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.

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