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Social Scientist

Recovering Policy Autonomy and Moving towards Egalitarian and Green Growth
Author(s): Amiya Kumar Bagchi
Source: Social Scientist, Vol. 42, No. 11/12 (November–December 2014), pp. 17-37
Published by: Social Scientist
Stable URL: https://www.jstor.org/stable/24372900
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Recovering Policy Autonomy and
Moving towards Egalitarian and Green Growth

Amiya Kumar Bagchi

From the Neolithic to the Urban Revolutions

Roughly 13,000 years ago, mankind discovered how to domesticate wild


plants and animals for its own use, as sources of food, shelter, transport and
tools. Cattle, sheep, goats, camels and horses were used as sources of milk,
meat, wool, clothing and shelter, and for carrying people over distances
that they could not cover quickly on foot. Some groups of people became
specialised as shepherds and pastoralists, and some became specialised as
sedentary or periodically moving farmers - those who practiced swidden or
jhumia cultivation. Some groups combined both kinds of activities. Gender
specialisation in terms of subsistence may also have taken place, with men
clearing the ground for agriculture and women tending the plots. It is this
change that the great archaeologist, Gordon Childe, called the Neolithic
revolution (Childe 1936, 1942). It was called Neolithic because while most
of the tools used were made of stone rather than metal, they were carefully
turned, often sharper and smoother than the kinds of tools humankind had
used earlier.
Next came what Gordon Childe (1950) styled the urban revolution.
This took place around 5000-7000 years ago in the river valleys of Shatt
el-Arab (Tigris and Euphrates), the Nile, the Indus and the Huang-Ho
(Yellow River). As chieftains and kings became more powerful, they at
tracted followers, tradesmen, architects, and many people began specialis
ing in crafts that found customers in the agglomerations of human beings
that we now call cities. Neolithic village farming and pastoral society was
transformed,

into the urban states and empires of the Bronze Age. Prior to the Urban Revo
lution there were no kings, no cities, no writing systems, and no social classes.
This was perhaps the most extensive and far-reaching social transformation
in human history, with greater implications for life and society than either the
Industrial Revolution or the Neolithic Revolution (Smith 2011).

This is an expanded version of the Foundation Day Lecture delivered at ANS Institute
of Social Studies, Patna, on 8 October 2013. 17

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Social Scientist

The Industrial Revolution:


0
<N The Uneven Spatial Diffusion of the Revolutions
The Industrial Revolution occurred roughly around 250 years back
!_
<u
X)
£ the pioneers of that revolution are still dominating the internation
<D economic order. But with the rise of East-Asian industrialised econo
u
<U
D mies, and the ongoing crisis in European Union and US economies, that
1 dominance is fast eroding. Before we move to the next section, there are
<u
X three points to be made about this sequence of revolutions. First, the pio
E neers of the Neolithic revolution were not necessarily the pioneers of the
§2
o urban revolution as well. There were many regions in Africa which were
Z practising settled or swidden agriculture, and pastoral activities for many
<N thousands of years without undergoing the urban revolution. Similarly,
T all the densely populated regions of the world had cities, but the industrial
revolution occurred only in North-West Europe. Secondly, the majority of
00
O the global population has not experienced the Industrial Revolution. The
z chief marker of the successful industrial revolution is a structural transfor

«N mation of both national income and occupations: the share of the primary
sector, producing agricultural goods (including fish, meat and vegetables)
£ and minerals, in both national income and employment must decline to,
say, 15 per cent or less, before we can call it an industrialised economy. In
this sense, none of the SAARC countries are industrialised economies. It
should be added that there are still communities in South Asia and else
where in the world which have yet to fully complete the Neolithic revolu
tion, and they are some of the worst victims of predatory capitalism and
globalisation. Thirdly, it would be a mistake to suppose that the majority
of the people benefited from either the urban or the industrial revolution
(Smith 2011; Bagchi 2006). As the eminent archaeologist Michael Smith
(2011) puts it, recently:

Here is what happened to life and society after the Urban Revolution:
1. People had to work harder to make a living.
2. People had less freedom and self-determination.
3. Human health went into a nose-dive: people had more diseases and the
lifespan was lowered.
4. Violence and chaos increased in many cases.

Almost in a repeated performance, the first industrialising country, Brit


ain, drove peasants and agricultural workers out of villages to crowd into
insanitary industrial cities, and the standard of living of the average worker
declined, not only in Britain but also in the follower countries, such as the
USA and Canada (Bagchi 2006). Only from the 1860s to 1880s, the expec
tation of life, literacy and real incomes went up in the core industrialised
countries of the North Atlantic seaboard and the overseas settler colonies
of the Europeans.
18

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Recovering Policy Autonomy

Industrialisation, Capitalism and Colonialism >


3
The Industrial Revolution occurred in England, but large-scale manu
w
factures, especially in the ship-building industry, had already made their
appearance in Venice and then in the Netherlands, but without the use ?
of steam-power or other forms of invented energy. These were all states I
in which the bourgeoisie-controlled state power. Venice was one of those DO
V
northern communes of Italy which witnessed the birth of capitalist states. 03
n

But while alone among the Italian city states, Venice for a time rivalled
the power of non-capitalist empires such as the Spanish and the Ottoman
Empires, the Netherlands and England were the first of the capitalist nation
states (McNeill 1974; Braudel 1984; Wallerstein 2011 [1974]; Bagchi 2006,
chapters 3, 4 and 6).
The Dutch and the British economies witnessed a structural transfor
mation of the economy from the seventeenth to the eighteenth centuries:
agriculture ceased to be the main source of national income and employ
ment. Its place was taken by manufactures or processed commodities and
trade. The structural transformation of the core industrialised countries
was accompanied by the colonisation of countries inhabited by non-Euro
pean peoples, and the latter partly paid for the upward movement of the
peoples of the North Atlantic seaboard and their overseas offshoots.
Harvey (2003) has argued that the phase of neoliberal imperialism
is characterised by accumulation by dispossession. In fact, from the very
beginning, under capitalism, accumulation by capitalists consisted of three
components. The first component was the investment of the surplus value
produced by the labour power of workers employed in enterprises run by
capitalists. The second component was the acquisition of lands of peasants,
including the common resources used by peasants by passing laws that
allowed the capitalist landlords to take over peasant lands and exclude
the peasants from the use of common resources (Allen 1992). The third
component was the dispossession of the people of the countries by the
pioneering capitalist states or states that the capitalist powers could bend
to their will through superior technologies of shipping, trade and war. The
colonial possessions of the European powers, followed by the USA and Ja
pan, witnessed the most successful series of accumulation by dispossession.
After Marx, Rosa Luxemburg was one of the great Marxist thinkers who
focused on colonial policy and militarism as key elements of global capital
ist expansion (Luxemburg 1951 [1913]). She regarded these as instruments
for bringing non-capitalist sectors or regions of the global economy under
the sway of capitalism, and for ameliorating the continually recurring prob
lems of under-consumption or deficiency of effective demand under the
capitalist order (for a discussion of Luxemburg's view of the role of external
markets in capitalist development, see Patnaik 1972).The colonial countries
served that purpose from time to time. But as Luxemburg pointed out mil
19

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Social Scientist

itary expenditures also ameliorated the problems of under-consumption.


o
es Budget deficits could also address the problem of deficiency of effective
s_
<u
demand, but such measures threatened to cause inflation and were an
JD
E anathema to capitalists and rentiers who wanted to prevent any erosion of

(j
the real value of their wealth (Patnaik 1986).
<u
Q A continued drive to acquire other territories was built into the compet
L itive nature of the capitalists and the states in which the profit-earners be
a>
-O came the guiding force (Bagchi 2006, Part I). After conquering the American
E
a continent and the Caribbean islands and acquiring further military prowess
>
o in the process, the European powers turned their attention to the most
Z populated continent of the world, namely, Asia, and started the formal col
CN onisation of the interior Africa, which had been, from the fifteenth century,
T supplying slaves for working the plantations from the Azores and the Ma
deiras in the Atlantic and the Caribbean islands, and plantations and mines
00
O in the mainland of the Americas. They succeeded in conquering the whole of
z South Asia, which proved to be the most profitable colony under the control
CS of any imperial power and converting China into a tributary vassal of all the
imperial powers, including Japan, which had withstood European attempts
£ to conquer it and gone on to become an imperial power itself.

Newly Independent Nations in Asia


Construct Developmental States
Formal colonisation of most of Asia and Africa ended in the two decades
after World War II, barring some Sub-Saharan colonies of Portugal. Struc
tural transformation of those ex-colonies or semi-colonies in Asia took

place only in the states, which, either through a Communist revolution or


through the pursuit of a Japanese strategy, or by combining both, was able
to create an effective developmental state (Bagchi 2004).
There are several elements in common between the Japanese strategy
and the Communist strategy. First, in both cases, the state takes control
of economic development. One of the key instruments for achieving that
is either the yoking of the earlier power-holders, chiefly the landlords and
their collaborating merchants, to the purposes of the state, or adoption of
drastic measures to curb the power of the landlords and their collaborat
ing merchants. The pre-1945 Japanese strategy was simply to use landlord
power for purposes of subordination of the ordinary people and pursuing
an aggressive foreign policy. Post-1945, this was changed to the abolition of
landlordism altogether by instituting thoroughgoing pro-peasant land re
forms. This reform was powered by both American fear of rebirth of Japa
nese militarism and the threat of a Communist revolution, and by an inter
nal radical movement demanding such land reforms. I will call the Japanese
strategy with land reforms the Japanese plus strategy. This way, it becomes
virtually indistinguishable from Communist reforms of agrarian relations.
20 One major difference between the two remains, however. In private enter

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Recovering Policy Autonomy

prise economies, people can own land; but so far the PRC has only leased >
3
land to teams of cultivators, individual households or companies.
«a
The second element the two strategies share is a determination to retain
the policy autonomy of the state. In a world in which the European powers ?
and the United States dominated other states through their investment in I
those economies and through loans and grants with strings attached to DO
P
them, policy autonomy required regulating foreign investment strictly, and OQ
ft

getting rid of foreign debt and so-called foreign aid. In the initial years after
the revolution, no Communist government in Asia received foreign aid
any way, except from the Soviet Union and other East European countries
of the Soviet bloc, and most of them tried to absorb the Soviet technology
and become gradually self-reliant. The Japanese did not allow any foreign
enterprise to control any sector of the economy, even during the years US
soldiers occupied their country, and Japan was heavily dependent on for
eign aid. The Republic of Korea (South Korea) and Taiwan (Province of
China) followed this strategy even when they were dependent on US aid.
Both got rid of US aid by raising their rates of investment and saving, and
by rapidly expanding their exports.
The third element for the construction of a developmental state both
strategies shared was a determined drive towards universalisation of liter
acy, as quickly as possible. The rate of literacy in South Korea in 1950 was
about the same as that of India. But by the 1960s, it had gone up to 60 per
cent in South Korea, and it took India another three decades to reach that
level. By now the South Koreans have attained 99 per cent literacy, and we
are still to reach 75 per cent literacy even by the most minimalist criterion.
Moreover, South Korean entrants into tertiary education have gone up to
more than 25 per cent of the relevant cohort, whereas, even with the very
low quality of education doled out by most private engineering, medical
and management institutions in India, the proportion of entrants of the
relevant age group has not exceeded 12 per cent.
There would seem to be a distinct difference between the Japanese
strategy plus and the Communist strategy in one respect. The Commu
nists nationalised all but the tiny enterprises, whereas there was a distinct
place for private enterprise in Japan, South Korea and Taiwan (Province
of China). There are, however, two qualifications to this distinction. First,
in both Taiwan (Province of China) and South Korea, banks remained
nationalised for a long time. In both economies, the government stepped
in as a direct producer when private enterprise seemed unequal to the task.
Thus, Pohang Iron and Steel Company (POSCO) was created as a public
enterprise with the money South Korea received as war reparations after
signing a peace treaty with Japan. In Taiwan (Province of China), the gov
ernment created two major semiconductor enterprises, which succeeded
in making that economy the global capital of computer hardware. On the
other side, both China and Vietnam encouraged private incentives for 21

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Social Scientist

stimulating agricultural and industrial production and innovation, when


o
(N the bureaucratic, centralised apparatus appeared to be unsuitable for the
<u task. In both the countries, it was domestic rather than international pres
-O
E sure that led to the so-called opening of their economies.
<u
0 Finally, all the successful developmental states have governed the
<D
Û market rather than being governed by it (Wade 1990). This disciplining
L of the market included the deliberate policies for generating the needed
V
-0 foreign exchange, its allocation. Both administrative control and mutually
E
reinforcing incentive structures were strategically used for this purpose
1 (Haggard 2004).
Z

CM India as a Failed Developmental State


I Now look at India's history as a failed developmental state. India failed to
introduce pro-peasant land reforms in the states in which the majority of
</>
o its population lived and where landlord power was especially notorious.
z These states are Bihar and Jharkhand, Uttar Pradesh and Uttarakhand,
<s Rajasthan, Madhya Pradesh and Chhattisgarh, and Andhra Pradesh. In
1949, a special industrial statement was issued reassuring foreign, mainly
£ British, enterprises that they would be treated on par with Indian-owned
enterprises. In fact, no definition of a foreign company existed until the
introduction of Section 29 in the Foreign Exchange Regulation Act passed
in the 1970s. Thus, influential former civil servants under the British
who turned politicians and policy advisors, and executives of big foreign
companies acted as the Trojan Horse, sabotaging many efforts towards
self-reliance made by patriotic scientists. Thus, at the time the Pfogramme
and Development Division of the Fertilizer Corporation of India at Sind
hri was preparing to enter as designers of new fertilizer plants, the whole
programme was scuttled by the decision of the Government of India to
import a set of turnkey fertilizer plants from abroad, and India never re
covered the initiative for designing and constructing fertilizer plants on its
own. Or look at the history of the Indian steel industry. In this industry
the Metallurgical and Engineering Consultants Limited (MECON) was
able to acquire the expertise to set up green-field plants or their extensions
in Bokaro and Bhilai. But the public sector steel plants were not allowed
to be expanded. The result is that India has emerged as one of the biggest
exporters of iron ore in the world, and China has emerged as the biggest
steel producer of the world by using iron ore imported from India and
Australia.

In spite of all these obstacles, Indian growth rates improved in the


1950s to mid-1960s. Then through the Green Revolution, Indian agricul
tural rates became respectable and Indians secured employment in many
public sector and their spin-off enterprises. The Green Revolution was
sustained by cheap credit extended by the nationalised banks and small
22 subsidies for electricity, fertilizers and irrigation. In the meantime, the

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Recovering Policy Autonomy

Indian private sector thrived on government patronage, and a section of it >


3
imbibed the mantra of deregulated markets. So they conspired with like ><
W
minded politicians and bureaucrats to hijack the Indian economy and de
liberately pushed the economy into a debt trap when Rajiv Gandhi became ?
3
Prime Minister. The crisis of 1991 could be foreseen in 1985. pj

The policy autonomy that was lost in 1991 has not been recovered, as DO
£
the latest crisis involving the falling rate of exchange of the Indian rupee •s
=T
and the collapse of the seven-year growth story of the Indian economy
clearly demonstrates. India's growth acceleration story was short-lived. As
India's current account deficit (CAD) as a proportion of GDP increased,
almost without a break, from January 2006 to July 2013, the government
behaved as if India had graduated to the position of the US economy
which thrives on sucking in funds for domestic absorption from the rest
of the world. Warnings had been sounded by many economists about the
stupidity of such behavior (see, for example, Chandra 2008; Chandrasek
har 2011). On the one hand, the government was keeping the domestic
rate of interest high in order, partly, to encourage debt-creating capital
inflows. On the other hand, it was allowing corporate houses to borrow
recklessly abroad, where the rates of interest were much lower. The gov
ernment allowed big firms, including subsidiaries of foreign transnational
firms, such as Renault, to import any manufacture it needed and spent bil
lions of dollars of foreign exchange. Thus, the incentive structure became
badly skewed against domestic industry, and especially labour-intensive
manufacture (Bagchi 2014b). Such skewed incentive structures were also
responsible for rendering Indian development excessively dependent on
the service sector (Mazumdar 2014).
There is a further factor that has made Indian development so ineq
uitable. In the regime of bonanza of cheap finance, the major beneficiaries
became business groups, and stand-alone firms, even if more profitable
than business house-affiliated firms, had little chance against take-over
bids by transnational firms or big business houses (Chakraborty 2014). So
inefficiency became built into the Indian industrial structure. The same
factors also facilitated the further growth of corporate power over the
Indian political system.
The recovery of the policy autonomy by a democratically-minded
political formation in India will be an arduous process. It will involve
toughly implemented pro-peasant land reforms all over India, disciplining
the Indian capitalist class, many of whose members used India as a base to
emerge as capitalists domiciled in Britain or some other foreign country,
raising the scandalously low rate of taxation on the Indian rich and su
per-rich, and fighting to remove the corrupt influence of big business on
Indian politics, an influence that has been repeatedly exposed in the CAG
reports and in investigations by courageous civil servants such as E.A.S.
Sarma, Madhav Godbole and Ashok Khemka. 23

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Social Scientist

Depredations of the Super-Rich and Global Warming


o
CS The recovery of the policy autonomy is essential for moving through the
s_
<u positioning of a developmental state to trajectories that transcend the
-O
£ borders of the developmental state. Otherwise mankind will have a tough
<u
u future because of the devastation caused by global warming and other
<u
Q manifestations of climate change. The recovery of policy autonomy by the
L people has to be a global movement because inequality and the political
V
XI and economic power of the super-rich have reached a historic high with di
E
a) sastrous consequences for the living standards of the ordinary people even
o in developed economies, and especially in the periphery of the Eurozone,
Z
such as Greece, Italy, Spain, Portugal and Ireland (Atkinson, Piketty and
CS Saez 2011). Private equity funds, domiciled in the USA, own three trillion
US dollars in assets (Kelly 2012), and generally escape taxation altogether
or pay a very low rate of tax. It has been estimated that in various legal and
illegal ways the global rich have stashed wealth valued at 13 trillion British
pounds away from the reach of the taxman (Stewart 2012). Belying the
CS claim of the mercenary economists, Piketty, Saez and Stantcheva (2011)
S"
have shown that the optimal rate of taxation on the top salary earners
i (some of whom earn salaries and bonuses running into tens of millions of
dollars) should be 80 per cent. Even mercenary economists cannot claim
strong disincentive effects of taxation of capital assets, especially if they are
inherited. Some feeble efforts have been made in the UK and Eurozone
economies to increase rates of taxation on tax-evading income and wealth.
Tax havens have to be banned altogether.
The rich, however, have always used strategies to defend their wealth.
As Winters (2011) has argued,

the rich have forged coalitions to defend their incomes and wealth whenever
they have felt that their wealth is threatened by the pressure of other classes.
Two of the most notorious recent examples of this are the coalition of Tea
Party Democrats and Republicans to block all measures of the Obama adminis
tration in the USA that might remotely benefit the poor, and the coalition of the
Conservatives and the Liberal Democrats in the UK to put through ever more
unequalising measures, such as raising student fees in all institutions of higher
education in one of the most unequal societies in the world (Bagchi 2014a).

Even after causing a global economic crisis by the working of unregu


lated financial markets, the super-rich are using their money power to force
politicians to construct an austerity regime, under which the poor will have
to suffer even more in order to allow the super-rich to protect their wealth
and increase its value (Krugman 2013). Since the wealth of the super-rich
has continued to increase, their ability to subvert the democratic process
has also continued to mount. This has been very recently demonstrated
by the election expenditures of Narendra Modi, the favourite politician of
24 India's super-rich, belonging to the Bharatiya Janata Party (it has been esti

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Recovering Policy Autonomy

mated that the BJP has spent on Rs 5000 crore, or slightly less than $1 billion >
3
on election advertising alone in campaigns for the Lok Sabha elections (Va
w
radarajan 2014). Then the candidates belonging to the rich-friendly parties
will spend untold thousands of crores of rupees for the Lok Sabha and State ?
3
Vidhan Sabha elections. w

DO
a;
Resource-Intensity and the Ecological Cost CM
r>

of Unequalising Growth 3"

Capitalism has been driven by the continual creation of needs among po


tential consumers and profits generated by the satisfaction of those needs.
One of the most ecologically damaging developments in this direction is
the invention of automobiles powered by petroleum-and gas-guzzling in
ternal combustion engines. In developing economies with poor regulation
of the use of continually changing models of automobiles, and continued
use of coal in poor households, air pollution - both household and out
door - has contributed to the accumulation of GHGs and led to increasing
numbers of deaths from air pollution (WHO 2012a and 2012b).
While the poorer countries of the world continue to struggle to re
solve the contradiction between non-renewable resource-driven growth
and the need for environment-friendly advances in income, employment
and human development, the environment has become a football kicked
around by big players in global politics. On the one hand, their drive to
usurp the non-renewable resources of the world is daily adding to global
pollution and global warming. Until now, industrial growth and economic
development have been critically dependent on non-renewable sources of
energy and materials, such as coal, oil and natural gas, iron ore, alumina,
copper, nickel, zinc, manganese and so on. The processes of extraction of
these energy sources and materials and their use for manufacturing and
chemical-based agriculture have contributed hugely to the accumulation of
greenhouse gases (GHG) and global warming and the change of global cli
mate towards far greater unpredictability and destruction of life-sustaining
environments. Mainstream economists, ignoring the irreversible nature of
climate change are still seeking solutions in price adjustments - such as 'the
correct rate for discounting the future' (for a critique of the mainstream
approach, see Foster, Clark and York 2009).
To take a glaring example of the irrelevance of such disquisitions, while
the arctic ice cap is melting, thereby endangering the ecology of the whole
world, all the countries bordering the Arctic, namely, Norway, Russia and
the USA are seeking to exploit the mineral resources, including oil and
gas at a breakneck speed. The US political and military base are mainly
worried about whether the USA or Russia will be main controllers of the
Arctic trade and resources lying under the cap (Senate Hearing 2013; Evans
2014). Two other countries, Denmark and Norway, are also contenders in
this geopolitical game. 25

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Social Scientist

While the IPCC continues to warn the global community that little is
o
CM being done to arrest or even slow down climate change (Gillis 2014), the
!_
<u two top users of non-renewable resources in the world, namely, the USA
-Q
E and China are trying to find new sources of non-renewable resources in
<u
u their own country or in nearby friendly countries. China and the USA may
<u
Q be regarded as rivals for acquiring the lion's share of the global resources,
but in an interesting development, the USA is helping China to exploit its
<u
-Q huge shale gas deposits, which are supposed to be the largest in the world
E
<u (Biello 2014). The extraction of shale gas involves enormous environmental
>
o problems. In the United States, there
Z
... is a growing concern about the negative environmental consequences of
cm
tracking, expressed in growing opposition from local communities and NGOs.
The 2005 Energy Act explicitly excluded tracking from the Environmental
to Protection Agency's (EPA) Clean Water Act, a clause that has become known
O
as the 'Cheney-Halliburton Loophole'. It was known that tracking involved
Z
injecting chemicals, and when companies refused to disclose which chemicals
CM
M" were being used, allegedly for reasons of'commercial confidentiality' The
Loophole also meant that not only were many shale gas operations done with
5 out a proper environmental impact assessment, since they had begun with no
measurement of the 'baseline', but they could not be properly assessed after
the event either. The growing pressure on operators to divulge the chemicals
they are using has resulted in many companies now openly declaring them.
... the Energy Institute (2012) concluded that media coverage in the Bar
nett, Haynesville and Marcellus shale areas was overwhelmingly negative -
about two-thirds of coverage was on the side of the opposition. A further envi
ronmental issue is that water recovered from tracking operations may contain
materials from the surrounding rocks. These can include radioactive materials
and heavy metals and need to be treated or properly disposed of to avoid con
tamination of water supply. This is another example of the need for proper
regulation to minimise damage from tracking. However, a number of morato
ria have been declared pending the outcome of EIAs (Stevens 2012, pp. 5-6).

In the case of extraction of oil from tar sands, as is being undertaken in


Northern Canada, the process of tracking involves building up tailing ponds,
where a noxious mixture of chemicals kills many species of fish or birds that
used to feed on the swamps earlier. It also requires enormous amounts of
water and that water cannot be re-used to meet human needs without using
complicated and expensive filtering processes. In the meantime, any water
from the tracking operation going into river systems contaminates the whole
basin. Moreover, the tracking generally means the displacement of hundreds
and thousands of people, especially in northern Canada which is the habitat
of many of the First Nations of that country (for an overview of the multi
ple problems posed by the extraction of oil from the tar sands of Northern
26 Canada, and the references, see Wikipedia 2014).

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Recovering Policy Autonomy

The environment and the people of Northern Canada also face >
3
problems associated with the construction of an oil pipeline across the
M
Mackenzie Valley to deliver oil to the USA. But all the earlier concerns
Ts
shown by the rich nations for ecological concerns have given way to the c
3
greed of their super-rich such as Dick Cheney and his clients who hope to w

accumulate further wealth by exploiting shale oil, shale gas and oil from DO
ft)
bituminous sands. Naturally, the energy industry and the Canadian and US Oft
o

governments cannot rest without tapping this profitable resource and are
busy commissioning studies by business-friendly think-tanks that would
minimise risks and paint unrealistic pictures of regulating the industry in
public interest.
Suppose, however, the global community through democratic resis
tance can discipline the super-rich and the politicians who eat out of their
hand, where do we go from there? We then move towards green growth and
egalitarian and democratic development as signalled in the title of my paper.

The Violence of Capitalist Imperialism and


the Necessity of Moving towards Green Growth
Let us look back a few years to 2001, then to 2004, and again to 2008. The
world that capitalism had constructed seemed to be invincible, after the
collapse of the Soviet Union. The USA and its allies began attacking any
country they considered to be inimical to their interests, not only with no
consideration for human lives, but also in violation of basic tenets of inter
national law. The US economy seemed also to do very well on the magic
of Alan Greenspan. Multinational corporations became gigantic, mostly
by acquiring other companies. Then the US stock-market bubble built on
the seeming prosperity of big IT companies and plain fraud, such as that of
Enron, collapsed. Then came the infamous 9/11 in the USA with the attack
on the World Trade Centre and the Pentagon, and the USA began its war
on 'terror', a phenomenon almost manufactured by US and British policies
in West Asia and North Africa, as Achcar (2002) and Mamdani (2005) have
demonstrated.1
While the US-led NATO soldiers and drones were killing thousands of
civilians in Afghanistan, Iraq and Pakistan, in 2004 another killer appeared
from the depths of the Indonesian archipelago. This was the tsunami of
December 2004: it originated in the sea near Sumatra and travelled all the
way through the Andaman Islands to the coast of Tamil Nadu, Sri Lanka and
further to almost the coast of Africa. The estimated deaths resulting from
that came to more than 225,000, most of which occurred in Indonesia, but
the number of Indian deaths also came to more than 18000. The estimated
economic damage came to more than $30 billion. In March 2011, a tsunami
struck Japan. Belying all the claims that Japan had built an impregnable wall
against that kind of disaster, the tsunami caused extensive damage along the
Eastern coast of Honshu, the main inhabited island of Japan. The number of 27

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Social Scientist

deaths caused by the earthquake and tsunami up to 2012 has been estimated
o
rs by the Japanese Police Agency as 15,883. There was another major calam
s_
V ity: radioactive liquid was released from the tanks of the Fukushima power
XI
E plant of the Tokyo Electric Power Company. Workers died from the radi
<u
u ation fall-out and the chief manager, who was trying heroically to control
QJ

Q the damage, died recently as the result of the same fall-out. It is feared that
L the radio-active liquid may have entered into the underground and coastal
V
XI water. The Fukushima disaster has again proved that there is no such thing
E
<u as safe nuclear energy. This safety will be especially threatened with climate
>
o change since the frequency of unforeseen earthquakes, tsunamis and storms
Z
will increase. It was a welcome sign that two former Prime Ministers of
ts Japan, Koizumi from the side of the ruling party and Hosokawa from the
T opposition were jointly campaigning for a nuclear-free Japan in the recent
mayoral election. But they lost against the candidate of a Prime Minister
10
O who wants speedily to turn Japan again into a military power, with the USA
z backing him. Moreover, in many countries of the world, there is a move
<N to establish nuclear power plants on the fallacious argument that they will
reduce GHG emissions, without considering the time needed to commis
5 sion them or the insoluble problem of disposing of nuclear waste, including
spent fuel rods (Sharma 2014). The real reason for going in this dangerous
direction is the pressure by the nuclear power lobby of the developed coun
tries, and their collaborators in the developing economies.
From mid-September 2008, with the declaration of the bankruptcy of
Lehman Brothers, a global financial crisis took off, although warnings of
such a meltdown of the financial system had been sounded by several ob
servers. The Indian policy-makers claimed that the country was immune to
this crisis. But from 2012, such immunity proved to be an illusion. Officially,
the growth rate is only 4.4 per cent of GDP now. This particular crisis is en
tirely man-made, born out of the financialisation of an inherently unstable
capitalist economy. Ironically, the economic meltdown was accompanied
by a spike rather than a decline in the prices of the most basic commodities,
namely, food grains, vegetables, and all kinds of dairy and marine products.
Food security of the poor was totally trashed by this development, since
food occupies anywhere up to 70 per cent of a poor person's budget. Again,
this crisis was man-made, caused by diversion of land to the production of
fodder for fattening the animals destined for rich households' table, for the
production of agricultural inputs into highly subsidised biofuel in the USA,
decline of public and complementary private investment in agriculture in
all developing countries that have been governed by the neoliberal dogma
that the market knows best, and the grabbing of farmland for mining and
industrial projects of big corporations. All through these years, prices of oil
and natural gas kept rising and added to the profit-hungry futures markets
in commodities, pushed up prices all across the globe.
28 The Economic and Social Survey of Asia and the Pacific for the year 2009

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Recovering Policy Autonomy

correctly identified a triple threat to the livelihood of Asia and by extension >
3
of the whole world, namely, food insecurity, deregulated finance and unaf x
0)
fordable energy prices (UNESCAP 2009). In other reports succeeding that,
the UNESCAP has sounded warnings that the current pattern of growth ?
is unsustainable for both social and ecological reasons. Many other public i
intellectuals and UN bodies such as the FAO and IPCC (Gillis 2014) have 03
W
sounded similar warnings. (râ
n

Reasons for Social Unsustainability


• The world has become polarised between a few thousand rich and
super-rich (high-net value) individuals and an ocean of several billion
men, women and children, with a thin stratum of middle-level earners
wedged in between, many of whom are themselves insecure. Just at
this moment one group of legislators in the USA is determined to deny
even elemental public health care to the poor of that country, and the
federal government has shut down, which means, among other things,
that many employees of that government will go without their wage
packet and basic public services will be discontinued until a settlement
is reached. A similar situation had occurred in that country seven
teen years back. The settlement between the US Congress which just
avoided that shutdown took the form of diluting the minimal health
care programme the Obama administration and planning for further
cuts in public services, and no increase in taxes on the rich. The world
has increasingly moved into a situation of corporate feudalism, with
the majority of the people becoming marginalised and manipulated
into submission by the exercise of money and media power and state
violence or state-backed private violence.
• In most countries, including India, these rich and super-rich individ
uals control or influence the political system to evade taxes, make cor
rupt gains and deny basic rights for a decent existence to those billions
of people.
• Some of these latter billions, seeing no future for themselves, then
take to crime, often serving as henchmen of the power-holders and
power-brokers, inflict horrible atrocities on women and children, or
join terrorist groups professing one ideology or another and indiscrim
inately kill real or imagined enemies and the civilians around them.

Reasons for Economic and Ecological Unsustainability


• Industrialisation and agricultural production have used non-renewable
minerals on a scale that cannot be replicated for all countries striving
for industrialisation. Currently, even agricultural production is greatly
dependent on large doses of fertilizers, pesticides and non-renewable
energy sources, such as coal, oil and natural gas. A recent report by
Citigroup has warned that Saudi Arabia, currently the largest producer 29

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Social Scientist

of oil in the world, could run out of oil to export by 2030, raising fears
o
CS that oil prices may rise significantly in coming years.2
<U • This resource-intensity of output is one of the main reasons why
-Q
E imperialist powers such as Britain and the USA wanted to control all
<u
u countries producing oil and natural gas, from Venezuela to Nigeria,
<D
Û
the Arabian Peninsula, Iran, Indonesia and Pacific islands, where oil
L may be found on or off shore. The twenty-plus- year long spate of wars
<u
-Q from 1991 inflicted by the NATO forces on Afghanistan, Iraq, Libya
E have been termed oil wars.
(U
>
o • The resource-intensity promotes inequality between and within na
Z
tions. Those who can control the corporations controlling large re
<N
sources thrive on that control.
• Intensive use of non-renewable resources has generated a cumulative
layer of greenhouse gases in the earth's atmosphere, led to global
warming, already flooded many low-lying areas in tropical and sub
tropical regions, melted the North Pole ice cap, raising the water levels
CS of oceans around the globe, and led to more intense and more unpre
dictable climatic turbulence in the form of typhoons, hurricanes and
tsunamis.
£
Moving towards Green, Egalitarian Growth
under a Democratic Global Order

One of the paradoxes of the current geopolitical situation is that re


energy, especially solar power, is becoming cheaper year by yea
enormous under-utilised capacity in the renewable (clean) energ
has already been built up (Cleantechnica 2013; Tawney, Letha, J
Lu 2014). The cheapness of Chinese solar panels led to a trade war w
European Union, which was ultimately resolved after arduous ne
(Steinhauser and Patnaude 2013).
Use of chemical fertilizers and pesticides has severely damaged t
ural fertility of the soil and land productivity in many areas of th
The way forward is to rebuild the humus in the soil, by using orga
izers. Experiments in Sub-Saharan Africa have indicated that pr
of land can be increased to high levels by using such methods
powering farmers' organisations, in which women are represented i
numbers, to take appropriate steps. If such innovations can be
and diffused throughout the country by a democratically electe
ment with a mandate for improving the living standards of the ma
then the transition to green growth can occur very fast (Ching
and Scialabba 2011; Auerbach 2013). Badgley et al. (2007) have c
that even with the little support organic agriculture has received f
ernments and international institutions, its productivity performa
worse than that of agriculture dependent on inorganic materials.
30

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Recovering Policy Autonomy

The Cuban Exemplar of Green Development >


3
There is now a country that can show the world how to develop health care,
tu
education and agricultural output without depending on non-renewable
energy, and that country is Cuba. The Cuban health care system - fami ?
ly-based and community-monitored - has long been regarded as the best I
system in the world (Bagchi 2007; Hernandez Pedraza 2014). Cuban doc oo

tors have served in many countries in the world, the most notable example 00
n

being Venezuela. In that country, the democratic regime initiated by Hugo


Chavez brought in to deliver health care cheaply not only to the dwellers
of the barrios of Caracas but also to the poor in the vast rural hinterland of
the country. Cuba can deliver health care cheaply because the doctors are
trained in public hospitals and Cuba can produce medicines cheaply in the
facilities it has built up (Silva Rodriguez 2009). Already by the beginning of
the twenty-first century, Cuba was selling its medical expertise to foreign
companies, in spite of US's ban on Cuban sales.
The country's first breakthrough in medical research was its discovery
and patenting of meningitis-B vaccine in late 1980s. It has been successfully
exported to cope with epidemics in South American countries including
Brazil and Argentina. The vaccine has now been licensed to Glaxo Smith
Kline who will now market it in Europe and it is hoped eventually in the
USA.

Cuba's attempts to gain a foothold in the international pharmaceuti


cal market have come up against formidable obstacles, both commercial
and political, with the stringent US trade embargo. This socialist island's
strength has been in the quality of its products, not in marketing and
export know-how. During the last few years the biggest earner for Cuban
biotechnology has been the export of Hepatitis-B vaccine to more than
thirty countries. The Cuban vaccine is widely regarded as more effective
than Belgian and US-produced vaccines.
The special obstacles to Cuba breaking into the Western market have
led to a policy of trying to find joint venture partners, which currently
include a Canadian, German and a Spanish company. Cuba's cutting-edge
products for neck and breast cancer have caused the biggest stir in the
world of biotechnology. They have just been licensed to a German phar
maceutical company, with rights to develop the drug TheraCIM h-R3 for
the European market.
Analysts say so far the commercial rewards for Cuba's many medical
innovations have only been a fraction of their potential. But if TheraCim
h-R3 receives regulatory approval, it could become a standard cancer
treatment in Europe in four or five years, with estimated sales of around
$3billion a year. (Fawthrop 2003)
Cuban medicines include vaccines against pneumonia and meningitis,
and anti-cancer vaccines such as CimaVax-EGF which attack cancerous
31

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Social Scientist

cells in lung cancer (Cuba VPM 2003; Cuba VLC 2011; Maclean 2013).
0
CS By 2008, at its Centre for Molecular Immunology, Cuba had developed
s
V eight anti-cancer drugs and registered them after taking them through all
_G
£ the stages of development, including two steps of clinical trials and was
eu
u researching and developing another 13 anti-cancer drugs (Silva Rodriguez
0)
Q 2009). At the Centro de Neurosciencias de Cuba, research and develop
1 ment was conducted on neuroimaging, cognitive neuroscience, neuroge
a)
xi netics, development of medical equipment relating to them, and treatment
E
of disabilities of neural origin. At the Centre for Genetic Engineering and
5!
o Biotechnology (CIGB), leading products included Ree. Hepatitis B vaccine.
CIGB alone had registered 79 patents in several countries of the world, and
(S more than 980 patent applications were pending. Cuba had also developed
T vaccines and medicines for animals and fish. The total number of Cuban
patents registered globally by 2008 exceeded 230 (Silva Rodriguez 2009).
ut
o While the stress on public health care and development of vaccines and
Z preventive care generally predated the crisis caused by the fall of the Soviet
rs Union, the latter was responsible for the turn of Cuban agriculture from
S"
dependence on chemical fertilizers and pesticides to bio-fertilizers and bio
3 pesticides was induced by that crisis (Hernândez Pedraza 2014).
When gasoline for farm tractors became scarce, Cuban agriculture
turned to 100,000 oxen. Since then, by a nationwide breeding campaign,
the number of oxen working the Cuban land has risen to 400,000. This also
implied the production of a whole line of cultivators, seeders and harvester
suitable for ox power.
Additionally, Cuban scientists developed more than 230 locally con
trolled and operated Centres for the Reproduction of Entomophages and En
tomopathogens (CREE) that create nontoxic pest controls. One such CREE
is located at an Agricultural High School where students scout the fields to
determine infestations, raise the bugs, do the releases and monitor the results.
Another centre known as Pasture and Fodder Research Institute, is
guided by the principle that diversity leads to stability. Instead of trying to
concentrate the maximum number of cows in a factory type of operation,
they study the best ratio of livestock to horticulture per hectare.
Cuba has emerged as a genuine knowledge economy, minimising its
dependence on non-renewable sources of energy and materials, and has
been able to raise most indices of human development such as nutrition,
health, education and gender parity far above those of most other devel
oping countries. All countries of the world have their own specificity and
complexity, and will not be able to follow a 'Cuban model' in detail. But
just as West European continental economies had learned from England to
follow their own path to industrialisation, and later the East Asian econ
omies had learned from the West Europeans to carve their own trajectory
of development, other countries of the world can learn from Cuba, and
32

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Recovering Policy Autonomy

the successful experiments in organic agriculture and renewable energy, to >


3
construct their path to green development. ><'
W

Ts
Conclusion c
3
For all who are interested in saving the world from the greed andta inhuman
ity of the super-rich and their client states, the following measures
CO cry out
-ff
for agenda-setting and movements based on that agenda. CTO
n

• There should be a sustained drive for investing in renewable energy.


China has emerged as the biggest investor in renewable energy, with
India lagging far behind. China has also emerged as the manufacturer
of the cheapest solar panels and cells in the world. India has far greater
access to solar energy than most other countries. We have also a long
coastline, and regions with winds blowing all the time. So tidal energy,
wind power and in restricted cases, small hydroelectric projects can be
used all over India. Hydroelectric power has to be more judiciously
built in the future, because it can lower the access of farmers to water,
displace people, and if they are not properly maintained, they can cause
soil erosion upstream and siltation downstream.
• Nuclear energy is based on a scarce material, uranium, conferring
power on its sources and on the countries that possess the most
advanced nuclear technology. It is highly dangerous and can cause
long-lasting damage across generations as the disaster at Chernobyl
and, of course, the effects of atomic bombing of Hiroshima and Naga
saki have shown. Radioactive waste cannot be got rid of, and will pose a
danger to all living things for thousands of years. Finally, it is anything
but cheap; the Government of India has never allowed a proper costing
of nuclear energy because it is treated as a top-security issue.
• But all this requires wresting the control of the planet from the grip of a
bunch of profit-and power-hungry individuals, who have not hesitated
to commit silent and active genocide in pursuit of their objectives.

Notes

There had been another 9/11 twenty-eight years back, in Chile. On that day,
Salvador Allende, the democratically elected President of Chile, had been killed
by the soldiers at the command of the army chief, General Pinochet, who then
initiated a 17-year long reign of terror in Chile.
Available at http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas
/9523903/Saudis-may-run-out-of-oil-to-export-by-2030.html

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Recovering Policy Autonomy

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Amiya Kumar Bagchi is Emeritus Professor, Institute of Development


Studies Kolkata, of which he was Founder-Director until 2012.

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