Socialistic Patern and The Middle-Class

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 India, that while on the one hand State enterprises are severely criticised for administrative lapses, inefficient management, nepotism, corruption and irresponsible wastage of public monies, simultaneously one hears also the insistent cry for the speedy nationalisation of industry and even trade and agriculture! It seems to be a case of people as well as leaders and political parties not knowing exactly what is wanted.

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.

II

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 Russia recently, has pointed out the abnormally high prices of consumer goods in Russia as, for instance, a shirt costing hundred roubles or about Rs. 100, and how the Indian worker could pay more things with his pay, than the Russian worker, with a far higher wage, could. Mr. Kasturbhai also gave it as his impression that in Russia the limitations of over-centralisation were coming to be realised, and measures thought out to bring about decentralisation. It may not be out of place to mention here that recognition of private property and the private sector of economy imply a certain automatic decentralisation of power as well as greater personal responsibility. Experience shows that the owner of private property, whether land, buildings or factories, generally takes greater personal responsibility and effects greater economy than in the case of management under municipal, governmental or court custodianship. Not only does public management of proverty or industry tend to be rigidly departmental and lacking in personal enterprise, but invariably the employers and employees engaged in a private concern have a greater stake in running it economically and successfully than in the case of a Government-run one, because it is not so much the bureaucrat or politician that suffers or bears the loss, but the rate-payer in cases of wasteful or inefficient management. Competition among producers is more advantageous to the consumer than State monopoly. Suppose the soap industry is nationalised: whatever the price and quality, the consumer has no choice but to depend upon it; but in a regulated free economy each soap manufacturer tries to woo the consumer as regards quality, price and even service. For instance; while communications addressed to Government often remain unanswered, does not one meet with prompt and even courteous response from any well established or reputed private concern? The recent experience of Government-controlled ration shops as well as the abnormally high prices of consumer goods in countries with a State monopoly of industry and trade, not to speak of the price paid in terms of loss of personal freedom, would amply illustrate this aspect. Even workers and employees can expect better sympathy and attention, both from Government and the public, to their legitimate needs and privileges when employed in a private concern than as State employees. We are apt to forget the various pinpricks recently experienced under a controlled economy which may, indeed, grow a hundred times worse under a full-fledged socialistic economy.

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!

III

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.

IV

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.

V

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.

VI

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 bone 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 ofnational 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.