Constant interaction between society, State and market through communities is key for progress

Economic Times, July 03, 2020

By Suresh P Prabhu & Pradeep S Mehta

A dispassionate reader will find many common thoughts in Thengadi’s and Rajan’s ideas. Samaj, Sarkar and Bazar — society, State and market — have to work as per complementary needs of each other.

Prime Minister Narendra Modi recently issued a clarion call for atmanirbharta, or self-reliance. The rationale, plausibility and possible ways of achieving it have been the subject of intense debate. But what it means is that it is time to redesign our economic governance, keeping in mind the interest of the poorest of the poor.

The prime minister is not calling for India to go back to its earlier days of autarky. Other than making a strong case for human-centric globalisation, Modi has also urged India’s business community to take every step for India to become a hub for global supply chain management.

Atmanirbharta is to be interpreted by understanding and analysing the term itself, and its origins and deeper implications. ‘Atma’, interpreted in popular jargon, means ‘self-reliance’. However, ‘atma’ has another meaning:
soul. This deeper meaning of atmanirbharta resonates the thinking and teachings of Dattopant Thengadi, founder of Bharatiya Mazdoor Sangh (BMS), among many other organisations. He propounded his philosophy, the ‘Third Way’, in 1956.

Thengadi’s ‘Third Way’ calls for realising that the soul of India resides in its villages, millions of informal, micro, small and medium enterprises (MSMEs), women entrepreneurs, homemakers and workers. Making them atmanirbhar is a prerequisite to making India atmanirbhar.

Evidently, this has started getting reflected in the manner in which rural India is bouncing back from the Covid-19-induced lockdown.

According to the latest Centre for Monitoring Indian Economy (CMIE) data, the rural unemployment rate has fallen below the pre-lockdown level. In the near future, considering a good monsoon, rural India will be able to absorb
more people in a productive manner.

In this context, critically, we need to distinguish progress from development. Ivan Illich, the noted Austrian-Mexican polymath and priest, considered development as a malignant myth, whose pursuit threatened those among whom he lived. In his 1973 book, Tools for Conviviality, Illich chronicled the adverse impact of development on the life of the poor in rural areas and slums — in terms of erosion of means of subsistence and traditional skills, loss of self reliance, dignity and solidarity of communities.

Inspired by Illich, Thengadi also rejected the idea of modernisation being sine qua non of westernisation. He noted that the sole focus on economic growth, without considering the influence of — and impact on — community and environment was unsustainable. He, therefore, viewed human welfare as a combination of economic and non-economic growth, and capable of existing in complete harmony.

State as Enabler
While the former can be monetised, the latter is largely experienced, like climate, environment, peace and security.
The role of the State is to take a comprehensive view of these goals and enable conditions for human welfare. To this end, education, ecology, economics and ethics, among other things, must be taken into consideration in an integrated manner.

This is Thengadi’s ‘Third Way’ — different from capitalism and communism — to achieve atmanirbharta
and economic resilience.

Therefore, the transition towards such an atmanirbhar Bharat would require institutionalisation of nine key principles:
*It is the total value of the basket of goods and services, and not just their market prices, that constitute national wealth.
*Maximum production and equitable distribution is key to avoiding artificial scarcity and price rise, and for ensuring adequate market and return for producers.
*Basic needs of life such as food, healthcare and basic education must be available for every citizen.
*Nature is to be utilised, not killed. Ecological factors, balance of nature and requirements of future generations should never be lost sight of.
*Greater stress should be laid on labour-intensive — rather than capital-intensive — industries, as it is necessary to reconcile efficiency with employment expansion.
*Instead of the factory, the home needs to be at the centre of production, and this will require a focus on developing indigenous technology with an emphasis on decentralisation of production processes.
*For the benefit of workers, technology should introduce reasonably adaptable changes in traditional techniques of production, without incurring the risk of increase in unemployment, wastage of available managerial and technical skills, and complete decapitalisation of existing means of production.
*Labour should be considered a form of capital in every industry. The labour of every worker should be evaluated in terms of share, and workers should be raised to the status of shareholders.
*Society is the third party to all industrial relations (along with industry and labour), and its interests should be considered on equal footing with the other two.

Vocal for Local
In short, it is now increasingly being realised that effective continuous interaction between individuals, markets, and the State, enabled and sustained through communities, is key for progress. It is no surprise that former Reserve Bank of India governor and current University of Chicago economist Raghuram Rajan, in his brilliant 2019 book, The Third Pillar: How Markets and the State Leave the Community Behind, recognises that all markets are embedded in a web of human relations, values and norms, and argues for a return to empowering local communities as an antidote
to growing despair and unrest.

A dispassionate reader will find many common thoughts in Thengadi’s and Rajan’s ideas. Samaj, Sarkar and Bazar — society, State and market — have to work as per complementary needs of each other.

Prabhu is India’s sherpa to G20, and Mehta is secretary general, CUTS (Consumer Unity & Trust Society) International. Amol Kulkarni of CUTS contributed to this article

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