The New Economy

Photo: Samakal
Photo: Samakal

An Evaluation of the Opposing Views of my Two Teachers  
By Professor M.M. Akash for Samakal; translated for Alal O Dulal by Professor Farida Khan.

Although Professor Nurul Islam was never directly my teacher, he served as the Deputy Chair of the Planning Commission in 1974 when I was a first year student in the Economics Department at Dhaka University. He was a professor in the department before joining the Planning Commission and also some of his former students were my teachers.

At that time, Jatio Shomajtantrik Dol (translated as National Socialist Party) and support from its student wing were quite powerful. Awami League ruled the nation. But the youth was disgruntled with existing conditions and enraged at the political leadership. When we came to the campus we learned an expression from senior students – “the four Caliphs”. Everyone in the economics department immediately knew to whom this expression referred. Under the leadership of Professor Nurul Islam, the other three were Professor Mosharraf Hossain, Professor Md. Anisur Rahman, and Professor Rehman Sobhan. Professor Mosharraf Hossain taught us Public Finance for some time. We were assigned the book by Musgrave, which was written in difficult English, during our very first year. Later, Professor Md. Anisur Rahman was our instructor. On the first day of class he told us “you all do not require a textbook”. You can learn microeconomics from peasants. “And if you need a textbook”, he passed on the reference of a book by the distinguished and famous left wing scholars from Cambridge University Joan Robinson and Eatwell.

The regard and respect for Professor Nurul Islam grew within the economics department during those years. A book written by him fell into our hands – it was published in 1979. The book was titled “Development Planning in Bangladesh – a Study in Political Economy”. In it he describes the state of the Bangladesh economy during 1972-1975; this could be considered to be the most uncertain and hopeful of times, the most heartfelt and heartless, the most impressive and the most heart wrenching, the most honourable and most tragic. As Charles Dickens in the tale of two cities – it was the best of the times; it was the worst of the times.

There is an excellent review of the political leadership in Bangladesh in this book by Professor Nurul Islam. He says that immediately after independence, the ruling class received the confidence of all of society. However, from the very outset, conservative and revolutionary forces competed for influence within the new state. The leadership positioned itself in the middle of these polarities and did not seem unduly influenced by either. In fact, it took on a secular policy and took steps towards a socialist approach, as long as the conservative forces did not resist this too strongly. Over time, one by one, those among the leadership made compromises. They would take one step towards secular socialist policies and then undermine this by taking another step in a completely opposite direction. The political leadership tried to keep both avenues open. They did not want to go against the organizational framework of the party, nor the vested economic powers in society. There was a fear that if the political leadership tried to speak to these vested interests about a more enlightened self interest, they may not be able to convince them and bring them around to their position; that if their economic and social advantages were taken away, they may part ways with the political leadership and take up adverse positions against them. The economic policies and plans put in place during 1972 and 1975 must be understood keeping these social dynamics in mind.

This assessment by Professor Nurul Islam is a relevant lesson even at this time.

This is what, in 1979, we received as an analysis of the 1972-1975 years from an insider with experience. The planning commission of that time included another giant, Professor Md. Anisur Rahman, who, much later in 2007 published a book titled “Through Moments in History: Memoirs of Two Decades of Intellectual and Social Life—1970-1990”.

On the last page of the last chapter of this book, he wrote “we must understand Sheik Mujib within a historical context before and after independence.” Before independence, he was an outstanding national leader who united the entire nation with his charisma. After independence, he was not quite prepared to lead a nation. He did not understand the manner in which the liberation struggle had materially altered the expectations and hopes of the people. He had sought a framework for an independent nation with his trusted friends from the past, and he continued to hold them more dearly than he did the public at large.

Evaluating him in this manner does not reduce his esteem in our memory; in fact, historical forces themselves set a limit on the awareness of our nation’s leader. As I have said earlier, our society has not freed itself from feudalism as yet. It is undeniable that we are still not living under a democratic system. We are living under a competitive family rule. Sheik Mujib wanted to establish a socialist system through BAKSHAL and he what he achieved was “feudal socialism”. Note that we may call the socialism that was founded in some countries in Europe in the Twentieth Century a “bureaucratic socialism”, even if it was established in the name of the dictatorship of the proletariat.

Later, over the years, Professor Nurul Islam was said to favor a mixed economy. Professor Anisur Rahman abandoned the traditional bureaucratic model of socialism and upheld participatory democracy for the working class, by the working class and for working class socialism. I myself received two types of lessons from these two teachers. Professor Nurul Islam was more pragmatic, and he took lessons from the reality of the moment. He identified both weaknesses and strengths, and believed in a democratic and transformative path to socialism. But within the highest leadership, he did not find the dedication and focus, nor the moral commitment and flexibility needed to pursue such a path. (It must be mentioned that none of these renowned economists supported the BAKSHAL one party rule). He naturally did not inquire into the matter of whether the BAKSHAL had failed or had been successful. Therefore questions of democracy for rulers in the name of a people’s democracy, proletarian dictatorship, a one-party system, participatory democracy, or democracy at all were not of that much relevance to him. That this still holds true for him is evident in an interview that he had in Prothom Alo on November 20th, 2014, when he was asked about economic progress and democracy. He replied, the relationship between democracy and economic progress is very complex. Are you asking if we can have progress without democracy? I would say that we can have it with or without democracy. This will depend on how committed the leadership is to economic progress and what policies it pursues.

He was asked if Ayub Khan had been able to make any economic progress during his regime? Professor Islam replied he had. However, that progress was finally destroyed. There are two ways of looking at this, he said. First, An outline for development can be made under any political system – with or without democracy, under partial democracy, communism, or socialism. On the other hand, history tells us that in some cases, under political dictatorship or when there is a political crisis, the economy can also suffer. During Ayub’s rule, there was economic development but when the politics fell apart, so did the economy. Second, when economic development reaches a high enough level, people are not satisfied with only their material conditions, they wish to exert their political rights. Until then, they are busy with their livelihoods and consumption needs. This is why some say that when the basic material needs of people are met, they will be attentive to political demands. These are the relationships between the economy and democracy.

It can therefore be seen that Professor Nurul Islam believes that economic progress can occur without democracy. History will tend to support this view as well. Let me now come to Professor Anisur Rahman. Sir once said, “let’s say there is a man drowning in the water. He doesn’t know how to swim. You jump in to rescue him. After that you take him by the hair and punch him and knock him out so that you can easily carry him to the shore safely. The man is saved. But can we call this progress? If we ask the man, did you want to be saved in this manner? He might reply that there may have been a different way to save him. You could have swum to him and said to him “come, hold my hand and we will reach the shore together”. This might have been more acceptable.”

We can call the first paradigm progress through a dictatorial system and the second paradigm progress through democracy. The second is no doubt superior. I have not arrived at any optimal position or solution in this debate. Feudal socialism is not desirable by any means. But when capital makes its rampant attacks, how are we to win the battle against it if we do not organize a regimented force against its regiments? The reader must have gleaned that my inclination is towards pragmatism. Such regimented force should only be used against attacking those forces that are the enemy of the people. However, the greatest danger of pragmatism is that sometimes there may be too much preoccupation with success which may impede a movement towards making the correct reforms at the correct time. A temporary non-democratic condition may be essential in finally attaining democracy. But if a temporary absence of democracy turns into a permanent one, then the main objective of freedom will be lost and may lead to greater danger.

Questions Regarding Economic Progress and Alternative Thinking

Having inherited these experiences and ideas, what are we to make of them today? A common thread that runs through both the opposing views are that economic progress or development is the only possible path for us. What is contested is how we achieve this.

However, how are we so certain that this historical trajectory of feudalism to socialism is the only path to follow? And where does capitalism fit on this path? When is a particular element or aspect of a society desirable, reactionary, or just inappropriate?

Particularly I would like to clarify Professor Anisur Rahman’s positions. The reference to Joan Robinson and throwing out the textbook to learn from the peasant are particularly poignant.

I will quote Professor Amit Bhaduri who was a student of Joan Robinson’s from here:

“We are indeed living in a globalized age. With their global reach, the large corporations, national and multinational, have reached almost all politicians who differentiate themselves by their rhetoric, but not by their actions. Academics and media persons have joined the political chorus of presenting this developmental terrorism as a sign of progress, an inevitable cost of development. The conventional wisdom of our time is that There Is No Alternative, the TINA syndrome in the development discourse… And yet this so widely agreed upon model of development is fatally flawed. It has already been rejected and will be rejected again by our democratic polity, for it fails to deliver us from poverty economically, and is also unsustainable environmentally.” It is also not job creating because its “emphasis in isolation only on labor productivity growth, which is an outcome of the obsession with cost-cutting corporate style of economic management in the name of efficiency and international competitiveness without taking into account its impact on employment growth.”

Let us ask our peasant farmer, Fagun Mia, for contemporary lessons in microeconomic choices. At present, Fagun Mia’s choice variables may entail whether he should lease land and farm some vegetables, whether his wife should join the local micro-credit organization, if should he wait for his son’s funds from Saudi Arabia where he has not been heard from for a few months or whether his daughter should be go to Chittagong to work in a garment factory. Fagun Mia has a lot of decisions to make. These are all responsive decisions – they respond to larger conditions of landlessness, the flight of labor to work in inhuman conditions where they face the income risk and injury, even death. These choices may lead to indebtedness in the face the violent land grabbers. He cannot expect to find fish in the polluted waters of his village, the birds have disappeared, the soil has turned saline, the water arsenic laden, the riverbanks are a desert or come breaking more rapidly than ever when the monsoon meets open dykes and climate change. Most of the goods in the market are priced above his demand curve. Let us welcome him to the new economy.

What is the future of this economy? And what is its vision? It is one where the nature of employment has been permanently changed by technology and the so-called labor-intensive service sectors such as health and education do not create jobs as they did before. Take for example the job of a mechanical Turk in Amazon for which people queue up in nanoseconds. Hired from anywhere in the world, a worker is paid per task and may hope to spend 4-5 hours (without counting search costs) to earn an expected income of $5. This is unlikely to buy you more than one meal. The fragmentation of work in post-industrial societies is not the end result that economic progress dreamed of. In light of what we now know, how have we rethought what economic progress means?

The original (in Bengali) appeared in Samakal on November 27, 2014.

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