Thursday 18 February 2016

Dancing With The Devil: How China And India Made Their Elites Richer By Impoverishing Their People.

Diabolical Dealing: At its base, India remains the numberless mass of deeply impoverished and politically marginalised people it has always been. Like their Chinese brothers and sisters, the vast majority of Indians have little reason to thank their neoliberal “liberators”. Their masters – white, yellow or brown – have always danced with the Devil. It’s an entirely inadequate consolation for neoliberalism’s victims that their souls, if nothing else, remain their own.
ANYONE WHO HAS SEEN the wonders of modern Chinese architecture might easily be persuaded that “neoliberalism with Chinese characteristics” is a spectacular success. But the skylines of Shanghai and Beijing testify not to the emancipation of the Chinese masses, but to the burgeoning power of the Chinese elites. Like the futuristic skyline of Los Angeles in the sci-fi movie Bladerunner, they are symbols of a deeply dystopic state.
For close to forty years the Chinese Communist Party has presided over the economic modernisation of China. From its state of near collapse following the excesses of the Cultural Revolution, the “capitalist roaders” so despised by Chairman Mao have steered their country to its present position as the world’s industrial powerhouse. Step-by-step they have mounted the staircase of economic growth and sophistication, freely borrowing techniques and ideas from the capitalist West, but never permitting modernisation to cross over into the development of a recognizably capitalist class. They called it “socialism with Chinese characteristics” and its extraordinary achievements are the reason why the Communist Party still rules China.
It could not have happened had China followed the example of Russia and instituted democratic reforms. The modernisation of China was a strictly top-down affair – albeit one in which the top takes action to head-off the threat of changes driven from below. The Party leaders did this by empowering their counterparts in the regions and municipalities: giving them just enough latitude to enrich themselves, but not enough to threaten the system as a whole.
Thus was established the unholy alliance between party apparatchiks, state owned enterprise bosses, free-wheeling entrepreneurs and organised criminal gangs that made the Chinese “miracle” possible. Driven by a combination of political ambition, personal greed, rampant corruption, extra-legal force and Chinese commercial acumen, the transformation of the Chinese economy and Chinese society proceeded at breakneck speed.
But the raw material for all this “progress” was – as it has ever been in human history – the bodies and brains of the great mass of the people. Those who found themselves excluded from the magic circles of power and personal enrichment.
Deng Xiaoping began the process by engineering the break-up of the agricultural communes and their associated systems of health, education and welfare. The millions of peasants displaced by these land and economic reforms were to become part of the greatest migration in human history. From China’s vast interior they made their way to the huge new joint-enterprise factories that were opening up along the Chinese coast. Many came with official permits, but many more came without. Living in a state of legal limbo, these “unofficial” migrants took what work they were offered and did as they were told. Like their Nineteenth Century counterparts, the millions of East-European immigrants who poured into the rapidly industrialising United States, they are essential to maintaining the low-cost labour upon which China’s Faustian economic bargain with the West is based.
You will not find these sons and daughters of modern China in the new air-conditioned office towers of Shanghai and Beijing. They live where the housing is cheapest, the pollution thickest, and health, education and welfare services non-existent. They are not dressed by Armani or Dior, and they do not holiday in Queenstown. Their workplaces do not put health and safety first, nor are they represented by unions. Attempts to better their conditions are more often than not ended by the bosses’ hired thugs. Complaining to the authorities only earns them a visit from the Police. (“Re-education Through Labour” camps are one of the few Maoist-era institutions that survived Deng’s reforms.) Few now remember, and none dare recall, the bright vision of Tiananmen Square. For them, the distinction between “socialism with Chinese characteristics” and “neoliberalism with Chinese characteristics” is difficult to discern.
INDIA RESEMBLES CHINA only inasmuch as neoliberals like to claim it as proof of their ideology’s benevolent impact on the peoples of the world. This is entirely delusional. All that India offers us is the same grim evidence of dystopian excess as the grossly unfree and unequal Peoples Republic. The investigative journalist, John Pilger, calls contemporary India: “extreme capitalism’s pact with feudalism”.
Mahatma Ghandi’s heroic attempt to construct a new India out of the British Raj: an India without castes and classes, in which all religions and all ideologies would be tolerated and enjoy equal rights; was foundering even before a member of a right-wing Hindu political movement shot him to death in January 1948. Jawaharlal Nehru’s attempt to make India a secular socialist republic fared no better. In the end, India’s ancient caste system outlived them all.
It is difficult to imagine a cultural template more suited to the imposition of neoliberalism that India’s rigid caste system. The latter has its origins in the political and economic needs of a society characterised by a grossly unequal distribution of wealth and power. As gross inequality backed by state power is a reasonably good description of the sort of world neoliberals are trying to create, it’s not hard to explain why India struck them as a nation it could do business with.
India’s “New Economic Policy” of 1991, like New Zealand’s Rogernomics “reforms” of 1984, was imposed on a nation in the midst of an economic crisis. That the crisis coincided with the fall of the Soviet Union (one of India’s strongest diplomatic, and economic, partners) only reinforced the message from the IMF that, in order to be bailed out of its difficulties, the country would have to embrace the new orthodoxy of open borders and open markets. India also followed the New Zealand model inasmuch as the Prime Minister who rammed through these changes, P V Narasimha Rao, was a member of the Indian National Congress – India’s democratic socialist party.
In the years since, India has become the destination for massive amounts of foreign investment, and its elites have taken advantage of their new open economy to enrich themselves beyond the dreams of even the wealthiest of feudal maharajahs.  High tech hubs, like the city of Mumbai, give the impression of a nation rapidly catching up with its Western competitors. But if the inequitably distributed wealth and high-tech industrial development is real, the notion that the Indian masses are being similarly enriched is illusory.
Since 1992, inequality in India has increased. With the removal of the protective barriers erected by the Congress Party in the 1950s and 60s, ordinary Indians have seen their economy taken over by all the usual transnational suspects. Coca-Cola, Pizza Hut, Microsoft, Monsanto and many, many more have brought with them the same sense of diminished influence and control that all the re-colonised peoples of the world have experienced.
At its base, India remains the numberless mass of deeply impoverished and politically marginalised people it has always been. Like their Chinese brothers and sisters, the vast majority of Indians have little reason to thank their neoliberal “liberators”. Their masters – white, yellow or brown – have always danced with the Devil. It’s an entirely inadequate consolation for neoliberalism’s victims that their souls, if nothing else, remain their own.
This essay was originally posted on The Daily Blog of Wednesday, 17 February 2016.


Galeandra said...

"India remains the numberless mass of deeply impoverished and politically marginalised people it has always been"........ and is being joined at breakneck speed by the USA's 97% or those in NZ who are in gaol or have few skills, or full-time job or living wage or roof for their heads. Compounding capital accumulates with interest as productivity gains are withheld from wage-earners, and entrenched ownership of political processes means the wealth gap irreversibly widens.

The power elite are true internationalists, freely skipping with their capital between the USA or Australia or Asia or NZ or Europe, living in their gated communities, creating the optics of patriotic belonging through flying flags or fete-ing sports achievers, measuring and celebrating increasing GDP and other forms of sanctioned 'growth' and owning the media headlines on which they surf.

There is no solution to this. As Chris Hedges so eloquently puts it in his Truthdig post today about the ultimate lack of substance in the Sander's campaign against Clinton: "This will be a long and desperate struggle. It will require open confrontation. The billionaire class and corporate oligarchs cannot be tamed. They must be overthrown. They will be overthrown in the streets, not in a convention hall. Convention halls are where the left goes to die."

Guerilla Surgeon said...

The phenomenon of Transnationalism has created a political/economic elite which has escaped the nation state and undermines it. Partly because they have more in common with each other and with their fellow countrymen. Rightly or wrongly they give ammunition to those organisations which have an anti-migrant stance, which use the loyalty question as an argument against immigration. The vast majority of transnationals however are simply imported as cheap labour, which further fuels anti-immigration rhetoric. Because immigration is – rightly or wrongly again – partly blamed for the hollowing out of the middle-class, particularly in the USA. (This whole phenomenon is a complicated can of worms.) The elites don't seem to realise that a large and prosperous middle-class is what buys their stuff. Still, when the machines take over we'll ALL be buggered.:)

Wayne Mapp said...


What exactly is the point of your item? An attack on globalization? An attack on market economics? An attack on the lack of democracy - but you have deliberately referred to India as well as China.

Or is it just a general provocation to the popularly received wisdom about the changes that have occurred in India and China over the last 30 years.

On just about every objective measure, the living conditions of the majority of the people of China have improved enormously over the last 30 years. I have visited China enough over that time and gone to a sufficiently diverse range of places to know the truth of the statistics.

I have seen the change in the living conditions of the Chinese people, in cities, in towns and in the countryside. The great surge of growth has lifted pretty much the entire population of China out of extreme poverty. Many hundreds of millions have living standards that are comparable to New Zealand. For instance there is a motor vehicle (not a tuktuk!) for every ten people. That means car ownership is widely spread, not confined to just a few.

Sure there is a great spread of wealth, but that is inevitable in a more open economy compared to what preceded the opening up.

India, I am less sure about. On statistical measures India only has one third of the GDP per capita as China. This is reflected in the fact that 50% of the people do not have access to mains power, with all the implications of that. However, that also means that 600 million people do have access to mains power. I suspect inequality is greater in India than in China, and that many more people have yet to be lifted out of extreme poverty. But again compare the situation in India to thirty years ago.

Nick J said...

China the land that reputedly poured more concrete over the last 10 years than the USA during the last century.

I was lucky enough to visit Beijing and Shenzen 12 months ago. I came away stunned by the modernity of these cities, so modern and futuristic than ours, it was like going to Mars. Yet amongst the modernity was tradition.

I visited the national government network centre where the topology anot purpose of the traffic was explained. Policy, commands and forms flowed from centre. The periphery returned compliance and cash. Central government then decided upon distribution...the Ministry of Poverty Alleviation sending it wherever. It was the Mandarin system on steroids.

I quizzed a businessman really corruptioneed as the news reported a trillion and execution of a party official. It was he explained the same as a capot taking more of a cut than the Don would allow. Fatal.

In Shenzen we visited a high tech factory. Mind blowing. It was explained that the company partook of the 5 Year Plan with the Party. They had been gifted land for factory and university. The education system fed the right qualification in. Once working all employees had shares and voting rights. So capitalism in the Western sense? Certainly not. Make no mistake the Party is pre-eminent.

Victor said...

A good post, Chris, although I think it's difficult to do a "Felicific Calculus" on the extent to which the average Chinese has benefited or otherwise from the enormous changes through which China has passed.

Chris Trotter said...

As always, Wayne, you examine only the aggregate figures and ignore the much more important questions concerning the manner in which wealth and power are distributed.

That China has modernised its economy is undisputed. I was there in 1985 and again in 2008, and the transformation was astounding. But the quality of life for those at the bottom had changed but little. And the bottom in China is very large.

In our own terms: the fact that 13th Century peasants lived in daub-and-wattle cottages, and 19th Century factory workers in terraced brick houses; actually tells us very little about the quality of their respective lives. Though Britain was indisputably a richer nation in the 19th Century, it is equally indisputable that the 13th Century peasant lived a healthier and happier life than the early 19th Century factory worker or coal miner. (Parliamentary intervention, dramatic improvements in sanitation and the rise of the Trade Unions would bring about rapid improvements in workers' lives by the end of the 19th Century.)

Guerilla Surgeon said...

The idea of capitalism raising people out of poverty depends on your definition of poverty for a start, and also on the methodology and statistics used in the analyses of poverty. Poverty is decreasing worldwide largely because India and China are both very large. If the policies in those countries decrease poverty, then poverty is decreased worldwide – quite a bit. But Africa for instance has been left behind. As has much of South America.
I also think we need a more sophisticated definition of poverty than is commonly used by conservatives. We also need a more sophisticated look at what's happening inside poor countries. One of the corollaries of economic development in these places seems to be that organisations like the IMF and the World Bank, and transnational corporations put pressure on governments to dismantle health, safety and environmental regulations. And their social welfare systems such as they are. (This has also happened in the west, increasing relative poverty.) This must annoy the crap out of those who realise that the more developed economies used government intervention and protectionism to aid their development. Nowadays nobody is supposed to do that.
Also – the two countries that have seen most development do not necessarily engage in free-trade. TPPA notwithstanding. Their civil societies and governmental systems are either nondemocratic or corrupt, or both. And the bases of development were laid down long before unrestricted capitalism took hold. What's often ignored is that countries such as Cuba and Eastern European Communist countries often did well in the reduction of poverty, particularly in health and education.
It should perhaps be mentioned that some of the industrial work undertaken by poor people in poor countries, particularly low skill and low responsibility work is not enough to lift them out of poverty, when previously they may well have been self-sufficient. That's not to say we should romanticise their previous lives. Factory work might be easier than working in the fields, but it is often tied to pollution and industrial diseases.
But – and it's a big but – nobody seems to realise or perhaps care what's happening to the middle classes in developed countries. Those few that have the skills to operate in the global system do very well. But they are fewer and fewer. They are becoming more and more insecure as the welfare state is dismantled, and are losing the ability to make choices. (Which is I think part of Sen's definition of what poverty is. If more wealth is created but only serves to make the rich richer, we are wasting our time and eventually, one way or another there will be a backlash. I hope something is done about it before that, but if not I just hope I live to see it. :)

John said...

China has lifted 300 million people out of poverty in a very short time - the biggest lift in world history.

I thought for those on the left that would be a good news story, rather than something to ignore.

Guerilla Surgeon said...

China may have lifted people out of poverty, but capitalism hasn't.

Anonymous said...

Ove the last few years I have been to India on several occasions and have seen the Bangalore super IT hubs with 1000's of workers, the same in Chennai, Mumbai & Hyderabad etc

One thing alot of these especially US transnationals have is an un-unionised compliant workforce that speaks English. In many instances in India workers are asked to work into the evening and on weekends at no extra pay or time in lieu etc It's also a cultural thing too ie no-one would dare say no to a manager etc

Once a travel agent in Mumbai told me that her US client told her that he was so impressed with her (Indians tend to personalise their work so a compliment is taken personally). In effect, I thought to myself the US client only 'likes' her work because it is a 10th of the cost of exactly the same thing that could be bought in the states. Simple - the 1st world just buys the cheap labour of the 3rd world.

Guerilla Surgeon said...

Ha! If you'd ever been to a travel agent in the US you would realise that he was impressed by her because she knew what she was doing, and of course was properly "deferential". American travel agents – at least the ones I've seen – are bloody hopeless. Can't do anything but sell standard packages. Can't arrange complex travel with the aim of shaving several thousand dollars off the airfares. In fact can't do anything much at all.