"Exploring a Socialist Alternative to Neo-Liberalism"

M. Vijaya Kumar

(Excerpt from the paper presented at the National Seminar on Neo-Liberal Globalization: Critique & Alternatives at Hyderabad, India on 22-08-2004)

Fighting Globalization & Capitalism

Globalization has been overhyped, conflictual, contradictory and open to resistance and democratic intervention and transformation and not just as a monolithic juggernaut of domination. Globalization involves both a disorganization and reorganization of capitalism, a tremendous restructuring process, which creates openings for progressive social change and intervention. The information economy represents a major restructuring of the spatial relations between capital and labour; this does not indicate that their productive relations are necessarily altered in any significant manner. The information society/information economy despite claims to the contrary is not technologically determined. Indeed, as with capitalism in general there is a central contradiction in the development of the information society. The supposition that the class struggle is over is ridiculous if the issue of the ownership of knowledge resources is the focus of analysis; the suggestion that we have move
d beyond
capitalism is rendered non-sensical if we look at the division of ownership and the conditions of workers throughout the information economy. Just as all organized resistance to capitalism appeared to be stomped out it now threatens to rise again from the very ground.The ­anti-globalization movement is not against globalization per se, but is against neo-liberal and capitalist globalization, opposing specific policies and institutions. We have failed rather miserably to address the multi-faceted development model of neoliberalism. History suggests that defeating neoliberalism will not be enough; we must go beyond reformism to defeat all forms of capitalism. To create this movement, we need to move beyond a stance of protest and reform, and project alternatives. If globalization is capital's response to structural conditions, it follows there are alternative, socialist ways of responding to the same conditions. Economic reforms are not a one-way street. The direction of reform Party led coalition Government in India promises "reforms with a human face" — whatever that might mean. But neo-liberal reforms have no human face — they are always Janus faced. The Left has to propose an alternative economic agenda.

Does a knowledge-society have to be capitalistic in some sense? Not necessarily. That is the kind of thing the left should be thinking about, instead of allowing itself to be paralysed by the bogeyman of globalization. If at all there is any shift that can be called epochal, it is that instead of any discontinuity, we can say that capitalism had reached maturity. For the first time, we are seeing the effects of capitalism as a comprehensive system, living alone with its own internal contradictions. It has little recourse outside its own internal mechanisms to correct or compensate for those contradictions and their destructive effects, in the words of John Bellamy Foster.

A Socialist Knowledge Economy:

The "knowledge society," or "information society," is one in which knowledge and information have roles more predominant than earlier days. It is now obvious that the knowledge and information sectors are increasingly important domains of our contemporary economies. But in order to avoid technological determinism and idealism, one should see the information or knowledge "revolution" as part and parcel of a new form of techno-capitalism.

According to Prof. Paul Romer, the knowledge economy is one in which growth, value and an improving standard of living are inextricably tied to knowledge, its creation and its deployment. Knowledge processing replaces the processing of physical things on the center stage of production. In a knowledge economy, knowledge plays a key role in the economic value addition across all sectors of the economy. The knowledge economy concept being touted by neo-liberals is fraught with contradictions, which are self-defeating. A true knowledge economy is one in which the fruits of knowledge effort are deployed for the benefit of the whole of the population, for improving their living conditions — not for enriching a few — because knowledge is a social product and it can never be privately owned. While assuring a reasonable and just return for those that create and apply knowledge for productive purposes, the goal should be to enrich the society as a whole. In a knowledge economy, knowl
edge and
information add more value to goods and services than physical labour. In fact, physical labour is getting transformed increasingly by automation. Moreover, intense human effort is required to process information and to turn it into useful knowledge. Such knowledge should not be owned by a few individuals. In an industrial economy, which I prefer to call as "Raw-material Processing Economy", economic activity has to be centralised spatially under a command structure with strict hierarchy to achieve economies of scale. This is reversed in a knowledge economy. In a knowledge economy, economy activity can be highly dispersed and broken up into independent cellular units. This makes the economic operation more efficient and cost-effective. Concentrating all activities under one private corporation runs counter to the very logic of a knowledge economy. That is why capitalism and knowledge economy are incompatible.

The Left in India has to propose an alternative path of development that ensures social and economic justice while doing away with the in built exploitation and injustice of capitalism. Needless to say that such project should be taken up by garnering the active support and participation of all democratic and progressive sections of the polity in a broad coalition. The Left has to popularize the concept of a ?Socialist Knowledge Economy?, whose broad characteristics I propose below. The vast and growing numbers of IT workforce in the country as well as the intelligentsia have to be enlisted into this movement. The picture I present here is not complete and definitely not absolute. It is only a starting point for initiating action towards building a knowledge economy.

1. Information Technology, like all other technologies is a double-edged sword. It can be used to intensify exploitation and dis-empower the vast majority while enriching a few individuals. In a socialist knowledge economy, the same IT can be used as a tool to bring about social and economic justice and prosperity for everybody. It is entirely at the discretion of those in power to choose, which way they have to wield the sword and to serve the class interests they choose to serve.

2. Our emphasis on IT initiative has to shift from cheap contract work for export to the development of high quality inward looking software and IT services that are specifically designed for India?s development needs. The central and state governments should spare their resources in setting up high-end research centers to conduct core research in computer software, industrial process automation, bio-informatics, virtual reality and multimedia applications, geographical information systems, e-governance facilities etc., which can be utilised for our own needs, without depending on outside MNCs. With a huge pool of IT and scientific experts, it is not an insurmountable task, provided we have the political will to execute.

3. In the case of bio-technology, India produces a large number of bio-tech specialists, but a majority of them are jobless. Foreign MNCs use Indian expertise and experiment on Indian farmers. With vast variety of crops, irrigation and environmental conditions, which differ from district to district, the need to develop new varieties of crops to suit local conditions is imperative. We can gainfully employ our bio-technology specialists to do research locally and develop genetically modified crops that suit our needs, without endangering the environment and safeguard bio-diversity. There is no limit to the degree of penetration of bio-technology into our agricultural sector and the consequent benefits it showers on our economy. We do not need multinationals to do this for us. The cost of setting up bio-technology lab facilities as well as the software for conducting research is coming down sharply, enabling smaller firms to enter this field, which till now is the sole dom
ain of
large MNCs. The core genetic research can be conducted by central and state level laboratories. Thus a three-tier approach will be most effective.

4. The handloom sector in India is in ruins. Successive state governments and the neoliberal policies of the central government have virtually killed the handloom co-operatives. This condition can be reversed and we can bring back light into their lives by utilising advances in IT. Our young engineers can be entrusted with the task of manufacturing and maintaining computerised automatic weaving machines, which can be supplied to our weaving communities at affordable cost. Power looms should be allowed only in co-operatives. Weavers co-operatives can help the weavers? families to add more value by producing ready made garments and help market them. We have before us the experience of the Benetton Co-operative in Italy (The popular "United Colors of Benetton" brand). Such a project is entirely viable and necessary. Besides improving the lot of the weavers, it will gainfully employ a large number of engineers and computer specialists locally.

5. We can draw on the experience of innovative projects such as Canada's Newfoundland Knowledge Hub Project, where locally available IT expertise is integrated into the local economies to develop local resources such as agriculture, fisheries, food processing, traffic management, community health, tax collection etc. Vast amounts of satellite data can be utilised by local expertise to develop geological information systems and maps that can be employed for water conservation and irrigation systems, flood and drought management, desalination and fresh water supply systems, non-conventional energy sources, micro-hydel power plants, roads, rural administration etc., that will enrich local economies. We can draw on the experience of China in developing micro-hydel power plants that can be run by local communities. Distributed power generation utilising locally available resources and managed locally is increasingly being seen as a more effective and environmentally friendly
alternative.

6. The inter-linking of water bodies and water management and conservation should be taken up in a bottoms-up approach, with the task of building and maintaining irrigation and water conservation projects entrusted to local bodies. By bringing about more area of waste land to use, we can distribute land to the landless poor, help them to set up agricultural co-operatives that provide a safety net against adverse weather conditions and consequent crop failures, distribute fertilisers, pesticides and agricultural machinery and market their products. Local educated talent will have enormous opportunities in running such ventures. Agricultural reforms will be meaningful only when aided by such measures.

Much water has flowed under the bridge. It is neither feasible nor is it correct to propose a centralised planned economy in this age of information. It is now possible, with the help of IT to build a de-centralised planned socialist economy that can effectively function in a democratic environment, by empowering local governance. Developing localised centers of excellence by unleashing local talent should be the goal of the socialist knowledge economy, while eliminating exploitation and social and economic injustice. To paraphrase Lenin's statement, in today's context, socialist knowledge economy is local governance plus deployment of IT for empowering the masses.