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On the Nature and Implications of the Expanding Presence of India and China for Developing Asia

Prabhat Patnaik: I think there is an important difference, it seems to me, between the situation in the case of the advanced capitalist countries, or even the case of Japan, on the one hand, and in the case of countries like India and possibly even China at the moment.  In the case of the advanced capitalist countries, when they went out for the global reach, basically the import of all kinds of primary commodities — they imposed on the world a pattern of international division of labor where they would export manufactured goods and import primary commodities, for which the theoretical rationale was provided by Ricardo, and which of course was carried over in the struggle against the Corn Laws — the basic idea was that free import of primary commodities, notably grains, may lead to a displacement of domestic production — would lead to a displacement of domestic production — and may even give rise to a certain amount of internal social opposition, but this internal social opposition is something which could be overcome very fast because of a number of possibilities that were open to them, primary among those possibilities being emigration from the metropolis — from Britain and Europe — to the New World.  In fact there were some years in which anything up to 1-2% of Europe’s population simply migrated in a particular year.  And this happened over stretches of time which were by no means very short.  As a result you had the possibility that the imperialist project was itself associated with the creation of opportunities that gave rise to a social consensus around it. . . .

Many people argue that, in the case of Japan, the global reach, or, if you like, the imperialist expansion of Japan into countries like Korea, was necessitated by the agrarian impasse inside Japan itself which gave rise to food riots and so on.  As a result, the crisis of the shortage of agrarian products was overcome because of this kind of reach.  Some people like Hayami for instance argue: no, the crisis itself was caused by this global reach; and, in effect, because Japan went and obtained cheap goods from Korea, you actually had a situation where the Japanese agricultural sector itself ran into a crisis and could not sustain its level of production.  98% of the Japanese budget, after the murder of Takahashi, was devoted to military expenditures.  Therefore, the capacity to draw in large numbers of distressed petty producers into the armed forces is something which was part of the imperialist project itself, providing a kind of safety valve, apart from the fact that industrialization itself was somewhat labor-absorbing even in that particular period.

The point I wish to make is that, in developing Asia, if a country like India wishes to have a reach, in that case there would have to be a pattern of division of labor whereby India would have to be an importer of a variety of primary commodities — agricultural goods and so on — which are being produced inside the country itself.  As a result you would have a situation where such a global reach on the part of India would be associated with distress and displacement as far as vast numbers of peasants and petty producers inside the country are concerned.  And as far as they are concerned, the capacity for absorbing them — whether by resettling them in newer open areas or by absorbing them into the growing industry, which may become possible to the extent that you can find markets outside in developing Asia, or by absorbing them into a military adventure — is extremely limited.  As a result the kind of social consensus that advanced countries, including later advanced countries like Japan, could gather around their global expansion program is a kind of consensus that would elude a country like India and, I suspect, also a country like China. . . .

I think there is a remarkable difference.  I mean, I think there are two differences I want to draw your attention to.  The first difference is that, in the period in which we had Non-Alignment, behind the argument for Non-Alignment was that we stand for the rights of every country to pursue the economy policy of its own. . . .  In other words, . . . we would stand for protectionism elsewhere, we would stand for countries to pursue their national economic policies in opposition to traditionally what we know as imperialism.  At the moment, the argument is shifting to one where we say, “We can give you a better deal than the Americans can.  Prefer us to the Americans.”  In other words, we are not, as it were, fighting for the rights of the countries to get out of the imperialist framework, but in fact we are fighting to have a framework in which we are somewhat better placed and in which we claim that we provide greater advantages than traditional imperialist countries. . . .  I think there is a very significant change that is taking place in India’s attitude towards developing Asia and other developing countries.  That change is associated with another change that is very clearly noticeable.  Originally, when you argued for a high rate of growth, the argument used to be that, basically, it would give rise to a trickle-down as far as the poor were concerned.  That is something which was disproved by experience.  Subsequently, there was a shift in the argument, which for instance you find in the Approach Paper to the Eleventh Five-Year Plan of the government of India: Alright, maybe we don’t have a trickle-down, but if we have a high growth rate, it will be possible for the government to intervene fiscally to actually garner larger resources for benefiting the poor. . . .

This desire to be a major world player is something which is not because of any venality on the part of the Indian bourgeoisie but . . . is intrinsic to the nature of finance capital. . . .  Finance capital seeks domination.  Essentially, once you are integrated into the phenomenon of globalized finance, the desire for domination is actually intrinsic to that integration. . . .  Maybe many of the developing Asian countries might be better off having a relationship with India or China than having a relationship with the United States.  But, on the other hand, this is something which, as far as India internally is concerned, is going to give rise to an accentuation of the distress of large segments of peasants and petty producers, and this again is something which is part of the phenomenon of our contemporary integration into international finance capital, which basically would mean that there is a desire for domination without necessarily even acquiring the kind of benefits for the bulk of the people that traditional imperialism had ensured.

In the current period of globalization, high growth, or larger economic strength, of economies like India is associated with greater impoverishment as far as petty producers, the working class, the laboring poor are concerned.  And I think this desire for a global reach, especially in developing Asia, actually carries that dichotomy forward. . . .


Prabhat Patnaik is at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi.  This lecture was delivered at the conference on the “Nature and Implications of the Expanding Presence of India and China for Developing Asia” organized by International Development Economics Associates (IDEAs) and Research and Information System for Developing Countries (RIS), New Delhi, India, 5-6 November 2009.  The text above is an edited partial transcript of the lecture.




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