Trump’s Policies and Billionaire Indian Dreams

This is the second book by Ignatius Chithelen (IC, hereafter), the first being his bestselling autobio­graphy. IC is a trained social scientist and journalist and both sets of skills are on impressive display in this book. Being a member of only the first club, I will succumb to the habit of embedding the work into some social scientific categories, slapping on a reference or two. Also, I will bend the sequencing of the chapters keeping my narrative in mind.

Workers and the Ruling Classes

IC’s thesis is simple. Due to forces at work in the United States (US) and India, Indian entrepreneurs are not welcome in both countries. In response, Canada and ­China are breaking down the walls into their countries.

Earlier, and later in Appendix C in the book, IC des­cribes one jaw of the pincer in which ­Indian workers are grasped: the rise of Narendra Modi and the Rashtriya Swayamsevak Sangh (RSS) as the ruling ­forces, with the Bharatiya Janata Party (BJP) as its parliamentary arm. In 1939, Golwalkar wrote of the purity of nation and culture, of the differences between races and cultures to be cut at “the root” and be assimilated into one. The BJP is forged from the disciplined organisation of the RSS comprising several million stormtroopers, hierarchically arranged from a base of an excess of 60,000 units. The ideology is spread through student organisations, trade unions, teachers, the intelligentsia, industrialists, overseas Indians, and retired army personnel. However, most Hindus, especially those belonging to the lower castes, continue to keep their distance from the ideology.

The edifice rests on the foundation of poverty and the agrarian crisis in India, which are captured in two characterisations. In Appendix B, we are told that ­India boasts of the largest number of stunted children in the world. The reason is chronic malnutrition. By the time the child is two years old, the problem is ­irreversible. Stunting is connected with malformed brains and causes irreme­diable harm, like limiting mental abilities and learning, and diabetes, hypertension, obesity, and a host of chronic diseases. According to the United Nations Children’s Fund, around 70% of adolescent children in India are anaemic. Anemia affects future pregnancies and children.

The second aspect is farmer suicides. In addition, farming in India is inefficient and wasteful. A third of the food rots. India is the second largest producer of vegetables in the world. Yet, its ­exports account for only 1% of the global trade. The widely known explanation is that India has less than a sixth of the number of refrigerated trucks and only 1% of the cold storages needed to preserve food and vegetables in transit. Only 4% of the food in India moves through cold chains compared to 70% in the United Kingdoms (UK).

Land use for farming in India is high because of the density of population and the demand for food. The productivity of farms in India is notoriously low scale is suboptimal. Big farms in India are not big enough to use tractors, ­harvesters, sprinklers, satellite-based mapping systems and other techniques to increase productivity. Funds-pseeking outlets in infrastructure and development projects look for countries that are not riven by strife. In India, small traders, informal workers, and big ­businesses live and work in an atmosphere of fear and trepidation. The objective to ­attract $500 billion to create a planned increase in jobs is chimerical with an ­increase in lynchings supported by the organs of the state and proudly publicised.

Crises of Capitalism

I am motivated to step back and reflect on the ordering of the processes in history. For the purpose, the classics by Leon Trotsky are chosen for their luminosity as well as their prog­rammatic resonance. Trotsky would view the tumult described in the book as ­reflecting the “organic” unity in fascism between a mass movement and the ­crises to which a decrepit capitalism is prone. The frequency and severity of breakdowns in the long downward ­spiral of his time are mirrored in the secular stagnation of our times. In Chapter 2, IC traces the crash of the labour market from the bursting of the internet bubble in 2000. Many information technology (IT) personnel were thrown out of work. The recession of 2001–08 foll­owed. The attrition of skills and morale brought about by regularly being handed pink slips is irreversible. The long-term solution adopted by American companies to preserve their bottom lines is automation.

Second, they exploit Indian labour in the classical fashion. The wages offered by American companies to Indian engineers dominate domestic wages by multiples. Indian workers give themselves to contracts where the sword of the visa is always hanging over their heads. The problem is made intractable as, due to natural self-interest and preservation, visa cuts are supported by American ­associations of engineers and IT professionals as well as some Democratic party leaders. The value of competition notwithstanding, when an Indian worker, having applied for a green card, resigns from their job and joins another company, their file is shoved to the end of the pile of applicants. Since social security payments are deducted from their wages, such cuts from employment enrich the coffers of the social security system by several billion dollars each year.

In Chapter 6, IC identifies the disequilibrium in the market for engineers and US President Donald Trump’s policies. The mismatch in quantity as well as skills has only been augmented. Both were at play in the loss of 2,00,000 IT and engineering jobs in ­India. There is no demand even for ­Indian Institutes of Technology (IIT) graduates. The domestic IT market is tiny. In addition, Indian companies are facing stiff competition from their American counterparts. Besides, there is a distorted incentive and specialisation process at work. Mechanical and other engineering students join their computer and electrical engineering classmates in honing their IT skills. When the industry crashed in 2017, these graduates could not find work because there was no ­alternative employment in mechanical or chemical firms.

Finance Capital and Class Dynamics

Three classes are at play in Trotskyist terms. These are the big bourgeoisie, the petty bourgeoisie, and the proletariat. The first and the last are in classic conflict. The minuscule big capitalist class needs the support from the second set whose limits are the slum proletariat at one end and the “upper” middle class at the other. In the preemptive strikes of fascism, new leaders are coronated from the dispersed and feckless members of “the new middle class.” Local thugs set about consolidating disparate and rootless elements and cobbling together combat deta­chments in service of the fascist regime. At the same time, the need for an overarching leader is felt, from one class or the other.

I cannot match Trotsky’s description of “National Socialism” here.

Naive minds think that the office of kingship lodges in the king himself … As a matter of fact, the office of kingship is an interrelationship between people. The king is king only because the interests and prejudices of millions of people are refracted through his person. (Trotsky 1971: 399)

A contradiction resides in the fact that as finance capital captures the means of production, it cannot provide livelihoods to the people. Financial contracts get more elaborate at the same time as they get written on a diminution of the sphere of production and employment. In the end, the law of value will hold and crises will become deeper and more frequent.

Puppeteered by the silken threads of big finance capital, the wrath of the ­middle class is diverted away from the source of its deprivation, to the working class. Also, the second and the third classes interpenetrate. The reserve army of the working class provides petty traders and hawkers, while the bankrupt members of the middle classes swell the ranks of the proletariat and the lumpenproletariat. The basic definitiona is under­lined. The dictatorship of finance is not the same as fascist dictatorship. The upward spiral of finance must coexist with the support of fascism by farmers, small businessmen, and the unemployed who have given up hope. The ultimate objective is the exploitation of labour power and destruction of potential worker control of the production process.

The assault on liberty is sinister bec­ause it is ubiquitous.

The adversary threatens to become unconquerable; he is everywhere and nowhere. He bobs up in factories and in schools, he penetrates into historical journals and into all textbooks. This means that facts and documents convict the bureaucracy, exposing its vacillation and mistakes. One cannot calmly and objectively recall the bygone day, one must remodel the past, one must plaster up all the cracks through which suspicion might leak out as reg­ards the infallibility of the apparatus and its head. (Trotsky 1971: 222)

Once victorious, finance capital tightens its grip on the institutions of sovereignty, the executive and the legislature, educational institutions, and the press. Nothing draws its ire more than the democratic order. The historic function of fascism is to smash the working class and thwart human freedoms when the capitalist class finds it impossible to fashion the democratic machinery to its own ends. As a last refuge, “dissertations on the ­nation … in general constitute, under such conditions, the most impudent ­lying” (Trotsky 1971: 363).

Impacts of Racism

Coming to the other jaw of the pincer in Chapter 5, IC shows how the home of the brave and the land of the free gets inhospitable as racism runs amok. Opportunities for Indians to emigrate vastly reduce. American universities are slashing scho­larships to foreigners as their own budgets get whittled down. IC argues that Trump’s policies of cutting skilled worker student training have long-term ramifications. It will not be possible to reverse the implications for work and technological change even if the next President is liberal and democratic. For, in order to protect their
activity, American companies are contending with the shortage of skilled labour of foreign workers by exporting themselves to countries like Canada.

The exchange is optimal as Canada faces a shortage of skilled manpower and an ageing population. Indeed, the country is rolling out the red carpet, ­especially for business and research
and development (R&D) in fields like machine learning. China, as in so many things, is not far behind. The prognosis is an exodus of Indian engineers and math graduates there to further research in areas like solar panels, web-based retailing, and e-payments. China, more than any other country, would be able to effect a terminal condition of global leadership in robotics, electric and
autonomous ­vehicles, and 3-D printing, in 2025. In principle, India and China can work to their mutual advantage. China is a source of capital. China invests a great deal in Indian start-ups that face stiff competition from American enterprises.

Prospects

In Chapter 7, Chithelen asks if it is the end of the road for Indian IT firms. In the early 2010s, Indian companies were hit by ­rising wages and the high turnover of employees. In part, these arose from the India operations of Microsoft, Google, IBM, Oracle, and other American and foreign companies. On the supply side, India faced a bottleneck of skilled engineering and math and science graduates. The answer to containing the wage bill was the automation of operations. The employee strategy was golden handshakes, downsizing and retraining.

The longer-term forecast for Indian IT companies is obsolescence following upon rapid technical change. Tech businesses come and go as customers shift preferences and loyalties. The Indian
IT industry profited for four decades ­because they were users, not creators, of technology. They survived using the new generation of computers that became simple to use and cheap but changed ­little in essence. In recent times, smartphones, tablets, downloadable applications ­enable American employees and consumers to access most services without the need for IT intermediaries.

Also, most of the IT infrastructure and back-office support have moved to cloud-based systems developed mainly by ­Amazon, Microsoft, Google and Oracle. American companies are up to speed with robotics, machine learning, big data analytics and other ways to substitute capital for labour, even American labour. The architecture for the task is start-ups that require large initial
investments in hardware and software in contrast to the earlier model, which worked with a few smart dropouts pooling their savings and pottering about in a garage.

Ic strikes home in Chapter 8 by making a tight case for the flowering of ­Indian entrepreneurship in the new economy. Healthcare is a case in point. Practo, for example, is a web-based service that assists patients to find information, doctors, and drugs. Start-ups in high-tech manufacturing are negligible because engineering education in India is theoretical. Technicians do not dirty their hands making gadgets. Research in ­industry and manufacturing in both the private and public sectors and universities is paltry. The latest equipment and blueprints must be imported from all over the world. Massive capital investments are called for, but even financial consortia are wary to lend at high inte­rest rates for well-known adverse selection reasons.

In Chapter 9, Ic explores the prospects for solar energy and wind power systems. All over the world, these spheres have been taken over by the new technology. As with any dynamic innovative process, prices fall as cheaper and more efficient storage systems are constru­cted. The case for solar energy in India is too obvious to make. The “socio-technical systems” explanation of Christopher Freeman would be that the hiatus ­between technique and the appropriate socio-economic structure might be protracted (Louçã 2019). As with other cases, the state will have to step in to intern­alise the externalities and provide atmo­sphere and incentives in terms of horizons and returns for private–public partnerships to grow. Indian investors will need to imitate their successful American counterparts.

Capital must be patient. Payoffs will follow long gestation periods. The best intellectual capital must be offered attractive contracts with profit sharing and stock options. In artificial intelligence (AI), the reservation wage of Google, Facebook and Microsoft cannot be less than that of banks and hedge funds. Hope is found in Chapter 1, where a section on professionals-turned-entrepreneurs illu­strates the risk-taking nature of Indian innovators as they take the leap from the cushiness of a steady flow of income to the hit-or-miss world of working out ­ideas. A later section provides evidence of the solid presence of Indians in cutting-edge technologies like cloud computing, drones, and AI. Indian ­venture capitalists are second to none in pushing frontiers from social networ­king to the biology–computer science ­interface.

The canonical organisational structure today is not hierarchical but flat. Highly skilled workers are compelled to work in teams. The probability that the exploitation of the working class will lead them to organised protest grows. In the heraldic language of Trotsky, the party of “counter-revolutionary despair” must be met with an “organisation of revolutionary hope.” The original project of the working class has not gone away (Sil and Wright 2018). Only, the strategy and tactics framed under the “old capitalism” will have to be reworked for the “information age.”

References

Louçã, Francisco (2019): “As Time Went By—Long Waves in the Light of Evolutionary Economics,” University of Sussex Business School, SPRU Economics Working Paper 2019–05

Sil, Rudra and Teresa Wright (2018): “The Dyna­mics of Labour Protest in an Era of Declining ­Social Protection,” Economy and Society, Vol 47, No s3, pp 335–42

Trotsky, Leon (1970): Fascism, New York: Pathfinder Press, A Merit Pamphlet.

— (1971): The Struggle against Fascism in Germany, New York: Pathfinder Press.