Venus Envy
  Vol V : issue 1

  Cover page
  Kaushik Basu
  Radhika Coomaraswamy
  Taslima Nasreen
  N. S. Madhavan
  Zehra Nigah
  Only in Print

Kaushik Basu

However, this must not be construed as an argument for banishing bodies like the WTO. Law courts in most countries are used disproportionately by the rich and the powerful. Nevertheless, it is arguable that the poor are better off in a nation with a functioning system of courts than one where there is none. Likewise, for the WTO. We need to work to reform it and bring it within the reach of all nations. Not to have a central arbiter of international trade is to ensure that poor nations will not have the little recourse to justice that they are now beginning to have.

Globalisation is one of the most misunderstood concepts today. First of all, to treat it as a matter of choice is a mistake. To say that one is in favour of globalisation or against it is a bit like saying that one is in favour of gravity or against gravity. This may (though, more likely, may not) be a good conversation starter, but is certainly not useful as a starting point for crafting economic policy or grassroots action. Globalisation is the outcome of individual actions of millions of people. It is doubtful if there is any government, organisation or corporation that can stall it. To pit oneself against something, in a situation where one has no chance of success, is to court failure, as Oscar Wilde did, lying ill and penniless in a drab hotel room in Paris on November 30, 1900. Ever the aesthete, he is believed (according to one legend) to have looked around the room and said, "This wallpaper is terrible. One of us will have to go." Those were his last words.

Given the virtual inevitability of globalisation, it is better to try to understand its consequences, good and bad, and to channel our energy to counter the latter. While it is true that globalisation has its pitfalls and can potentially marginalise sections of the population, it can also confer huge benefits. The villagers of Jakotra all agree that they are much better off today than ten years ago. Arguably, this is because of globalisation. If they had to sell their products only in the neighbouring villages, the prices that their produce would fetch would be much less and the demand would be tiny. It is because they are now using long-distance trade channels (and there are efforts afoot to sell their embroidered clothes abroad) that they are able to earn more.

Historically, one of the more important reasons India had remained poor is that our markets were so severely balkanised. Banditry, bad roads and arbitrary taxes en route meant that one was forced to sell the bulk of one's products in one's neighbourhood. We may now lament the occasional octroi check-post that the inter-city driver has to encounter, but it is sobering to remember that the seventeenth-century French traveller, Jean de Thevenot, recorded encountering sixteen customs points during a sixty-mile journey in India.

A recent macro study of the Indian economy by Maureen Leibl and Tirthankar Roy[1] confirms what one can see at the level of artisans in Gujarat. The economic reforms of 1991, far from hurting handicrafts, have helped this sector. The authors describe the handicrafts sector "as one of the major success stories in India's globalisation" (p.5370). In the last decade, the share of handicrafts exports in the overall manufacturing exports of Indian has risen from 2 per cent to 5 per cent and employment in this sector has more than doubled. While there is reason to believe that this trend can persist for a while (India's share of the global handicrafts market is still way behind China's), it is foolhardy to suppose that this will never change. The apprehension of the artisans of Jakotra that they will some day lose out to large-scale global producers is probably real. In a small way, similar things are already happening. Indian manufacturers have begun producing 'African-looking' crafts, which are sent to Africa for Western and Japanese tourists to buy from the roadside in Kenya, Tanzania and elsewhere.

What is widely misunderstood in India and in the West, where there is mounting opposition to outsourcing, is that the real problem is not with globalisation but with the inexorable march of technology. Technology has brought enormous benefits to mankind. High-tech, large-scale manufacturing and the computer revolution have brought certain comforts and luxuries within the reach of an average person that were once available only to feudal lords and kings. At the same time, this has meant that more and more income is accruing to capital rather than to labour. Hence, many of those who rely solely on labour earnings for their livelihood find their incomes shrinking. The unbelievable and embarrassing level of inequality that we see in the world today is a consequence of this phenomenon. We need to do some innovative thinking to counter this tendency, not only because such inequalities will inevitably give rise to political turmoil, terrorism and strife, but because they are morally unacceptable.

This trend is likely to continue and harden. Over time, labour will become less and less important and the earnings that accrue as labour income will shrink, especially in comparison to capital income. The solution to this is not to stop technological change (for one, it is unlikely to be within anybody's power to do so), nor to try to resist globalisation, but to give workers a share in the earnings that accrue to capital. This is different from giving workers a fixed assured income as in the standard welfare state. What is being suggested here is that they be given equity, that is, a share of the profits earned by corporations.

Once such a system is in place, if a company downsizes in the US and comes to India in search of greater profit, workers in the US will have less to complain about, since they will get a share of the additional profit. Globalisation has led to increasing rancour between first and third world labour unions. What I am arguing is that this labour versus labour view of the world is unnecessary and misguided. It is possible and better to go back to the old-fashioned idea of capital versus labor.

The details of a system that gives equity to workers will need plenty of effort and a lot of creative thinking, and this is not the place for me to outline where such effort should begin. But I have no doubt in my mind that this is the direction that we will have to go, either through far-sightedness and our own initiative, or after strife, war and terrorism hit us, perforce.

At the time I set out from Delhi for my Gujarat travels (in early January, 2004), the Indian media was euphoric about India's economic take-off. The Indian government's performance in the year 2003 was being hailed as outstanding. Indian entrepreneurs were buying up companies abroad with alacrity, the Sensex had crossed 6,000 and India's foreign exchange reserves had breached the $100 billion dollar mark. And to some people the economy looked even better because these statistics somewhere got addled with Tendulkar's 9,000 runs.

The celebration seems to me to be mistimed. It is true that the Indian economy is doing very well overall and, if we stay the course, it will, along with China and maybe Brazil, become a global force. But nothing special really happened in 2003 other than some round figures being attained. India's take-off started between 1991 and 1993 and the process, fortunately, is continuing. As far as the growth rate goes, 2003 is not a record year. Higher growth occurred in 1988-89 and each of the three years from 1994 to 1997 saw growth rates close to what the growth for 2003-04 is expected to be. Moreover, the monsoon and consequent bountiful crops played a major role in this year's good performance.

There is another problem with the euphoria. We must not treat GDP growth and the build-up of forex reserves as ends in themselves. They are important, no doubt, but only as instruments to improve the conditions of the poorest people in India. As Ela Bhatt, the charismatic founder of SEWA, kept reminding us in her soft undertone, there is far too much poverty, too much destitution, hunger and unemployment in India for us to celebrate. It is getting at these fundamental deprivations that we have to strive for. A country cannot be considered successful as long as it fails to reach out to the marginalised and fails to bring hope to the hopeless.

It is true that in a globalising world there are severe limits to what a single country can do. We have to be wary that capital can take flight and exchange rate fluctuations can ruin trade. But even with these limitations there is much that India can do — while pushing for a higher growth rate and greater trade — to arrest the growing regional disparities, to bring jobs to the jobless and, in general, to reach out to the dispossessed. tlm

Notes:

1. ‘Handmade in India: Preliminary Analysis of Crafts Producers and Crafts Production,’ Economic and Political Weekly, vol. 38, December 27, 2003.

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