Socialistic Pattern and the Middle-class
By
D. V. RAMA RAO, M.A., LL.B.
Although
the Congress has declared a ‘socialistic pattern’ of society as the country’s
goal, the term is felt to be vague. Further, it is not clear whether this is compatible
with a democratic pattern, and no serious attention has been paid to the need
for translating the objective without jeopardising basic equity and social
justice. Hence, the achievement so far is generally lopsided, and the effect on
the middle-class has been particularly disastrous.
Socialistic
doctrines, it may be noted, which emerged in the later half of the last century
were more of the nature of a reaction against the socio-economic ills resulting
from the then obtaining unrestricted commercial-cum-industrial enterprise than
the outcome of rational and objective thinking. It is still typical of the
confused ‘leftist’ thinking of our times, especially in
It
should be noted that what is termed Capitalism is neither static nor a
doctrinaire dogma but largely a changing condition. It is indicative of a
pattern of economy that emerged spontaneously rather than by deliberate intent,
as a result of the unforeseen, and to some extent uncontrollable forces
released by the industrial revolution of the later 18th and early 19th
centuries, coupled with the doctrine of laissez faire, i.e., unrestricted
commercial-cum-industrial enterprise. No doubt, that gave rise to several
evils, but ever since the fact has come to be realised, enlightened and
rational opinion all over the world, irrespective of sectional interests, has
persistently endeavoured to have free economy regulated by wise policies to
avoid the ills inherent in an unrestricted competitive economy. In fact, with
the acceptance of the welfare concept of the State by the Democracies, together
with its natural corollary of a co-ordinated and regulated free economy, the
19th century capitalistic pattern has almost ceased to
exist; an important fact not sufficiently realised yet in our country. Western
Democracies have also shown a remarkable flexibility and capacity for
progressive adjustment to the needs of an equitable welfare economy, because in
tackling socio-economic problems they have not been inhibited by any rigid
doctrinaire dogmas; whereas leftist ideologies, having emerged more as
emotional reaction than as rational approach, have tended to be rigid. Maybe,
the challenge of Socialism and the menace of Totalitarianism have helped
quicken the pace of transforming a competitive capitalistic economy into a
regulated welfare economy. The fact, however, remains that the free economy of
the Democracies has proved far more flexible, responsive and progressive than
Marx could have dreamt. Contrary to the earlier socialistic beliefs, not only
has adult franchise, irrespective of property qualification, been adopted
practically by every democracy without class resistance, but labour conditions
have also steadily improved. Capital, too, instead of being monopolised in
fewer and fewer hands, has become wildly diffused. It is the orthodox
Socialists that seem to be baffled by the unforeseen problems inherent in State
Capitalism, which Socialism in practice has come to mean, while the Democracies
have not been shirking to meet the needs and to face frankly the problems of a
welfare economy under a democratic set-up.
Commonsense
shows that the remedy for the ills of unregulated competitive economy is to
have a regulated free economy, and not necessarily State owned and managed
economy, because the unlimited power and non-justiciable right of Government
over everyone’s property, and, in effect, person too, (which will inevitably be
the case under complete and logically pursued Socialism) may lead to far
greater ills and tyranny. Socialism, in fact, presents far more fundamentally
knotty problems than a regulated free economy does: Can an independent
citizenship or a free Press be possible under a regimented State economy
reducing practically everyone to the status of an abjectly dependent State
employee? A critical analysis would reveal that neither an effective
functioning of Democracy nor a spontaneous cultural development would be
possible unless the large majority of citizens can have independent pursuits,
and a good few of them ample independent means, free from the cramping effect
of reliance on State jobs or patronage. Let it also be noted that the investor,
often confused with the term ‘intermediary’, is necessary whether in a free
economy or under nationalization, as evidenced by the high rates of interest
obtaining in professedly socialistic countries to induce the public to save and
invest in Government bonds. It may sound paradoxical, but a well-regulated free
economy in an enlightened Democracy may well achieve practically all that
Socialism aims at, without jeopardising democratic personal freedom, while
unwary nationalisation may well end up in a supra-centralised State Capitalism.
As for the allegation that big business tends to run the politics of a country
under a free economy, well, any way, if it be a choice between businessmen
running politics and politicians-cum-bureaucrats running business–which will be
the case under nationalization–most people might prefer the former.!
Therefore,
while the State may assume the minimum of powers required to ensure a regulated
and co-ordinated free economy, the recognition of justiciable rights to person,
property and a free Press–which are largely inter-related–within at least well
defined limits, is also essential if Democracy is to be preserved. In the
Western Democracies and even in England, where Parliament has supreme sovereign
powers unrestricted by a written Constitution, fundamental justiciable rights
have ever been zealously prized and stoutly defended by citizens and even
governments; and, although a greater degree of social security and economic
equity than in countries professing Socialism is achieved in several Western
Democracies, they have wisely kept welfare economy and social equity as their
goal instead of a rigid and doctrinaire socialistic goal. But, there is a fast
developing tendency on the part of the Government in our country to
indefinitely extend the powers of the State to the detriment of fundamental
individual rights. This may easily prove a danger to a Democracy that is still
in its infancy. In a country like ours, it is the firm establishment of an
effectively functioning Democracy that should receive priority. Social justice
will naturally follow on the strength of enlightened public opinion, as has
happened in other Democracies. But if, under the pretext of expediency, or due
to confused thinking, fundamental democratic rights were to be curtailed, both
the means of determining what constitutes social justice and of knowing whether
it really comes to prevail or not, may be once for all gone, as has happened in
totalitarian countries professing Socialism.
It
is argued that to achieve speedier welfare economy, the governmental sector of
economy has to be increasingly extended. It may be pointed out that Government
getting into the shoes of the capitalists does not necessarily mean a change in
the capitalistic structure of economy; nor has Socialism led to a more
egalitarian society or resulted in more economic price and better service to
the consumer than in countries following a regulated free economy. According to
Mr. Daniel Lerner, quoted in Thought (6-3-1954), while the pay scale in
the American Army ranges in the ratio of about one to twelve-and-a half times,
the same varies from about one to seventy times in the Soviet Army. It is also
surprising that while decentralisation of power is talked about, simultaneously
measures calculated to lead to increased concentration of both economic and
political power in the hands of the Government are advocated. Mr. Kasturbhai
Lalbhai, Leader of the Industrial and Agricultural Delegation which visited
Can
any impartial observer deny that the most shining examples of efficiency,
economy, enterprise and service, whether in the industrial, commercial,
cultural or educational spheres, are to be found more in the private than the
public sector? Or that the worst examples of favouritism, inefficiency and
waste are to be found more in the public than the private sector? Could it have
been possible for such institutions as the Viswa Bharati, Adyar Culture Centre,
Banaras Hindu University, Indian Institute of Science, Annamalai University,
Birla’s Educational Centre at Pilani, Bharatiya Vidya Bhavan of Bombay, not to
speak of various excellent independent journals, publishing houses, cultural and
missionary institutions and the like, to function without the initiative and support
of citizens of independent means? Could the talents and enterprise
of a Ford or Tata have found proper opportunities for utilisation under a
completely State-run economy? More likely, for want of a pass in a public
service examination and such other bureaucratic red-tape they would have rotted
as some petty clerks or worse. A people endowed with initiative,
resourcefulness and self-confidence would never crave for State guardianship of
each and every aspect of a citizen’s life. The sooner the cheap ‘Ma-Bap’
concept of the State is given up, the better for all concerned. There is always
a better chance of talent getting due recognition, culture getting due scope
for spontaneous growth, and the right man reaching the right place, in an
enlightened Democracy with a relatively free economy than under a rigid,
bureaucratic State regime. Government has nowhere proved a good discoverer of
creative talent, much less genius. Creative cultural springs invariably dry up
at the bureaucratic touch. It would be wise on the part of a Government to aim
at creating suitable and encouraging conditions for cultural pursuits to
thrive, and at giving adequate aid to well-established cultural bodies or
institutions, rather than presume to directly sponsor culture. One need not be
an apologist for zamindars or landed interests to point out that, with the
hitting of these sections, the prime sources of cultural patronage have also
been seriously hit. And everyone knows how Government sponsored culture tends
to be no more than, largely, official snobbery and free delegations for a lucky
few!
Western
thinkers are increasingly realising the limitations to nationalisation and
cautioning against the ever widening powers of the State which may have a
disastrous effect on spontaneous cultural expression and fulfilment of
individual aspiration. To any impartial observer, it would appear that today it
is not so much the influence of the wealthy sections as the ever widening
tentacles of Governments that are a growing potential threat to the free
citizen. In England which, perhaps, furnishes the best example of a balanced
evolutionary development in most respects, it is interesting to note that an
intellectual and cultural body like the Fabian Society, noted for its serious
and systematic study of public and socio-economic problems–in refreshing
contrast to our own intelligentia who mistake slogans for sound thinking–seems
to be realising the limitations to nationalisation in the light of new
experience, as is reflected in the ‘New Fabian Essays’ edited
by R. H. S. Crossman. If such be the case in a rich and enlightened Democracy
like England noted for the integrity, fair-play and the efficiency of its
public Services, what should be the verdict in a country like ours with an
undeveloped economy, a Democracy still largely in the stage of
cheap demogogy, and relatively inefficient and less public spirited services?
As
it is, the State, in addition to being the biggest employer, assumes the role
of educational and scientific expert, social and religious reformer, cultural
guide, and supreme judge and dispenser of social justice and national destiny!
Is it wise to further extend its powers? Should we not retain at least an
independent Judiciary with sufficient powers in the interests of free
citizenship, and as a check against possible abuse, or arbitrary exercise, of
power by the State? To say that the Government has no intention of denying fair
compensation for any expropriated property, even after extended constitutional
powers, is untenable since the intentions of a Government, however genuine,
cannot be a substitute for justiciable democratic rights, because no Government
can be sure of retaining power indefinitely, and there would be no check on
possible abuse of power by a future Government. The best check against
irresponsible abuse of power by future Governments lies in retaining a healthy
respect for fundamental individual rights and establishing firm democratic
traditions by the present Government and citizens. Further, the most glaring
variations in the rates of compensation in different States, and in the methods
of payment, for landed interests already abolished, well indicate the
potentialities for arbitrary and unfair implementation of even a well intended
but non-justiciable executive measure. For instance, in Orissa, the proposed
rates of compensation for Inam lands, most owners of which are middle-class
investors of modest means, may not in many cases come to even one-tenth of the
market or invested value. It is equally strange to argue that Judges are not
infallible, because politicians are no less so; indeed, the politician is much
less dependable in the matter of objective and impartial approach (especially
in an infant Democracy like ours) because of his pressing need to cling to
cheap vote-catching devices!
If
the Government, enjoying ample powers, is unable to regulate and co-ordinate
free economy to achieve social justice and national objectives, neither can it
be hoped to do better under State ownership and management which, after all,
cannot transform national character. To mistake national shortcomings
for the necessary evils of a free economy would be folly. Does a middle-class
teacher’s or clerk’s pay of Rs. 35, in contrast to that of Rs. 70 of an
illiterate and unskilled Central Government worker, indicate social justice?
There is no constitutional bar to reduce the wide disparities in personal
income or in the pay scales obtaining in the State sector. Has a Government,
whose pay-scales range in the ratio of nearly one to seventy times, a moral
right to preach the removal of inequalities in the private sector? Is it not
the case at present that politicians and bureaucrats in power, who claim to be
public servants, proportionately, command more comforts, amenities and privileges
than the private Citizens, however well-to-do, said to be their masters? What
guarantee is there that the same pattern would not continue under extended
powers of State Capitalism, if not, indeed, grow worse as has happened in
totalitarian countries professing Socialism? It requires to be considered if it
would not be desirable to confine State enterprise generally to the realm of
utility services, irrigational, hydro-electric and such other essential power
resources, which is naturally an ever widening sphere, and to concentrate on
more efficient, fair and integrated administrative Services, instead
of assuming ever new powers and embarking on enterprises which, with advantage,
could be left to private initiative. The State may, if
required, step in only to help fill up any gaps or deficiencies, or to set a
model example or standard but not to encroach upon the natural
domain of free enterprise and investment.
The
general indifferent attitude to the plight of the middle-class on the part, especially,
of political parties, and the level of thinking with regard
to the land problem, which is tinkered with rather than tackled, well
illustrate the current confusion. While in other Democracies, welfare economy,
is brought about by rational measures conducive to general prosperity,
without an artificial distinction between agricultural and non-agricultural
investment, together with a wise system of taxation of
incomes, the tendency in our country is to view the investors in land who,
after Zamindari and Jagirdari abolition, comprise for the most part middle-class
people with modest incomes, as a new kind of untouchables! This prejudiced
mentality is the result of illogical and inconsistent arguments.
It is argued that land can be distributed but that a factory cannot be. A
factory may not be, but what about the share capital, bank deposits and the
like? Money hunger is even more widespread than land-hunger! If good wages and
bonuses are a sufficient incentive to workers, surely, a fair share, say 3/5 to
2/5, in crops and reasonable security of tenure ought to be also a sufficient
incentive to tenants. It is even more amazing that, while it is assumed that
just or fair compensation is necessary in the case of non-agricultural
investments, the principle is blatantly ignored and violated in the case of
land investments. For Imperial Bank shares, compensation at 3.5 times the
actual share value is considered fair, although most of the shareholders are
likely to be richer than an average landowner, but, in the case of land, any
nominal pittance is supposed to meet with the ends of social justice and
equity! It is simply an accident that some happen to be investors in land. Hard
earned middle-class family savings have as a rule come to be invested in land in
industrially undeveloped mofusil areas, for want of alternate means of local
investment. Even non-cultivating landowners take interest in land repairs and
the like, and keep up mutually beneficial contact with their tenants; but
investors in a plantation or company have no such contact or interest except
that of dividends. The investors in land are no more responsible for the land
problem than the investors in other sectors are for that of urban unemployment.
Further, most landowners are invariably engaged in some business or
professional activity to supplement their modest income from land; and are the
main support of all cultural, civic and public activity in mofusil areas. Many
such persons engaged in business or trade are able to command their credit largely
on account of their landed property. It is wrong to imagine the average
landowner to be an absentee landlord wallowing in wealth and idleness. In many
cases lands which are already tenanted are put up for sale; or a farmer may
sell his holding. If a person invests on such land and allows the tenant or
farmer to continue to cultivate out of consideration, he is
called an absentee landlord! Middle-class investors in land lack such
well-organised representative associations, and publicity and support in the
Press, as the more wealthy and influential investors in other sectors enjoy. To
treat the investor to land alone, on this account, on a different footing
amounts to unfair sectional hitting and is utterly against the spirit of basic
equity and social justice. Sardar Patel, during the Constituent Assembly
discussions, wisely warned against invidious distinctions between different
sectors of wealth. Gandhiji too did not make a distinction between landed and
other kinds of property (vide page 9, ‘In the Shadow of the Mahatma’ by
G. D Birla).
But,
strangely enough, even some otherwise fair-minded persons have sought to make
an unfair distinction between agricultural and non-agricultural investments
during the Constituent Assembly discussions. Indeed, one of the foremost
leaders was reported to have compared owning land, in a way, with owning
slaves! It is difficult to understand how owning land is more immoral than
owning houses, Company shares, Government bonds or bank deposits. In fact, the
landowner is much less the master of his tenants than the owner of a factory or
plantation may be of the workers employed therein. From the equitable and
commonsense point of view, provision should be made for justiciable or fair
compensation upto a reasonable limit, irrespective of kinds of property.
Here
we may briefly touch upon certain relevant aspects of the land problem vis a
vis the middle-class. As long as land is saleable, rentier investment in
land to some extent would be unavoidable, though it can be discouraged by such
means as imposing a suitably graded surcharge on land-tax and restricting the
landowner’s share to, say, 1/3 to 3/5 of the share produce, which would fetch
about 3 to 4 per cent net income on investment value to the landowner. This is
much less than dividends or interest obtaining in other sectors and
sufficiently low to discourage rentier investment in land; less than that would
lead to friction and evictions, as experience has shown, and 2/3 share leaves a
fair margin to tenants. Further, a too drastic reduction of the landowner’s
share would create a new middle-class problem, in the absence especially of
guaranteed suitable employment as well as social security for all, besides, it
would unduly depreciate land values, which is not in the interest of the
farmers who far outnumber tenants, since they view land both as a means of
occupation and of commanding credit, as well as saleable capital in times of
need. Most of the tenants of today may be prospective independent farmers of
tomorrow. After all, what is called the land problem is largely the general
problem of under-employment, driving far too many into excessive dependence on
land. The best way to lessen pressure on land is not by laying over emphasis on
redistribution of land already brought under cultivation, but by partly
utilising the amply available cultivable waste land and, more so, by the
resuscitation of suitable cottage industries, promotion of medium-scale
industry as well as needed bigger industries and development projects, extension
of utility services and the like,–thereby providing ample productive and
beneficial occupational opportunities which would automatically tend to solve
the problem. In fact, Gandhiji, who correctly understood the problem, always
gave more importance to provision of whole-time or subsidiary occupations
through revitalisation of cottage crafts than to mere measures of
redistribution. But until the handloom weavers, reduced to beggary, were
starving in the streets of Madras and until a leader of the stature of Rajaji
took up their cause, our Government, leaders and experts could not appreciate
what would have appeared as obvious to any sensible layman!
The
fact that a single cottage craft like the handlooms provides occupational means
of subsistence to nearly as many as the total number of those engaged in all
the major industries in the country, easily explains the importance Gandhiji
gave to suitable cottage crafts as the only practical means towards the
solution of the widespread under-employment in the country, with which the land
problem is closely associated. But our Government and national leadership have
failed to grasp the correct nature of the problem. Instead of pursuing
a wise and sound policy in time, they have tinkered with the land problem, largely
at the expense of the middle-class. And as more and graver
problems than those sought to be solved have arisen as a result of their
bungling, they seem now to seize on the Bhoodan move as a face-saving device.
In plain language, landowners are made to meet exclusively the price of
obviating the failure of the nation as a whole to tackle
with success the general problem of poverty and unemployment, euphemistically
called the land problem! Even if land ceilings, apart from the
many practical difficulties involved, are thought necessary after due
consideration of all relevant aspects and data, it is but an equitable
principle that any costs involved in steps towards a desired pattern of
national economy should be proportionately borne by all wealthy sections and
not shoved on to a particular section, which is also the Fabian view as
advocated by Bernard Shaw. If the nation as a whole cannot bear the costs or
burden of compensation involved in such steps, how, with any sense of equity,
can a particular section be expected to bear it?
After
Zamindari abolition, about 70 per cent of cultivators in the country are
independent farmers and about 12 per cent of cultivators, tenants. Since there
is a tendency on the part of the middle-class to transfer their former
investment in land for the most part to other sectors, and since several
cultivators can afford to purchase land available at the buyers price,
transference of as much land as possible by normal mutual transactions should
be encouraged; that would be conducive to capital formation in the
non-agricultural sector needed for the success of the National Plans. In the
absence of such a policy, the amount of ‘dead capital’ with the cultivators,
who as a rule invest on land only, cannot be known. Probably, with a sound and
suitable policy and, if necessary, by advancing loans to the needy cultivators
on easy terms to purchase land to the extent the land-owners intend to part
with it, in a few years half the number of tenants may become independent
farmers. A small percentage of tenants may remain, but it would not constitute
a problem. If required, a five to ten per cent special cess on all personal
incomes whether agricultural or non-agricultural above, say, the Income-tax
level, may be imposed during the Planning period to finance a National Rural
Bank, with the main objects of advancing loans to needy cultivators to purchase
land and help settling surplus landless mofusil labour on the amply available
waste land. A certain percentage of casual labour can always be usefully and
gainfully absorbed in agricultural operations. So, if about half of such labour
could be absorbed on new land or in other pursuits, it may cease to be a
problem.
As
regards Bhoodan and ‘villagisation’ which are based on idealistic anarchy, they
may be practicable in primitive communities or simple Ashrams with devoted
idealists, but hardly suited to a complex and developed society where
enlightened and well-informed opinion should guide a democratic welfare
Government to achieve the needed objectives in a systematic and equitable
manner. It is incongruous, if not escapist, on the part of professedly
democratic political parties to identify themselves with moves smacking of
idealistic anarchy. It is worthwhile considering the desirability of confining
Bhoodan to cultivable waste land and of utilising the Sarva Seva Sangh, with
its missionary spirit, in the work of settling the needy on new lands and help
building model colonies, and in community development projects and
revitalisation of cottage crafts, in a well co-ordinated and systematic effort
on governmental level.
With
the near completion of the First Five Year plan, most persons belonging to the
middle-class and investing sections, whether engaged in business, professional
or cultural activities, who form the backbone of the nation, are finding it
increasingly difficult to intelligently plan careers for themselves or their
family’s future with anything like reasonable certainty. Naturally, in spite of
the leaders’ exhortations to the contrary, many who would prefer independent
pursuits are forced to look to Government jobs as the only means affording some
definite security, which is by no means a healthy democratic trend. The object
of national planning in a democratic set-up should be, besides balanced and
increased production, the creation of better and wider individual opportunities
so as to enable each citizen generally to intelligently plan for, and help,
himself within the broad frame-work of national welfare economy, instead
of attempting to plan and spoon feed all aspects of each person’s life from the
cradle to the grave. In short, better services, rather than doubtful reforms
based more or less on the personal predilections of a few men at the top, might
be a better State policy.
Unless
all these aspects and implications are dearly grasped, a hazy socialistic goal
may merely end up in crippling Democracy and the middle-class without
compensatory benefits. In this connection, the significant resolution passed
recently at a public meeting at Berhampur (Orissa) presided over by Shri
Shradhakar Supakar, Leader of the Opposition in the Orissa Legislative
Assembly–though it seems to have escaped the notice of the Press–may be quoted
in full:
“This
meeting emphatically protests against the general tendency on the part of the
Central and State Governments and most of the political leaders to completely
ignore and disregard the legitimate interests of the middle-class and their
modest investments, and deeply deplores that every reform should be sought to
be carried out solely at the expense of the already hard-hit middle-class.
While in advanced Western Democracies, an equitable distribution of
national wealth is brought about by levelling down the wealthiest sections by
a wisely graded system of taxation, and levelling up the poorer sections by
ensuring better and varied means of livelihood, thereby bringing all generally
to the middle-class level, in our country, the unfortunate effect of all
lopsided reforms is to slowly wipe out the middle-class by making its position
ever more insecure, thereby creating a greater gulf between the poorer and
richer sections. This is all the more deplorable and shortsighted, since no
alternate means of livelihood or social security for all is ensured, and even
hypocritical, since it is done in the name of social justice and a socialistic
pattern of society. This meeting warns the concerned authorities and political
leaders that to reduce the middle-class to frustration and desperation is the
surest way to hasten the social upheaval intended to be averted by all.”
None
need, or should, take a sectional view, but since it is the middle-class that
largely shapes public opinion and sets most of the national patterns, and since
it may be the standard of the desired future pattern of a society with less
conspicuous disparities in incomes, it should awaken to its responsibilities in
the larger interests of the nation. The recent elections in Andhra have shown
that it is the attitude of the middle-class that largely determines the course
and results of elections. If the plain reading on the wall be not heeded by
political parties, the only remedy may be to set less store by political
parties and to return, in the coming elections, a sufficiently large number of
reliable, capable and honest Independent representatives, who could be a
healthy check on the vagaries of political parties.