the state
governments are using or threatening to
use a colonial Land Acquisition Act, which
allows the government to acquire “for
public purpose”2 any land, on payment of
“compensation”, even though the owner
may not be willing to part with the plot.
The acquired land is then handed over to
the enterprise at a subsidised rate. That is,
global capital has to pay just a fraction of
even the meagre compensation that is given
to the peasants.
This is just the beginning of this new
phase of capitalist expansion. Critics of
this policy argue that the compensation
being offered is not “adequate”; that those
who are not landowners but depend on
agriculture for their livelihood are not
compensated; that agricultural production
will go down as the proposed SEZs or
industrial estates are largely located on
prime agricultural land; that the tax
exemptions offered to enterprises located
in SEZs together with the loss of water
cess and other payments, which the displaced
farmers used to make, cause heavy
revenue losses to the state governments;
that severe ecological damage will occur
where the SEZ is located on what was
originally forest land. The governments of
the states are impervious to such arguments,
whatever the colour of the party
in power in the state. They are also equally
ready to use force to break up farmers’
resistance. This raises the obvious question:
why are the state governments bent
on pursuing a policy that is bound to cost
them a lot of rural votes?
The pithy answer is that they have no
option. Once the path of development
called globalisation has been chosen, such
eviction was always on the cards. Of course,
they hardly had a choice. Without a grassroot
level movement with a different ethics
and morality based on the local3 (as
opposed to the effortless surrender to that,
which is globally mobile) this course of
development was inevitable, no matter
what be the public posture of the party or
coalition in power.
To understand the compulsions of the
Left Front government one must try to
understand the phenomenon of globalisation,
how the meaning of imperialism
has changed in the context of globalisation
and how the role of the state has undergone
a drastic transformation in the age of
globalisation. These questions can be properly
addressed only if one revalues and
expands the concepts of rent4 and primitive
capital accumulation.
It is often said, and quite validly, that
there is a great gulf between the imperialism
of today and that of Lenin’s time.
But this statement often implies that the
significance of the state has diminished
greatly in this new era of globalisation. It
is true that the flexibility of the state,
particularly in economic matters, is being
gradually eroded, especially in the poor
countries, through the process of liberalisation.
But this does not mean that the need
for state power has been exhausted.
One of the characteristics that differentiate
this age of imperialism from its
immediate predecessor (that is the period
extending right up to the 1960s and 1970s
of the last century) is its immense dependence
on state power for rewriting economic
laws and for their harsh implementation.
In the previous period – which used
to be called the period of neo-imperialism
– imperialist capital’s open and observable
reliance on the state was not the order
of the day. While in the present era laws,
regulations, and even principles of jurisprudence
are being grossly altered with
impunity to facilitate imperialist plunder.
In this overt fight the international economic
organisations play a stellar and
crucial role, but it is only through state
power, acting at the behest of global
PRANAB KANTI BASU
The question of displacement of
farming communities to acquire
land for industrialisation has
assumed great political significance,
primarily because of the strong resistance
offered by these communities at Singur in
West Bengal and Ghaziabad in UP. Land
acquisition has become a prime objective
of the state governments, as they clamber
over each other to seek the graces of global
capital.1 Following in the true tradition of
the distributors of grace, global capital
doles out the goodies to those who offer
the best tributes in terms of tax exemptions,
subsidised provision of natural resources
like land and water, and the like.
The idea of special economic zones (SEZs)
suits this particular need of governments
and of global capital. The SEZs are territories
demarcated by the state governments
with the concurrence of the central
government. Enterprises located in these
territories are exempted from customs
duties, income and excise taxes. They are
also enticed with other privileges like free
or subsidised water supply, subsidised electricity
supply and, most importantly, with
the promise that the right of the labourers
to associate in trade unions will be suspended.
The areas where the SEZs are
located are usually chosen by some global
enterprise or a fraction of global capital.
The concerned state government then
acquires the land from the farmers against
payment of some meagre compensation.
1282 Economic and Political Weekly April 7, 2007
capital, that the necessary changes can be
implemented.
Capitalist Rent
The principle endeavour of imperialism
in the current age is to extract rent, taking
advantage of natural or imposed immobility
and non-replicability. The reason can be
found in the history of evolution of capitalism.
Grossly put, since the 1970s, technology
and the organisational structure of
capitalist enterprise have evolved in such
a way that income distribution is becoming
acutely skewed. Technological innovation
is directed towards reducing manpower
requirement. At the same time the need for
technicians with some degree of mechanical
competence in the operation of computeraided
production processes is increasing
disproportionately. This technical labour
force has to be compensated for the investment
in acquisition of such training. Though
they can hardly be differentiated from their
older traditional counterpart in the labour
force, in terms of their mechanical deference
to the orders of the management, they
earn higher wages. For this small segment
of the workforce, as well as for the expanding
segment of managerial staff, salaries
and wages are rising. For the large masses
of the population, who cannot afford to
acquire such skills, unemployment is on
the rise. To maintain the demand-supply
balance, the sectoral division of investment
is adapted to the increasingly unequal
distribution of purchasing power. An increasing
proportion of the workforce is
employed in the production of luxury goods
and services. Demand has to be generated
for such commodities. Esoteric needs have
to be created in the minds of the small
fraction of the workforce that can buy. So
there is an expansion in the workforce
employed in sales and advertisement. But
this is insufficient for compensating for the
sluggishness of demand caused by the
phenomenal decrease in the rate of growth
of the demand for mass consumption goods.
The culture of the market-oriented society
has mutated to the aid of sustaining/seducing
the exponentially expanding desires of
the rich. An elementary aspect of this new
culture is that it breeds a perception of a
fast rate of obsolescence of consumer
durables. This also causes a fast rate of
obsolescence of technology – both of that
employed in producing such commodities,
as well as that embodied in the durables
themselves. The cost of increasing R&D to
support this fundamental systemic
requirement is balanced by the accompanying
reduction in labour required for production.
This further adds to the trend
towards decrease in the demand for mass
consumer goods. Credit financing of consumer
purchases is a commonly used
instrument for boosting sluggish demand
under the circumstances. This leads to the
expansion of the financial sector dedicated
to financing consumer purchases. The small
workforce employed in this segment also
belongs to the developed enclave. Globalisation
expands the scope of earning profit
in another area – speculation. New instruments
of global speculation emerge. Faced
with this current phase of systemic crisis,
global capital is also expanding the scope
of other routes of surplus extortion, which
have always been available within the
system. It is increasingly falling back on
the tried and tested method of investment
for colonisation of resources to extract rent.
This may be a trifle baffling and so calls
for some elaboration. Capital, having
acquired proprietary rights over the
resources that were previously under the
control of the feudal classes used them for
rent earning which supplements its profit
earning.5 Put very succinctly, rent is earned
on the basis of immobility of resources and
of produced goods. It may be extracted
through the establishment of proprietary
rights over immobile resources. Or it may
be extracted by curbing the mobility of
produced goods across the boundary of a
designated market. This latter is what is
usually called monopoly profit. Within
Marxist political economy this is best
treated as a species of rent.6 This is theoretically
reasonable because rent is extracted
on the basis of immobility and
monopoly over the rarity that cannot be
devalued or diluted because of immobility.
The additional price that is extracted by
the monopolist firm originates in just this.
The immobility of a resource may be a
natural characteristic of the resource (as
in the case of land, minerals, etc) or the
immobility may be created by devising
suitable laws and regulations (like in the
case of knowledge, genetically engineered
varieties of plants, etc). Patent laws render
knowledge and technology immobile and
non-replicable. The right to such resources
vests with the capitalist enterprises that
fund research or are able to use bourgeois
legal processes to sanctify the theft of
knowledge which belonged traditionally
to some community. Thefts of rights over
traditional plant varieties and over traditional
herbal medicines are some examples
of the latter process. If some other economic
agent wishes to use such monopolised
science and technology, it has to pay a
subject to royalty. Technology (for example,
genetic engineering) too is used to
generate such monopoly. Seeds are being
so engineered that plants that are born of
such seeds are incapable of reproduction.
Monopoly over immobile resources generates
rent for the owner.
The immobility of resources may be
used in either of two ways to generate rent.
The immobility may be used to depress the
payment to some input purchased by capital,
or the right to the immobile resource
may be appropriated by global capital itself
to extract a rent from the user of this
resource. The immobility of labour is the
most striking example of the former, while
the appropriation of land by global capital
for realty business is a common example
of the latter kind of rent extraction.
Rent generated by the immobility of
labour and appropriated by global capital
raises some thorny theoretical issues and
therefore calls for some elaboration. Since
its inception, trade in services had been
excluded from the purview of the General
Agreement on Tariffs and Trade (GATT).
The reason that was generally advanced
was that in the case of services, unlike in
the case of goods, production and sale are
simultaneous events. As a result, insistence
on free trade in services would amount to
the insistence that every country should
allow every other country to set up service
providers. This would not require just free
access for foreign capital, but also the
indisputable right of foreign enterprises to
set up shop with their own personnel. It
was argued that this would infringe on the
right of sovereign nations to allow or
disallow foreign nationals the right to enter
the country. However, at the Uruguay round
of negotiations it was decided to include
trade in services within the purview of
GATT under an agreement called GATS
– the General Agreement on Trade in
Services. Subsequently, it was also included
within the scope of the World Trade
Organisation (WTO). Trade in labour
services was however kept out of the scope
of GATS. One of the reasons offered for
this exclusion was the same as that
advanced at the initial stage of formation
of GATT for exclusion of trade in services
in their entirety.
The real reason was that the exclusion
of labour services from the purview of
WTO implies that the unemployed in India,
for example, cannot migrate to the US in
Economic and Political Weekly April 7, 2007 1283
search of jobs, though the provisions of
GATS ensure that an American insurance
company can set up an establishment in
India as a service provider. The company
cannot be barred from employing personnel
from the US either. Because labour is
immobile the wages in high unemployment
areas like India are less than the
wages in say, the US. This is also compounded
by the difference in the socially
conditioned needs of labour. This culturally
determined difference, in turn, is sustained
partially by the immobility of labour. The
wage difference allows global capital to
earn super-normal profit by fragmenting
the production processes controlled by
them, outsourcing parts of the process to
the low wage areas. If we designate any
earning above the normal that originates
in the immobility of resources as rent then
the additional profit that is earned by a
publishing house in an advanced country
by outsourcing editing, proof reading, etc,
to some concern in the low wage areas can
be called rent. Such rent earning is not
restricted to parent concerns located in the
advanced countries alone. Enterprises
owned by global capital and located in
poor countries like ours can also earn rent
from the immobility of labour by putting
out parts of its production process to smaller
enterprises which are exempt from statutory
regulations relating to minimum wages
and other benefits for labour, environmental
standards, etc, which are applicable for
larger concerns to which laws like the
Factories Act apply. This has a significant
implication, which we have mentioned in
passing.7 The “first world” is not geographically
specific any longer. This is one
instance of the impact of globalisation of
capital. There is little point in distinguishing
big capital in terms of origin, even if
this were actually possible. Their objectives
are the same and therefore their
operations would cause the same kind of
impoverishment.
Rent extraction by global capital originating
in the immobility of labour has
another important theoretical implication.
Immobility of resources generates rent.
The so-called scientific laws of demand
and supply do not decide the distribution
of the rent originating in the immobility
of a resource. This shows up the claim of
the scientific logic of the marketplace to
be part of the ideological apparatus that
is generated in the course of capitalist
growth and which is essential for persuading
the doubters, of the efficiency of the
system. The business process outsourcing
(BPO) enterprises located in the low wage
regions enjoy a cost advantage on account
of the low labour cost. This generates rent
that is attributable to the immobility of
labour. But this rent does not accrue to the
BPO enterprise. It is appropriated mostly
by the enterprise owned by global capital
that puts out work to the BPO unit. The
distribution of rent is determined by the
distribution of economic power. In the
present age this is entirely the preserve of
global capital.
The question of power, with all its
“unscientific” connotations, is something,
that the discourses of both neoclassical and
traditional Marxist political economy treat
as an aberration in the age of capitalism.
A revaluation of rent in the age of capital
however shows power, which cannot be
reduced to any economic index, as an
inseparable aspect of the capitalist economy.
This is global capital’s “feudal
plunder”.8
Primitive Capital Accumulation
In order to facilitate rent earning of global
capital the state must actively ensure both
the proprietary rights of capital over resources
and also the immobility of these
resources. The process of acquisition of
these rights is what constitutes primitive
capital accumulation (PCA). So rent extraction
and PCA are fundamental aspects of
the economy in this era of globalised capital.
A concept, that is central to our analysis
of the international economic organisations
is PCA. Let us elaborate this concept and
its centrality in the current phase of capitalist
development. Since the demise of the
primitive tribal communities,9 society has
been divided into the surplus producing
working classes and the surplus appropriating
classes. In each society, surplus is
appropriated in a specific way. For a particular
mode of appropriation to be viable,
a particular state structure, containing a
specific legal apparatus is necessary. The
modern capitalist state and its legal system
may appear to be non-discriminatory
because, in a formal sense, they are impersonal.
10 But this blase indifference can
be sustained only by a very crude and
fundamental discrimination below the
surface. A process that is both prior and
simultaneous to the working of the “nondiscriminating”
capitalist market constitutes
this discrimination. The capitalist is
able to earn profit through the process of
buying and selling in the market, which
just requires this neutral state apparatus,
only because the working classes have
been dispossessed of all means of production
other than the ability to labour. Without
this the component that is common to all
production processes – labour power –
would not become a purchasable commodity.
This process of dispossession, which
simultaneously creates capitalist property
relations, together with the laws and regulations
for contract and exchange, is called
the process of primitive capital accumulation.
This is, of course, a commonplace
of Marxism, but one whose deep significance
has conveniently been forgotten by
many Marxists, particularly those running
states, which are trying to curry favour with
global capital. How else can one explain
the eagerness, verging on greed, with which
a state government run by Marxists is
displacing farmers to provide land for
setting up industrial ventures, up market
housing complexes, and so on.
The Tatas have reached an agreement
with the Leftist government in West Bengal
to set up a car-manufacturing unit at a place
called Singur. The land earmarked for the
project is very fertile and produces multiple
crops. Conversion of multiple-crop land to
non-agricultural land has violated the state
government’s own announced policy, but
that is a separate issue. The farmers were,
by and large, vehemently opposed to the
government’s plan to acquire their lands
for handing over to the Tatas. A major
opinion, which comes through in the interviews
given by the farmers is that all the
talk of compensation – even if one were
to ignore the failure to keep the promises
made previously by the state government
in similar cases – was quite meaningless
to these peasants. What was the correct
quantum of compensation? They led a life
that quite satisfied their material and
cultural demands. For this they were totally
dependent on their plots of land. It was as
much a part of their culture and life, as it
was a means of livelihood. The peasants
had a holistic culture that directly opposed
the commodity culture of globalisation.
The concept of land as a commodity was
thoroughly alien to their culture. From our
cultural perspective, which refuses any
holistic or ecological position, we can
invent a justification of their stand: loss
of land will deprive the peasants of the
opportunity to work (which is the realisation
of human existence), even if they can
earn sufficient interest income from the
monetary compensation without doing
any work! The state government was definitely
using violence to intimidate the
1284 Economic and Political Weekly April 7, 2007
organisation formed by the peasants to
resist the attempts of the government to
evict them from their land. But also “leftist”
mass organisations had been asked to
“explain” to the peasants that the money
being offered was more than sufficient
compensation. In other words, these
organisations were being deployed to carry
out the task of cultural transformation –
from a holistic culture to the commodity
culture that is consistent with the needs of
global capital. This experience also teaches
another important lesson – the significance
of an overdeterministic or interdependent
approach. It is not just a question of economic
transformation that was involved,
but changes at all levels of social existence
and perception.
The recent spate of state violence against
farmers to force them off their land in order
to hand it over to global capital for real
estate business or for setting up industrial
enterprises11 reminds one vividly of the
passages on primitive capital accumulation
in Marx’s Capital. The passages on
the transformation of arable land into
pastures in Capital read eerily like a description
of the eviction of farmers for the
creation of SEZs.
Marx quotes Bacon on an Act of Henry
VII, promulgated in 1533 and comments
on it:
The device…was profound and admirable,
in making farms and houses of husbandry
of a standard; that is maintained with such
a proportion of land unto them as may
breed a subject to live in convenient plenty,
and no servile condition, and to keep the
plough in the hands of the owners and not
mere hirelings’ what the capitalist system
demanded was on the other hand, a degraded
and almost servile condition of the
mass of people, and the transformation of
them into mercenaries and of their means
of labour into capital [Marx 1954, p 674].
This Act was a sort of act, which we
nowadays call a “Land Reform Act”. This
Act even contained a clause that limited
the number of sheep that could be owned
to 2,000, where it was reported that some
even owned as many as 24,000. If a cottage
was built for an agricultural labourer it had
to have an attached plot of arable land of
at least four acres in size.
the cry of the people and the legislation
directed, for 150 years after Henry VII,
against the expropriation of the small
farmers and peasants, were alike fruitless
(ibid, p 673).
…The rapid rise of the Flemish wool
manufactures and the corresponding rise
in the price of wool in England gave the
direct impulse to these evictions…The new
nobility was the child of its times, for
which money was the power of all powers.
Transformation of arable land into sheepwalks
was, therefore, its cry (ibid, p 672).
In place of wool one has to just substitute
“cars”. True, there is no produce of the soil
that the car manufacturer, Tata, directly
needs. None the less, every materially
productive activity requires land. From
this point of view, it is immaterial whether
agricultural land is transformed into pastures
or is converted into the site of a
factory shed or is traded off as real estate.
Further on Marx quotes Bacon:
Inclosures (sic) at that time (1489) began
to be more frequent, whereby arable land
(which could not be manured (sic) without
people and families) was turned into pasture,
which was easily rid by a few herdsmen;
and tenancies for years, lives and at
will (whereupon most of the yeomanry
lived) were turned into demesnes (ibid,
p 673).
So we see a re-enactment of the same
sequence of events that occurred in Britain
in the 16th and 17th centuries. The attempt
to prevent the expropriation of the peasantry
that was attempted by Henry VII,
could not withstand the onslaught of PCA
in the late 17th and the 18th centuries. By
the time of Elizabeth I, it was officially
recognised that these laws had fallen into
disuse and that pauperism was rampant.
This was implied in the passage of the poor
rates. Of course, the poor laws were to be
used to wring out the maximum hours of
work from those who had been dispossessed
as a result of the enclosure movement
and the general tendency of land
concentration in that period (ibid, p 667).
We even find parallels to the privileges
that are being offered to the capital
invested in the SEZs.
After the restoration of the Stuarts, the
landed proprietors carried, by legal means,
an act of usurpation, affected everywhere
on the continent without any legal formality.
They abolished the feudal tenure on
land, i e, they got rid of all its obligations
to the state, “indemnified” the state by
taxes in the peasantry and the rest of the
mass of the people, vindicated for themselves
the rights of modern private
property…(ibid, p 676).
The owners of the enclosed lands, therefore,
were exempted from the normal
financial obligations to the state, much in
the same way that the enterprises within
the SEZs are exempted today.
There is a widely held view that PCA
occurs prior to the establishment of capitalism.
The seeds of this idea are there in
Marx’s Capital.12 In reality this process is
endlessly entwined with capital’s expansion.
Marx discussed the process of dispossession
in the context of right to land,
but the process of dispossession/occupation,
which is essential to the survival, and
expansion of capital can be treated as a
theoretical concept. For its expansion
capital does not appropriate just land. It
acquires rights over knowledge, culture,
nature and even the games that people
play. In fact the process of acquiring control
over markets can also be seen, theoretically,
as a part of PCA.
Importance of Rent
One is aware that this is a somewhat
different way of looking at PCA than was
proposed by Marx. Never the less, one
feels that expropriation of the right of a
community to any resource and the simultaneous
conversion of that resource to
employable physical capital can be termed
PCA without violence to the essential meaning
of the term. One is also conscious that
the concept of PCA is being deployed here
to understand a process that has not been
analysed through PCA. To us what is
important is that on the basis of exclusive
rights acquired by global capital, it appropriates
rent, which is concealed as profit.
The laws of the state and economic rules
and regulations are changed, even drastically,
whenever necessary to facilitate this
war of occupation. Marx did not discuss
this significance of PCA. But, as we have
discussed, rent earning is perhaps the most
significant aspect of global capital today.
So we find the repetition of history
somewhat as a farce. The grotesque aspect
is that the “leftists” who had once demanded
land reforms that were expected
to give some security of tenure to the actual
cultivators (though understandably there
was never any legal measure adopted to
give land to the tiller) are now championing
the expropriation of peasant rights.
There is a significant difference between
the course of economic history that is
unfolding in India today and the course
narrated by Marx. PCA was supposed to
constitute the prehistory of capital, but we
find that it is also a simultaneous event.
This is not much of a surprise. In these
postmodern times we have long ceased to
believe in purity. The idea of society moving
through fated stages, where each stage is
born through the dialectical supersession
of one stage by another, is no longer
generally accepted as a valid proposition.
Economic and Political Weekly April 7, 2007 1285
What were previously the dominant positions
in society are distorted and appropriated
by the dominant positions in the
succeeding order. The new dominant
position also mutates in the process. There
is no purity in the positions of the dominant
and the subordinate positions within a
society, either. Both mutate in the interest
of systemic stability to generate a modified
kind of hegemony of the dominant. This
has been called “synthetic hegemony”
[Chaudhury, Das and Chakrabarty 2000].
Capital does not, therefore, abrogate precapital.
It distorts and appropriates it. In
the process it too is modified. (This of
course begs the question whether one can,
even theoretically, conceive something
called “pure capitalism”. Quite obviously
our position would be that this is not
possible.) Our discussion of the importance
of rent to global capital is rooted in
such a conception of transition.
Imagining an Alternative
In conclusion we will talk about imagining
an alternative. We have remarked
that the ruling left does not really have an
option. It has to expropriate the rights of
the peasants. There is no point, other than
that it has some rhetorical worth, to blame
this party and that leader. If one goes
through the large number of leaflets published
by the various left-of-left-front
groups criticising the ruling left front, one
can sense their theoretical discomfort. They
criticise the government for lying, for suppressing
truth, for police repression, and
such other violations of what are broadly
liberal bourgeois ethics. It is important to
criticise the violations of bourgeois human
values. The barbarity of the government,
its violation of the constitution must be
highlighted. Such critiques can serve the
rhetorical purpose of showing up the heartlessness
of the system. But if there is no
possible alternative path of development
then in the current age of global capital
what is happening is inevitable. Unfortunately,
the left has also abdicated its responsibility
of imagining an alternative.
And this goes for almost all shades of left.
One proposes that the search for an
alternative should start from this clash
of ethics involved in the process of primitive
capital accumulation – the ethics of
the peasantry versus the ethics of the
market, of global capital; the ethics of the
forest dependent people versus the ethics
of the market which proves with its “costbenefit”
analysis that it is efficient policy
to displace these traditional right holders
and construct dams. In general terms the
alternative must emerge out of the clash
between the ethics of the local and the
ethics of the globalised. We do not think
that the beginnings of an alternative lie in
ensuring global mobility for one who is
locally confined. The entirety of what is
rooted in a local space can never be globally
mobile. If that were possible then this
essentialism would be correct – nature,
culture all have but one essence, which is
expressed in market price. Culture cannot
be globalised. It either dominates or is
dominated. The manifestations of so-called
fusion cultures involve a hierarchy between
the fused cultures. I think even appreciation
of a culture by one who belongs
to another culture involves a relation of
domination or fragmentary appropriation.
Nature, too, cannot be globalised. The local
community had rights over what was part of
the natural balance of the locality. Actually
“right” is a misnomer in this context.
Perhaps one can say that the relation of
nature with the local people was one of
mutual dependence. Wood becomes the
property of one who uproots the tree. This
property owner appropriates rent. Trees
become wood. And the one who initiates
this metamorphosis after death becomes
the rent-appropriating owner.
The project of constructing an alternative
path of development must stop rent
extraction by the global while respecting
local differences. The locally rooted
working people are the bearers of these
differences. Cooperative-based production
must emerge from the initiative of the
labouring people. And some kind of machinery
for direct interaction will have to be
created to prevent rent extraction. The
alternate globalisation that we are talking
about is the globalisation of the relations
between these cooperatives.
The proposal perhaps begs more questions
than it answers. A basic question –
why should the labouring people be the
bearers of local specificity? Consider one
who is employed in a factory. The person
can no longer be identified as a worker if
this factory shuts down. So if the particular
region or locality, the factory, loses its
specific characteristic – that of producing a
particular good – the worker ceases to exist
qua worker. On the other hand, the owner
of the factory is not the bearer of this
regional specificity. The capitalist’s calculations
are based on the generality of market
existence, on the expression of this universal
– the market price. It is with profits
calculated at market prices that the capitalist
is concerned. The capitalist has no
qualms about shutting down a factory to
construct luxury apartments on the land if
this business promises greater profit. One’s
identity as capitalist, what we can after a
fashion call capitalist class position, remains
unscathed but the working class position
ceases to exist if the factory shuts down.
The characteristic of a factory is to
produce manufactures. The bearer of this
characteristic is the labourer engaged in the
factory. The characteristic of agricultural
land is to produce agricultural crops. That is
why when the government takes over agricultural
land for construction of industry
or amusement parks the peasants oppose
such moves. Does it mean that one is
opposed to all change, to the production
of new goods and services, to all relocation
of labour? No. But we do insist on the nee
for working out a participatory change.
Even the development of science and technology
is responsive to the power structure.
So a cooperative relation must grow between
science and technology and an alternative
development. It is now almost a
cliché that education and the pursuit of
knowledge and science must be adapted to
the needs of production. I would not disagree.
But I would be specific: the relation
must be cooperative. In the present situation
this slogan simply amounts to the demand
that education, knowledge and science
must all be subservient to the needs of
global capital.
This proposal for exploring alternatives
is rather inchoate and, therefore, likely to
be confused with various kinds of civil
society movements. A possibility that is
rather unpalatable is to be equated with
radical environmentalists. So let us mark
at least some of our distance from them.
They have a tendency to forget history and
present some position in time as if it was
the original, unsullied, natural situation.
So when one talks of “locality” one must
remember that it is also the result of some
complex historical process through which
some communities had been displaced.
The current natural and demographic structure
has a history, which includes displacement
of adivasis and spoliation of a past
natural balance. The attempt to disown
history or the complex process that has
brought the present into being may work
in favour of some self-seeking interests.
Just as we should not disown history, so
also we cannot reject the present. Modern
development creates refugees of development
by constructing industry or housing
1286 Economic and Political Weekly April 7, 2007
resorts for the rich on agricultural land; by
the loss of fertility caused by modern
farming that cannot be replenished; by the
loss of occupation of the fishermen caused
by the discharge of chemical effluents into
water bodies; by the displacement of forest
dwellers and agriculturists on account of
construction of large dams. The displaced
crowd cities in search of livelihood. They
construct marginal communities in the
“illegal” shanties lining railroads, leaving
behind old settlements, old community
identities. They find odd jobs in the
unorganised sector, remain unemployed or
engage themselves in “anti-social” activities
to eke out a living. They form new
communities. Their desires and demands
change. We cannot turn back the wheels
of this inhuman progress by rejecting the
present. To which past shall we return?
Which historical situation shall we designate
as original? We have to start from the
present – from the current demands of the
labouring communities. This must be the
starting point of the movement to construct
a cooperative human psyche so that one day
the worker in the armaments factory will
also march for peace. The alternative does
not lie in the imposition of some leadership’s
dreams and schemes, ignoring the
present demands of the community of
working people, which are expressed
mainly in their economic struggles. Rather,
one can attempt to limit the scope of market
centrism by joining in the economic struggles
of such communities. If one can mobilise
public pressure to compel the government
to increase its social welfare spending,
for example, the orientation of health
and education towards the demands of
market worthy individuals may be partly
balanced.
The little that we have been able to
articulate by way of an alternative to the
devastating course of globalisation simply
constitutes a preliminary proposal based
on a theoretical understanding. It has no
pretension to constituting a plan of action,
however sketchy. Indeed such cannot be
the product of an intellectual exercise,
individual or collective.
We will end on a self-critical note. The
proposal is for the construction of a different
economy and society based on an
alternative set of ethics. Ethics is born of
morality, which is constituted in the process
of living, of dreaming, of dreaming
of a different living. But we have based
our proposals on our theoretical analysis.
Analysis is inevitably limited by the categories
it uses, by its structure of logic.
Categories spring traps which analysis
cannot avoid. But an alternative ethics can
be established only by transcending the
categories of the dominant culture, which
cloud our thoughts. Transcendence occurs
through the daily conflicts of our life.
Transcendence is a process, which the
dominant categories cannot capture, analysis
cannot pin down. It occurs in our desires,
which build, and are built, into our dreams.
If it were an analytical process then intellectuals
could competently draw up blueprints
of social change. Certain terms that
we have deployed in this paragraph indicate
our inability to theorise transcendence
in the same way as we theorise materiality.
Terms like “cloud”, dreams’, “desires”,
“cooperative relation”, etc, are terms that
we do not use as economists.
Our proposal for an alternative rests
largely on a binary – general/specific.
Unfortunately, in spite of trying to evade
the issue through various linguistic
juggleries, one is forced to admit, at the
end of the day, that ultimately, a major
lacuna of all analytical exercises dealing
with the nature of society and change is
the inability to transcend binary thought
categories. The particular binary that we
have deployed has its own limitations. We
have said that the labouring people are the
bearers of their local specificity. We have
advanced some arguments in support of
this proposal. But even an exploitative
class with a localised power base is a
bearer of local specificity in some sense.
The landed aristocrats, say the zamindars,
extracted/extract feudal rent on the basis
of feudal landed property rights over a
defined territory. So this lord was/is the
bearer of local values. It follows that we
are not proposing an alternative based on
the dreams and desires of the labouring
people simply because they are the agency
of the local. Faith in the working people
is an autonomous, fundamental characteristic
of our position. Opposing the concrete,
which has a specific character that
cannot be dissolved in any generality or
essence, against a faceless entity that dissolves
into a particular manifestation of an
essence, may lure the analysis into some
snares. We often tend to ignore the existence
of a power structure at the level of
the local community. Our hope is that the
local working people’s cooperatives will
be able to transcend local sectarianism
also. One must, of course, be constantly
alive to the other possibility.
We should be watchful about the limitations
of using the “general/concrete”
binary or the related “global/local” binary.
But we should be conscious that in the age
of globalisation the greater danger lies in
being blinded by the seduction of the global,
which includes, among other devices, the
glorification of universality against the
tyranny of the locality. Globalised production
and consumption are not conditioned
by any societal norms. The market can
only register “demand”, i e, need backed
by purchasing power. It has no way of
taking cognisance of the need to live of
the poor who do not have the wherewithal
to buy what they need to survive. The
harsh individualistic culture that sustains
support for the market, would find
this refusal to judge the need to survive
as intrinsically superior to the desire to
satisfy a whim to be ethically correct. If
the survival of the poor family had been
desired by the society, the family would
have been able to earn sufficient income
by selling the resources at its command in
the market.
Building the alternative will entail,
among other things, recovering humanism,
a concern for others in society, which
has been buried deep under decades of
market hedonism. The alternative does not
consist of just changing the policies of the
government. We will all have to participate
in the construction of a new humanity
and a society. It is but inevitable that global
capital and the state will resist the construction
of the alternative – cooperative
construction, that is. Counter resistance
in self-defence will follow. The details of
the alternative will ultimately be worked
out in the course of this construction
and struggle.
Email: pranabkbasu@gmail.com
Notes
[I have benefited greatly from my conversations
with Dipankar Das and Sumit Chowdhury while
this piece was evolving. I am also grateful to
Dipankar for meticulously going through the
initial draft.]
1 By the term “global capital” we are referring
to capital that has crossed a certain threshold,
in terms of size, to acquire the passport to
global mobility. The significance of this
categorical separation will become obvious as
we go along. For the time being it is sufficient
to note that this type of capital is not geocentric
in either source or area of investment. It has
therefore little or no national allegiance.
2 “Public purpose” is a vague term, which can
be suitably interpreted to suit the needs of
global capital. For example the government of
West Bengal has used this Act to acquire land
that will be handed over to the Tatas for
EPW
Economic and Political Weekly April 7, 2007 1287
construction of a small car factory. This has
been interpreted as a public purpose because it
is claimed that it will provide employment to
the people of the state. Even if one does not
contest the veracity of this highly improbable
claim, one can still ask how the employment
of workers by a profitable enterprise in order
to enhance its profits can be termed as a deed
with a public or social purpose.
3 We will elaborate this alternative later.
4 Rent is earned on the basis of monopoly of
rights over resources that are not replicable.
Marx discusses this in volume III of capital
[Marx 1959]. Primitive capital accumulation
(PCA) is discussed in volume I of capital [Marx
1954]. There are now three classes of economic
functionaries. There are the landlords who have
dispossessed the traditional right holders of
their rights and established sole proprietary
rights over land. There are the capitalists who
take this land on lease against payment of rent
to the landlord to use the land for profit. And
there are of course the labourers who work on
payment of wages.
Discussing the basis of the ability to extract
rent, Marx says, “…the monopoly of the socalled
landed proprietor of a portion of our
planet, enables him to levy such a tribute”[Marx
1959, p 625]. Marx then goes on to divide rent
into two analytical parts: differential rent (that
is generated by the extra productivity of some
plots, which causes the product to fetch more
revenue than is sufficient to cover normal wage
charge, material cost, other charges and profit
at the normal rate); and absolute rent (that is
generated by diminishing wage and/or rate of
profit on capital invested on such plots). This
latter is rendered possible because such capital
or labour has no alternate field of employment.
Marx cites the case of the small farmers who
cannot hire in large plots of land. Because of
the large numbers of such farmers in comparison
to the number of such plots available, the owners
of such plots were able to depress the profit
on capital of the small farmer and so extract
absolute rent.
To my mind the key factors that allow rent
extraction are barriers to the ability to replicate
– this aspect Marx mentions explicitly [Marx
1959: 633] – and monopoly. The planet earth
is not replicable and so monopoly over fractions
of this earth allow the owners of these titles
to extract a payment, called rent from the
capitalist who would employ this resource. But
if these attributes exist or are created in other
fields then rent could be extracted from these
fields too. The discussion that follows may be
simpler to follow if we introduce another aspect:
the aspect of immobility at this point. Let us
elaborate. Suppose all the landowners in India
get together and decide to charge at least a
minimum rent, irrespective of productivity of
land. The capitalists who are land dependent
have to foot the bill because land being immobile
across market boundaries cannot be obtained
within the geographic area of India without
payment of such absolute rent. If land could
be imported competition among rentiers would
reduce this component of rent ultimately to
zero. Like in the case of what is called quasirent
in neoclassical economics – free entry of
firms into the competitive markets force down
rent to zero in the long run by wiping out what
is a virtual monopoly in the short run. Marx
discusses the converse case [Marx 1959, p 629].
The owners of worst grade small plots were
able to extract absolute ground rent because
of the competition among a large number of
small capitalist farmers for such plots. This
was not out of their pockets but squeezed out
of the labourers, who could be paid low wages
because of the unavailability of alternate
employment. In the long run, however, such
rent could not be paid because the emigration
of labourers led to wage increase.
If these attributes are present in other fields
the right owners can extract rent. We discuss
just one example. The free flow of knowledge
(i e, its mobility) is cut off through the
imposition of suitable patent laws. This renders
knowledge, science and technology nonreplicable.
The owners of patents then have
monopoly of rights in these fields that can be
used to extract rent.
Another direction in which we have expanded
Marx’s idea of rent is that though the functions
of the owner of rights that entitles one to rent
and the function of the capitalist are separated,
in our discussion they vest in the same entity.
Marx treats this as an exceptional case,
rather than as the rule [Marx 1959, p 751].
This is simply caused by the changed
historical circumstance, which also explains
the simultaneity of global capital’s expansion
and PCA.
5 There is some difference between this and the
discussion in Capital. See fn 4.
6 Marx calls this surplus-profit and treats it as
a kind of absolute ground rent [Marx 1959,
p 775].
7 See footnote 1.
8 The term “feudo-capital” has been used to
designate this symbiosis [Chaudhury and
Raychaudhury 2003].
9 Such societies, which are arguably the earliest
form in which humans organised themselves,
have been characterised as classless. Class
division, that is the division into surplus
producers and surplus appropriators, can occur
only when society produces a surplus over and
above its subsistence requirements. In other
words, surplus production is a necessary
condition for the existence of class divisions.
Since science and technology were (are) very
rudimentary in these societies, such societies
did not (or do not) produce any surplus. Hence
class divisions do not exist.
10 The capitalist has the necessary finances to
purchase the inputs (including labour power)
that are required for production. The laws of
private property ensure that the inputs belong to
the capitalist because he/she has purchased it
in the market. So the output produced from
these inputs also belong to the capitalist. The
money earned by selling this final product in
the market constitutes the revenue of the
capitalist. The excess of the revenue over the
cost of purchase of the inputs is the surplus,
which, naturally belongs to the capitalist. So
for appropriating the surplus as profit, all that
seems to be necessary is that the market should
function.
The market is the place where exchange of
goods and services occurs. In an act of exchange
two parties simultaneously give and take two
properties that are of equal worth. For example,
I give ten rupees to the shopkeeper and the
shopkeeper gives me a ball-pen. They are of
equal worth, in the sense that we have both
agreed to this. Otherwise the transaction would
not have taken place. This exchange is possible
because I was recognised as the legitimate
owner of rupees ten, and the shopkeeper was
recognised as the owner of the ball-pen. Also
once, the shopkeeper and I had agreed to the
price, exchange required that we kept the
contract to exchange the ball-pen and the
money. In plain words, it was necessary that
I did not run away with the ball-pen when it
was handed over to me. Thus, for the market
to function only the laws of private property
and contract are necessary. These laws are
impersonal. Anyone who has the money can
own property (the state does not designate by
name who can own property). Any two persons
who own property can contract to exchange
(the state does not bar any property owner
from exchanging the property).
11 Ultimately it will be impossible to prevent land
handed over to capital for industrial ventures
from being transformed into real estates if it
is more profitable. All indications are in that
direction. According to the projections of Merrill
Lynch, the Indian realty sector will grow from
$12 billion in 2005 to $ 90 billion in 2015. The
fact that Merrill Lynch has invested $ 50 m
in Panchsheel Developers, a regional developer,
Morgan Stanley has invested $ 68 m in
Mantri Developers, a medium-sized Bangalorebased
developer, indicates that this is not all
hype. Real estate funds set up abroad for
investment in India alone totals $ 2.7 billion
currently (‘Land Grab and Development Fraud
in India’, Analytical Monthly Review, editorial,
September 2006).
12 “…but the accumulation of capital
presupposes surplus-value; surplus-value
presupposes capitalist production; capitalist
production presupposes the pre-existence of
considerable masses of capital and of labourpower
in the hands of producers of commodities.
The whole movement, therefore,
seems to turn in a vicious circle, out of which
we can only get by supposing a primitive
accumulation (previous accumulation of Adam
Smith) preceding capitalist accumulation; an
accumulation not the result of the capitalist
mode of production, but its starting point”
[Marx 1954, p 667].
References
AMR (2006): ‘Land Grab and Development Fraud
in India’, Analytical Monthly Review,
September, Kharagpur.
Basu, Pranab Kanti (2001): Asiatic Feudalism,
Capitalism and (non)Transition, PhD dissertation,
Department of Economics, Calcutta
University, Kolkata.
Chaudhury, Ajit Dipankar Das and Anjan
Chakrabarti (2000): Margin of Margin: Profile
of an Unrepentant Postcolonial Collaborator;
Anushtup, Kolkata
Chaudhury, Ajit and Sarthak Raychaudhury (2003):
Feudocapitalism, Other Voice, Kolkata.
Marx (1954): Capital, Vol I, Progress Publishers,
Moscow (reprint 1974).
– (1959): Capital, Vol III, Progress Publishers,
Moscow (reprint 1974).