Saturday, September 24, 2005

Politics and Business

Watched an unusual movie called the Motorcycle diaries(2004). Unusual because of the narration and its being one of the few non-Hollywood foreign movies I have watched. Its a story about a young Argentinian Doc who along with his friend sets out on a trip across South America in his old Norton 500 motorcycle. The movie ends with a note that this guy later went on to become the famous leftist revolutionary Che Guevara. Disclaimer: Despite what a friend of mine used to insinuate in college, I do not hold communist views. Fact is I dont know what exactly communism stands for.

One interesting thing is that Che is not a celebrated or popular cult figure in India. I remember seeing one picture of him in a roadside youth club in Coimbatore once. But he is absent from our political scene; he is not revered or mentioned by any of the leftist parties in their political rallies or speeches.

During the trip, young Che is disturbed by the fact that economic interests which drove colonialism destroyed most of indigenous culture in Latin America. For instance, in Peru, he is stuck by the fact that the magnificient Inca civilisation was demolished to make way for the modern day Lima, simply because one of the warring sides had gun powder. Noam Chomsky tells us that the fate of native Indians in North America was not less cruel. The understanding is that economic interests driven by businesses widen the gap between the rich and powerful few and the deprived masses.

Seed of War: "Is there any man, is there any woman, let me say any child here that does not know that the seed of war in the modern world is industrial and commercial rivalry? -- Former American President Woodrow Wilson

“[T]he prosperity that companies like Microsoft now enjoy could not occur without having the strong military that we have.” -- Defense Secretary William Cohen

This blog is not the usual left vs. right debate that every one comes to hear about now and then. I was struck by the complicity of business interests in American politics and the National Security Council's plans to maintain this sphere of influence to protect American business interests. In fact, Noam Chomsky alleges in his book "What Uncle Sam really wants?" that America went to war with developing countries to prevent them from setting a good model of development without aiding American business interests. He calls this the Threat of a Good Example. Che Guevara's dream to create "one, two, many Vietnams" is interesting in the view of American policy makers' fear of a good model of development which did not involve American businessmen. But in reality, despite America's failure in Vietnam, the only example that Vietnam can now stand for is one of liberalisation and successful opening up to external trade. There could be a lot of debate on the rationale of America's military involvement in a lot of countries (explicit or CIA-backed) post WWII. The fact is that most of the American populace including the war veterans still do not understand the rationale of the Vietnam War or the Iraq War. Was there just an ideological intent of preventing Communism or was it a plan to prevent any Government from succeeding in meeting the people's needs without American investment and trade?

Even if we agree that the communist plan is really decadent and unsuitable that China itself has thrown it away, isnt the US model of business-driven foreign policy dangerous for the Third World ?

What the US is NOT doing:

1) Interfering in other countries to support the spread of democratic ideology.

The US supporting the Shah of Iran in a coup to overthrow the democratic government of Mossadeq.

2) Using its military power to prevent human rights violations across the world.

A list of US war crimes post WWII themselves qualify as human rights violations.

What is the US actually doing?
If we dont consider the business angle, the whole of US foreign policy will appear to be a series of mistakes and goof ups since 1945. But considering the benefits they have brought to the US business community, all of the US operations make tremendous sense. Be it the control of oil resources in the Persian Gulf or the liberalisation of African countries to act as sources of raw materials and markets for US corporations.

Where does India fit into all this?

Since we downplayed the socialist angle in our economics, probably we dint attract much of US attention. Though there are stories making rounds in the newspapers about Congress receiving support from the CIA in Kerala and West Bengal to keep the Communists in check.

Since 1991, the IMF-forced-liberalisation and reforms have opened up the Indian economy to foreign investment. The quality of services to the urban populace have definitely gone up. But have the really needy people, the "poorest of the poor" really benefited from economic reforms ? Or has the gap between the classes just gotten wider ? Through GATT and WTO, India is being forced to support IPR and product patents in pharmaceuticals. The current situation is that the Indian poor can afford a lot of medicines unlike our neighbour Pakistan because India has developed its own pharma industry where some companies have discovered cheaper ways of making drugs than their foreign counterparts. If in the future, the product patents come into practice, in the worst case, the cost of these drugs will go up and the Indian poor will die unable to afford costly drugs. This is barely the free trade that one is taught with ferverent zeal in Economics courses.

Is this an example of US arm-twisting a country into opening up avenues for its industry to set foot at the cost of real development for the poor and the defenceless? This is a very naive logic that has been discussed lots of times by economists everywhere but surprisingly I havent heard of a good counter logic in favour of the GATT reforms in pharma.

What about Indian politics ? The business lobby here is getting a stronger say in Government policies. The American model of lobbying and using the Government to push business interests might well be underway here too. The nexus between Politics, foreign policy and Business is gaining hold in India also. It cannot do much harm to other countries though considering the relatively weak position of India vis-a-vis the other economic powers. But with growth, the tendencies to exploit and make profits at the cost of weaker peoples/countries will turn into a very real threat to Indian policy makers.

Gokulakrishnan S


Vijay Krishna said...

Excellent piece.

As the incriminated friend ;) all I would like to say is that Communism is too lofty an ideal to be practised by commoners. And nowhere has communism ever led to any kind of development. Even Buddhadeb is now wanting economic reforms in his state!

Che Guevara, though not a publicly celebrated figure, lives on in India in numerous T-shirts worn by people who claim to be rebels! Yet, they wear Levi Strauss, sip Coca Cola and work in the BPO sector!

Rabbi's Arbit Ramblings said...

Good post Kelayya,
I think the diro has done a gud job. It was an immensely watchjable movie with little or very less overtones of Red.

BTW one Q to Vijay:
Why cant the rebels wear Levis, or sip Coke and work in BPO? Live and let live.

Gokulakrishnan S said...

Economic reforms are inevitable. But what is of concern is the way junta want to adopt it without any attention to the consequences on the poor and the rural population. I was shocked to hear a US PhD giving fundaes from his thesis on Globalisation and there was no mention/study of the Indian poor in his presentation !