If the recent turmoil in the Congress Party and its outcome prove anything, it is that in spite of the dismal performance of the public sector nationalisation remains popular with large articulate sections of the community. That is why Mrs Indira Gandhi has been able to push through the nationalisation of banks with such ease. Mr Morarji Desai, a known conservative, has found it expedient to proclaim that he too would have implemented the measure if he was not deprived of the Finance portfolio and even Mr SK Patil, an inveterate critic of the public sector, has been prudent enough to confine himself to a criticism of the manner of the takeover.
The popularity of the nationalisation is a measure of the unpopularity of big business among the more vocal sections. This is the simple explanation for the fact that even those who are cognisant of the failures of public sector projects and the burden that their inefficient management places on the country’s economy find themselves supporting the nationalisation of banks.
Hangover
Some advocates and supporters of nationalisation are undoubtedly motivated by ideological considerations. Others are unable to overcome the hangover of the past in spite of the knowledge that even communist governments are finding it necessary to introduce an element of competition in their economies and to reduce centralisation and the countries that have gone in for large-scale nationalisation have as a rule failed to make rapid progress.
But such men as are either ideologically motivated or suffer from a hangover of the past are clearly a small minority in the Congress Party. The question is: why have the others been so anxious to fall in line? It will be a simplification to say that they have no views of their own and that they can be led in any direction by a determined leader. It is not their views but their prejudices which are important.
There is hardly an under-developed country in which businessmen are particularly liked and respected. This is true even of societies like Pakistan which are thoroughly opposed to the doctrine of Marxism in any form and where the trade union movement is still in its infancy. The resentment against the riches of the 22 top business houses was, for example, an important factor in the upheaval against the Ayub regime earlier this year.
India has had relatively respectable socialist and trade union movements for some decades. Mr Nehru did much to popularise a mild variant of socialism in the country. But the factors that account for the unpopularity of big business in India are in some respects not very different from those that operate in Pakistan.
Commerce and industry, as we know them today in Asian and African countries, are the products of the process of modernisation. They offend against traditional culture and value systems. Of necessity they disrupt the pre-modern economic structure. They introduce an element of competition in essentially non-competitive societies. They challenge traditional leadership based on heredity and claim privileges on the strength of their newly earned wealth. It is immaterial that many business magnates are orthodox in their religious and social outlook, because their activities disrupt traditional societies and inevitably provoke resistance.
This resistance expresses itself in many ways. The situation is fairly simple in societies where industry and commerce happen to be owned largely by entrepreneurs from the imperial country as in most African countries or by foreign minorities as in Indonesia and Malaysia. Nationalism there naturally acquires socialist overtones till the realisation grows that businessmen are necessary and that it is not so easy to replace foreigners with local people. The situation is slightly more complex in India because most of the country’s commerce and industry is owned and run by indigenous entrepreneurs. But the difference in the two situations is not as wide or as basic as it might appear on a surface view.
Small Groups
In India a large part of the country’s business and industrial activity is controlled by small ethnic and religious groups – Parsis, Jains, Marwaris and Gujaratis. The fact that except the few hundred thousand Parsis the other groups in question have been assimilated to the cultural mainstream helps. But it will be naive for anyone to suggest or believe that the popular prejudice has nothing to do with linguistic and provincial considerations. Maharashtra Congress leaders would, for instance, not have been so enthusiastic about bank nationalisation if some of the affected institutions belonged to the Maratha community and its economic status in Bombay was better than it happens to be. The same applies to Mr Atulya Ghosh. His support to bank nationalisation need not be regarded as hypocritical just because of his alleged relations with big business. The Bengali intelligentsia feels dispossessed and favours radical measures which will curb the activities and power of the non-Bengali business community in their State.
But even if we did not have this complication the problem would not have disappeared. A deeply rooted traditional culture like India’s cannot but be expected to put up a stiff and prolonged resistance against forces of change. That commerce and industry on the one hand and their detractors on the other are unaware of their objective role in Indian history does not alter the reality of the situation.
The impression has been created that the image of the business community has been tarnished because its members indulge in malpractices, because many industrialists behave like speculators and because they produce shoddy goods which they sell at unreasonably high prices in an over-protected market. Implicit in all this is the suggestion that European and American businessmen behaved very differently at a similar stage of development in their countries and that there is no corruption in socialist countries.
Unwarranted
Both these assumptions are to a large extent unwarranted. But it is equally interesting that the bureaucracy, which often connives at and even facilitates these malpractices and takes a share out of the gains, does not attract the same kind of hostility. In fact there is no effective opposition to any move which seeks to augment its power. In theory it is often decried by senior ministers and all left parties for ineptness, inefficiency and corruption. But its powers and privileges continue to grow. There are others like film actors and actresses whose conspicuous consumption does not create any resentment. In fact they manage to pass off as radicals.
Several social forces have combined to produce this bizarre result. Both the feudal landlords and professional men dislike businessmen because their value systems are different. The feudalists come from a wholly non-competitive world in which everyone’s status is defined. It will be interesting to find out the number of socialist and communist leaders this class has produced and the contribution its way of life has made to the triumph of distributive concepts in India.
The professional men identify themselves with the civic values of their Western counterparts without caring to recognise that these values have grown and prospered in the context of a host of other developments, specially of economic growth, and that they cannot be transplanted easily on alien soil. The result is that they acquire contempt not only for the traditional elite but also for less sophisticated and earthy businessmen who are determined to make good, are not sufficiently articulate in terms of modern ideologies and are often orthodox in their personal lives. It is a modem variant of the traditional struggle between the Brahmin and the Vaishya in India or the mandarin and the trader in China. The producer of wealth continues to be despised by the intellectual in most developing countries.
The Gandhian heritage with its emphasis on austerity and civic consciousness and responsibility reinforces this trend in Indian intellectual life. There is a shrieking disparity in the living standards of the upper strata and the common people in the country. Conspicuous consumption and display of wealth appear vulgar in the midst of degrading poverty. The disparity needs to be reduced. But certain points need to be kept in mind.
First, the process of modernisation must inevitably accentuate disparities in income. Westerners who are pained at the disparities in India either do not know their own history or are being hypocritical. Secondly, men who have just been released from the thraldom of traditional restraints and have not yet acquired modern sensibilities cannot be expected to resist temptations. The contrast between the manners and behaviour patterns of old type businessmen who built fortunes and their modem counterparts illustrates the point. The former indulge in much less conspicuous consumption.
Finally, the socialist and communist movements in India represent the bureaucratic aspirations of middle classes who are reluctant to use their hands and have nothing but contempt for all producers of wealth, whether he is an industrialist or a well-to-do farmer. These classes are articulate and politically effective.
In the absence of competition from the truly poor sections of the community which have not yet been politicised and made aware of the power that their numbers give them, the middle classes are able to impose their will on the political system to the detriment of the dispossessed on the one hand and the country’s economy on the other.
Unionism has become a double edged weapon in India. It is aimed at the employer and the consumer simultaneously. Poor service and as little work as possible have become a dominant feature of the national ethos. Socialism in India has become an ideology of distribution of wealth to the middle strata. It has to become an ideology of harder work and far greater productivity if the country is to advance economically.
The Times of India, 22 July 1969