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PRABHAT PATNAIK | 7 FEBRUARY, 2017

Demonetization: Why The People Are Silent


NEW DELHI: Why are the people remaining quiet, if they are so inconvenienced by the demonetization decision?

This again is a point that is harped on continuously by the ruling Party and government spokesmen.

The answer to this question appears to me to lie at two very different levels. At the first level, there is no denying the fact that shock and awe does succeed in its objective. If people are shocked and awed, then, as already mentioned, the discourse of right or wrong ceases to be applied for judging the action.

And once this happens, the anger, which would have erupted if the action had been judged to be wrong and hence visualized as inflicting only gratuitous distress upon the people, ceases to erupt. In other words the people themselves fall prey, precisely because of the scale of the action, to the propaganda that some higher good must be getting served by it.

And their own distress, even if it is acute, is seen by them as serving this higher good; it therefore becomes acceptable to them. The inversion of perspective that I talked about earlier, does succeed in its objective; people fall victims to this inverted perspective. And their doing so, and remaining quiet despite hardships, is then adduced as justification by the government for the measure that caused them this suffering.

There is however a different level at which an answer has also got to be sought to this question. And this has to do with the fact that in the era of neo-liberalism mass struggles for improving the material conditions of life of the common people tend to disappear.

The fact that no sustained strike action by workers has occurred in the neo-liberal period (I am not referring here to the one-day strikes that have been occurring fom time to time, even on a massive scale), the fact that no large peasant mobilizations have occurred even during a period of acute crisis of the agrarian economy unleashed by neo-liberalism, despite the fact that over three lakh peasants have committed suicide over the last two decades, bear testimony to this fact of vanishing mass struggles.

There are several reasons for this. First, there is a weakening of the working class movement that is spontaneously effected by the neo-liberal regime. This is because such a regime entails a decimation of traditional petty production through the encroachment of big capital; but the employment growth that is achieved under the neo-liberal regime is grossly inadequate for absorbing even the natural growth of the work-force, let alone those displaced by the destruction of petty production. Thus there is a swelling of labour reserves which weakens the striking power of the workers.

The privatization of public sector enterprises, the outsourcing of work that used to be done within the public sector to private providers, and the progressive casualization of the work-force, which is the form that the growth in the relative size of the reserve army of labour takes, contribute to this process, resulting in an overall weakening of the trade union movement, and of the strength of the working class as a whole.

Secondly, since neo-liberalism pushes the economy into a vortex of globalized financial flows, whatever may be the political outcome of elections makes little difference to the economic policies that are pursued, for fear that doing otherwise would drive finance away. Taking the economy out of this vortex would create room for an alternative, but apart from ideological reasons and lack of political will, one factor deterring such delinking from globalization is the transitional pains it would bring to the economy owing to the sudden outflow of finance.

Neo-liberalism therefore forecloses the alternative possibilities open to an economy, since most political parties are too frightened to propose de-linking or imposing capital controls as a practical course of action. An atmosphere of overall hopelessness thus comes to prevail in the neo-liberal era. The Left, with its strong and consistent ideological opposition to neo-liberalism should constitute an exception to this general reluctance to seek an alternative to neo-liberalism. But the weakening of the striking power of the working class, which robs it of powerful class support, acts as a constraint upon the Left. And to the extent that even progressive opinion in the country falls prey to the ideological hegemony of neo-liberalism, this further hamstrings the effectiveness of the Left.

Struggles for material improvement in the conditions of life of the people as a whole therefore recede to the background in the era of neo-liberalism. True, there are specific struggles, e.g. against the location of a plant in some particular place, and struggles deriving from identity politics, i.e. for improvement in the material conditions of life of some specific group; but these do not add up to any overarching struggles on material conditions of life for the people as a whole.

The people, no doubt, do come out in support of say an anti-corruption crusade like the one led by Anna Hazare, but they do not themselves acquire any agency role in such mass gatherings. And this inability to acquire any agency role in launching struggles for material improvement in the conditions of life afflicts even the petty producers and peasants who have been getting squeezed by neo-liberalism.

The quietude even in the face of the hardships caused by demonetization has to be seen in this context. Since neo-liberalism cripples the ability to launch mass movements of the sort that characterized the earlier period, there is a general tendency towards fragmentation among the people (and the flourishing of identitarian movements at best), a sense of isolation, and hence of fear that any open opposition to the government measure would invite the wrath of the supporters of the government.

There may be individual expressions of mob fury against some hapless bank staff in some remote region, but little expression of mass protest or even mass anger against the move itself.

This very fact however, far from indicating people’s acceptance of demonetization, constitutes evidence of the attenuation of democracy. Democracy conceptually entails a subject role for the people. This subject role is asserted through collective actions, which incidentally is one reason why trade unions are so important for the functioning of democracy itself. If the scope for such collective action is restricted by the prevailing neo-liberal economic regime and the people are so fragmented, isolated, and hence afraid, that they do not even protest when a government brings acute hardship to them, then we are clearly seeing an attenuation of democracy.

Just as the peasants have taken to committing suicide in the face of the agrarian crisis rather than agitating for their demands before the government, likewise we now have migrant workers going back to their villages en masse owing to the crisis caused by demonetization, rather than protesting against the measure; and so on with other groups.

Put differently, the displacement of the people by the “leader” which has been occurring of late and which was mentioned earlier, is to be located within a development that has been occurring for a long time under the neo-liberal regime where the people have been progressively losing their agency role. The fascist tendency of subverting the agency role of the people is a continuation in a more concentrated form of a tendency that was already unleashed by neo-liberalism.

To identify this tendency of neo-liberalism to strip people of the agency role they could exercise through collective economic and political interventions, is not to suggest that this state of affairs must inevitably prevail under a neo-liberal regime. Nor should we draw the conclusion from the quietude of the people that they are satisfied with their lot, as the government spokesmen would like us to believe. Progressive opinion in the country must express itself and take the lead in intervening to break the quietude among the people in the face of the demonetization onslaught. This is necessary to prevent the slide of the country towards a fascist State.

(Professor Prabhat Patnaik is a reputed economist and author of several books)

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