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Capitalism, Exclusion, Transition: The Politics of the Present

Kalyan Sanyal's magnum opus, Rethinking Capitalist Development, can be seen as a contribution to the project of reimagining political economy in a way that would place "unsolved political problems" at its centre. It could also be described as a response to the opaqueness of economic processes today and their apparent resistance to existing categories and frameworks. Despite the irony in the fact that it is unlikely to be read by many economists, this treatise is what every author would want her book to be - generous, fertile and good to think with.


today and their apparent resistance to

Capitalism, Exclusion, Transition

existing categories and frameworks. Sanyal’s attempt to reread the con

The Politics of the Present
temporary global economy begins by invoking the popular perception that “the triumph of capitalism seems unques-Satish Deshpande tionable, self-evident and total” (RCD:1).

Kalyan Sanyal’s magnum opus, Rethinking Capitalist Development, can be seen as a contribution to the project of reimagining political economy in a way that would place “unsolved political problems” at its centre. It could also be described as a response to the opaqueness of economic processes today and their apparent resistance to existing categories and frameworks. Despite the irony in the fact that it is unlikely to be read by many economists, this treatise is what every author would want her book to be – generous, fertile and good to think with.

This review essay is based on a keynote presentation at the session “Engaging with the Work of Kalyan Sanyal” that was part of a seminar at the Institute for Social and Economic Change, Bangalore. I am grateful to Supriya RoyChowdhury for the opportunity to pay my respects to one of the most fertile works of political economy in recent times. Thanks also to the session chair, R S Deshpande, my co-panelists, Rajesh Bhattacharya and Snehashish Bhattacharya as well as the other seminar participants for their engagement.

Satish Deshpande ( teaches at the department of sociology, Delhi University.

Economics has gained the title of Queen of the Social Sciences by choosing solved p olitical problems as its domain.

– Abba Lerner (1972:259)

bba Lerner’s famous four-decadeold provocation remains relevant as a marker of the shift in the terrain of debate. Today it is no longer useful to talk of commonplaces like the contiguity of disciplines, the arbitrariness of borders, or the content and volume of intellectual trade across them. The crisis of disciplinarity in the 21st century is rather more fundamental – “otherness” is now a matter of the heartland rather than the hinterland. How should economics (for example) respond, not so much to the known fact that the political or the social are constitutive (rather than merely contiguous or contributory) aspects of the economy, but to the discovery that it is precisely the inherited modes of bracketing this fact that are clouding disciplinary vision and rendering the economy illegible? Regardless of the discipline involved, such a predicament rules out both a r eturn to “business as usual” as well as facile talk of inter-, trans- or anti-disciplinarity. And while every social science discipline today is confronting its own version of this predicament, economics is arguably among the most affl icted.

The broadest characterisation of Kalyan Sanyal’s magnum opus, Rethinking Capitalist Development: Primitive Accumulation, Governmentality and Post-Colonial Capitalism (2007) is that it is a courageous attempt to meet this predicament head on. More concretely, the book can be seen as a contribution to the project of reimagining political economy in a way that would place “unsolved political problems” at its centre. Rethinking Capitalist Development (henceforth RCD) could also be described as a response to the opaqueness of economic processes

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The book ends with a reference to the protests against the World Trade Organisation and the G-8 summits in various cities across the world, protests that included representatives of both the dispossessed from the third world as well as an embattled first world working class facing job losses due to outsourcing. It is Sanyal’s contention that these protests symbolise the struggle of the “need economy” against the “accumulation economy”, and that “it is on this rough and uneasy terrain that one can catch a glimpse of the politics of exclusion and resistance for the postcolonial world today” (RCD:262). The journey from the common sense perception of the desirability of capitalism as an already-established universal truth to the emergence of popular resistance to it as a predatory system is covered in 261 p ages of text divided into six chapters.

Central Theses

The basic argument of the book is easy to summarise and rests on three key propositions: First, the global capitalist economy today consists of an interlinked “complex” with two distinct spheres, one defined by the circuits of capital proper

– the “accumulation economy”, which dominates the advanced capitalist countries; and the other – the “need economy” – which exists outside the circuits of capital proper and is the dominant form in the postcolonial economies of the erstwhile third world. While the accumulation economy functions in the normal capitalistic fashion in that it is accumulation-driven, the need economy is geared to the fulfilment of subsistence requirements albeit through the market.

Second, the central feature of the postcolonial economy is the continued operation of a specific form of primitive accumulation that also requires its own (partial) reversal. Contrary to orthodox Marxist theory, primitive accumulation is a permanent rather than only an initial


feature of capitalism, which requires the continual dispossession of those who inhabit its “outside”. However, the conditions of ideological and political hegemony of capital include the electoral compulsion to divert some of the surplus from the accumulation economy towards “developmental” interventions that enable the survival of the dispossessed in the need economy. Thus, primitive accumulation in the postcolonial context does not produce wage labourers to be employed (and exploited) by capital; it leads instead to “exclusion”, or the incarceration of large numbers in the “informal sector”.

Third, when understood as the interplay between the accumulation and need economies, the dynamics of contemporary postcolonial capitalism breaks free of narratives of “transition”. It is not necessary any more to adhere to a fi xed historicist understanding of the teleo logy of development – of “real” capitalism arriving some day, or of socialism following it later. All the convoluted explanations for an inevitable yet eternally blocked transition can now be dispensed with. Postcolonial capitalism will continue in its normal course to require the coexistence of the accumulation and need economies; this dualism is not a sign of defi ciency, weakness, incompleteness, immaturity or aberration. We need not wait for the transition because it has already happened – the future is here, and it is now.

Theoretical Location

To appreciate the main strengths of RCD

– its ambitious attempt to interface divergent strands of social theory, and the sheer panoramic sweep of the trajectories it maps – we must understand how the book positions itself in relation to the literatures it addresses.

While the Introduction runs quickly (RCD: 8-26) through known positions on the political economy of “underdevelopment” (dependency, world systems and variants of the articulation of modes of production thesis), it also identifi es two preferred interlocutors. These are the feminist critique of the triumphalism of capital offered by J K Gibson-Graham, and an ensemble of neo-Gramscian perspectives centred on the idea of the “passive revolution”. Sanyal appreciates Gibson-Graham’s attack on the “capitalocentric” nature of economic discourse,1 as well as her2 insistence on foregrounding non-capitalistic sites of production within capitalism such as the household and forms of self-employment (RCD: 4-5). But he disagrees on two points: He believes that “Gibson-Graham problematises the economy by unsettling the ‘hegemony of capital’; but in her analysis, the concept of hegemony itself escapes problematisation” (RCD: 6). Moreover, where Gibson-Graham “foregrounds economic heterogeneity and strategically deploys it to question the dominance of capitalism”, Sanyal argues that it is “economic heterogeneity that constitutes capitalism” and asks “whether that heterogeneity itself can be seen as an expression of capital’s hegemony”? (RCD: 7).

The concept of hegemony is the hinge which allows Sanyal to move from the Gibson-Graham critique to the neo-Gramscian one. Once again, he is in sympathy with much that is said here, and is especially appreciative of how the Gramscian approach foregrounds the political problem of transition outside the classical sites of western capitalism. The “passive revolution” provides a powerful generic framework for theorising the blocked transition in postcolonial contexts: a weak bourgeoisie is unable to hegemonise society in the name of an exclusively capitalist agenda, and must also accommodate the interests of other classes and groups. The “complex hegemony” required in these contexts forces the State to cater not only to the modern capitalist sector of the economy, but also to the pre-capitalist sector that must be placated because it contains the vast m ajority of the population – which, given universal suffrage, makes it the inescapable site of legitimation. The neo-Gramscian term “pre-capital” thus has both a theoretical and a chronological meaning; it becomes the reason for the inevitability of a “surrogate synthesis” (rather than the genuine one of a fullfledged bourgeois revolution).

While he recognises the genuine advances that neo-Gramscian perspectives have made over older varieties of Marxist theorisation (as seen in the mode of production debate), Sanyal breaks with

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this position because of what he calls its “historicism”. Even though the neo-Gramscians recognise that transition (to “full” capitalism) is permanently blocked, the underlying reason for this remains purely political, because the need for l egitimation prevents the use of the m assive coercion that would be needed to destroy and subsume pre-capital. Though transition is not practically feasible, it still remains theoretically possible. By contrast, Sanyal wants to argue that the survival of pre-capital is (also) an integral and “normal” economic feature of postcolonial capitalism.

In the Gramscian notion of passive revolution, pre-capital is exogenous to capital, a remnant of the past that refuses to go away, and capital must learn to live with it. But if pre-capital is seen as arising out of... the capitalist development process itself, then both capital and pre-capital are freed from the historical/chronological ordering, and the prefi x pre gives way to non. ...In other words, commodity relations integrate capital and non-capital to form the post-colonial economic (RCD:39; emphases in original).

The most important consequence of this shift of perspective is that it abolishes the idea of transition:

[T]he characterisation of the post-colonial economic as a complex of capital and noncapital, with the latter emerging in a space produced by the internal logic of the former, totally dispenses with the notion of transition. If there is a possible transition in this scenario, it is from pre-capitalism to the capital-non-capital complex. ... [This] amounts to saying that transition in the historicist sense has already occurred and what we have is capitalism with an inherent heterogeneity

(RCD:40; emphasis original).

Another point of difference with the neo-Gramscian framework is its (explicit as well as implicit) reliance on a mainly national rather than global frame of reference. Sanyal’s use of the term “post-colonial” is intended to signal a global focus even as he seeks to distance himself from the nation state in both its s patio-juridical as well as more broadly theoretical usages.

With its theoretical trajectory shaped in the Introduction, the rest of the book sketches in the details by laying out Sanyal’s position on three crucial issues: the notion of primitive accumulation; the two avatars of development discourse; and the all important idea of the need

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economy. At an even 100 pages, Chapter 2 (“Ship of Fools”) is by far the longest in the book, and could have been tightened somewhat. It seems to have two functions, first to act as an extension of the “Introduction” by continuing with the task of outlining the general argument, and second to present the detailed position on primitive accumulation.

Sanyal uses the image made famous by Foucault – that of the medieval practice of banishing the insane, the diseased and the unwanted into permanent exile on sealed ships – to refer to the “castaways of development” who are uprooted from their lives by the depredations of the accumulation economy and left to wander about in the need economy. With respect to primitive accumulation, Sanyal first points out the “presentist” nature of the term in the classical literature. It was developed retrospectively by Marx from the vantage point of an already existing capitalism, and presupposes the universality of capital, something which the postcolonial economy refutes emphatically through the creation of the sphere of non-capital.

Sanyal also delves at length into its specifically economic features to underline the distinction between the primitive accumulation of capital and capitalist accumulation as such. Unlike in the classical context, relations between noncapital and capital do not involve onesided transfers of surplus from the former to the latter. However this part of the argument, especially the claim that economic relations between the sectors involve conditions like those of “balanced trade”, remains obscure and unconvincing (RCD:52).

Though outlined in Chapter 2, the argument on the discourse of development is set out in Chapter 3 (“Accumulation as Development: The Arising of Capital”) and Chapter 4 (“De-essentialising Development: Capital and Governmentality”). Sanyal uses Foucault’s notion of a discursive regime – as well as a wide variety of authors from the development and post-development literatures – to argue that development discourse has played a crucial role in legitimising capital and establishing its hegemony. In the phase of the “arising” of capital, development was positioned as a discourse of systemic transition and it presented pre-capital as its other, requiring its overthrow or at least subordination. In India, for example, this phase is that of the initial decades after Independence when the goal of development is to usher in the transition to a fully capitalist (or developed) society. In the second phase, after the recognition that postcolonial capitalism “naturally” produces non-capital and that poverty is a permanent rather than transitory phenomenon, development discourse shifts to emphasise “improvement” in the condition of the poor and the “management” (rather than eradication) of poverty (RCD: 88). A crucial feature of development discourse for Sanyal is its global rather than national l ocus, especially in the light of the role played by international development i nstitutions like the World Bank.

In Chapter 5 (“Difference as Hegemony: Capital and the Need Economy”) Sanyal reiterates and systematises what has already been said about the need economy in the earlier chapters. In its essence, the need economy is an attempt to restore (at least partially) the unity of labour and the means of labour that characterised the pre-capitalist economy, and thus to reverse the effects of the “accumulation by dispossession” that is a permanent feature of capitalism. But this restoration happens in rather changed circumstances: it is made possible through transfers of surplus from the accumulation economy via development programmes, and it is integrated with the discursive regimes that legitimise capital globally. Sanyal makes extensive forays into the literature on the informal economy, development aid, and initiatives like microcredit and self-help groups to argue his case that contemporary capitalism not only thrives on difference, but that it even requires it for its own legitimation.

Zones of Engagement

This serious, sprawling, uneven (sometimes elegant, sometimes ungainly) and amazingly wide-ranging book offers i nnumerable points of purchase for p roductive engagement. Let me briefly mention four sites where a critical d ialogue with RCD may prove particularly fruitful.

  • (1) The Specific Structure of the Need Economy and Its Relationship to Capital: As RCD itself notes, and as Sanyal’s later work shows (for example, Sanyal and Bhattacharya 2009), this is an area where a lot more needs to be done. In brief, it is not enough to simply say that the need economy is “outside capital but inside capitalism” – the nature of the relationship (or a typology of possible relations) needs to be worked out. This is particularly important given the tendency of capital to develop enclaves of informality within its own sphere through ancillarisation, subcontracting, outsourcing and the like. The need economy remains seriously undertheorised in RCD and would richly repay attempts at revision and refi nement. The main problem currently is that – at least from the point of view of the worker – there seems to be little difference between large sections of both sectors. If expanded reproduction is allowed in the need economy (RCD: 213) and there are no stipulations about products or technologies, then it becomes difficult to see how the two can be separated. After all, even the drive for accumulation is experienced by individual capitalists or managers in terms of personal goals and desires. Finally, while the overall project of RCD is more than successful in “mainstreaming” p olitical-social processes within economic ones, the need economy is a site where this is especially important. The organisation of production in this sector is likely to be crucially dependent on s ocial and political capital of various kinds. Indeed the explicit nature of this dependence and its centrality may well make it a favoured candidate for differentiating the two sectors.
  • (2) The Post-national rather than the Postcolonial as Frame of Reference:
  • Sanyal is of course very deliberate in his reliance on the term postcolonial. He believes (or hopes) that it will help free his analysis from what he sees as the p arochial national ambit of the Gramscian notion of passive revolution. But there is surely a strong case to be made for the term postnational3 which can perform at least as well and probably much better. To begin with, it is important not to be misled by the name and think of the post-national as “not- global”. Indeed, every global

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    institution or influence is today mediated through the post-nation, or the form of the nation state following the end of the hegemony of the anti- colonial nationalisms. The post-nation is particularly important in a context where legitimation (or the nurturing of non-capital) has to be balanced with accumulation (or the ravaging of non-capital). As a quick illustration, consider the fact that the Indian state is centrally implicated in both the war against “Maoism” and the Mahatma Gandhi National Rural Employment Guarantee Act. By contrast, the term postcolonial has lost its moorings in colonialism and has become a free-floating term with a notoriously variable range of meaning.

  • (3) The Political-Ideological Uses of Transition Narratives: One of the minor disappointments that readers of RCD may face is the unidimensional treatment of transition narratives as the products of an almost pathological “historicism”. While Sanyal’s antipathy towards them may be amply justified, it is surprising that he ignores the inspirational aspects of transition narratives, or more generally, utopias. When considering their exhortativepolitical role, questions about the empirical plausibility or theoretical soundness of utopias are not the decisive ones. The immense popular energies that they can harness underlines, by contrast, the negative consequences of their absence. Although the concluding sections of RCD do seem to be implicitly aware of this, it is important to think explicitly about the ideological aspects of the move from the “politics of transition” to the “politics of exclusion”. What sorts of futures can the latter promise, and how best may these promises be articulated?
  • (4) The Links between Urbanisation, the Need Economy and Postcolonial Capitalism: This is a theme that surfaces often in RCD, and also seems to have been part of Sanyal’s concerns in his l ater work.4 It is surely well worth examining if there are indeed reasons why the “outside” of capital is expected to become more urban, thus leading to the “urbanisation of poverty”. Although initial indications seem to point in a different direction,5 further study may yield significant insights, and
  • there is already an emerging literature dealing with precisely this intersection.

    Finally, some thoughts about the reception of this work, thoughts made more poignant by the untimely passing of the author. RCD has already received significant attention both in India and abroad. Perhaps the best known instance is the indirect debate on some of its arguments initiated through Partha Chatterjee’s account of the contradictory links between democracy and economic transformation in contemporary India (Chatterjee 2008).6 There is little doubt that RCD will continue to attract attention as well as engagement, both because of its basic temperament and because of its amazing intellectual span. It is noteworthy that though he is sure of his ultimate destination, Sanyal never tries to be singular but always seeks company – he is constantly in conversation with

    o thers, even when they are headed in d irections different from his. It is no mean feat for an author trained in the habitually insular discipline of economics to produce a bibliography that begins with Izaz Ahmad and ends with Slavoj Zizek, and also manages to delve fruitfully into diverse theoretical enclaves.

    In conclusion, let me return briefl y to the beginning. Abba Lerner’s famous epigraph is less a criticism and more a statement about the conditions of possibility that disciplines must face. There are strong reasons why disciplines are shaped the way they are. These are also the reasons why disciplines are daunted by the “otherness” in their own heartland – they are simply not equipped to deal with it meaningfully, and opting out is the prudent option. It takes immense effort – and courage – to undertake the radical reschooling and re -tooling required to tackle unfamiliar things. Although it is not e ntirely successful, this is what RCD sets out to do. Sanyal’s key point of departure is the realisation that “the capitalist economic remains insuffi ciently theorised in the neo-Gramscian story” (RCD:50, emphasis original). The core of his project is the attempt to theorise accumulation-bydispossession as an economic process that is fundamentally political, with the fi rst pair of descriptors carrying as much weight as the second pair. But if its reception so

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    far is any indication, RCD will generate more interest outside economics than inside it. Nevertheless, despite the irony in the fact that it is unlikely to be read by many economists, Rethinking Capitalist Development is what every author would want her book to be – generous, fertile and good to think with.


    1 “When we say that most economic discourse is ‘capitalocentric’, we mean that other forms of economy (not to mention non-economic aspects of social life) are often understood primarily with reference to capitalism: as being fundamentally the same as (or modelled upon) capitalism, or as being deficient or substandard imitations; as being opposite to capitalism; as being the complement of capitalism; as existing in capitalism’s space or orbit” (Gibson-Graham 1996:6).

    2 Sanyal refers to Gibson-Graham in the singular even though this is the pen name of two feminist economic geographers, Katherine Gibson and Julie Graham (who died in 2010). Since Sanyal surely knew this (Graham is actually thanked in the Acknowledgements of RCD), he must have had reasons for doing what he did, and hence I also use the singular pronoun in deference to his usage.

    3 I use the term in the sense explained in De A lwis et al 2009, which is the introduction to a set of articles on this theme published in the EPW of 7 March 2009.

    4 As suggested by Bhattacharya and Sanyal (2011).

    5 Available data seems to suggest that both the rate of growth of urban population and the contribution of rural-urban migration to this growth have declined somewhat over the last decade. Amitabh Kundu (2009) even suggests that the exclusionary nature of urban population growth is more of a concern than exaggerated fears of its rapid acceleration.

    6 See also the symposium featuring responses to this article and Chatterjee’s reply to them in the EPW of 15 November 2008.


    Bhattacharya, Rajesh and Kalyan Sanyal (2011): “Bypassing the Squalor: New Towns, Immaterial Labour and Exclusion in Post-Colonial U rbanisation” in Economic & Political Weekly, 30 July, pp 41-48.

    Chatterjee, Partha (2008): “Democracy and Economic Transformation in India” in Economic & Political Weekly, 19 April, pp 53-62.

    De Alwis, M, S Deshpande, P Jeganathan, M John, N Menon, M S S Pandian, A Nigam and S A Zaidi (2009): “The Postnational Condition” in Economic & Political Weekly, 7 March, p 35.

    Gibson-Graham, J K (1996): The End of Capitalism (As We Knew It): A Feminist Critique of Political Economy (Oxford, UK and Cambridge, USA: Blackwell).

    Kundu, Amitabh (2009): “Exclusionary Urbanisation in Asia: A Macro Overview” in Economic & Political Weekly, 28 November, pp 48-58.

    Lerner, Abba (1972): “The Economics and Politics of Consumer Sovereignty” in American Economic Review, Vol 62, pp 258-66.

    Sanyal, Kalyan (2007): Rethinking Capitalist Development: Primitive Accumulation, Governmentality and Post-colonial Capitalism (New Delhi: Routledge).

    Sanyal, Kalyan and Rajesh Bhattacharya (2009): “Beyond the Factory: Globalisation, Informalisation of Production and the New Locations of Labour” in Economic & Political Weekly, 30 May, pp 35-44.

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