Demonetization: Drama and Diversion

The generation of black incomes is a continuous process. Black incomes re-enter the ‘white’ economy in a laundered form. A businessman’s aim in life is not to live in a house with gunny bags of notes, but to keep multiplying his money, for which he needs to buy ‘white’ assets. For example, builders take part of their payments in cash, but they don’t keep storing cash in underground pits; rather, they redeploy the cash in real assets on a continuous basis. At any given time, therefore, of the accumulated wealth generated through these processes, only a portion is in the form of notes, which is the amount needed for circulation. (Imagine a game of musical chairs, with notes as the person left standing.)

While demonetization may inconvenience traders to the extent to which they happen to have it in note form at the time, it is an interruption, not an eradication. Necessarily, the State has to reintroduce legal tender to replace the demonetized notes, whereupon the process can start again, as long as the activities themselves are not eliminated; and the State cannot keep on repeating demonetization, as it would destroy faith in the currency.

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Agrarian Crisis Pt. VIII

Effect of 25 Years of Neoliberal Policy: Tightening Grip of Parasitic Forces

The immediate causes of the present agrarian crisis can be located in the neo-liberal policies of the last 25 years. Among these are: the reduction of public sector investment related to agriculture, the reduction of bank credit to agriculture, the near-winding up of public sector extension services, the reduction of Government expenditure in the rural areas, the opening up of agriculture to imports, the reduction of public sector procurement and price stabilisation measures, the increase in administered prices of inputs, and the large-scale forcible acquisition of peasant lands for various projects. In this sense, it is not wrong to see the present agrarian crisis as one wrought by neo-liberalism. These neo-liberal policies in turn can be traced to the predatory interests of foreign investors and the Indian corporate sector (which itself has innumerable ties to global capital).

At the same time, all of these policy measures operate in the context of the existing structure of agrarian relations in India. We need to view various policies in this context in order to understand their impact.

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A Budget amid Agrarian Crisis Pt. VII

Peasants as Subjects

In previous sections of this article we have been talking about the agrarian crisis as if there were agreement about what it is. But in fact there are two basically opposed, rather mutually exclusive, views as to what the agrarian crisis is, and hence about how it should be addressed.

All ruling class programmes claiming to address the agrarian crisis ultimately separate the question of India’s agriculture from the question of those who work it. Their ‘solutions’ are defined in terms of the ‘productivity’ and the profitability of some future agricultural operators (this is what Modi means when he talks of ‘doubling’ farmer incomes), not in terms of the subsistence and productive capacity of the today’s actually existing peasantry. In essence, as we discuss below, this means maximising the returns to big capital, and assuring people that big capital will generate employment for those among them displaced.

The rulers in fact consider the existing peasantry to be the main obstacle to the sort of transformation they wish to bring about. For their aim is to create, within the sea of India’s agriculture, islands of high returns based on sizeable investments linked to global capital, while consigning the rest of the peasantry to a twilight of multiple subsistence employments in agriculture and elsewhere. Unsurprisingly, this ruling class programme faces resistance from peasants.

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