Laissez faire capitalists think that India’s labour laws are too protective

Written By: - Date published: 2:09 pm, May 20th, 2014 - 53 comments
Categories: Privatisation, Unions, workers' rights - Tags: ,

Narendra Damodardas Modi

From the I do not believe what I am reading file.

The right think that the solution to all of society’s woes is more market freedom.  Problems are evidence of a restriction of the free operation of markets.  Whether it is failing education standards, diminishing environmental protection, declining terms of trade or faltering growth the cause always is a failure to adhere sufficiently to a neoliberal market model.

An element of this is the right’s hatred of trade unions.  Making sure that ordinary workers’ families can live in dignity is an anathema to the free market model.  It is only when ordinary workers struggle and fight each other for sufficient resources to look after their families that the benefits of the free market are unlocked.  Workers get less and less and the owners of capital become richer.  What could possibly be wrong with this?

I always thought that the undermining of the trade union movement was a particularly first world problem.  But recent news from India suggests that capitalists are eternally vigilant and eternally active.

India, the world’s largest democracy and the home of an ancient and intensely sophisticated culture, has recently had an election.  Superficially the results are impressive.  Narendra Modi’s Bharatiya Janata party is in line to win 282 of the 543 directly elected seats in India’s lower house.  Allies’ wins will drive the figure of supporting MPs to over 340.

But the result is a clear example of why MMP is a far superior electoral system.  Bharatinya Janata won 31% of the vote but over half of the seats.  The previously dominant Congress Party, the party of Mahatma Ghandi, won only 19% of the vote.  But despite getting about a fifth of the popular vote it is in line to win only 42 seats which is less than a tenth of the seats on offer.  Why is it that Commonwealth nations tend to have the most barbaric of electoral systems?

The aspect of the election that really struck me is that Modi campaigned on labour market reform.  In one of the poorer countries in the world he advocated for a reduction in union protection so that market forces could operate in a “cleaner” environment.

As the leader of the Gujarat State Modi has been responsible for the establishment of areas reminiscent of a Chinese Special Economic Zone where businesses could rely on a quick decision on investment and tailored infrastructure and a migrant labour force to support business growth.

As an example of his thinking there is this transcript of comments that he made at a recent meeting:

Among labour issues, one industrialist raised the issue of the manufacturing sector incurring losses due to the national rural jobs guarantee scheme, MGNREGS. “We feel India’s productive labour has become unproductive. What do you have to say?” asked S K Poddar, chairman of the Adventz Group. In his response, Modi said, “When liberalisation was being talked about, labour law reforms should have been talked about, too, but we lost that chance.  Today, there is a need for the next generation of NREGS, which should focus on asset creation. China says it wants to create jobs. I believe India should focus on job creation, too.”

No doubt Modi’s win will have international capital flooding to India in search of even cheaper labour.  But this shows how broke the system is.  When countries decide to compete against each other by reducing the quality of return for their employees the winner will be whoever is able to smash their workforce over sufficiently to make sure that their workers will accept any sort of employment conditions just so they can have the dignity of feeding their families, well sort of.  And the mantra is growth.  If we just consume even more then all of our woes will be taken care of.  We may trash our environment and make a misery of the lives of those at the bottom of the heap but at least the corporate balance sheets will appear to be healthy.

And the formula for success is interesting.  You just have to get someone that the right wing media will crown as a charismatic leader and fund his campaign.  Then anything is possible, even if the actual proposals are ludicrous.

India may be in for a difficult time.  Although its wealthy may think that nirvana has arrived.

53 comments on “Laissez faire capitalists think that India’s labour laws are too protective ”

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  1. Colonial Viper 1
    20 May 2014 at 2:17 pm

    The neoliberal right wing continue to play their little game of pro-corporate international wage arbitrage. They enjoy using the threat of corporate/capital walkouts to get their way over entire societies.

    NB 600M Indians still defecate in open air situations. But I don’t think that includes many of the 56 or so Indian billionaires. Inequality much?

    • marty mars 1.1
      20 May 2014 at 3:08 pm

      Yes i agree with your first paragraph.

      I wonder if pooing in open air situations may actually be better for everyone in the long run. For a start the issue will not be behind closed doors and therefore out of mind, and it will not require water to flush thus reducing the use of water for this, and the flushings will not, in the ever frequent storms, be sent to sea without treatment. Sure someone will have to clean up – but guess what maybe the pooer (ouch, too close to poor that one) can clean their own poo up just like doggie poo, and place it in conveniently positioned council approved receptacles for transference to the council run humanure stations.

        • Colonial Viper 1.1.1.1
          20 May 2014 at 5:07 pm

          Thanks for this joe90. I think I might skip eating tonight.

        • marty mars 1.1.1.2
          20 May 2014 at 5:42 pm

          Yep joe thanks for that link – I’m sure i read that one when you posted it last time – good to read it again – it made me angry and upset again. Inequality? Read the link to understand it.

          It was also good to read that my thoughts have good company.

          “The eradication of manual scavenging was a recurrent theme throughout Gandhi’s life. He called the practice “the shame of the nation.” He wrote, “Evacuation is as necessary as eating; and the best thing would be for everyone to dispose of his own waste.””

          The caste system solidifies inequality as effectively as the class system.

        • mickysavage 1.1.1.3
          20 May 2014 at 5:57 pm

          Thanks Joe. Grim, grim reading.

          I wonder if the Employment of Manual Scavengers and Construction of Dry Latrines (Prohibition) Act is one of those pesky pieces of legislation that Modi is talking about?

        • greywarbler 1.1.1.4
          20 May 2014 at 8:57 pm

          The book I read – the Indian women who were untouchable had to defecate in an open field early in the morning before others were up. Then it was raked over. During the rest of the day it wasn’t easy for them to relieve themselves as they have so little space which they can use privately.

          In this book if they want water they have to wait at the well till someone who isn’t in their untouchable group will draw water for them. They cannot handle anything or it becomes ritually dirty, their shadow falling on a higher caste means that person has to go through a ritual to clean the result of this invasion of their pure bubble.

          I don’t feel warm to the Hindu religion.

      • Huginn 1.1.2
        20 May 2014 at 5:49 pm

        No Marty, pooing in the open air is definitely not better for everyone.

        Women and girls are massively disadvantaged. The lack of secure toilet facilities means that girls don’t go to school after a certain age; women can’t find work, and women and girls in general are confined to their homes.

    • Markymark 1.2
      20 May 2014 at 5:54 pm

      CV you don’t know jack about the Indian economy. Stop pretending you do.

      Also please provide links for your claim about the lack of toilets.

  2. Once was Tim 2
    20 May 2014 at 2:50 pm

    India will be in for a difficult time. I was hoping for a better showing of the third tier (such as Samajwadi et al).
    HOWEVER ….. if Modi thinks he’s able to progress some severe right wing agenda that pisses a variety of minorities off (and a sizable proportion of the mainstream that voted for him), then I suspect he’s in for an even bigger surprise than that somebody called Tarn Yabbit in Australia got.

    One can draw parallels across borders – such as the sense of entitlement amongst NZ Labour’s ‘old guard’ – propping up the fading neo-lib agenda, and the fact that Congress DESERVED to get a routing.

    However (and especially in India) – if he thinks this outcome gives a divine right to bulldoze the downtrodden in order to progress the extremities of his belief system, I’m afraid the guy is in for a very rude surprise.
    In some ways – given I’m running out of life, I lament the lack of protest and expedient means of expressing the silent majority’s plight has been lost in the little South Pacific backwater we know as Aye Tea Roar New Zill

    • Once was Tim 2.1
      20 May 2014 at 2:51 pm

      Ekshly…. there’s a real lesson for NZ Labour in all of this – hopefully they have the smarts to catch on (tho’ somehow I doubt it)

  3. djp 3
    20 May 2014 at 2:52 pm

    Im most concerned about what effect his Hindu Nationalism will have on minorities :/

  4. DS 4
    20 May 2014 at 3:35 pm

    It is truly amazing, isn’t it. Just a few years after the greatest crisis of capitalism since the 1930s, when, for the first time in living memory, the deep state briefly had to drop the façade, the world has wall-to-wall right-wing governments. The Presidents of the US and France (as limited as they are), and the Prime Minister of Denmark are islands in a sea of global conservatism.

    • Once was Tim 4.1
      20 May 2014 at 3:44 pm

      Yup @ DS. One wonders how it could have happened. I think the best explanation is ‘Fear’.

      It’s not all bad though – there are parts of the world that are waking up, and that are ahead of the game. Unfortunately we have a government, and a populace who either prefer to bury their heads, or sign up to the religion of ‘aspiration’ – for which incredible indebtedness is the price they’ll pay (that is of course right up until the shit hits the fan in their little whare)

    • Gosman 4.2
      20 May 2014 at 3:59 pm

      President of France is now adopting more business friendly policies as his more left leaning proposals failed to make a blind bit of difference to the economic decline France is experiencing.

      • Colonial Viper 4.2.1
        20 May 2014 at 4:25 pm

        Of course it made no blind bit of difference, France’s socialist president softened up his left wing agenda the moment he took office and then news of his affair was blasted out to weaken him further. France remains tied to the deadweight Euro, and French banks including Societe Generale, BNP Paribas and Credit Agricole are all part of the bankster cartel and up to their eyeballs in liabilities.

        The more money you suck out from local communities, the worse it will get for France.

        • Gosman 4.2.1.1
          20 May 2014 at 4:49 pm

          I find it funny that leftists can’t accept blame for the failure of their policies. It is always someone elses fault. Often times it is the result of some ‘dark’ conspiracy to thwart the ambitions of some left wing politician who is forced to ditch their populist policies once in power.

          • Colonial Viper 4.2.1.1.1
            20 May 2014 at 4:52 pm

            All I know is that the wealth of the billionaires of this world have been increasing steeply for several years now, exactly the way you like and want it. But seriously, the most you are ever going to get from them is drippings from their dining table, don’t you find that demeaning?

          • Colonial Viper 4.2.1.1.2
            20 May 2014 at 4:55 pm

            Oh look BNP Paribas about to be criminally charged in the USA

            http://dealbook.nytimes.com/2014/04/29/u-s-close-to-bringing-criminal-charges-against-big-banks/?_php=true&_type=blogs&_r=0

            I find it funny that leftists can’t accept blame for the failure of their policies.

            I find it funny that you understand full well that the power-elite clique of billionaires wields the most influence of any group in modern western society yet you aim to deflect due blame from them.

            • Gosman 4.2.1.1.2.1
              20 May 2014 at 5:11 pm

              I haven’t denied the influence of rich and powerful companies and indiciduals at all. I have stated they have less ability than implied by people like C.V. They certainly don’t force politicians top ditch policies by contructing elaborate honey traps such as that implied in relation to Francois Hollande.

              • Colonial Viper …
                20 May 2014 at 5:18 pm

                It’s not an elaborate honey trap (although those have been used very many times in the past). Your emails and txts are all open book to the intelligence services, if you’re having an affair they will know about it immediately. It’s pretty simple

                • Gosman …
                  20 May 2014 at 5:31 pm

                  The question is so what? It isn’t as if Hollande’s love life was so shocking that it’s revelation has forced him to ditch his economic plans. He is French for goodness sake!

          • framu 4.2.1.1.3
            20 May 2014 at 4:58 pm

            i find it funny that you think the EU has no effect on what france does

            theres no dark conspiracy – just a powerful bunch of people and institutions who are able to leverage things for their own benefit at everyone elses expense

            It doesnt actually matter how much detail and nuance others uses in their responses to you does it – you will keep sticking to your binary idiocy.

            “some left wing politician who is forced to ditch their populist policies once in power.”

            totally ignoring the fact that this has actually happened many times in many countries of course.

            for a trool – your a really bad one

            • Gosman 4.2.1.1.3.1
              21 May 2014 at 3:00 am

              Who is the EU in this equation? Basically it is driven by the Franco Germany axis. If France is forced to modify it’s economic policies then it really is the fault if the French for allowing that sorry state if affairs to get to that stage.

              • McFlock …
                21 May 2014 at 12:20 pm

                “Basically” you’re full of shit. You might want to actually research the politics of the EU before being a moron.

    • minarch 4.3
      20 May 2014 at 4:17 pm

      Dude…..

      Uruguay

      Seriously !

  5. Gosman 5
    20 May 2014 at 4:10 pm

    There is a law in India requiring companies employing more than 100 workers to seek government approval before they can fire employees or close down. Is there anybody here willing to defend that?

    • Colonial Viper 5.1
      20 May 2014 at 4:30 pm

      Germany has one better where if a corporation is going to close down and move production overseas, the unions must be informed several months in advance.

    • Colonial Viper 5.2
      20 May 2014 at 4:31 pm

      Better still, if any company or corporation decides to close down a factory, workers should be legally prioritised to buy the entire operation for scrap value and start a worker co-op.

      • Gosman 5.2.1
        20 May 2014 at 4:41 pm

        If you like. I have no problems with this in principle. However informing Unions of job losses is compltely different to getting permission from government to shed workers. Do you think that is a good law?

        • Colonial Viper 5.2.1.1
          20 May 2014 at 4:49 pm

          I haven’t read the law, I wouldn’t know if it was well drafted or if it managed to achieve the intentions of the legislators.

          I’m sure foreign corporates want it scrapped ASAP though, for their own convenience. Am I right?

          • Gosman 5.2.1.1.1
            20 May 2014 at 5:08 pm

            Why should government have to agree to allow firms to retrench staff or to even go out of business entirely? Governments don’t usually involve themselves in the decision of businesses to hire staff. Not in well developed market economies they don’t anyway.

            • Colonial Viper 5.2.1.1.1.1
              20 May 2014 at 5:11 pm

              Well I think it’s crucial that if company executives and directors break the law of the land, that they are held culpable to the full extent of the law of the land.

              • Gosman …
                20 May 2014 at 5:28 pm

                I am sure you do. You’re the sort of person who most likely supports the prosecution of business owners and them being thrown in jail for daring to raise prices above government set maximum levels like has happened in places like Venezuela.

                Regardless of that the question remains whether the law should be repealed or not. Do you see a reason why there should be a law that companies should get permission to retrench staff?

                • McFlock …
                  20 May 2014 at 5:41 pm

                  the negative externalities of sudden increases in unemployment.

                • Tracey …
                  20 May 2014 at 5:48 pm

                  have the companies received direct or indirect taxpayer assistance through tax deductions, subsidies or other?

                  do you consider companies are a part of society or apart from society?

  6. Markymark 6
    20 May 2014 at 6:11 pm

    Greg it is hard to take you seriously, when you write such bullocks.

    To begin with, India’s market reforms (initiated in 1991 by the center left Congress Party) have resulted in a booming economy with stunning economic growth rates and huge poverty reduction.

    After adopting capitalism is 1991, India has literally pulled hundreds of millions out of poverty and into an aspirational middle class (currently estimated at 300-400million people). Yet there remains still large amounts of poverty in India (the remaining 600million Indians are destitute).

    The economic reforms contrast with pre 1991 India, where the country was run in as a Socialist country with decades of 1% growth and grinding poverty (which kept close to 100% of the population and hundreds of millions, destitute). This decades long stagnation was famously refereed to as the ‘hindu rate of growth’.

    When economists talk of labour market reform in India, they talk of removing some of the most archaic and restrictive labour market regulations that dont exist anywhere in the developed world. For example, in India a worker cannot be fired, without approval of the government in each case!

    Lastly, Mahatma Gandhi has no relation to Rahul Gandhi or the Nehru-Gandhi dynasty. It is misleading to catergorise the Congress political party as the same pre independence movement of Mohandas Gandhi.

    • Tracey 6.3
      21 May 2014 at 11:21 am

      you wrote

      “After adopting capitalism in 1991…”

      Really? You might like to read Dr Tirthankar Roy is Professor in LSE’s Department of Economic History.

      India in the World Economy
      From Antiquity to the Present

      Part of New Approaches to Asian History

      Author: Tirthankar Roy

      Date Published: June 2012

      “The book charts how two very different capitalist traditions evolved in India from ancient times until early in the Second Millennium CE. One of these formed along the coasts, lived on overseas trade, and usually operated from small coastal states. The other one formed in the land-locked interior, served overland trade, and took part in moving the taxes that sustained vast, powerful empires. The empires emerged in the fertile plains of the Ganges and the Indus, and lived on land taxes. The ruling classes understood the value of the seaboard, but could not easily take control of that zone. Roads connecting inland empires to the coast were few, and road-building was costly because of the uplands, forests, and numerous rivers.

      A major turning point in this history was the rise of the Indo-Islamic empires, and the spread of their power from the Indus-Ganges plains to the south (the Deccan Plateau), the east (Bengal), and the west (Gujarat). In the 1500s, the land-based states did establish a foothold in some places on the coast, notably, Surat in Gujarat, Masulipatnam in the southeastern coast, and Hooghly in Bengal. Their established reputation as business hubs attracted not only Indian merchants, but also European merchant companies, including the Dutch and English East India companies. The English East India Company later acquired three port sites on the coasts, in Bombay (now Mumbai), Calcutta, and Madras, but these towns initially had little significance beyond the Company’s own transaction and could not rival Surat or Hooghly.

      And yet, Bombay, Madras, and Calcutta became pivotal during a second turning point in the story. As the Mughal Empire collapsed in the 1700s, hordes of Indian businesses migrated to the Company cities, starving the interior of money and talent whereas Indo-European partnerships flourished in the ports. An even more extraordinary development was the rise of a seaboard state ruled by the East India Company, a body of merchants with tacit support from Indian merchants. Never before in Indian history had the coast acquired so much political and economic power.”

  7. tas 7
    20 May 2014 at 6:18 pm

    http://en.wikipedia.org/wiki/Licence_Raj

    India has a history of having a highly regulated economy run on socialist principles. It has been a disaster that has fostered widespread poverty and corruption. Since 1991, India has gradually instituted free market reforms.

    Modi’s human rights record is troubling, but criticising his economic policies is silly. The status quo is clearly not working in India.

    • Tracey 7.1
      21 May 2014 at 11:22 am

      Dr Tirthankar Roy is Professor in LSE’s Department of Economic History.

      India in the World Economy
      From Antiquity to the Present

      Part of New Approaches to Asian History

      Author: Tirthankar Roy

      Date Published: June 2012

      “The book charts how two very different capitalist traditions evolved in India from ancient times until early in the Second Millennium CE. One of these formed along the coasts, lived on overseas trade, and usually operated from small coastal states. The other one formed in the land-locked interior, served overland trade, and took part in moving the taxes that sustained vast, powerful empires. The empires emerged in the fertile plains of the Ganges and the Indus, and lived on land taxes. The ruling classes understood the value of the seaboard, but could not easily take control of that zone. Roads connecting inland empires to the coast were few, and road-building was costly because of the uplands, forests, and numerous rivers.

      A major turning point in this history was the rise of the Indo-Islamic empires, and the spread of their power from the Indus-Ganges plains to the south (the Deccan Plateau), the east (Bengal), and the west (Gujarat). In the 1500s, the land-based states did establish a foothold in some places on the coast, notably, Surat in Gujarat, Masulipatnam in the southeastern coast, and Hooghly in Bengal. Their established reputation as business hubs attracted not only Indian merchants, but also European merchant companies, including the Dutch and English East India companies. The English East India Company later acquired three port sites on the coasts, in Bombay (now Mumbai), Calcutta, and Madras, but these towns initially had little significance beyond the Company’s own transaction and could not rival Surat or Hooghly.

      And yet, Bombay, Madras, and Calcutta became pivotal during a second turning point in the story. As the Mughal Empire collapsed in the 1700s, hordes of Indian businesses migrated to the Company cities, starving the interior of money and talent whereas Indo-European partnerships flourished in the ports. An even more extraordinary development was the rise of a seaboard state ruled by the East India Company, a body of merchants with tacit support from Indian merchants. Never before in Indian history had the coast acquired so much political and economic power.”

  8. Philj 8
    20 May 2014 at 9:00 pm

    xox
    Grossman, you said that TS was a site for lefties, or words to that effect. What are you doing here?

    • Gosman 8.1
      21 May 2014 at 2:55 am

      I don’t believe I stated that it was for leftists only. It certainly caters to this audience mainly but so what?

  9. Phil 9
    21 May 2014 at 11:02 am

    John Oliver (you’ll know him from The Daily Show and The Bugle Podcast) has a brilliant interview with Fareed Zakaria, on the outcome of the election, the platform Modi ran on, and what his mandate is expected to produce.