Thursday, February 28, 2019

Moving Towards A New Deal

Image Credit: Washington Post
If there is one thing that is endearingly remembered even now in the United States, it is the “New Deal” introduced by Franklin D. Roosevelt in 1933. As part of it, an enormous amount of public money was pumped to revive the economy, which was reeling under the great depression. The deal resulted in the 3Rs; Relief for the unemployed and poor, Recovery of the economy, and Reform of the financial system. The welfare of the poor and the ordinary took the center stage throughout the period of the New Deal.
It left such an indelible imprint on the people’s psyche that a new New Deal called the ‘Green New Deal’ has now been conceived by various organizations and passionately backed by prominent intellectuals. This Green New Deal is a set of proposed economic stimulus programs in the United States that aim to address the twin problem of climate change and economic inequality.
There are many people who passionately speak about the inviolability and eternity of capitalism. They feel that there is no other alternative especially after the collapse of communism. They are utterly wrong. What they fail to understand is capitalism in its purest form of laissez-faire never appealed to the people except for a handful of the ultra-rich. It is the capitalism with a mix of socialism, in other words, the government managed, welfare-oriented capitalism espoused by Keynesian theories that appealed to the poor and the ordinary.
It is increasingly becoming perceptible that the world is getting divided on the lines of the conservative right wing and the liberal left wing. The conservative right promotes a combination of religious nationalism and the pro-rich free enterprise. And the liberal left is the only entity that speaks for the poor and the ordinary, and therefore puts the welfare first. The conservative right limits itself to doing lip service as far as the poor are concerned.
Take the example of Donald Trump. He came to power advocating the upliftment of the working class, but once in power, started promoting the interests of the business oligarchs and even got obsessed with building walls to rake up hyper-nationalism. He gave an unprecedented corporate tax cut stating that the cut would enable the businesses to pay more to their workers and create more employment opportunities.
Now the truth has dawned on the society that the tax cut measure was exploited by the corporates for the stock buyback to maximize their wealth. Therefore, a measure that could be termed as an epitome of trickle-down economics, which was intended to create opportunities for the working class, ended up empowering the ultra-rich to accumulate more wealth thus accentuating the problem of inequality.
Back in India, we are facing a similar situation. The right-wing Bharatiya Janata Party (BJP) led government has been implementing the pro-rich ‘Modinomics’. The only people that are happy with the current dispensation are the ultra-rich whose interests were served on the pretext of ease of doing business, and the pro-Hindutva elements who are obsessed with religion-based nationalism. The strategy of Modi government so far is to serve the interests of the rich in the name of reforms and ease of business and rake up religious nationalism from time to time to sustain the emotionally charged environment they created over some years with an aim to reap rich electoral dividends.
So, Modi’s tenure is marked by crony capitalism-induced ease of business for full four and a half years and the last-minute welfare to woo the poor and the ordinary, who take elections seriously and queue up in front of the polling booths with unending optimism.
So, the current situation amply manifests the truth that the world is increasingly becoming pro-rich with the poor and the ordinary completely sidelined. The kind of economics that is being implemented now is the neo-liberal economics espoused by Hayek and Friedman. It is being proliferated by the US-backed institutions, such as the World Bank and the International Monetary Fund (IMF) by imposing it on the developing world.
Our democratic institutions, which were designed and formulated centuries ago, are finding it increasingly difficult to withstand the changes brought about by the technology explosion. The disruptive technologies such as Artificial Intelligence (AI), Internet of Things (IoT) and Big Data have empowered the big businesses to game the democratic political system. They, through their investments, managed to establish a stranglehold over the media houses and therefore, able to influence the public perception in favour of certain political formations. All these don’t augur well for the future of democracy. The ordinary people, who hitherto enjoyed decisive power through the universal adult franchise, may ultimately lose it to the business oligarchs.
So, there are two things people must realize. The first thing is, the very feeling that capitalism in its purest form is here to stay is highly untenable, and it is the Keynesian economic model, which espouses active governmental intervention to promote the public interest, which will sustain capitalism in the long run. In other words, we must need a New Deal that is embedded with egalitarian ideals. Otherwise, this world will invariably end up being a fiefdom of the big businesses and invariably cause public unrest in umpteen manifestations.
The second thing is, our democratic institutions which have become antique, and therefore not in a position to keep pace with the explosive technological changes, must be adequately reformed to reflect the current day realities. But politicians and plutocrats are unlikely to bring about these reforms as the current situation serves their purpose. Therefore, the electorate and the civil society must take the initiative to exert pressure on the ruling class to bring them about.
The only weapons that could be mustered up by the poor and the ordinary to bring about a change are: enlightened electorate, democratic deliberation, and political confrontation. These weapons could be used to exert pressure on the political class to formulate pro-people economic policies and to press for reforms to safeguard and deepen democracy against the backdrop of marauding neoliberalism and technology explosion. Only people who are united can rise above the narrow domestic walls such as caste, creed, and religion can achieve this.

Friday, February 15, 2019

Technology is only an enabler, not a panacea

Image Credit: askreporter.com
When technocrats talk about technology, they sound too optimistic even to the extent of being arrogant. They give an impression that technology is the panacea for all the ills suffered by the humankind, and humanity’s salvation lies in driving more technological innovations. They touch upon the cutting-edge technologies such as Artificial Intelligence (AI), Internet of Things (IoT), big data, Virtual and Augmented Reality (VR and AR) and precision and regenerative medicine to buttress their claims. But are their claims true? Will technology really be able to find solutions to all our problems? Will it allow us to win over poverty, malnutrition, weapons of mass destruction (WMD), prejudice and inequalities? Will it succeed in enabling the entire humanity to lead better lives? These are the questions the right-thinking people, who are not influenced by the euphoria, are asking.
Some time ago, The New York Times published an interview with Sunder Pichai, the Chief Executive Officer of Google. During the interview, he rightly stated, “Technology doesn’t solve humanity’s problems. It was always naive to think so. Technology is an enabler, but humanity has to deal with humanity’s problems.” Sunder’s answer is laced with humility and pragmatism. The other technocrats should take a leaf out of his book and practice the same humility and pragmatism while talking about technology and shun the practice of generating excessive euphoria around it.
The science and technology community, no doubt, should be proud of its inventions, which certainly enabled a large section of the society to lead better lives. The problem is, any product or service that results from technological innovation is initially available only to the super rich and it takes a lot of time for it to percolate to the masses. Moreover, the technology, which has been monopolized by the super-rich, is posing a threat to democracy and pushing the nations towards oligarchy.
Take the example of education and health care. Technology, as it did with many fields, has also transformed the fields of education and health care. There are many privately-owned schools that are equipped with smart classrooms and internet access, where the children of the rich and the elite study. These schools are even gearing themselves up to introduce cutting-edge education technologies such as Virtual and Augmented Reality. All these technologies have reduced the role of a teacher from being the sole knowledge source to that of a mere facilitator in these schools. The children of the poor and the lower middle class, however, attend the same dilapidated government schools where a set of largely unmotivated teachers do their half-hearted teaching in the same old chalk and talk method.
Coming to healthcare, the precision and regenerative medicine are available only in some corporate hospitals which are prohibitively expensive for the ordinary folks. The poor and the lower-middle classes are not even able to get primary health care as the primary health centers run by the governments have almost become defunct.
As Sunder has stated, technology, no doubt, is an enabler. The problem is it enables only a select few and an overwhelming majority of the people are not able to access its enabling benefits.
With the emergence of cognitive technologies, humankind, for the first time in its history, is facing a rival in the form of AI capable robots. Now, there is a lot of effort that is being made by the tycoons to persuade the people that automation will not make people go jobless and people merely have to reskill themselves to grab the new opportunities the cognitive technologies will be creating in future. But skilling and reskilling need training and the training is increasingly becoming inaccessible to the poor and the lower middle-class. According to the World Bank, the darling of our politicians and plutocrats, “more than two billion working-age adults (all over the world) are not equipped with the most essential literacy skills required by employers.” It needs no elaboration that all these people must be from the poor and the lower middle-class background. When skilling itself is not happening where is the question of reskilling?
With the advent of disruptive technologies, even the governments have shifted their focus from people-centric policies to tycoon-centric policies in the name of speeding the economic growth. As a result, tax cuts, easy credit and bailouts in the name of ‘ease of doing business’ are increasingly becoming rampant.
The plutocrats have already brought the idea of Universal Basic Income (UBI) to fore to compensate for the job losses. The idea, however, will further sabotage democracy and lead to oligarchy. When UBI becomes a reality, the program will mostly be funded by the plutocrats which will make them the de facto rulers of the country.
Humanity is also confronted by the big data that will be generated from various interconnected devices and social media platforms, which could be used for mass surveillance. Though the governments all over the world are making the right noises about curbing any misuse of big data, they will take no more than token measures in that direction. There are already enough indications that the rich and the elite are gearing themselves up to leverage upon these mass surveillance techniques to further strengthen their stranglehold over the society by sabotaging the democratic process, which is the only ray of hope for the poor and the ordinary.
Already, the ultra-rich, who have tightened their grip on the mass media through their investments, started selling their own narratives to divert the attention of the people from the bread and butter issues and by not letting the people see the objective reality. In the near absence of an independent media, there is either nobody or scarce few who are ready to reveal the truth about the impending dangers.
As long as Technology stays as an enabling force for a select few, it leads to concentration of wealth and power and democracy remains a namesake. It finally becomes an instrument in the hands of the rich and turns into a Frankenstein’s monster, which not only wreaks havoc on humanity but will ultimately swallow its own enthusiastic promoters.

Friday, February 8, 2019

Modi's Last Minute Welfare

Image Credit: geographyandyou.com
People are mostly economic beings. In the words of one of India’s greatest sages, Swamy Vivekananda, “He walks, and the stomach goes first and the head afterwards… It will take ages for the head to go first.” People, however, get swayed by emotional issues, think about bread and butter things at the end of the day. Maybe that is the reason Modi dispensation, which appears to be going all out to rake up divisive issues to secure a second term, changed tack for a while to give an impression that it has, at last, started paying attention to people’s bread and butter things through the interim budget.
Perhaps for the first time during Modi’s tenure, the finance minister made a pro-poor statement during the budget speech saying, “The poor have the first right over the nation’s resources.” It has many concessions and freebies to offer to salaried class, farmers and informal sector workers. These concessions and cash transfers, which are aimed at reducing the rural distress, sound good at the outset.
So, it has once again proved that on the eve of an election, governments in India shed their plutocrat-centric policies and temporarily adopt pitchfork-centric policies. They, for a while, reluctantly set aside their plutocrat cronies to give an impression that they are pro-poor, pro-farmer and pro-rural.
For full four years our politic­­­­­os move hand in hand with business oligarchs and hand over nation’s resources to them in the name of development. A­­­nd as if it is not enough, they even give them tax cuts and bailouts in the name of ease of doing business. When the poor and the ordinary take to streets demanding ease of living, their pleas are simply ignored.
The entire thing makes me recollect the article titled “of the 1%, by the 1% for the 1%” authored by the Nobel winning economist, Joseph Stiglitz. Governments in India, irrespective of who is in power, appear to have only one strategy. They safeguard the interests of the 1% plutocrats for full four years to enable them to accumulate more wealth, which leads to the concentration of economic power, and play a ‘sop opera’ in the election year to grab the attention of the rest of the 99%.
Now the question is why do they do this? The plutocrats who they nurture, constitute only 1% of the population and democracy, unlike corporate governance, allows only “one person one vote”. Therefore, politicians, as elections near, reluctantly do something which caters to the needs of the poor and the ordinary, who patiently queue up in front of the polling booths elections after elections with unending optimism. So, the politicos, irrespective of who is in power, think about the poor and the ordinary only on election eve and this budget is a clear manifestation of this trend.
Most of the news media, while writing about the budget, prominently mentioned how the government missed the fiscal deficit target. Now the economists who don’t lose any time in showering praises on Modi government for bringing the fiscal deficit under control through its judicious spending, start predicting that with the introduction of these welfare schemes, the fiscal slippage will happen more rapidly.
In this neo-liberal era, the fiscal deficit is a big thing and becomes extremely important for the governments during the first four years. “Fiscal prudence” is important for them to get higher ratings from international credit rating agencies and accolades from the World Bank as these entities brand welfare as ‘populist’ and blame it for being responsible for widening fiscal deficits.
But neither international credit rating agencies nor the World Bank ever said that big business defaults followed by bailouts and corporate tax cuts, which have insidious costs, are not good for maintaining fiscal prudence.
So, the governments practice fiscal prudence during the first four years of their tenure by cutting welfare expenditure and handing out all the sops to the tycoons in the name of ease of doing business and only during the election year they get reminded of people’s welfare and let “fiscal slippage” happen. Once they win the elections, they – politicos, plutocrats and egg headed economists – once again emphasize on stalling the fiscal slippage and things will be back to square one.
Hailing the budget, Prime Minister Modi stated, “It is essential to ensure that the benefits of development reach all sections of society. This Budget will empower the poor, give a boost to the farmers and an impetus to economic growth.” But he might have forgotten the fact that he ignored the same poor during the first four years of his tenure.

As far as the targeted cash transfers the FM has introduced now are concerned, they are paltry when compared to the corporate debt that the government had written off. Some trade unions even accused this government to be more caring towards cows than workers. Because it allocated 500 crores for worker’s pension and 750 crores for the welfare of the cows.