T C A Srinivasa-Raghavan: Leave the future to the Naxals?

LINE & LENGTH

Growth is necessary but not sufficient to solve the political consequences of 450 million unemployable.

Last week, this column had argued three things. First, that over the next three decades or so, even if the huge dollops of investment which India is looking for materialise, it would have at least 450 million people who would not find employment.

Second, it also argued that econocratic solutions comprising "schemes" in the name of poverty alleviation were pointless because, for one reason or the other; they would only half-work at the margin and not solve the main problem.

Third, therefore, the problem needed to be viewed as a political one but we were not doing so. Instead, as reports suggest, the Congress is thinking of reviving Indira Gandhi's 20-point programme!

This response arises from the central assumption of Indian politics. This is that people want the state to provide jobs directly or by creating an enabling environment. But few pause and reflect that this is a Western political economy paradigm. We have adopted it without asking if there is something that the citizen may want even more, and indeed, whether at all he looks to the state to provide him with a job when it can't provide him with security.

But this was not always so. You only have to look at pre-1937 Congress literature to see how providing jobs was not the central concern of the party. That came when the Congress turned leftwards under Jawaharlal Nehru.

He was a Fabian socialist who believed in both state intervention in the economy and markets, that is, no state intervention. We therefore ended up getting the worst of both worlds in both economics and politics because ad hoc and reactive policies came to be the norm.

The worst aspects of Fabian socialism on economics have been fully spelt out over the last four decades. But we are yet to recognise its effects on politics. In fact, when you combine the effect of the Fabian world view with the sort of competitive politics that we have, you end up with terminal "short-termism" in which poverty alleviation schemes are seen as the only solutions.

Electoral competitiveness and its forceful pursuit in the Indira Gandhi mode have also altered the definition, and therefore our understanding, of politics. We confuse low-level machination or politicking with politics, which actually has a different role to perform.

But leave that aside for the moment. The central question now should be this: what will be the political consequences of 450 million unemployed and unemployable people? This issue, regrettably, is not being debated at all. Everyone is pretending that it either doesn't exist or that it will somehow go away if they throw some crumbs in its general direction.

India will not be the first to be faced with large-scale unemployment. But the scale of the problem here will be larger than faced before by any country before.

There are two ways of looking at this problem. One is to treat it as a mere scale issue. Under this solution, there is no difference between having 10 million unemployed and 450 million unemployed if the percentage of the unemployed of the total population is about the same. As such scaling up provides the necessary and sufficient answer, something which China is attempting and we wish to copy.

The other approach is to accept that absolute magnitudes do indeed matter. After all, if light bends near a super-heavy object, why can't policy?

This would mean acting on the premise that it is not merely a question of dealing with percentages. This, in turn, means that though scaling up is necessary, it is not sufficient.

If this is conceded""which orthodox economists will not because of their orthodoxy""at least to the extent of allowing a reasonable discussion, we need to ask what else needs to be done to meet the sufficiency criteria.

The starting point may have to be a dilution of the idea that the only function of politics is to intermediate between different groups when they seek economic and political power. This is fine but it suffers from a fatal flaw in our context.

This flaw is that for the intermediation to be effective, the groups have to have a distinct political identity. But how do the unemployed acquire an identity that is also so politically effective that bargaining solutions become possible? If jobs is your criterion, how do you ensure jobs for those who don't have a block of seats in the Lok Sabha?

An essential feature of effective bargaining is relative bargaining strength. In its absence we have had only the model that aims to acquire that strength""Naxalism. Do we want that to be the standard model? The starting point of such movements is a rejection, in toto, of the "system". Do we want to face these anti-"system" movements all the time even though they are based on a disruptive re-distribution of economic and political power?

We have a tsunami creeping up on us, which even breakneck growth can't solve. This lies at the heart of our condition. Perhaps it is time economists made way for political scientists, who alone might be able to suggest ways to dampen the impact of the waters that are rising around us.