Economic Development

Economic Development

Anjan Chakrabarti & Anup Dhar

1. Anjan Chakrabarti is Professor of Economics, University of Calcutta. 2. Anup Dhar is Associate Professor, School of Human Studies and Director of the Centre for Development Practice, Ambedkar University, Delhi.

This paper is a draft. A version of this draft is to be published in Marxian Handbook of Economics, Edited by David Brennan, David Kristjanson-Gural, David Cathy Mulder, and Erik Olsen, Routledge, 2016.

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Anjan Chakrabarti & Anup Dhar

Abstract A unique Marxian theory of development is unpacked and defended. This Marxian theory has three essential features that are otherwise absent in competing Marxian and non-Marxian approaches. First, it foregrounds the necessity of a theory of outside in the form of world of the third, as distinguished from third world. Second, the epistemology of development is traced to the blending of capitalocentrism and orientalism, thereby connecting development with class, power and world of the third. Third, an alternative evaluative space combining class process/struggle and need process/struggle capable of explaining the social needs based idea of development is opened up.

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Economic Development Anjan Chakrabarti Anup Dhar

The post-war Marxian and neo-Marxian approaches to “development” have stretched from critiques of “underdevelopment” under national and global capitalist systems to that of viewing imperialism as a pioneer of development. After the collapse of “planned socialism” and the postglobalization adjustment by remaining “socialist” nations, which increasingly veered towards capitalist development, we are now confronted with the problem of distinguishing the Marxian understanding of development from other versions, especially the mainstream ones. In this context, one wonders about the very existence of the critical relation between Marxism and development, between class and social needs. Responding to this crisis, we present below some theoretical advances expounded from a newly developed Marxian theory of development that has tried to critically engage with the question of “economic development” by taking into consideration this historical backdrop and theoretical literature. Debates and Counter-Debates on the Underdevelopment Thesis

The linkage between Western countries and the “backward nations” became important in early twentieth-century Marxian literature.1 Nikolai Bukharin and Vladimir Lenin expressed doubts on imperialism’s progressive impetus in the stage of monopoly capitalism, which they contended had become a barrier to the development of the forces of production. Instead, imperialism should be seen as an instrument for capturing markets and plundering the resources of backward nations for the benefit of monopoly capital and imperial powers, and in the process may have become a cause of the underdevelopment of imperialized/colonized nations. The only way to break the shackles of underdevelopment was to overthrow or bypass capitalism by initiating a socialist revolution in the world and particularly the underdeveloped countries. The underdevelopment thesis was developed and popularized during the 1950s–1970s by scholars like Paul Baran, Paul 1

See Larrain (1989), Chakrabarti and Cullenberg (2003) and Ruccio (2011) for an extensive

review and analysis. 3

Sweezy, A.G. Frank and others. Through various approaches such as “center-periphery,” “unequal exchange” or “world systems” they made a case for the “development of underdevelopment theses” by tracing the cause of underdevelopment in the so-called periphery countries/regions to be that of development of the core developed countries/regions. Instead of facilitating development of forces of production, it was argued that capitalism paradoxically shored up underdevelopment in the periphery. This thesis drew sharp responses. Criticizing Lenin’s position, Bill Warren (1980) provocatively declared imperialism and its modern version in neocolonialism (i.e. the postindependent status of the peripheral countries) to be the pioneers of capitalism. Justifying the capitalist penetration of third world countries through imperialism, Warren argued that imperialism helps to break feudal/pre-capitalist fetters and unleash the forces of production and creates an advanced capitalist society in these countries. Even if one accepts the argument of underdevelopment theorists about international bondage, the satellites are still better off as compared to the counterfactual situation of the absence of foreign investment and international exchange relations, a protectionist agenda that was favored by underdevelopment theorists. The economic rise of least developed countriessuch as in East Asia was showcased as empirical evidence of Warren’s position. Intervening in the debates on transition from feudalism to capitalism in Western Europe and particularly England, Robert Brenner (1977) argued that the motor of change within the heart of historical materialism was not any economic element such as forces of production but the political aspect of class struggle. He turned his criticism against the economic essentialism in Dobb (development of forces of production as the prime mover) and non-class emphasis in Sweezy (external trade as the prime mover) into a full-fledged attack on the underdevelopment theories (Hilton 1978). The latter were criticized for ignoring or demoting class relations, class exploitation and class struggle and focusing on non-Marxian ways of explaining underdevelopment. Brenner averred that advanced countries were not dependent on the underdeveloped countries for growth or luxury consumption and that the economic plight of the underdeveloped countries should be identified in its internal class structure and the politics of class struggle and not in their externalized relationship with the developed countries. Finally, the Althusserian articulation approach critiqued underdevelopment theories for the demotion of questions of class structure and mode(s) of production. Modifying the classical

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version of historical materialism through concepts like traditional mode of production and colonial mode of production, Rey (1978) claimed that capitalism is innately dynamic and cannot be blamed for underdevelopment. Underdevelopment in the peripheries arises because of the precapitalist relations of production that arrest or slow down the development of capitalism. So the cause of underdevelopment resides in the existing social formation in the peripheral countries. Capitalism will be justified in its elimination of such feudal modes of production through violence; it will hence have to dispossess peasants of land. However, this violence will in the end be counterproductive and will stir up the conditions for deeper and expansive forms of class struggle and a socialist revolution. All these responses in turn were roundly criticized and found to be wanting for being methodologically deterministic (economic or political) and teleological, for considering violence as necessary for capitalism and for social change/transition, for their inadequate theorization of questions of class and modes of production and for their inherent capitalocentrism. Faced with internal criticisms within Marxism, the influence of these approaches waned by the 1980s. Moreover, in the post-globalization world, with the production of social life in the so-called peripheries being increasingly hooked to the circuits of global capital and with global capitalism now appearing from within the erstwhile underdeveloped countries (for example, note the shift of capitalism to BRICS), periphery as a pure, unadulterated space of local capital/non-capital or as a satellite to industrial capitalism in the West became incongruous. Marxian Critique of Mainstream Development In the class-focused Marxian approach pioneered by Resnick and Wolff, the “economy” is seen as decentered and disaggregated, consisting in turn of a variety of capitalist and non-capitalist class processes overdetermined by other non-class, including non-economic, processes. The epistemological roots of mainstream development can be discerned through a class-focused scrambling of economic dualism. Economic dualism presumes a “hegemonic self” and a “lacking other” (for example, capital and pre-capital) as a starting point, examples being Arthur Lewis’s agriculture-industry divide or formal-informal economy divide. It takes as a priori two constitutive centrisms (from within the decentered and disaggregated economic reality however): “capital as center” or capitalocentrism and “Europe or West as center” producing Euro-centrism

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or Orientalism. In the mainstream developmental paradigm, capitalocentrism and Orientalism emerge as mutually constitutive, as a stapled logic reinforcing one another, forming in turn the stable deterministic core of economic dualism. What the class-focused approach shows is why and how the capitalocentric-Orientalist picture ingrained in economic dualism that supposedly mirrors the economy is in fact a political construct that perpetuates a deterministic and teleological imagination of development to emerge (Chakrabarti and Dhar 2010). To begin with, the making of economic dualism helps occult the question of class (processes) and indeed the class-focused language of the economy. The foreclosure of class process erases possibilities associated with the category “class process” and makes impossible the conception of a decentered and disaggregated economic reality. Thus any meaningful (classfocused) presence of the differentiated “what are not capitalist” class processes is disabled; rather, the diverse existence of a multitude of “what are not capitalist class processes” are grouped into the homogenous whole “non-capitalism”; furthermore, non-capitalism in the global South becomes the undifferentiated lacking other of modern European industrial capitalism through Orientalism. The Orientalist gaze works in tandem to displace the non-capitalist into pre-capitalist, where pre-capitalist is not merely a homogenous space in relation to the capitalist space, but also reflective of, and in turn reflecting, the abnormality of what is known as third world. The heterogeneous “what are not capitalist” class space is re-presented into a lacking, redundant, underdeveloped other—a pre-capitalist other of the capitalist class process—rendered, depending upon convenience, the “victim other,” “the evil other” and “the redundant other.”In this way, “traditional pre-capitalist third world” comes to symbolize a signpost of economic backwardness; the household, agriculture and informal sector emerge as traditional sites of such backwardness; peasant families, indigenous populace, tribal groups, informal sector workers, the poor, poor and hapless women and poor children appear as harbingers of pathology, as victims of the so-called traditional structures of decrepitude, as “third worldliness” as a whole and as legitimate subjects (actually objects) of the “uplifting mission” and of external/outside (inter)national interventions. The multitude of non-capitalist class processes, now re-presented as pre-capitalist, are thus left with only two possible futures—mutation into capitalist class process or mutilation through primitive accumulation.

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But the third worldish other, the pre-capitalist other, the lacking other, is not tout court the outside vis-à-vis modern capitalism, but rather what is perceived as lacking in relation to the latter. It is not defined by “what it is” but by what is lacking or is absent in modern capitalism; it is thus not the Other qua Other; it is capital’s internal other, albeit lacking. Clearly, the “lived experience” of the outside of capital or the Other qua Other of capital is more than that imagined through the re-presentation of the outside/Other as lacking or third worldish. There is thus an occulting of the Other qua Other in the dualistic model. We have provisionally called this Other qua Other world of the third (as distinguished from third world). Therefore, from a class-focused perspective, the developmental paradigm, even in its hegemonic existence, is not structured on two, but, instead, on three axes: (i) modernism/capitalism as “p,” (ii) the lacking other/third world as “~p,” which is however foregrounded and (iii) the foreclosed Other/world of the third. If third world is the constitutive inside, or the “appropriate(d) other” of development, then world of the third is the constitutive outside, the “inappropriate(d) Other.” Because of foreclosures of class and world of the third (Chakrabarti et al. 2012), “capital” and “modern” emerge as nodal points anchoring the capitalocentric-Orientalist epistemology of what comes to be defined as the dual economy and development. It becomes the basis of organizing our thought-world and associated practices and experiences, achieved by displacing and reducing the otherwise decentered and disaggregated economic reality into the structure of the two, “p” and “~p,” where the former (p) is valued and the other (~p) is seen as “lacking p” and hence devalued. When such dualistic imaginations of the economy and transition find sufficiently deep roots through processes of interpellation and subjectification in and through concrete situations, institutions and practices, they tend to define without doubt—especially in the global South—our everyday and commonsense understanding of economy, culture, politics and progress. “West is now everywhere, within the West and outside: in structures and minds” (Nandy 1983, xii). Tragically, even adherents of the post-developmentalist school who are critical of capitalism or are sympathetic to a possible outside to capitalism often fail to distinguish between the logic and register of the lacking, yet appropriated other and the different, hence nonappropriated Other. The consequences are far reaching.

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Interrogating Post-Development and Empire Post-developmentalist approaches criticize mainstream development by focusing on (i) the Orientalist construction-denigration of Southern economies as “third world,” (ii) the essentialism driving the received notion of Southern or third world economies and (iii) the destructive power and the havoc created din non-western and non-modern economies by the modern western idea(l)s of progress grounded on capitalist development with its teleological moorings (Escobar 1995 [2012]). They seek freedom and revitalization of “third world” from this universal project of capitalist development. Two criticisms of post-developmentalist approaches readily follow. Gibson-Graham

and

Ruccio

(2001)

point

to

post-developmentalism’s

realist

epistemology, i.e. “the presumption that economic knowledge reflects the true state of a real entity called the ‘economy’ (generally understood as a locus of capitalist dominance)” (162) and the reduction of the economy to capitalism which in turn is taken as “somehow extra-discursive and beyond the forces of deconstruction…[appearing] as an ontological given, disproportionately powerful by virtue of its indisputable reality in a world of multivalent concepts, shifting discursive practices and unstable meanings” (165). The result is that “rather than representing the economy as a radically heterogeneous social space, post-developmentalist critics reinforce the discursive hegemony of capitalism and thereby tend to marginalize the very alternative economic practices they seek to promote” (166). Post-developmentalism’s acceptance of the received economic representation (with its inherent realism and capitalocentrism) excludes the possibility of viewing the economy as decentered and disaggregated. From another angle, it implies that post-developmentalist scholars would not be in a position to appreciate the emergence of the dual(istic) model of the economy or its centrist logic from within a decentered and disaggregated economic space. Instead, as the true reality of the economy, what would get accepted is the given dual economic structure, divided between modern capitalist economy (p) and traditional pre-capitalist economy(~p), thereby leaving little scope for escape from the boundaries imposed by it. The second criticism follows from our conceptualization of world of the third as distinct from third world. The underlying epistemology of capitalocentric-Orientalism motoring

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economic development makes invisible this distinction, and post-developmentalists fail to detect it (Chakrabarti and Dhar 2010). Therefore, Escobar notes that “the development discourse…has created an extremely efficient apparatus for producing knowledge about, and the exercise of power over, the Third World” (Escobar 1995 [2012], 9; italics added). He deposits faith in rescuing the “third world” by arguing that “the Third World is contested reality whose current status is up for scrutiny and negotiation” (214–15). In general, the post-developmentalists end up with the same dual model of (p, ~p) and fret over the devalued representation of (~p). Their opposition to economic dualism problematizes and defends the same “x.” The point is missed that the “making-unmaking” of third world is not just an empirical affair, but also, and primarily so, a matter related to how the outside is conceptualized in relation to the center (stapled capitalmodern) from within a decentered and disaggregated economy. There is an urge to resist the negative representation of third world without quite realizing that, as the “lacking and constitutive inside” of capitalist development, there can be no conceptualization of third world except in its denigrated form. Had the outside been theorized, it would have become clear that development’s object of control, regulation and penetration is not third world, but instead world of the third. World of the third harbors the possibility of a non-capitalist language-logic-lived experience-ethic outside of and beyond the circuits of (global) capitalist modernity; and that puts under erasure capitalist ethic and language. However, in developmental logic, world of the third is displaced into “third world”—third world as pre-capitalist—as a lower step in the ladder of capital-logic and linear time. World of the third as also the critique of the capitalist present and future is thus reduced to a third worldish past. To be stuck in the dual frame not only (fore)closes the imagination/articulation of non-capitalist alternatives—alternatives to capitalist development— but additionally leaves the examination of the hegemonic Inside (i.e. global capitalism) inadequate. The inability to theorize the outside is by no means restricted to post-developmentalists. Renditions of globalization in which the “local” is assumed to be subsumed within the global become problematical as well. For example, absence of an outside to the global marks the rendition of “Empire” in Hardt and Negri (2000). They aver that globalization has relocated entire nations into the logic of global capital, thereby rendering redundant the idea of an outside.

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Third world as the resisting outside thus becomes historically obsolete. Resultantly, world of the third is doubly forgotten in Hardt and Negri’s Empire by the denial of the existence of even the third world. Unpacking Formal-Informal Dualism The unpacking of the formal-informal economic dualism and the counter-cartograph of the economy through the class-focused decentering takes off by identifying three broad types of labor in the everyday: (i) individual labor (A), (ii) non-labor (B), and (iii) collective labor (C). To this we add two other criteria: distribution and remuneration. In the case of distribution, we simply take two forms of output distribution—commodity and non-commodity—and for workers’ remuneration too two forms—wage and non-wage. This way we end up with twentyfour different class sets (Cullenberg 1992). Table 1 Sl. No.

Performance of

Workers’ Access to

Output

Workers’

Surplus Labor

Appropriated

Distribution

Remuneration

Surplus 1

A

A

Com

Wage

2

A

A

Non-Com

Wage

3

A

A

Com

Non-Wage

4

A

A

Non-Com

Non-Wage

5

A

B

Com

Wage

6

A

B

Non-Com

Wage

7

A

B

Com

Non-Wage

8

A

B

Non-Com

Non-Wage

9

C

A

Com

Wage

10

C

A

Non-Com

Wage

11

C

A

Com

Non-Wage

10

12

C

A

Non-Com

Non-Wage

13

A

C

Com

Wage

14

A

C

Non-Com

Wage

15

A

C

Com

Non-Wage

16

A

C

Non-Com

Non-Wage

17

C

B

Com

Wage

18

C

B

Non-Com

Wage

19

C

B

Com

Non-Wage

20

C

B

Non-Com

Non-Wage

21

C

C

Com

Wage

22

C

C

Non-Com

Wage

23

C

C

Com

Non-Wage

24

C

C

Non-Com

Non-Wage

Com: commodity, Non-Com: non-commodity

Even at this elementary level the economy appears as the institutional configuration of innumerable forms of these twenty-four class sets. Considering further overdetermining conditions of existence (processes of distribution and receipt of surplus, social needs, race, caste, gender, property structures, power relations, etc.) for these class sets would only deepen the level of heterogeneity in the economy. Because no one class process can be reduced to another, the class-focused economy is constitutionally disaggregated. Insofar as the economy cannot be reduced to one or a set of class sets (say, capitalist or feudal), the class-focused economy is also decentered. Economic dualism is untenable once the class-focused perspective to the economy and the economic is inaugurated. The international symposium on the informal sector organized by

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International Labour Organsation/International Confederation of Free Trade Unionsin 1999 classifies the informal sector workforce into three major groups: (i) owner-employers of micro enterprises using a few paid workers, with or without apprentices; (ii) own-account workers owning and operating one-person businesses, who work alone or with the help of unpaid workers, generally family members and apprentices; and (iii) dependent workers, paid or unpaid, including wage workers in micro enterprises, unpaid family workers, apprentices, contract labor, home workers and paid domestic workers. These three settings could potentially map out into the twenty-four class sets, dispersed into exploitative class sets of capitalist, feudal, slave and CA communitic types (5–12, 17–20), independent class sets (1–4) and non-exploitative class sets of AC communitic and communist types (13–16, 21–24).2 Once the capitalocentric-Orientalist picture of the economy is abandoned in favor of a class-focused decentered economy, there no longer exists any logical basis for hailing a specific economic organization, say, the capitalist one, or even a group of class sets, as the privileged formal sector. Similarly, no basis exists for assigning “informal” to a particular class set. The received terms “formal sector” and “informal sector” and the dualism formal/inormal dissolve into the heterogeneous and overdetermined infinity of the class processes in an economy. Moreover, various kinds of class sets may encompass the formal sector. Let us rule out the possibilities of (i) unpaid labor or payment in kind and (ii) non-commodity from the definition of formal sector; then, the formal sector could comprise class sets (5, 9, 13, 17, and 21), wherein capitalist class set is only one type, namely (5, 17). By contrast, class set 21 would be a communist class set in which collective performance and appropriation of surplus appears in relation with the market form of labor power and output. It is equally possible that many of these class sets could be within the informal sector, which in turn makes the division between formal and informal at best hazy and at worst impossible. Reduction of the formal sector to capitalism

2

Communitic class process (CA and AC) refers to two possible scenarios where (i) even as direct producers may collectively (C) produce surplus, only one of these producers (A) appropriates the surplus (say, the male head of family in family agricultural unit) and the rest are excluded, and (ii) even as direct producers perform surplus labor individually (A), the appropriation is done collectively (C) such that nobody is excluded from participation in it (say, all members of independent farm units come together to appropriate the surplus even as the produce is individually created in their respective farms) (Chakrabarti and Dhar 2010). 12

and the informal sector to non/pre-capitalism becomes untenable in our rendition of development. Finally, as the class sets are in continuous flux and change from within and from one type to another, it also renders the question of transition open-ended and non-teleological (Chakrabarti and Cullenberg 2003); which is in contrast to the deterministic route of formalization of the economy forwarded by the mainstream approaches such as ILO (International Labour Office 2002). What does economic dualism mean in the backdrop of such a decentered and disaggregated economy? The dualistic structure suggests a further reconfiguration of this economy by fixing and hence privileging a particular class process, say, capitalist or (5, 17), as symbolizing the formal sector and the other class processes, now homogenized into non-or precapitalist, as the informal. Further, recall that mainstream literature attributes a positive sign to the characteristics of the “formal” which, by default, is the capitalist class process here (for example, see Porta and Shleifer 2014). At the same time, defined as lacking those attributes, the non-capitalist class processes are consequently positioned as devalued in relation to capitalist class processes, and the non-capitalist class processes consequently get clubbed into the homogeneous figure: pre-capitalist. The formal-informal dual is typically mapped into the capitalist-precapitalist duality posited in terms of the privileged center of the formal sector à la the capitalist sector. Any subsequent endeavor to smuggle in heterogeneity remains incarcerated within this pre-constituted dual structure. While the ILO discourse brings into contention the lack of formal centric aspects of rights and laws, recognition, decency, security and so on in its characterization of the category of informal, in economic terms, the most important distinction is made with respect to productivity (value added) and competitiveness. Once this capitalocentric-Orientalist view is accepted, transitional logic under the formal-informal dual model is laid bare as a (political) attempt to govern the re-location and re-construction of the socio-economic contours of informality through the lens of and in favor of privileged entities of capitalist and modern. Porta and Shleifer (2014) argue that informal enterprises are unproductive and stagnant. For a medium sample country, informal enterprises add fifteen per cent of value per employee of formal enterprises. This means that the informal sector is overwhelmingly clogged by simple reproduction enterprises unable to

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generate substantial surplus value for reinvestment in capital accumulation, which makes them incapable of growing and competing. This difference in productivity is reflected in differences in income, quality of product and competition, making them conclude the following for informal sector enterprises: “Far from being reservoirs of entrepreneurial energy, they are swamps of backwardness. They allow their owners and employees to survive, but not much more” (118). Attempts to valorize informal sector or to rethink long-run development by building on it are futile and counterproductive, a position that is widely shared by policy-makers across the world (see, for example, India Ministry of Finance 2013 in the case of India). In addition to being seen as a victim of its own backward structural deficiencies (as ILO and the World Bank claim), the recalcitrant presence of informality also emerges as a threat to the transition of underdeveloped economies to modern capitalist ones. The transition logic stemming from the development frame entails that the informal sector must (be made to) wither away. Development Crisis as Transitional Crisis An analogous and in fact the original classical development narrative informs the Lewisian dual model of small industrial capitalist economy and predominantly agricultural pre-capitalist economy such that, via the capitalocentric-Orientalist logic of transition, the latter gets truncated and the former expands rapidly (Escobar 1995, Chakrabarti 2014). East Asia in the 1960s–1980s and post-Mao China (ongoing) are often held as successful examples of such a transition. However, it is also widely recognized that the Lewisian transitional logic has run into problems in many parts of the world. Take the case of India. The fact that people are leaving the rural economy en masse is an “opportunity” even as the fact that, despite high economic growth for the last two decades, those same people are not able to find jobs in the labor-absorbing formal sector (resulting in the rapidly burgeoning informal sector) signals a transition crisis (India Ministry of Finance2013). In this context, the strategy of the formalization of the informal sector is indispensible for completing the development utopia. Resultantly, the two logics of transition, from agricultural to industrial and from informal to formal, have been telescoped into a united rationale in the contemporary development paradigm. Development as Growth: Global Capitalism and Primitive Accumulation Following liberalization policies in the post-globalization period, global capital was privileged as the “center” with the intent to remap economies in relation to this new centrism. Since mass

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poverty is seen as emanating from the “traditional,” “pre-capitalist” socio-economic structure, the “magic medicine” supposed to eradicate poverty is structural transformation (the basis of structural adjustment), which would eliminate or transform these backward qua third world structures in favor of modern infrastructures and institutions, attitudes/habits (including laws), education for generating human capital and modes of governance to facilitate capitalism-induced growth. Growth to reduce mass poverty can thus be achieved only through a structural transition of the third world in the image of modern capitalism. Notwithstanding the many hiccups and turns (inequality, re-distribution, human development, etc.), this remains the number one objective and strategy of development (see any World Bank Report to verify this point). Marxism, on the other hand, argues that this lengthy process involves the disruption and separation from means of production and means of subsistence of the world of the third subjects, which among other things, brings about the mass commodification of labor power. This process of “separation” can transpire through piecemeal disruption or large-scale displacement through primitive accumulation. As the strategy of growth-induced development changed in the course of history, so did the form and pattern of primitive accumulation as a continual process of capitalism-induced growth. Take the case of India. The post-1991 reforms in India implanted the centricity of global private capital as against self-reliant state capital during the planning period and began the long-drawn-out process of creating a competitive market economy. Through outsourcing, sub-contracting, offshoring and body shopping, the global capitalist enterprises forged relations with local enterprises procreating and circumscribed within a nation’s border (the local market) and with enterprises outside the nation’s border (the global market). Specifically, via the local-global market, global capital was linked to the ancillary local enterprises (big and small scale, local capitalist and non-capitalist) and other institutions (banking enterprise, trading enterprise, transport enterprise, etc.) and together they formed the circuits of global capital. Induced by the expansion of the circuits of global capital (inclusive mainly of manufacturing and services), rapid growth of the Indian economy is feeding into an explosive process of urbanization and producing along the way a culture of individualization, consumerism, new ideas of success, entrepreneurship and human capital, new ways of judging performance and conduct, changing labor/gender/caste-related customs and mores, etc. Resultantly, a social cluster of practices, activities and relationships

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transpires that literally captures the production of an encampment; we named it the “camp of global capital.” Circuits-camp of global capital is provisionally named “global capitalism.” World of the third, on the other hand, constitutes the overdetermined space of capitalist and non-capitalist class enterprises that procreate outside the exchanges within the local-global market and hence circuits of global capital. The social cluster of practices, activities and relationships connected to the language-logic-ethos-lived experience of this space constitute the “camp of world of the third.” The spatial associate of the logical Other of development in the era of neo-liberal globalization and global capitalism is the circuits-camp of world of the third. We can make no a priori value judgment regarding world of the third; that, in concrete manifestation, could be in “agriculture” or the “informal” sector; in rural or urban, in India or in Paris; solely or a mixture of good, bad or ugly, rich or poor, liberal or totalitarian, exploitative or nonexploitative, etc. This does not mean that the border between the two camps are rigid and compartmentalized; rather, flows of all kinds (economic, political, cultural and natural) spill over from one to the other thereby constituting and transforming one another, even to the extent that what is in world of the third presently can become part of the circuits of global capital in the future and vice versa (Chakrabarti et al. 2012, ch 7-9). It may be recalled that what for us is circuits-camp of world of the third is for modernist discourses like development “third world”: this is the Orientalist moment through which capital and modern concomitantly emerge as the privileged center. It is what turns the disaggregated non-capitalist space into a pre-capitalist one. As a figure of lack, third world epitomizes mass poverty, arising in no small part due to inefficient and non-competitive practices, activities and “backward” institutions; third world as nurturing excess labor, as harboring a large reserve army of the unemployed/underemployed. Rather than appreciating the possibility of an outside to the circuits of global capital, one loses sight of the world of the third through its foreclosure. Instead, what awaits us is a devalued space, a lacking underside—third world—that needs to be transgressed-transformed-mutilated-assimilated. This foreclosure of world of the third through the foregrounding of third world (or, by substitute signifiers such as social capital, community, etc.) helps secure and facilitate the hegemony of (global) capital and modernism over world of the third.

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This changing map of the Indian economy was/is driven by, among other things, the primacy accorded to global capitalist sites of performance, appropriation and distribution of surplus value which, via the central policy objective of high growth rate, resulted in the expansion of the circuits-camp of global capital producing in turn a new wave of primitive accumulation with reference to world of the third. Global capital has been expansive, but not necessarily inclusive. It structurally excludes. The hitherto (en)closed bastion of agriculture and forest economy is fast crumbling under the relentless barrage of global capital and global market producing in turn (i) continual internal crisis and migration of its younger population and (ii) an enduring process of alienation and expropriation of land, forest, rivers, etc. However, what appears as progressive from a modernist perspective comes to be seen as wrongful wounding and violence (including what Jonathan Lear (2007) calls “loss of concepts,” a “loss of events,” a “loss of mental states” and at least a “threatened loss of identity”) from the perspective of world of the third. This in turn allows us to make sense of the countrywide resistance against this process without reducing the content of the resistance to capitalocentric-Orientalist logic or its mechanics of cost-benefit calculation. In post-colonial conditions, we not only have a materially divided society (structurally, income-wise, socially), but also a nation with divided perspectives and understanding of what is “progress” and “just.” This makes it imperative for Marxism to take a position vis-à-vis primitive accumulation, not to extol it as “historically inevitable” but critically analyze it by deconstructing historical inevitability and its underlying deterministic teleology towards capitalism and modernism (Chakrabarti and Dhar 2010). Development as Social Needs: Class and Redistribution Like the classical development approach that emphasises growth, classical Marxian approaches with their emphasis on modes of production have emphasized the centrality of production in theorizing (stages of) development; distribution has been traced to the point of production. However, without accounting for redistribution there is simply no way to make Marxian theory relevant in contemporary development analysis that combines economic growth with redistribution programs (such as under the human development approach or inclusive growth/development). As it stands, there is no Marxian theory (or, for that matter any theory) that integrates production, distribution and redistribution in one frame, and specifically class with social needs.

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The class-focused approach does not per se account for the “marginal” existence of the poor, the old and so on who provide no necessary conditions of existence to any class process. If we are to follow the class distributions that tie payments to conditions of existence the agents provide, then these people, incapable of being such condition providers, do not qualify as justifiable recipients of the fragments of subsumed class payments, which is why surplus cannot be exhausted in the payment of subsumed class processes; there must be a remainder after subsumed class payments. There must conceptually be two forms of distribution: one directed as subsumed payments (towards the point of production) named as production surplus and the other over and above the production surplus named as social surplus. Social surplus targets the various socially determined needs of the people (such as relating to poverty, environment, children, unemployed, old, etc.) who provide no conditions of existence to the class processes. The surplus aimed at providing conditions of existence to class processes is conceptually distinct from those surplus distributions directed at reproducing social needs. Himself aware of this division, Marx in “Critique of the Gotha Programme”not only referred to the distribution of surplus related to production but also distributions mentioning, in his own words, “the general costs of administration not belonging to production,” “that which is intended for the common satisfaction of needs, such as schools, health services, etc.” and “funds for those unable to work, etc., in short for what is included under the so-called poor relief today” (1977, 13–30). Moreover, our understanding of need is not referring to a natural space, consisting of some pre-defined objective ends. “Need” as such is an empty category that manifests in concrete/specific form in a historical context, through conflicts over interpretations and social struggles. Therefore, the emergence of need as specific social need and its character is socially determined and remains open to interpretation, change and even to dissolution. Need-related development struggles are over the meanings of needs and of their character and also over the manners, mechanisms and forms of appropriating and distributing social surplus and who should be considered as the rightful recipient of social surplus. Players engaging in the need space include central governments, regional governments, local bodies, NGOs, international agencies such as the World Bank, class structures, political parties and social movements. Having defined and defended social surplus, let us summarize our surplus scheme in accounting terms (Chakrabarti et al. 2008). Denote the total surplus (surplus value plus surplus product) of a nation as TS, decomposed into production surplus and social surplus. Define SV1

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as the sum total of surplus value directed towards production surplus (subsumed payments, SC) and SV2 as the remaining surplus value directed towards social surplus (SS). Moreover, many goods may be directly consumed. Let SUV be the surplus appropriated in use value form and let the distribution SSE be divided between production surplus and social surplus. 3 Summing these, our analytical terrain encompassing production, distribution (to the point of production) and redistribution (away from production) becomes: n s     Surplus  SV1   SC i   SUV /   SSE  i  1   r 1      Production Surplus

     

     2  // SV  SS  SS  SUV  SSE      k  k 1  z 1       Social Surplus m

g

If the struggles over production surplus are over class-related processes and hence are class struggles, then the struggles over social surplus pertaining to struggles for or against various needs are need-related development struggles. Class and need struggles (which in turn are impacted by all kinds of non-class and non-need struggles) are locked in overdetermined and contradictory relations. While this open-ended development space is sensitive to alternative interpretations and invocations of social needs that may have counter-hegemonic potential (call it radical needs), there is always a robust attempt, especially by state and international agencies, to promote those social needs that will ensure the control and regulation of world of the third subjects (by giving it a victim/marginalized/evil status). Call the latter hegemonic needs. Open to radical and hegemonic needs, our theory of development opens the need space to the possibility of intense and unpredictable development struggle. The Development State: Compassionate and Violent Marxian literature on the state had paid particular attention to the place and function of state in a scenario of development centralized on modernization and capitalism. The problem has been that thus far Marxian theories have been drawn to a critique of the “capitalist” state (as, say, in many 3

For simplicity’s sake, we presume that SUV is measured in socially necessary abstract labor time too.

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underdeveloped and developing countries), but at the same time have considered state as essential to its political project to achieve “socialism” (ironically, often the name for state capitalism as in the USSR and private capitalism as in China). This paradox stems from the inability to separate the category of socialism/capitalism from the state, thereby confusing socialism/capitalism with which political force has state power and with their dubious identification with planning or market. The source of confusion in turn stems from the inability to realize that socialism from a Marxian perspective requires at the minimum certain justice conditions connected to its evaluative space—productive justice, appropriative justice, economic democracy justice and development justice. Bringing into play these justice conditions (as well as multiple other considerations) in the overdetermined and contradictory reality, including within the open-ended site of the state, is bound to have distinct and differentiated patterns of impact on the place and function of state as against the ruling dispensation’s attempt to hoist the development state over the post-colonial economies through modernization and capitalism. Take the case of India. By invoking and activating hegemonic social needs via the redistribution of social surplus, capitalist development focuses on the compassionate face of the state, on how it engages in the act of handholding with respect to world of the third, albeit in the name of uplifting third world from its so-called decrepitude. Propelled by capitalism-induced, growth-obsessed policies of the state, the other dimension of development releases the violent logic of creation and expansion of the circuits-camp of global capital through primitive accumulation, a process encouraged and facilitated by the state. In the name of uplifting the third world, the developmental state in one turn intervenes in world of the third via various inclusion-based social programs targeting social needs even as it comes down hard on world of the third to facilitate the process of primitive accumulation. Resistance to capitalist development must thereby encompass both axes: through challenges to primitive accumulation it must force the state to abandon its support for it, and by foregrounding radical needs it must compel the state to address these. Connecting these oppositional imperatives to class exploitation and to the proposition of postcapitalist imaginations and projects, actual and potential, will challenge in turn the hegemony of capitalist development. It is only then that the horizon of post-development gets actualized. Reference List

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 Brenner, R. 1977. “The Origins of Capitalist Development: A Critique of Neo-Smithian Marxism.” New Left Review 104: 25–93.  Chakrabarti, A. 2014. “A Post-Colonial Critique of Economic Dualism and Its Politics.” Journal of Contemporary Thought 40 (Winter): 158–65.  Chakrabarti, A., A. Dhar, and B. Dasgupta. 2015. The Indian Economy in Transition: Globalization, Capitalism and Development. New Delhi; London: Cambridge University Press.  Chakrabarti A., A. Dhar, and S. Cullenberg. 2012. World of the Third and Global Capitalism. New Delhi: World View Press.  Chakrabarti, A., and A. Dhar. 2010. Dislocation and Resettlement in Development: From Third World to World of the Third. London: Routledge.  Chakrabarti, A., S. Cullenberg, and A. Dhar. 2008. “Rethinking Poverty beyond NonSurplus Theories: Class and Ethical Dimensions of Poverty Eradication.” Rethinking Marxism 20 (4): 673–87.  Chakrabarti, A., and S. Cullenberg.2003. Transition and Development in India. New York: Routledge.  Cullenberg, S. 1992. “Socialism’s Burden:

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 Kanth, R.K., ed. 1994. Paradigms in Economic Development: Classic Perspectives, Critiques and Reflections. New York: Routledge.  Larrain, J. 1989. Theories of Development. Cambridge: Polity Press.Lear, J. 2007. “Working through the end of civilization” in International Journal of Psychoanalysis, Volume 88.  Marx, K. 1977. “The Critique of the Gotha Programme.” In Karl Marx: Selected Writings, 2nd ed., D. McLennan, ed., 13–30. New York: Oxford University Press.  Nandy, A. 1983. The Intimate Enemy: Loss and Recovery of Self under Colonialism. New Delhi: Oxford University Press.  Porta, R.L. and A. Shleifer. 2014. “Informality and Development.” Journal of Economic Perspectives 28 (3): 3–24.  Rahnema, M., and V. Bawtree. 1997. The Post-Development Reader. London: Zed Books.  Rey, P.P. 1978. Les alliances de classes. Paris: Maspero.  Ruccio, D. 2011. Development and Globalization: Marxian Class Analysis. New York: Routledge.  Warren, B. 1980. Imperialism, Pioneer of Capitalism. London: Verso.

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