Sunday, August 31, 2008

Kerala's Public Life: Doublespeak and Double Standards

'Yes Comrade Minister, We have taken control of the police station..!'

THE DOUBLESPEAK in Kerala’s public life is reaching insurmountable levels. Take the case of the attack on a police station at Kottakkal in Malappuram by the pro-CPM, Democratic Youth Federation activists two days ago and the alleged attack on the same station by the Muslim National Development Front activists a few months ago, on March 21,2007.

The attack on the station early morning of August 30 has become quite an embarrassment for the Home Minister Kodiyeri Balarkishnan as around 35 DYFI activists did storm the station and forcibly took away a worker who was kept in lock-up there. A few police personnel were injured in the attack too, as the newspaper reports say.

But the Home Minister failed to find anything untoward about the incident. He has, in fact, ordered suspension of some police personnel on duty in the station for dereliction of duty.

But in the case of the NDF activists collecting in front of the station as their senior leaders were arrested during the night, things were quite different. Though the NDF leaders have denied that there was any attack on the station, as no one was injured and no property was damaged, the Home Minister had said it was an incident as serious as the police station attacks organized by armed Naxalites in late sixties and early seventies.

The same double standards and doublespeak is evident in the way the minister defended the rising incidents of political crime in his home district, Kannur. Kannur today is in the list of districts with top crime levels even in the national crime records bureau. Still he said the other day that even family disputes were being dubbed political in his home district. Those who are familiar with what goes on in Kannur, especially in his own grounds like Kodiyeri, Pinarayi and Thalassery villages, would laugh at the ingenuity of the minister.

Saturday, August 23, 2008

Laughing Gas

A Nano car or a No No car?

Ratan Tata of Tata Sons says he would pull out of the prestigious Nano car project in Singur if the Tatas were not welcome in West Bengal; Mamta Banerjee says she does not care whether he stays or quits.

Friday, August 22, 2008

Capitalism, Socialism and the Way Forward for the World: A Global Debate

I WAS involved in a heated global debate on these issues at the creativecapitalismblog, launched to discuss global efforts to bring a better life to the people in the poorer counties, following the famous Davos speech by Bill Gates. These discussions took place following a few interesting posts made by Martin Wolf, an eminent economist and associate editor of Financial Times, London. There are references to some posts from a few others from various countries, like an economist-investor from Germany, who identifies himself as fh, and an entrepreneur-economist from the United States, Tracy W, in the following edited version, which mainly trace my own line of argument:

N P Chekkutty:

Martin Wolf writes: But the biggest destruction of capital in the last century, in peace time, occurred in the Soviet bloc.

Is it right to compare the command economy of the Soviets or China with the democratic system where the market economy has been in full flow?
Perhaps it would be more correct to describe the destruction and wastage in Soviet bloc as creative destruction because in the past decade Russia has grown at least ten fold compared to the time Putin took over. The growth should seem impressive in the light of the kind of problems they faced at the time of the collapse of the earlier system.

Same should be the case with East Germany. It was a mess when integration took place but we do not hear the same complaints we used to hear in the mid-nineties about the economic costs of integration. So perhaps, there is much substance in what fh says, that the US, in spite of its clear advantages, is making a mess of things for themselves and others.

Martin Wolf:

Russia hasn't grown anything like 10-fold since Putin took over. Real growth has been about 6 per cent a year, if I remember correctly: so you can do the maths easily. Actually, for what it is worth (not very much, I agree), Russia's measured GDP is just about back to where it was in 1990. I think you may be confusing real growth with growth in nominal dollars. But that merely reflects the fact that the rouble overshot downwards massively in 1998 and 1999.

I really don't think that a 74 year detour, from which Russia emerged a basket case, can be called "creative". It is worth remembering that Russia was the fastest-growing large economy in the world immediately before WWI. So if it had not been for the Soviet experiment, Russia would almost certainly be a rich country today, which it is not (particularly if you ignore the oil and gas windfall). This also ignores the gigantic human and political costs of the Lenin-Stalin experiment with totalitarianism, from which Russia has not, alas, recovered. It may never do so.

Also, no, I don't think fh is right on the US. The US has always been a boom-bust economy and it still is. It is after all a capitalist country. Just as it is senseless to expect Germany to become the US, so it is senseless to expect the US to become Germany (as I discuss above). But the US has been the preponderant source of global economic innovation since the late-19th century and particularly since WW II. Among large countries, it also has much the highest average income per head. The US is the global economic frontier. One has to be blind not to see that it has been astonishingly successful.

N P Chekkutty:

Fh writes: The German AWG (Aussenwirtschaftsgesetz) should be coming into force very soon. Broadly speaking, that law is designed to make it much more difficult for foreigners to take over German firms.

Fh, Can I take it that this is a major step in the direction of insulating the German economy from the global one? Put it more clearly, is it an indication of the German aloofness or maybe, a new surge of protectionism in one of the most important economies in the rich world?

And one more question: Exactly against whom are these measures aimed at? Is it the rest of west which has always been an alley since the Second World War, or is the new forces from the developing world that the law would try to keep out? I have seen quite a bit of parochialism in some European countries of late, like when an Indian steel firm, Mittal, made an effort to buy up the French steel-maker, Arcelor.


Why the AWG, NP? Well, Germans have seen the UK economy become a "hollowed out" one -- the auto industry, shipbuilding, hardly exist any more; GEC (once the No. 1 firm in the FTSE) no longer exists. ICI (Imperial Chemical Industry) another huge UK company shrank massively and was sold off to ...Norway?

And the once great civil engineering company Wimpey is now reduced to a house-builder, suffering from the construction slump in the UK.
When German managers look at the US auto industry, they have nightmares at the thought that such a fate could overtake German car giants like VW, BMW. That's why Porsche and one of the German states (Länder) fought tooth and nail to acquire the VW majority and will never let it go. The same applies to many other large German companies.

P.S. Yes, Mittal - but in my opinion, he acted just in time to get Arcelor.
I think Sarkozy has also tightened up against outside takeover attempts. I know Mittal Steel from the time when it bought a steel mill in Temirtau (in Khazakhstan)...

N P Chekkutty:

MW writes: Russia hasn't grown anything like 10-fold since Putin took over. Real growth has been about 6 per cent a year, if I remember correctly: so you can do the maths easily.

I am not going into an argument with a veteran economist like Martin Wolf on the figures with regard to Russia's growth. But I find that my figures were correct, on cross checking.

According to a report published in the major Indian newspaper, The Hindu, dated August 4, 2008, the Russian economy which was at $200 billion ten years ago, crossed $1.4 trillion in 2008. its per capita GDP quadrupled to $7000 in this period.
Of course this growth includes its oil and gas revenue too. But why should Russia count this revenue out while all others including the US count their oil revenues in GDP?

Martin Wolf:

As I said, the huge rise in Russian dollar GDP is mostly because of the nominal appreciation of the rouble, not real growth. The appreciation was itself largely the inevitable consequence of the overshooting after the 1998 devaluation, plus the benefit of large oil and gas revenues. Figures for changes in national income in a foreign currency (the dollar) don't mean anything very much. As I said, you are confusing real growth with growth in nominal dollars.

N P Chekkutty:

MW writes: If I were fh, I would worry a bit more about Germany and a bit less about the US.

This, I am afraid, does not actually answer the point raised by fh. He was referring to the failure of the US in meeting some key social responsibilities of an economy, like health care and professional training. If an economy fails to take care of these basic social demands, I do not know how far it's worth to speak of.

So it is welcome when someone speaks of socialism. The pre-90s model has been a disaster, but that does not rule out socialism as a way out for the future. This could be much more important for the third world, as without an effective public policy and state intervention, ensuring a semblance of decent and equitable distribution there could prove to be next to impossible.

And the search for non-Anglo American models, like the German social market, expands the scope of finding a better way out for the world because so far the entire debate has been monopolized by the Anglo-American model of free market. Why not look elsewhere too for a workable solution?

Martin Wolf:

If a country wants to be export world champion (a silly aim!), then somebody has to buy the products and if a country wants to run huge current account surpluses, somebody has to run the deficits. I make this simple point in a forthcoming book.
I agree there should be many models. That has been one of the points made in my various posts.
Anyway, that's it.


The American type of capitalism is too exclusive, in my opinion. Racial prejudice, lack of access to a good education, even living in the "wrong" state all combine to deny many Americans the chance of a better life.

N P Chekkutty is right, we can learn from other socio- economic models, seek out and analyse the reasons for others' successes and failures.

@ MW: Being Exportweltmeister just means that Germany is producing goods and services that other countries need or want to buy, at a price the latter are willing to pay.

Tracy W:

There's no reason to believe that socialism is necessary for a semblance of a decent and equitable distribution.

Why oh why are people so attracted to the idea of socialism that despite its massive failure, they still think it should be kept alive? Do they also advocate bringing back the Spanish Inquisition? And how about the habit of doctors going straight from autopises to attending childbirths without washing? Perhaps they spend their evenings plotting to blow up sewage treatment plants so we can check the theory that contaminated water causes cholera?

N P Chekkutty:

I think I need to explain why I still feel socialism needs to be taken once again into serious consideration.

I will try to do it later on, but right now let me tell you that when I speak about socialism, I do not mean the state capitalist system that Soviet Union experimented with disastrous consequences. Ever since the world War, there has been quite a bit of debate about what we do mean by socialism in a democratic polity.

N P Chekkutty:

Tracy W asks: What is the attraction of the word "socialist" that you, and other writers, find so valuable that you are willing to keep the word...

A considered analysis calls for a major attempt to understand modern history, politics and economics which is beyond the scope of this debate. I will confine myself to the limited scope of this forum where the primary idea was to locate which model is the best one to help those at the bottom of the pyramid.

I begin my search from where Martin Wolf left out in this note. He said, "that many social goals can only be met through political action. That is also where they ought to be met."

This leads us to which kind of politics. The contemporary experience, mainly in poor countries, make it plain that you will have to work with the poor and working class people to find a sensible way for human liberation.

I say this from a study of Marx and his concept about dialectical and historical materialism, a philosophical innovation from Hegel and enriched by the various strands of political and economic thought in Europe and elsewhere in the 19th and 20th centuries. In our times there has been a series of debates which enriched this world view and one cannot forget people like Antonio Gramsci, Mao, Deng Xiao Ping and Ho Chi Minh who gave new inputs. The fact is socialism is not just a few Russians who bungled their state control; it goes beyond to experiences in China, Viet Nam, and many newly independent countries like India where the communists and socialists helped develop and enrich political theory and practice. It also goes to the German, French and Italian left movement also which has a great history and tradition.

Look at the developing world: The contribution of socialist and communist parties to parliamentary democracy is immense. They helped bring in much more people friendly legislations, more equitable distribution and more public participation in governance.

Martin Wolf:

The view that communist regimes are responsible for the deaths of 100m people is not a cliche. The figure comes from "The Black Book of Communism: Crimes, Terror, Repression". It is controversial (since we don't really know how many died in China and there is dispute over whether the famines in the Soviet Union and China were deliberate, or not). But it is not unreasonable.

Tracy W:

Look, I agree that it is important to remember socialism. But it seems odd to focus merely on the failures of history and ignore the successes. And really really odd to pick the name of something with such a horrible history to call your new idea by. If the only reason you favour the name socialism is that it contributed to a series of debates, why not pick the name of a philosophical idea that also contributed to the same series of debates but didn't lead to millions of deaths, like libertarianism, or capitalism? (I would still prefer you to pick a name that was new, to avoid confusion, of course.)

N P Chekkutty:

What is in a name, after all? Right.

But it is not so easy or historical to forget the history and experiences of our times. Without a proper understanding and possibly appreciation of the contribution of the left politics, both socialist and communist, to the modern world I am sure we would never able to move on, to anything new and more meaningful for human endeavor.
Dear Tracy, let me say that there are some degree of unity of views between us, and some areas of profound differences. As far as I can see, the unanimity is about the value of capitalism as a vehicle for wealth production; but there is divergence over distribution or redistribution. You seem to think that the market would take care of it because it has its own means to ensure that wealth trickles down to every pore, to every nook and cranny of our universe. For me, we need special efforts to ensure that it reaches to large parts of humanity.

Now the question is how to ensure this? There were so many ideas including a direct transfer, say issuing cheques to all of them, to making things available at low cost, etc.

For me, all these are peace-meal and half-hearted. They are half remedies discussed half heartedly and without conviction. If we want to help poor, we need to empower them and empowerment takes a lot of social and political involvement and intervention, which has been the main idea Martin Wolf finally came up with.

I believe, and I have observed, that the forces that can act most effectively in this area are the political parties and other formations that belong to the poor people and working class. (Remember, I am talking about the developing countries now.) I belong to South Asia and in this region, (like others in other parts) I know that the political parties from the left have made immense contribution (you realize this when you contrast them with bourgeois parties) in bringing a better life to these people. (See for example, the National Rural Employment Guarantee Act in India, which helped millions survive in the days when thousands committed suicide in farm sector. There are many examples, but I can't write about all of them here.)This Act is the contribution of Manmohan Singh Government with the communist parties putting pressure.

But why can't we call them by some other name?

This involves the history of the left movement. In Communist Manifesto, Marx and Engels describe their political view as scientific socialism, to distinguish itself from the earlier utopian socialists. Unlike in Europe, where the Euro Communists in 70s abandoned their flag and name, in third world you can't be so utopian, to use Marx's own terminology. You need a strong and united working class movement to see that these sections are able to fight on for their rights. Once they reach the developed world's levels of growth, I am sure they may not need the red flag any longer. But that would take many many more years to come.

Tracy W:

Chekkutty, why are you saying this? What did I say that gave you the impression that I wanted to forget socialism? I said, in the comment you are replying to:
"I agree with you that we should not forget socialism. Just as we should not forget that hot things burn and that contaminated water can lead to cholera outbreaks. I hope that we can learn from history what not to do. "

I don't know how you can read that as a call to forget the history and experience of our times. Is there anything else I can say that can convince you I am entirely in favour of remembering socialism?

You say, Once they reach the developed world's levels of growth, I am sure they may not need the red flag any longer.

The Asian Tigers appear to have managed very well without the red flag.

And just to repeat myself, I am utterly convinced that we must remember socialism. I think the history of the left movement should be studied in schools. I just don't understand why you want to call your system "socialism". Why not call it "feudualism" or "slavery" or "religious intolerance"?

N P Chekkutty:

Memories do differ. And what you remember may not be what I would like to remember. As for those deaths of people, I agree terrible mistakes have been made. All sensible people say this. But which system has not been responsible for similar crimes? Who dropped an atom bomb on the people of Hiroshima after the Red Army had entered Berlin?

As for the dictionary definition of socialism, let me tell you I go by what the theoretical definitions of these terms are in the writings from Marx to contemporary Marxists and the party programs of various communist parties with which I am familiar.

Asian Tigers appear to have managed very well...

Asian Tigers? hahaha
Do you know how big are these places and who rule them? Fine examples for the victory of capitalism proper!

(This is an edited version of the debate.

Thursday, August 21, 2008

S K Pottekkad and his travels: A reminder from the past

IN CHARLES Dickens’ Hard Times, there is a poignant scene: Her father’s beloved dog returns to Liz one day many years later, reminding her of the poor father, who was no more…

S K Pottekkad launched forth on his travels all over the world from the little world of Athiranippadam in Kozhikode, which he immortalized in his book, Oru Desathinte Katha, the story of a desam. The street a few furlongs away, which had been his regular haunt from early childhood and whenever he was in his city, the S M Street, also became famous through his novel, Oru Theruvinte Katha, the story of a street.

Today, SK’s statue overlooks the street and both the writer and his beloved street are eerily looking out of place in a city that is fast outgrowing its past, metamorphosing itself into a modern metropolis. For those who are familiar with the old Kozhikode, a city that has been the place for great writers and artists, who lazily spent their time in the environs of Mananchira, the tank that the old Zamorin built for his subjects, all these are part of a cherished memory.

Luckily a part of this history came back to me a few days ago, when SK Pottekkad’s first passport which took him to all parts of the world, suddenly came to us as a reminder of this past. It was 16 years after the death of the great writer, and almost everything that belonged to him had been consigned to oblivion, that this little dog-eared document that accompanied him everywhere suddenly popped itself up into our midst.

It was a passport issued to Sankarankutty Kunhiraman Pottekkad, Chandrakantham, Puthiyara, Kozhikode, Malabar, on March 16, 1946 by the Government of Madras, then part of the British colonial administration. It was lying in the possession of famous theatre activist and revolutionary writer Madhu Master all these years and his son, Thejas photographer, Vidhuraj, fished it out.

Three years later, after India became independent, on May 2, 1949, that SK set out from Bombay on a passenger ship to Italy. He returned after a few weeks and then on May 29 took another ship to Rhodesia and from there moved to other parts of Africa. In June he went on to Mozambique and then to Portugal.

In 1950 he passed through the Suez Canal, at a time when the canal was at the center of a global confrontation, and reached Switzerland. Two years on, he was in Malaysia and next year, in 1953, he traveled to Indonesia and then to Egypt. The story comes to an end on March 16, 1954 when the term of the document comes to and.

But SK continued his travels and through his dozens of books that gave a graphic description of what he saw in all those places took Malayalis to all those exotic locales widening our universe and making us a people quite at ease with the wide world outside.

Sunday, August 17, 2008

Michael Phelps: The Birth of Another Legend

Records are always made to be broken, said Michael Phelps after he broke the one set by his compatriot Mark Spitz in 1972 Munich Olympics, winning his eighth gold in the swimming pool in Beijing.

Now who will break his, and when?

Friday, August 15, 2008

Capitalist Do-gooders and the People of Bhopal

THE CREATIVE Capitalist entering the social sector for the benefit of the poor in expectation of public recognition as a reward is a good idea.

Only if it works in the field.

The suggestion for effective checks and balances is to go for continuous evaluation, and publish reports for assessment in a transparent way.

Grand ideas indeed. Will ensure some good work for those experts too.

But let me try to give the example of a small project I had seen in a school in my home town: They were producing vegetables in the organic way and the students and teachers were involved in this humble project which ensured the school kitchen received good vegetables at affordable cost.

Then came the government into the scene: a minister landed with his entourage, news cameras and a big ceremony of digging, cutting ribbons, ceremonial planting of saplings, etc, was organized and the next day when the students went back to their garden what they saw was a place that looked as if it had been run over by a thousand elephants in heat...

I do not blame the minister who came with an army of hangers-on to the fragile garden. For him the public glow was the essential part of the show, because he thrived on it. And I do not blame a CC do-gooder doing the same, descending on a small project somehow being run by a small grassroots group with all their limitations, but also with some limited success and applauded only by those local people who are benefited out of it and without much media glare. But when a powerful international group enters the scene with its immense media control, money power and resources, and puts up such shows with an eye on the public glow, then it would be doom for those small grassroots level movements that are slowly seem to emerge in many parts of the world, caught in this whirlwind.

So what is the way out? I would suggest to identify ways how not to trample upon the small shoots, how to be careful and culturally sensitive; how to help local people do these things themselves. But can the global capitalist powerhouses be so sensitive? I am not sure, going by our past experience.

It is around 25 years since the people of Bhopal,India, were gassed by a global company but no one from this philanthropic, crocodile-tear-shedding giants in the West cared to teach a lesson to this particular company and stand up for those victims who suffered for so many years.

Tuesday, August 12, 2008

A Glorious Moment in the Life of a Nation

Twenty-five-year-old Abhinav Bhindra wins the first individual gold medal for India in the Olympics.

Monday, August 11, 2008

Child Labour, Sweatshops and the West’s Crocodile Tears

This is in continuation of the debate on creative capitalism, an idea made popular by Bill Gates. For earlier inputs see tag: Capitalism.

Tim Harford writes:

My final worry about recognition is that we do not always recognize behaviour that will truly help the poor. A simple example: a friend
of mine recently bought shoes made in Italy rather than shoes made in Romania, specifically because she was worried (in a rather vague way) about encouraging sweatshop labour.

I am a bit worried about this 'concern' for the poor in other parts of the world expressed through the market place. It could backfire on the poor person in most cases.

Let me try to explain this through an example:
Sometime ago while I was working in Delhi, we used to get tea, coffee, etc, from the Indian Newspaper Society's building in Rafi Marg, a stone throw from Parliament House, served mostly by small children from Nepal. I asked the boy why he was serving in the canteen instead of going to school like all other kids do.
He said he would like to. But things were bad at home, and his father had no way but to send him to India where he could find some work. He said once things are better and he earns a little money to help his parents, he would go back and get into a school one day.

I knew child labor was a crime but what could I do? Report him to the police? I could only pray that things would get better for him, and perhaps now that his country is a republic he may be able to go back and enter a school.

I was trying to say, there are moral choices in this. Avoiding goods for fear of aiding sweatshops even inadvertently might harm a family somewhere, who are dependent on this little money for their survival. Those little ones in the sweatshops in those far-away dreary places too have their parents who had to make a moral choice too, and it is difficult for any parent to send the kids to these work places instead of schools. But they have no option in most cases.

I do not say the world should keep a blind eye to the extremely poor working conditions in the poorer parts of the world. By no means. It should always be concerned, it should agitate, put pressure on governments, and try every which way in which it could help them.

But paying a higher price for the goods of same quality from a developed country to avoid something suspected to be tainted by the sweat of a child from a poor country can't be the right answer to this moral question. Perhaps it boosts one's self esteem, but surely it would not help bring in a better world for any one of us.
Posted by: n p chekkutty | July 26, 2008

Stephen Landsburg writes:

Undermining the anti-sweatshop movement would be an excellent place to start.

This is an excellent proposition because one of the first things the West can do to help the poor in the developing world is to dispel the sentimental nonsense revolving around this concept about 'sweatshops' in those countries. The fear of sweatshops and the 'conscientious' objection to the products from these countries is a virus fast spreading all over the developed world and I am sure, it would hurt the poor of our world much harsher than any other steps the West can take, say the protectionist legislations or even the the refusal to help with aid.

A few days ago in response to a post by Tim Harford, I had made the following observation: "Avoiding goods for fear of aiding sweatshops even inadvertently might harm a family somewhere, who are dependent on this little money for their survival."

I feel that since Prof Landsburg has made a scathing criticism about the way the West is dealing with this issue, it is necessary to look at it from the standpoint of those countries and people who are likely to be hurt by such measures.

First let us accept that the working condition in most of the developing world is not as comfortable as the workers in the developed world enjoys. But the crucial aspect is that while there may be choices for the workers of the developed world, there is precious little choice for those living in these parts of the world. The less choice, the less bargaining power you have. Hence exploitation of the labor is at a much higher level in these parts, no doubt about it.

So what to do? Leave them to the care of God and disallow their products from the Western shops? And thereby deny them the daily meal, if at all they are able to afford a meal by all these exertions? I have seen hundreds of kids who work in road projects, small workshops, mills, canteens, etc, and then go to school to build their lives. By refusing to buy the products that may have their sweat on it, what we actually do is to deny them the only chance to hold on to a better life, stonewalling the only glimmer of hope they may have.

The best way here is to put pressure on the governments, the factory owners and the business community in these parts of the world to improve working conditions, to go for stricter law and enforce labor standards. Here the trade unions and political parties who are deeply involved with the poor people's lives could be of immense help. So what we need to do is to think of building strategic tie-ups with the political establishment, say the trade unions, political parties, etc, and enforce change. But the Gates Foundation memo never even speaks of such a strategic initiative as they do not think the political society in the third world can be a valuable ally in the effort to promote creative capitalism. I think this is a fundamental mistake on their part. They speak of Prahalad and the gains to be picked up at the bottom of the pyramid. Fine. But unless you have somebody alive at the bottom how can you pick up anything from there?
Posted by: n p chekkutty | August 04, 2008

A response to a query from Jessica Haussler, Frankfurt:


My objection to the campaign against 'sweatshops' now gaining ground in the rich countries not because I do not want the working conditions there to improve. I do certainly want the difficult conditions in which people work in many companies who are suppliers to the global chains to improve. Naturally, any consumer pressure that would force the corporate firms to take actions to get the situation improved would be welcome. But that can be done not by diverting production units, shifting locations, or cutting back orders. But through forcing their collaborators to go for better standards, by persauding the local governments to enact much stricter laws, and ensuring decent working conditions do exist in those countries also.
But the problem with a blanket campaign and boycotting of such products simply on the basis of a suspicion that it involves child labour can be disastrous to those people who depend on them. Possibly they work in abominable conditions, but refusing to buy their products would only mean denying them their daily meal. I suppose no conscientious consumer can ever think of doing it.
Posted by: n p chekkutty | August 06, 2008

Saturday, August 9, 2008

Laughing Gas

Don't forget your oxygen masks...!

The breath-taking display of fireworks on the inaugural day of the Beijing Olympics adds to the acute environmental pollution in the city: news

Debt Relief Activities and Farmers: A Report from Kerala

THE ECONOMIC Review 2007, released during the budget session of the State legislature by the Kerala State Planning Board, makes the claim that the GSDP of the State in real terms increased by 8.1 per cent in 2006-07, which is marginally higher than 8 per cent of the previous year. The document says: “What was notable in Kerala during 2007 was that the high growth rate came together with reduced rural distress. The most significant reflection of this was that peasant suicides came to an end in the second half of 2007, Kerala being the first major suicide-affected state to have put and end to this tragic phenomenon.”

The review looks at the first year of the Left Democratic Front Government led by V S Achuthanandan, which came to power in May, 2006. In the previous years the State was reeling under a spate of peasant suicides and according to official figures there were as many as 179 cases reported from the tiny district of Wayanad alone during 2002 to 2006. Two other major districts affected were Palakkad and Kasargode. Hence the first priority of the Government as it took over, was to find a solution to the widespread farmer distress. One of the first steps taken by the Government was to set up a statutory Agricultural Debt Relief Commission, a six-member body with members drawn from peasant organizations, legislative assembly members, judicial officers, etc, empowered to look into the complaints and find redress with the resources made available in the State budget.

The Economic Review noted: Of greater significance is the setting up of a statutory Debt Relief Commission by the State Government, which, brought substantial hope to the distressed peasantry with its formation.

It is a fact that the commission did give rise to a lot of hope among the poor peasants who were reeling under a tremendous burden of mounting debts. In the first few months itself, it had received over 4.76 lakh complaints from peasants all over the State. But the claim that the Government was able to put an end to the suicides among farmers was far fetched, as even during the 2008 summer, a few suicides were reported from Kuttanadu, known as the rice bowl of Kerala. What is distressing about the Kuttanadu suicides is that while so far the suicides were confined to the hill regions, they were now spreading to new areas. (As I finalize this note, a report came from Kasargode that on July 25, 2008, two peasants committed suicide in the district as they were not able to get any support under the government sponsored schemes.)

With a view to keep a tab on the functioning of the Agricultural Debt Relief Commission, this correspondent and a friend, journalist K P Vijayakumar, spent a few weeks monitoring it, during November-December 2007, when the Commission was holding its first sittings. We also checked back with the rural situation, looking at specific cases in order to locate what went wrong in the life of those who were forced to appeal to the Commission. It was a sad spectacle that we witnessed, as the Commission struggled with its limited funds, few staff members and many hurdles of a technical and administrative nature, facing hundreds of highly strung poor peasants waiting for redress of their grievances everywhere they went. The Commission was empowered to write off 75 per cent of the loans amounting to Rs.50,000 taken from cooperative banks, which they had to compensate from funds promised through budgetary provisions. However, they had no authority to provide relief on loans availed from nationalized or private scheduled banks. A large part of the agricultural loans were from the commercial banks and private money-lenders, as the peasants had availed every possible loan from every source available.

Here are a few cases we have studied, watching the Commission’s proceedings, talking to the distressed peasants who came to present their grievances and visiting some of their homes and villages to examine the actual state of affairs that led them to the depths of penury and distress.

The Debt Relief Commission had conducted a series of sittings at the Government Guest House, Kalpetta, headquarters of Wayanad, known as the district that has seen the largest number of peasant suicides during 2002--2007. These sittings were held in the last week of November and the first week of December, 2007.

Annamma Mathai, a 65-year-old woman from Pulpally panchayat in Wayanad, whose husband had died two years ago leaving her a land holding of 2.05 acres and a huge debt, had arrived in the town on the evening of November 29, as she had received a letter from the Commission to be present personally the next day. She was cultivating ginger and pepper in her small holding and as the products normally used to fetch reasonable returns, it was sufficient to keep the family going. Still, it left them nothing as savings because of seasonal fluctuations in prices. However, pepper vines were hit by a fast spreading disease wiping off all the plants. Her husband Mathai took a loan of Rs. 25,000 from the Nadavayal branch of South Malabar Gramin Bank to revive his farming operations. But he was unable to repay the loan and after his death, the total amount she owed to the bank had reached Rs. 42,000 leaving her no way to escape debt trap.

Annamma was the 52nd person in the queue and after a few hours’ waiting on an empty stomach --she had had no breakfast-- she was ushered into the presence of the Commission. Her files were examined and the Commission after consultations with bank officials, gave its verdict: The interest and penalty interest will be waived, she will have to pay the principal amount.

She was standing there thunder-struck, no words coming out of her mouth. Then after the lapse of a few moments, she managed to say through her tears: “Sir, where do I find the money, I have nothing…”

Moments later, she was seen moving out of the building, her head low and her frail figure swaying like a reed in the heavy Wayanad wind blowing outside.

A large number of peasants who came to the Commission were small-holding farmers whose small loans had become huge debts with penal interest as they were unable to repay the loans. But what kept them from repaying these small loans? Expert studies have been made by various agencies which came to the conclusion that non-remunerative agricultural practices, continuous price fluctuations in the market which left farmers with no savings, heavy debts owing to non-farming activities like expenses on weddings, widespread diseases of the plants, etc, as reasons.

We went to a few villages to see what actually took them to debt trap and such deep penury. One of the villages visited was Poozhithode, a small hamlet in the ward four of the eastern hill panchayat of Chakkittappara, in Kozhikode district. It is practically an inaccessible place as there are no roads; one has to walk three kilometres to reach the place. Here we met Vettappala Chinnamma, a 68-year-old woman, who lives in a dilapidated two storey building, with her sister. Chinnamma came almost fifty years ago to this remote village from Ranni in South Kerala as her family came to the north in search of a better livelihood. Land was cheap and plenty and her father had 5.5 acres of forest land converted into farm lands. They had planted areca-nut palms in the land.

Areca-nuts are spices used as an ingredient in many products and hence depend solely on global markets. There were times when it fetched very good prices, but recently there has been a major drop in prices and demand that left many farmers in distress and their plantations remained uncared for. Chinnamma’s was a two-member family with 5.5 acres of rich agricultural land, in which stood 3500 areca-nut palms, all of them headless wonders by then. When diseases hit, they had no resources to care for the palms and with no income from the land, they were almost starving. The areca-nut palms were all destroyed by the disease that had spread in the region making it a graveyard of areca-nut palms. These are long and lean plants which bear gold-colored areca-nuts with minimum care for the palms, but once the disease hits, the only way out is to replant them and for a plant to grew and bear nuts it takes a few years’ time and an infusion of heavy investment.

Chinnamma had the land but no resources to replant them. She was surviving only because of the Pubic Distribution System which is still widespread and quite effective in Kerala. Her ration card entries revealed the story of how misfortune came to take control of her life: Till May and June 2007, she was not lifting any rice from the PDS outlet. Then came the season of plant disease and ever since, from July to November, the time of our visit, the entries said she had received five kg of rice every month.

This village has many such cases of sudden misfortune hitting them like a bolt from the blue. Poovathumalil Kuttappan, an active CPM worker, has five acres of land with 3000 areca-nut palms, but the contagious disease destroyed his entire plantation. He made an effort to revive his fortunes, taking loans from various sources to replant and fight the disease. He had taken a loan of Rs. 15,160 from the Chakkittappara Service Cooperative Bank and another of Rs. 85,000 from the Union Bank of India, and was facing revenue recovery proceedings from both.

Poozhithode is classic case of an entire village going to dogs: It has an area of 88 hectares of land, and there were as many as 29 peasant families with small and medium holdings there. In the last week of November 2007, there were only six families remaining as all others had left the village looking for means for survival elsewhere. It was not lack of hard work, or physical resources or land that made their life miserable. It was the unpredictability of a peasants’ life, its total lack of any social security cover even as they solely depended on the vagaries of a global market and an equally unpredictable climate and spreading plant diseases that made them flee from the place they had lived for generations. Peasants complained that the diseases were now becoming more and more common and frequent, and many suspect it could be the impact of a changing climate patterns, irregular rainfall and excessive dependence on chemical fertilizers and pesticides.

While diseases and poor prices destroyed life in area-nut plantations, it was a global drop in prices that brought hardship to villages in Wayanad where coffee is grown. In the first week of December a visit to Kambalakkadu, a small town that smells of coffee and renowned for its coffee market, gave a picture of what went wrong with this global brand. It was here we met Sarojini, a worker in a coffee plantation at Kozhinjakkadu, in Kaniyampatta panchayat. She lives in a small hut with her two children; her husband had abandoned her two years ago. She had received Rs. 60 for a day’s work in the plantation besides four idlis, three of which she had saved three for her children.

The plantation was in bad days and there were no permanent workers any longer. Sarojini got work for three days a week. In a way, she was lucky compared to Adivasi women who got a pay of only Rs. 50 a day, if at all they had work.

The present economics of coffee production is hopeless for small and medium growers, says James, a small grower here. The coffee prices were falling and expenses for cultivation were growing. He had three acres of coffee but recently had to sell 35 cents of land to meet pressing burdens. His family of four survives on the coffee grown in the remaining 2.65 acres of land. Last year his total yield was 30 bags of coffee, each bag containing roughly 54 kg of beans. Processed, it would yield 30 kg of coffee kernel per bag, which fetches Rs. 70 per kg. Considering the expenses he incurred in maintaining the plants including the manual work, fertilizers, etc, he points out that it works out to a loss of around Rs. 60,000 per acre. At the same time, the Nescafe Classic coffee, a major brand, is sold at Rs. 68 per pouch of 50 grams in the retail outlets.

The Government policy of coffee procurement monopoly for the Coffee Board had done damage to the growers as the prices offered by the Board were quite low compared to open market. After a series of agitations, the growers were allowed to sell in the open market which, during the season of price hike, helped them. In fact in 1994-95, the local prices had touched a record of Rs. 120 per kg, but later on it fell sharply and during 2002-03, it touched the lowest benchmark of Rs.15. Last year it stood at Rs. 70, way below the boom period prices.

A third major crop that was examined during the study was pepper, an important spice grown widely in Wayanad. Pepper is historically known as black gold because of its vast demand in the world market even from the Roman times. Pulpally, known as the base of Pazhassi Raja who resisted the British East India Company in 18th century in a series of heroic battles, has been the centre of pepper trade and till a few years ago, when the plants were hit by a debilitating disease even as the prices started to crash, it was a prosperous area. In its best of times, there were as many as 540 Mahindra jeeps in this small village; one of the largest congregation of such vehicles in a small village in India. However, in the past five years this village had seen as many as 124 farmer suicides, the largest number in any Kerala village.

What brought a spate of misery here is a double tragedy: The crashing prices combined with a sudden spread of new diseases that destroyed not only the pepper vines but its supporting plants like murikku, a local variety of soft wood tree bearing bright red-colored flowers in summer. Pepper can be replanted easily but without the supporting plant, it just can’t survive. The effort by State and Central Government organizations and farm officials to revive the pepper cultivation in Pulpally is yet to take off as the entire village looks like a graveyard of pepper vines, the dried and withered supporting plants remaining like ghosts.

The sudden decline to penury and destitution has had a tremendous psychological impact on the village population, and local doctors say that there has been a sharp increase in the incidence of psychological problems and disorders. Many people have left the village, leaving behind their lands uncared for, in search of jobs in Karnataka, and women have left for the sweatshops in Tirupur and other places.

So what we saw in the villages in the last weeks of 2007 was something dramatically different from the picture described in the Economic Review report, 2007. The Government’s actions had indeed raised high hopes but the limitations imposed by the restricted operation of the Commission had put a brake on its effectiveness.

The Government in its efforts to bring some succour to distressed farmers, had decided to take over debts up to Rs. 100,000 in the case of peasants who committed suicide. It has helped a number of families who were left without any means of subsistence after their breadwinners had taken the easy way out. The Central Government package of taking over loans for agricultural purposes from nationalized and scheduled commercial banks, announced in the budget 2008, has also helped ease the situation to an extent. The Economic Review reveals that as many as 248 loans availed by the deceased farmers with liabilities up to Rs. 100,000 had been written off by commercial banks and the total amount was to the tune of Rs. 76.67 lakh. In addition, the cooperative banks had written off 487 loans of the deceased farmers, worth a total of Rs. 153.26 lakh by May 31, 2007. The total loans taken over in the both categories came to 885 involving a total amount of Rs. 2.30 core.

It is a fact that compared to the gloomiest days in recent past, things seem to be looking up now. There are many factors that helped ease the tensed situation. First, there is a minor revival of world market prices for a variety of cash crops raising hopes once again; secondly, the debt relief efforts by State and Central Government agencies seem to have arrested the trend of mass despair; third, there is a substantial increase in paddy procurement prices from Rs. 6.30 to Rs. 9 this year; and the implementation of the National Rural Employment Guarantee Scheme is somewhat effective in the poorest districts of the State, contributing to this trend.

But these are temporary and piecemeal measures whose effects could be wiped off once the prices dip again and the official aid programmes are withdrawn. What we need urgently to develop seem to be a long-term strategy that will ensue regular, remunerative prices for the farmers, a social security net for those who face sudden reversal of fortunes owing to the over-dependence on global markets, and an effective and farm-based science and technology development programme that would help address the widespread problems of diseases, erratic climate conditions, changing farming practices, etc.

(, August, 2008.)

Wednesday, August 6, 2008

Laughing Gas

The General finds the going tough...!
In Pakistan, Nawaz Sharif and Azif Ali Zardari join forces to put an end to Musharraf rule: news

Sunday, August 3, 2008

Kerala’ s Contribution to Marxist Thinking

This is part of a few posts I made on the topic in a discussion in memory of the late Dr T K Ramachandran, whose contributions to the understanding of Marxism in our contemporary social context is immense:

I feel that here we need to focus more on broad trends and historical sweeps. It was Eric Hobsbawm who categorized the history of the long, majestic 19th century into the ages of revolution and empire and the short, unhappy 20th to the age of extremes. These were broad categories but the historian's vast and panoramic view helps us see what we otherwise would have missed: the main threads that determined the history of our times.

Likewise, we need to look back and try to delineate what were the main trends in the development of our Marxist thinking, in the light of our historical experiences of the past 70 years since we were first introduced to this philosophical and political system. We can think about it only in the light of the experiences of our times, past and present, because the Marxist thought emerged in a symbiotic relationship with the life of the people. It was a corollary to the political life emerging outside.

In this I would divide our Marxist thinkers into three broad categories: First, the classicists who were the pioneers who tried to negotiate the revolutionary new ideas to the twin concerns of our national freedom and the emancipation of the toiling people. I will include in this group K Damodaran, EMS, C Unni Raja and a few others who continued to wield influence till the late sixties.

Then comes the age of confusion and soul-searching: The sudden emergence of the spring thunder, the realization that the answers of the classicists were not sufficient to explain our new reality and the influence of the pre-and-post War thinking from other parts of the world, all contributed to this new generation of thinkers. For me people like K Venu, K Satchidanandan, B Rajeevan, TK Ramachandran, et al, would be a part of this group.

Then in the nineties' terrible experiences after the fall of the Berlin wall-- and in India, the fall of Babri Masjid-- brings to the fore a new kind of Marxist thinking, something which I would describe as Subaltern Marxism or Post-Marxism. They are not card-holding Marxists, they are not even consciously Marxist in any sense, but they have inherited the great and most vibrant aspects of Marxist philosophy, that it its libratory aspects. Now I would like to include most of our dalit thinkers, thinkers from other streams who are making an effort to explain the new reality to us in most unconventional ways.

Here I would like to add a few points:

How do we assess the first generation Marxists like Damodaran and EMS? I remember a major volume brought out by Dr K N Panikkar and others in memory of Damodaran after his death in JNU some time in late seventies. It was an effort to examine the national liberation movement and its various strands in India to which Damodaran had made his seminal contribution. They were pioneers and as pioneers they were making an original and invaluable contribution.

But how far they were able to actually capture and internalize the complex debates that were going on elsewhere in the world during that period? It would appear they were not able to actually grapple with this question, as I can see even after many years people like EMS were defending their mistakes in 1942. Perhaps, the earlier debate between M N Roy and Lenin on the colonial question in twenties could have been of immense help to chart out the correct course. Lenin was asking the communist parties in the colonies to be part and parcel of the national liberation movements in their respective countries, so that the party could emerge as a real and powerful force.

This was accepted in principle, but when the real test came during the August Kranti movement in 1942, the party took a line that was totally opposed to this basic understanding. So it would seem that though the correct political line was already there, the party's leadership was not able to apply it to the concrete political context which means a failure to apply Marxism in the proper sense.

Perhaps this lack of proper internalization in the national context was not an isolated thing, confined to the forties. It continued and we can see the abominable way the CPI took to defending Indira Gandhi's semi-fascist rule in 1975.

So we need to critically examine whether our early communist thinkers were taking Marxism as a kind of mechanical rule book, not a live philosophical and political system that need to be analyzed and applied to the context?