Demonetisation and the Indian Left: Now is the Time to Question ‘White’ Money
- Bipin Balaram
Indian socio-political situation is fast beginning to resemble a fourth day sub-continental cricket pitch. Dusty, cracking all over, with ominous looking footmarks and with the ball now keeping low, now rearing up and now turning square. The Indian left is in a position of being asked to chase down 280 on this socio-political pitch. On such a wicket, you defend, you die! It is precisely this mistake that the Indian left has been committing in the face of fascist onslaught. Looking to win is the only way even to stay alive.
Lessons from the ‘Battle of JNU’
The ‘Battle of JNU’ serves as a good example. Faced with charges of anti-nationalism, the Indian parliamentary left built their case on the distinction between good and bad nationalism, i.e. between democratic, people-oriented nationalism and the chauvinist variety. The class essence of this distinction is simple. The left positioned themselves on the side of bourgeois-democratic nationalism and the far right was (correctly) pictured as chauvinist nationalists; the former thought of as being progressive and the latter reactionary. This meant that the left had only one practical prescription: shun chauvinism and embrace ‘good’ nationalism, a nationalism whose spirit was thought to be imbibed from the freedom struggle. Needless to say that such a line had nothing to do with historical materialism which locates nationalism as a strictly bourgeois ideology. This ideology can be a progressive force only till bourgeoisie remains a progressive class or till capitalism is still in its progressive phase. As capitalism enters its decaying, moribund phase, nationalism, being a bourgeois ideology, turns into its chauvinistic twin. It should not come as a surprise that the left views nationalism as a static concept divorced from the socio-economic reality. To grasp the dynamic nature of the ideology of nationalism needs an analysis based on materialist dialectics which was abandoned long ago by the reformist left. This non-dialectical approach was also evident in left’s dualist analysis centered on good vs bad nationalism. Progressive and chauvinistic nationalisms are not water tight compartments; the former can gradually mutate into the latter and replace it as the ideology of the bourgeoisie in times of capitalist decay. Proletarian movements support nationalism only in the progressive phase of capitalism, that too in a qualified sense. Going back to ‘good’ nationalism is an illusion as it needs progressive capitalism to be brought back. Zombies cannot be brought back to life! This line betrayed the social democratic orientation of Indian parliamentary left which seeks to ameliorate capitalism, rather than to transcend it. Left failed to explain the bourgeois-democratic class nature of nationalist ideology, its metamorphosis into chauvinism as a necessary consequence of the decay of capitalism and the need to espouse proletarian internationalism in its stead. The practical fallout of left’s line became evident very soon. When the government chose the military ‘surgical strike’ route to shore up its nose diving popularity, the left had no other option but to support it, albeit accompanied by laughable lessons on the advantages of ‘restraint’. The left’s embrace of bourgeois-democratic nationalism robbed them of the possibility of putting forward the platform of solidarity between the toiling masses across the borders. They failed to declare that the war is between the ruling classes and that the working class should not be made to fight it for them. This mistake cannot be repeated in the ‘Battle of Demonetisation’, response to it should be grounded in revolutionary Marxism.
Elements of Left’s Reaction to Demonetisation
The left has already busted the tall claims of the government regarding demonetisation and has termed it a gimmick and empty posturing. A number of commentators have clearly shown that this step will have at best a peripheral effect on ‘black’ economy. It has been pointed out that, contrary to what Modi bhakts so cinematically imagine, ‘black’ money is seldom kept in hoards beneath one’s bed. According to the data pertaining to the income tax raids for the last 5 years, only less than 6% of black money recovered was in the form of hard cash. Prof. Arun Kumar’s important study titled ‘The Black Economy of India’ puts the black money in cash form at a mere 3% of the annual black income generated. Cash is evidently the least preferred form to stash black money with the more preferred ones being gold, real estate, foreign currency and safe havens abroad. As Jayati Ghosh wrote, “…only a small proportion of the funds received from illicit tax-evading activities is kept in the form of cash, and almost never by large players. They tend instead to buy real estate and other property, hold gold and stocks and shares and, most of all, move the money abroad. So this move touches only a tiny fraction of the assets accumulated through illegal activities.” Moreover, those who are familiar with the workings of capitalism know that a whole cottage industry will spontaneously emerge offering assistance in changing even this 3 – 6% to white money. That is exactly what has happened in the last 2 months. Another claim that Modi has repeatedly made is that demonetisation is a planned move to eliminate fake currency. According to the study conducted by ISI Kolkata for the NIA, the fake currency in circulation in Indian economy comes to around 400 crores. This amounts to about 0.03% of the demonetised notes. To claim that the best way to fish out 0.03% fake notes in the economy is to demonetise the whole notes is farcical, to say the least. Compare this with the following statistic – the bad debts which have been waived by the government banks in the last 3 years amount to around 1.1 lakh crores. If the state is so concerned with ‘peoples’ money’, then why is this being done? And why is it that the public does not even get to know the names of the people or the companies who have benefitted from such waivers? V. Sridhar has put the ineffectiveness of demonetisation in perspective, “The two denominations that were outlawed on November 8 account for about Rs. 14 lakh crore circulating as cash in the Indian currency system. By the government’s own admission, it is expected to flush out a maximum of Rs. 2 to 3 lakh crore as a result of the exercise that has paralysed the entire economy. Given that the GDP (at current prices) in 2015-2016 was about 136 lakh crore, the share of black money that would be impounded after the massive exercise would be a miniscule 2.2% (assuming a haul of Rs. 3 lakh crore from the ongoing exercise). That does not sit well with all other studies that have estimated the size of Indian black economy.”, as amounting to about 70% of the GDP. The figures that are emerging now, 50 days after demonetisation, provide more evidences to prove that the drive was a total flop. On December 13th, the RBI announced that, out of a total of Rs. 14. 18 lakh crore of invalid notes, it has already received back Rs. 12. 44 lakh crore, the difference being only Rs. 1.74 lakh crore. This in itself busted the government’s prior claims that black money worth Rs. 3 lakh crore would be flushed out. After this announcement, the RBI has released no more data, obviously to spare their political masters’ blushes. But JNU’s Surajit Mazumdar has used RBI’s currency in circulation (CIC) data to “get around the RBI’s miserly attitude towards releasing the data in its possession to get at a reasonably accurate picture of what has happened”. According to his calculations, the amount of invalid notes not returned to the RBI before December 23 would amount to only less than Rs. 1 lakh crore and “the value of such currency would be below 6.5% of the value of these notes in circulation on November 8”. He further concludes that “We are still very far away from the full replacement of the cash withdrawn from circulation, with such replacement falling well short of the halfway mark by December 23”. This shows what a monumental flop this whole exercise has been. Moreover, the present ruling dispensation has shamelessly continued the previous government’s policy that the names of the Indian account holders in foreign banks cannot be made public, thus unmasking the real class affiliation of the state. So it emerges that the ruling class, irrespective of which political entity is in power, has no interest what so ever in unearthing black money. The demonetisation drive was never designed as an attack against black money, it was just an empty ‘shock and awe’ move designed to mask the non-performance of the government on all counts and its failure to deliver on none of its poll promises.
Among the left reactions, Prabhat Patnaik’s article and interview stand out (Prabhat Patnaik, Demonetisation: Witless and Anti-People, The Citizen, Nov. 9, 2016, Prabhat Patnaik’s interview with Jahnavi Sen, Nov. 12, 2016, The Wire). Its importance lies in the fact that Patnaik goes beyond the above commonplace (but correct) objections raised by the left to reveal the real economic character of ‘black’ money. Patnaik observes correctly that “black money refers to a whole set of undeclared activities” and that hence, it “refers not to a stock but to a flow”. He provides a succinct ‘definition’ of black money, “… the term ‘black money’ itself is a misnomer, since it conjures up the image of a stock of money which is supposed to be held not openly, in the form of bank deposits, but clandestinely in the form of currency notes, and that too in pillowcases or in containers buried in the earth. Actually when we talk of ‘black money’ we have in mind a whole set of activities which are either entirely illegal, such as smuggling, or drug-running, or procuring arms for terrorist organizations, or are undertaken in excess of what is legally permitted, or are not declared at all so that taxes are not paid on them.” He invokes Marx’s comments from Capital to argue that capitalists engaged in these black activities see no point in hoarding money. Any capitalist worth his name wants his money to make more money and that entails circulating it, whether ‘black’ or ‘white’. He concludes that “the essence of unearthing black money lies therefore in tracking down black activities, not in attacking money hoardings per se. And this requires honest, systematic and painstaking investigation.” Patnaik cites the example of British Internal Revenue Service in this regard and argues that in India, “…the size of the tax administering personnel has to be larger, tailored to the needs of the country; and if this is done, then unearthing ‘black money’, at least in the domestic economy, is merely a matter of patient and efficient tax administration.” Patnaik correctly calls all the far right’s bluffs. But, what is the practical prescription that emerges out of his analysis? A “patient and efficient tax administration”! One hoped that invoking Marx would result in a more radical conclusion. But it did not. With this, Patnaik is rooting for the restitution of ‘responsible’, liberal capitalism, the insurmountable and structural contradictions of which got us here in the first place. Picture Arvind Kejrival reading this article, I am sure that he would be in agreement with almost every word. This reveals the class nature of the left’s current stand – it is bourgeois-democratic. In a subsequent article (Prabhat Patnaik, The Chimera of a ‘Cashless’ Economy, The Citizen, Nov. 16, 2016) in which he attacks the argument that demonetisation would usher in a ‘cashless’ economy, Patnaik concludes thus: “The freedom of the foreign capitalists matters to it [the government], but not the freedom of its own citizens, their freedom to carry out transactions in any medium they like.” The freedom that Patnaik is arguing for is again a bourgeois freedom, one that the capitalist state was keen to protect in its growing phase. The biggest drawback of these left reactions is that they fail to locate the problem of ‘black’ activities and the self-declared crusade against it in the form of demonetisation drive in the context of capitalist mode of production and its myriad structural contradictions. This arises from the ahistorical and non-dialectical orientation of the social democratic left which stops them from elevating their critique and their struggle to revolutionary proletarian level. So, it seems that the left is repeating the same mistake that it committed in the ‘Battle of JNU’, it is clinging on to the bourgeois-democratic critique of demonetisation. It is advocating a return to ‘clean economy’ via efficient tax administration and to ‘liberal politics’ devoid of fascist right. They are again on the defense, it is just a matter of time before one turns square and takes the middle!
The Duty of the Marxist Left
It is undeniable that Modi’s ‘shock and awe’ move has elicited considerable support mainly from among the urban middle class and salaried professionals. The affluent sections of the society and the big bourgeoisie have come out in strong support too. We see film stars, cricket players, media celebrities and opulent businessmen celebrating the ‘birth of a new India’. But the working class has not been fooled by this move as it is them that bore its brunt from day one. Petty traders, the self-employed and those belonging to the lowest rung of the petty bourgeoisie were confused. But with difficulties mounting with every passing day, this confusion has given way to tremendous discontent and anger. Demonetisation has split the Indian society clearly along class lines as few issues have in recent history. The simmering discontent and anger among the toiling classes are met with euphoria and chest thumping from among the upper class. In such a situation, when the class fault lines and class contradictions are spontaneously emerging with enormous clarity, what is the duty of the Marxist left?
It is their duty to channel the resentment that is spontaneously sprouting among the working poor into a broader and deeper movement which questions the basis of class structure itself. Their daily struggles after November 8th have already shown to the working population the criminal insensitivity of the state and the ruling class towards their plight. Two months of utter chaos has revealed to the workers that they have been made pawns in an effort to appease the middle class contingent from which fascism draws its main support, to give it a semblance of the ‘clean up’ of the Indian society that the ‘strong man’ had so rhetorically promised. A whole country was dragged to the streets to make plump middle class babus feel nice. It is also fast emerging that this move has not put the affluent ruling class in any trouble at all, while it has forced the common man to beg for their own money. Such facts which the working men have gathered through their painful experiences following demonetisation has already made the workers conscious of the injustice that is being meted out to them. It is the revolutionary duty of the Marxist left to elevate this spontaneously emerging consciousness to the proletarian level.
Does this mean that the points that the left is raising now are not to be highlighted? Not at all. All the points which effectively undermine the fascist myths, like those which have been impressively compiled in the ‘Citizens’ statement against demonetisation’ signed by a host of left intellectuals needs to be highlighted. But this is NOT enough. Such points, even though correct and important, confine the critique to a bourgeois-democratic level which would be agreeable to any liberal bourgeois. This constitutes only a defence, a plea to go back. What is needed is to attack, a rallying call to take history forward. For this, the discussion should be taken, at least among the advanced sections of the toiling class, to the level of revolutionary proletarian consciousness so that this section can direct the whole downtrodden. For this the real essence of ‘black’ money has to be revealed, its place in capitalism and its proliferation in capital’s stagnant and crisis ridden stage should be explained. Based on this the only realistic and practical way to get rid of it has to be outlined.
The ‘Whiteness’ of White Money
To understand the essence of ‘black’ money, we should know why white money is so ‘white’. Picture a worker working in an automobile factory who earns as wages, say, Rs. 10,000 a month. Is this white money? Yes, it is. And why? Because it is the equivalent in monetary terms of his labour power which he sold to the automobile factory owner for that month. Let it be that this worker is liable to pay Rs. 500 as income tax on his monthly earnings and that he does it. This is needed because without it the state will not be able to take care of the ‘social’ needs of the population as a whole. So, the 9,500 left with the worker is the ‘whitest’ money imaginable; he has earned every penny of it with the sweat of his brow, every vehicle that rolls out of the factory has his labour crystallised in it. And he has given a part of the wage as social deposit to the state too. Now picture the automobile factory owner who, in this case, happens to be a ‘responsible’ and ‘law-abiding’ capitalist, a liberal-democratic soul for the kind of which the Indian left has nothing but respect (if you want, you may imagine Ratan Tata here, the archetypal example of ‘good’ capitalist, notwithstanding the fact that the Tata empire owes its origin to the opium trade). This owner pockets a monthly profit of, say Rs. 20 crore from the operations of this factory. For this, imagine he is liable to pay Rs. 5 crores as tax which he, by virtue of being the ‘good’ capitalist, pays regularly. The 15 crores left with our owner, according to the legal definition, is white money. He has undertaken a perfectly lawful business, has declared all his profits and paid the full tax on it. So, if he gifts a fancy vehicle worth 5 crores to his daughter on her birthday, no one can find fault with him. After all, he is spending his rightfully earned ‘white’ money. He may even spend 1 crore on philanthropic purposes which will improve his chances at landing a Padma Shri (Ratan Tata is a Padma Vibhushan). As long as we stick to legal definitions, things are simple. The worker lives with his white money and the owner with his.
But the worker’s white money was the result of his labour being spent in the manufacturing process, what is the owner’s white money a result of? He cannot surely have performed labour worth 20 crores in a month. The truth is that not even an iota of his labour is crystallised in any of the vehicles that roll out of his factory. All that he has done is to use the money at his disposal to set up the factory and to buy raw materials (when we investigate the genesis of this ‘money at his disposal’, we shall invariably see that it comes from the profits earned by his father. If one asks this question to enough number of Tata generations, one will end up in opium!). With respect to the whole of the production process, the capitalist is ‘superfluous’; he puts no labour whatsoever into it, in fact he is not needed at all. Fans who idolise these businessmen may claim that they perform the very important labour of management. Engels anticipated this question 130 years ago and wrote that, “… we see that in reality the capitalist owners of these immense establishments have no other action left with regard to them, but to cash the half-yearly dividend warrants. The social function of the capitalist here has been transferred to servants paid by wages; but he continues to pocket, in his dividends, the pay for those functions though he has ceased to perform them… the economical development of our actual society tends more and more to concentrate, to socialise production into immense establishments which cannot any longer be managed by single capitalists. All the trash of “the eye of the master”, and the wonders it does, turns into sheer nonsense as soon as an undertaking reaches a certain size. Imagine “the eye of the master” of the London and North Western Railway! But what the master cannot do, the workman, the wages-paid servants of the Company, can do, and do it successfully. Thus the capitalist can no longer lay claim to his profits as “wages of supervision”, as he supervises nothing. Let us remember that when the defenders of capital drum that hollow phrase into our ears.” If he does no labour, not even supervision, where does he get this ‘white’ money from? Marx tells us that the profit which our ‘good’ owner has accumulated and which he flaunts as ‘white’ money is nothing but unpaid labour; instead of giving the worker the monetary equivalent of the value he has added with his labour, the capitalist pays him only that much which is needed for him to subsist. For example, our worker may have added value worth Rs. 20,000 in a month, but he is given only 10,000 as wages because this is enough for him to subsist. So the profit that our ‘good’ capitalist has accumulated is the sum of all the surplus values that he has extracted from every worker in his firm. Hence it turns out that our respected, tax paying owner is in fact a parasite who lives on the proceeds of workers’ labour. The profit that he has amassed, which the legal apparatus declares as ‘white’ money, is pitch black.
Then why is this money, which is the result of naked extortion of the working class, called ‘white’? Only because such an extortion is permitted under capitalism. Amassing ‘white’ money by paying the worker only a share of what is due to him and pocketing the rest is the allowed form of legal extortion under this mode of production. Why is such extortion legal? Precisely because the state is always the state of and for the ruling class. The state’s logic and therefore the legal logic is the logic of the ruling class, and now it is the logic of capital. There has always been extortions which were legal and allowed under every mode of production. Once slavery was perfectly legal, serfdom too was legal in its time and so is surplus value extraction now. These become legal not because they are ‘correct’ but because they are necessary for the continued existence of the ruling class and the perpetuation of the system. In capitalism everything becomes legal which helps directly or indirectly in the valourisation of capital and allows our ‘good’ capitalist to live on others’ labour. But he is expected to give a fair cut of the booty to the state as tax. The capitalist need not resent this at all because it is the cost of maintaining the whole superstructure the way capital wants it. The hard earned money of our respectable bourgeoisie only becomes ‘black’ if he fails to correctly declare the amount that he has legally extorted and to give the state its due. So we see that the distinction between ‘white’ and ‘black’ money is purely artificial. Every penny with the bourgeoisie is black; the whole booty is the result of naked extortion. This points towards a contract between the state in capitalist system and the bourgeoisie: he may extort as much as he wants from the working class legally, declare sincerely what he has extorted and pay tax for it to the state. The state, in return, will make sure that the social relations which prop up this mode of production are preserved, as far as possible by throwing back some crumbs to the working masses to keep them happy(this is called ‘welfare funding’) or if needed, by force.
‘Black’ Money in the Age of Moribund Capitalism
Now the question is, when there is a perfectly legal and respectable way of extortion and amassing ‘white’ money, why do capitalists choose the ‘black’ money route at all? The most obvious reason is greed. Greed is not a personality trait which characterises certain capitalists alone, it is a value which the logic of capital forces everyone to internalise. How can it be otherwise in a system which proclaims amassing money as the sole purpose of existence, when the worth of a human being is equated with and only with the money in his possession? In such times, no capitalist would want to part with a share of his hard earned money to the state, he may instead choose to hide his profits. Or, capitalists may want to undertake black activities like cultivating marijuana or manufacturing arms instead of cultivating wheat or manufacturing cars. If greed were the only reason for the proliferation of ‘black’ money, then it could be controlled to a good extent by “efficient tax administration” and effective policing. The class conscious vanguard of the bourgeoisie and the state always know the importance of making sure that extortion take only legal routes. So they themselves will take the initiative to control their overzealous colleagues and to make sure that deviants are punished. But such exemplary behaviour is restricted to times of prosperity for capitalism, when it begins its downward slide, such niceties are forgotten.
We are passing through one of the deepest structural crisis that capitalism has encountered in its history and a crisis of profitability is at its centre. It was precisely to augment the steadily decreasing rate of profit that neoliberalism and globalisation were ushered in the world over by the capitalist class. But we now know that instead of diffusing the crisis, it has made it deeper. Globalisation and financialisation means that crisis no longer remains a local phenomenon now, it spreads like wildfire. The financial crisis that started in the US in 2008 has developed into a full blown stagnation of world capitalism. The myth that emerging economies are immune to this crisis has been busted with Brazil and China being pulled into it. There are enough indications to suggest that Indian economy too is slowly but steadily being pulled into this mire. Huge layoffs have become routine in even the biggest Indian firms (at the time of writing, the news that L & T have laid off 14,000 of their employees is doing the rounds). The Indian state has been working very hard to alleviate the hardships that this is beginning to cause to our ‘respectable’ capitalists and to salvage their faltering profit margins. It is overseeing large scale informalisation of the workforce, workers’ rights are being taken away one by one, labour rules are being diluted almost daily, governmental control on capitalist enterprises are becoming non-existent and even small efforts from the part of the working class to resist these measures are being met with severe repression by the state in active collusion with the class of capitalists. There is a conscious effort from the part of the Indian state, especially under Modi, to crush workers’ power and to facilitate capital’s freedom of exploitation and to increase the surplus extraction. ‘Ease of doing business’ which every state government is competing to promote is nothing but ‘ease of exploitation’. Despite these efforts from the state, the crisis shows no sign of ebbing. The contradictions are getting deeper with time, the class antagonisms are becoming more evident than ever, and the bourgeois is finding it difficult, in the face of consistent stagnation, to generate enough profits through ‘legal’ extortion alone. Here comes the real importance of ‘black’ economy and ‘black’ money. The contract between the state and the bourgeoisie entered into in the ‘respectable’ phase of capitalism is strained to the point of snapping. The capitalist class has shed all its pretensions of being respectable and liberal. In such a situation, ‘black’ activities, far from being an aberration, has become all pervasive and perhaps the only way to arrest the fall of the rate of profit. In 2014, the National Institute of Public Finance and Policy estimated the Indian black economy to be 70% of the national GDP. Such figures indicate that black activities have become perhaps the only ones through which the capitalist class can maintain their profits. Very many activities, particularly financial ones, which were deemed to be ‘black’ activities in the Nehruvian era, have already been legalised to aid the bourgeoisie in its endeavour. So we understand that ‘black’ activities and the resultant ‘black’ money are not the main problems that India faces, they are only the manifestations of the main problem that the whole world is facing now: the terminal decay of capitalism. In such a scenario, ‘efficient tax administration’ and policing will be unable to curb these black activities.
Hence it emerges that, as far as the working class is concerned, the duality between ‘black’ and ‘white’ money is rather fictitious. The ruling class accepts this duality as common-sense because it gives them an opportunity to paint the money in their possession as ‘white’ as long as they pay taxes and do legal business. We have seen that ‘white’ money with the ruling class is not in any sense clean money or neat money, it is every bit as dirty as ‘black’ money. It is the result of exploitation of the toilers, it really becomes ‘white’ only when appropriated back by the working class. The left should never commit the blunder of accepting this duality and basing their critique on it; the Marxian left should equip the workers to see through this regressive dichotomy. The spread of ‘black’ activities and the state’s effort to legalise erstwhile ‘black’ activities has to be seen in the context of the terminal crisis of world capitalism. On that basis, it should be argued that controlling ‘black’ money or even ‘black’ activities cannot be done without controlling a system built on ‘legal’ extortion. The capitalist class who live by ‘legalised’ extortion, the spoils of which are then painted white to deceive the workers, are shadow boxing with ‘black’ money to legitimise their loot. The point is to appropriate this class; that means death knell to the capitalist mode of production. Such an analysis which connects the problem of ‘black’ money to the structural contradictions of capitalism and to its dismal future prospects shall alone qualify as a revolutionary Marxist one.
Prospects of a working class counter attack
Fascist movements have always found the fertile soil of capitalist crisis very conducive for their growth. The case of hindutva fascism is also not different. Its roots lie in the revivalist movement of the Indian upper classes in the early 20th century. Ever since, it has hibernated in the Indian political scene, slowly gathering momentum. The contradictions of state welfare capitalism gave it its first break and the subsequent full blown neoliberal crisis gave it the chance to grow into a dangerous mass movement. Hindutva fascism has to perfectly play various roles in this crisis ridden stage of capitalism. First, the capitalist ruling class expects it to crush all workers’ resistance and ensure the ‘ease of maximum exploitation’ to counteract the effects of falling profit rate. It is expected to clear all obstacles in the path of exploitation and extortion of the working class. The upper middle class and the well to do sections of the petty bourgeoisie, who are one of the main gainers from the flow of foreign capital, expect it to follow a policy of aggressive pursuit of foreign capital which will open to them still new vistas as middlemen. The lower middle class and the lower rungs of the petty bourgeoisie, who are extensively being pushed to the ranks of the proletariat, hope that the authoritarian fascist rule would be able to achieve what liberal bourgeois rule could not – crush and discipline the working class, restore the profit margins for the capitalists, tame the crisis and somehow prevent their slide towards the ranks of the toilers. Needless to say that all of these are pipe dreams. The terminal contradictions and antagonisms of capitalism cannot be resolved by self-proclaimed ‘iron will’. But fascist movements can do other useful things too for the ruling class. It can provide, more than any other movement, simple and illusionary solutions for real contradictions. It can create imaginary enemies, can weave a web of fantastic plots and can provide an illusionary sense of greatness based on a way too distant and imagined past. In short, it can deflect attention from the real causes for the rotten state of affairs to illusionary ones which can stop the basis of capitalism from being questioned. The current quixotic drive against ‘black’ money is one such attempt to produce a semblance of doing something great which will set everything right. Hence the fantastic claims by Modi and his followers that demonetisation will solve all of India’s problems and usher in a developed India! Yes, the claims are comical, but we should never underestimate their potency to sway a highly demoralised, insecure and overworked population.
The great attraction of fascist movements for the masses as opposed to the social democratic left is that they at least acknowledge that the system is rotten. They offer wrong reasons and phantasmal solutions, but the masses cannot be faulted in thinking that it is way better than a left which fails to acknowledge the terminal decay of the system and offers nothing but a pull back to ‘democracy’ and ‘welfarism’. In contrast, the revolutionary left completely acknowledges the rotten state of affairs, reveals its real cause as the inevitable decay of the capitalist mode of production and liberal democracy and offers the only practical and correct solution – crushing capitalism and moving forward. This difference of approach becomes very clear in the current context. Faced with the profusion of ‘black’ money, fascism acknowledges the problem and offers a quixotic solution. The left highlights the illusionary nature of the solution but fails to view the problem in the context of rotting capitalism and offers nothing but a throwback to ‘responsible’ capitalism via ‘efficient tax administration’ which is every bit as illusionary as the fascist solution. The revolutionary left should acknowledge the problem of profusion of ‘black’ activities, locate the legalised extortion of surplus value from the working class as the blackest among them, reveal the connection of these ‘black’ activities with the death throes of capitalism and offer an attack on capitalism as the only pragmatic solution.
If there is a lesson for the Indian left in the demonetisation hungama at home and in Trump’s triumph in US, it is this: defense is no longer an option; rooting for status quo, for liberal democracy, for ‘good’ welfarist capitalism, for ‘clean’ and ‘responsible’ politics, in short the yearning for ‘good old’ days of peaceful parliamentary bliss and making its restitution one’s main political aim is the surest way to total ruin. Every facet of the ruling establishment has (rightfully) been discredited, the belief in bourgeois democracy is abysmal, the politician-corporate nexus has been laid bare more than ever, everyone from informal daily wage labourer to white collar professional live in perpetual insecurity and fear, the economy is more volatile than ever with a major crisis looming and inequality has touched obscene levels. The social order that we see developing before our eyes is the result of the inescapable decay of bourgeois democracy; generalised monopoly capitalism has no use for ‘progressive’ democracy. What we have now is not ‘crony’ capitalism but the only form in which capitalism can exist today, as a moribund, parasitic, zombie. The dream of just resisting the right wing onslaught and going back to liberal times once it is past is an illusion because it is precisely the contradictions of those liberal days that have got us here. Unable to resolve these fundamental contradictions, first the myth of ‘mixed’ economy and Nehruvian socialism evaporated and now we see the death throes of cut throat neo-liberalism that replaced it. You try to defend the disgraced system in any form and you will be ruined, you advocate a return to the rotten state of affairs that got us here, you will be obliterated. There is no refuge in the past. Full Steam Ahead is the only option.
Demonetisation and the subsequent chaos has opened up a class cleavage in Indian society which the revolutionary left has to exploit. The big bourgeois, the upper rungs of the petty bourgeois and the upper middle class are strongly in support of the fascists. The working class and the lowest sections of the petty bourgeoisie which are getting rapidly proletarianised are seething with anger. The revolutionary left has to equip the working class to lead the counter attack against the phantasmal solutions that fascism offers by questioning the legitimacy of a system based on legalised extortion. It is high time for them to turn the tables on the ruling class, which is sitting cosily under the protection of the fascist right, by questioning the whiteness of white money itself. In this, the proletarian left should be able to enlist the support of the toiling section of the petty bourgeoisie. A section of the left has advanced the thesis that the demonetisation drive was a well planned attack to wipe out the petty bourgeois elements (small shop owners, retail traders, petty producers etc.) and thus to consolidate the grip of the corporate bourgeois on the market. This definitely seems to be the effect that it is having now, but that should not lead us to conclude that it was the plan all along. It is from the same petty bourgeois class that the fascists draw their cadre base; they also function as its most stable electoral constituency. The truth is that there was no ‘grand’ plan behind this move. It was a knee jerk move prompted by the need to do something before the impending round of state elections to shore up their nose diving popularity. It was taken under the stupid assumption that the economy can be bent with the same ease as the petty bourgeois vote base. Of course, as many commentators have pointed out, it revealed supreme ignorance of the way capitalism works and incompetence in gauging the possible effects. But this has provided the revolutionary left with an opportunity to utilise the estrangement of the petty bourgeois, especially its lower rungs, from the fascists. Demonetisation has accelerated their slide towards the ranks of the proletariat. The social democratic left has also been trying to get petty bourgeois support, but in the classical reformist way by completely forsaking revolutionary Marxism and sinking down to the petty bourgeois level. Instead, the revolutionary left leads the petty bourgeoisie and elevates them to proletarian consciousness. Marx’s comments on the revolutionary potential of the petty bourgeois has to be kept in mind here, “If they are revolutionary, they are so only in view of their impending transfer into the proletariat, they thus defend not their present, but their future interests; they desert their own standpoint to place themselves at that of the proletariat.” Demonetisation has given the petty bourgeois toilers a real glimpse of their hopeless future and has provided an excellent opportunity for the working class to equip them to defend their future interests. Such a working class fight back aimed at crushing the putrefied capitalism is the only defense against fascism.
