Rejoinder to Amartya Sen’s interview in The Telegraph, July 23
By Prof. Dipanjan Rai Chaudhuri
Professor Amartya Sen’s interview (The Telgraph,, July 23) makes us sad.
1. “The market economy has many imperfections, on which I have written extensively. But it also creates jobs and incomes, and if the income goes up, government revenues go up, so there is money available for education and healthcare and other things.” So said Amartya Sen.
Textbook (neoclassical) economics is a strange discipline. It is timeless. There is a history of economic thought but no history of economic phenomena. Prof Sen has given above a perfect textbook lecture, which he applies, in the best traditions of textbook economics, equally to the early capitalism of 17th century England, the colonial economy of 19th century Bengal, and the late capitalism of present-day India.
Centuries have rolled by, nevertheless, and the lecture given above has become irrelevant in the era of “Jobless Growth.”
The burden of Prof Sen’s intervention is that the present inflow of big capital into West Bengal will bring jobs.
How many jobs, Prof. Sen?
The water tank manufacturers Patton proposed a 13 million dollar investment in Falta SEZ in July, 2006, employing 250 people — 3 to 4 jobs per crore of rupees investment.
In 2003 the refined petroleum goods industry in West Bengal (which includes Haldia Petrochemicals) had a fixed capital of Rs 2178.21 crores (total investment — Rs 3359.05 crores) and 6610 employees — 3 jobs per crore of rupees of fixed capital and 2 jobs per crore of rupees of investment.
Lakhs of jobs downstream had been promised. Haldia Petrochemicals went into production in 2000. Up to 2003-04 the plastics industry showed 6643 employees, many, no doubt, from pre-2000 days.
How many people will the Tatas employ in Singur? Nobody knows, not even Prof. Sen. It is almost a state secret. But this we know. The Tata Indica (car) factory employs 250 people, and not one of them comes from the people displaced by the factory.
The Bourbons, it is said, learnt nothing and forgot nothing. We, the talking classes of Bengal, are almost as bad. We have not forgotten B.C. Roy, but we have not learnt the lesson that
(a) implanting sporadic big plants do not lead to industrialisation (apart from Durgapur, what remains?). and
(b) in a state where the number of unemployed in 2004-05 was 33.37 lakh, even according to the conservative, formal estimate of the Finance Minister (Budget speech, 2007), a few thousands of jobs, while certainly welcome, do not provide a solution (B.C. Roy’s “industrialisation” could not prevent the 1959 food movement and the 1967 food movement. The foot-soldiers in these struggles were unemployed youth, destined to play a big part in the final ouster of Congress rule.)
The CPI(M), the media, a large section of the opposition, and Professor Sen have bypassed the main issue to concentrate on a side-issue, the use of agricultural land.
The main issue is whether the virtually jobless massive investments, being touted through ignorance (or malice, who knows?) as the solution to our economic problems, of which the most glaring and soul-destroying is that of unemployment, do really have this miraculous potential .
We have seen enough of “trickle down” since B.C. Roy’s days. We are not ready to listen to sermons, however eminent may the preacher be, to wait for the investments to give rise to jobs and income. They never do. Ask the people of Amlasole. We want an alternative model which can give jobs today, or, at least, tomorrow. Market economy has no such model, and it is painful to see one of the best minds this country has produced fumbling in the coils of that wily retiarius, the market, and promising nothing more than “trickle down”.
2. “In countries like Australia, the US or Canada, where agriculture has prospered, only a very tiny population is involved in agriculture. Most people move out to industry. Industry has to be convenient, has to be absorbing.”
Where will the people move out? To industry? Alas, real life in late capitalism has little in common with the timeless textbooks of economics.
Since Prof. Sen has studied Singur, he must know what “Sanhati Udyog” has calculated. About 10,000 people will lose their livelihoods. The Tatas have clearly stated they offer no jobs. The few trainees they have picked up were also told that there was no job guarantee. So, presumably these 10000 people, among whom are agricultural labourers, bargadars, van rickshaw pullers, small vendors, and other labourers, will have to survive, presumably on air, for at least 10 years to taste “trickle down” . Or, what nobody is articulating clearly, they are the sacrifice. They will move out.
Period. To nowhere.
Late capitalism does not have jobs in industry for people “moving out” of agriculture.
3. “..government revenues go up, so there is more money available for education, healthcare and other things.”
It is strange hearing these words, linking the market to education or healthcare, from the initiator of The Pratichi Trust’s surveys of primary education and healthcare in West Bengal. He should know better.
There is no market for millions of the literate poor. No demand. A few “Eight class Pass-walas” will suffice for the market. So, the government will never be overly worried about mass literacy, drop-outs, a proper education for millions. The money may even be there. But it will be spent on other things. The latest proof is the fizzle-down of the “neighbourhood school” based “education for all” proposal and its replacement by Sarva Siksha Abhiyan, which has degenerated, at least in this state, into nothing more than some forced spending without policy or direction.
In spite of Prof Sen’s forceful expositions, may be, his life-work, capital and governments continue to regard female health, children’s health, and, in general, community health as non-marketable stuff, just as they regard a proper education for all. No demand . No government expenditure.
So, Prof Sen’s premisses don’t hold out to the end. The investments will bring profits to big capital, and some taxes to the government (provided the target is not in a SEZ). The few employees will get good pay, perhaps. That is all. The overall unemployment picture will not change, quality of life outside the factory enclave will continue at its worst.
We need something else, and it is disappointing to find that Amartya Sen cannot help us with ideas for this.
4. “The government’s policing has been in some cases over-strong……It is possible that in the past, the violence committed by the government was greater, but from what I hear, it is possible the opposite might be the case now.”
Does the “some cases” include Nandigram? Although Prof. Sen has “not studied it in the way ” he has “studied Singur”, he reads newspapers and, may be, looks at the TV. Is he at peace with what he read and, maybe, viewed on the TV?
I had the honour and misfortune to help in a minor way Justice Bhargava’s tribunal on Nandigram. Rape, stuffing rods into the female sex organ, shooting into a retreating crowd of women and children — these are some of the material to be found in the depositions before the tribunal. A spot of “over-policing”, no doubt. And, pray, what acts even the scatter-brained opposition of ours has been perpetrating “now”, which is “greater”, from what Prof Sen hears, than this violence?
Of course, Laxman Seth says that these are lies, because no raped woman would talk of it, and Laxman Seth is an honourable man.
Perhaps we should remain at Singur. But, there, too, I fail to recollect any act of the opposition which can match the murder of Tapasi Malik., or have the opposition taken to burning chowkidars of Tata’s Wall in secret? Of course, Tapasi Malik was not killed by policemen, and both the interviewer and the interviewed steered clear of the acts of the CPI(M). So, Prof Sen might claim a caveat on this issue, too.
But, this part of the interview leaves a bad taste in the mouth.
5. Let us come finally to the issue the interviewer and the professor found important: the use of agricultural land for industry. The main question here is not economic, it is one of rights. It may be good economics, or unavoidable economics. But has a citizen of India, who owns land, the right to say No to a package he considers inadequate in compensation for his land? Prof Sen shows that a better and fairer package should have been offered in Singur, and talks of the ‘tactical’ mistake of the government. But, nowhere does he say, in so many words, that the citizen has a right to his land, the right to say No. He reminds us ” it is very important in a free country, any people can come in and go out from any place they like and you cannot establish restriction of movement either by the goveenment or the Opposition.” Quite. But, in a free country, presumably, it is quite in order to take away land from the owner by a simple notification of the government (we all know about the 1894 imperial law).
Even the rulers in Delhi are mulling over demands for setting up a National Rehabilitation Commission without whose approval no displacement of people will be allowed in any project. Prof Sen opposes bureaucratic directives to capital of the kind ” I want it in Siliguri and Bankura but not here”, but we are sad to observe that he does not once say that the real mistake of the government was a bureaucratic one in Singur, too, because the would-be-dispossessed were not adequately consulted (a point even conceded by Jyoti Basu). In fact, the government emphasises that, under the 1894 law, consultation is not mandatory. Prof Sen wants the government to correct its tactical mistake regarding the value of the land in future deals, but presumably this, too, will be a unilateral action by the government, for nowhere is it mentioned that the affected are also to be consulted. So, bureaucracy (which earned a strict NoNo in dealing with capital) seems okay in dealing with the affected people.
We are indeed sad, for this we did not expect from Amartya Sen.
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Amartya Sen’s Interview
What are your views on farmland acquisition for industry and the Singur-Nandigram controversy?
Amartya Sen: That is a very complicated question and has many aspects. Let me separate them out.
First of all, the need for industrial priority in West Bengal, which is a big long-term question and an extremely important issue.
It is sometimes underestimated the extent to which Bengal has been de-industrialised. Bengal was one of the major industrial centres in the world, not only in India. In European writings, Bengal has again and again come up as being one of the most prosperous areas in the world as an industrial base. The kind of reputation that some parts of Italy gained later.
It is often said that historically, Calcutta was founded 300 years ago by Job Charnock but it is also true that there was an urban settlement based on trade and industry, apart from agriculture, in this area. This we see not only from Indian records but also from the writings of Ptolemy and Pliny the Elder. The Europeans were aware of that.
Very near from Calcutta, there were industrial areas of huge prosperity. There is also mention in the writings of Fa Hien who came here in 401 and spent 10 years. He went back by boat. He took the boat from Tamralipta, which is very close to Calcutta. Effectively, it was greater Calcutta. So this has been a trading and industrial area for a very long time.
When Charnock came and the Battle of Plassey happened, there was not only English but the French, the Portuguese, the Spanish, the Flemish and the Danish merchants. They were all interested in the industrial products of this area. Under the British, there was de-industrialisation of classical industry but new industries came in the form, for example, of jute. But gradually that went off after Independence and there was further de-industrialisation.
The policy of the Communist Party itself was not well thought-out. The industrial agitation may have given the workers a little bit more rights, but they lost many more rights by the industries withdrawing out of Calcutta.
Jyotibabu was aware of the problem and Buddhadeb Bhattacharjee has tried to carry the understanding forward by trying to make it possible to have a big industrial base here. And it is extremely important.
It is also very important to recognise that production of industrial goods was based on the banks of the Hooghly and the Ganges, which are fertile areas anyway. So to say that ‘this is fertile agriculture land and you should not have industry here’ not only goes against the policy of the West Bengal government but also against the 2,000-year history of Bengal.
This is where industry was based because even though the land may be very fertile, industrial production could generate many times more than the value of the product produced by agriculture. The locations of great industry, be it Manchester or Lancashire, these were all on heavily fertile land. Industry has always competed against agriculture because the shared land was convenient for industry for trade and transportation.
Q: What about land acquisition?
Sen: I think some mistakes were made and the government should admit it and to some extent the government has admitted it.
Singur’s location could be questioned because there were some other locations one could have thought of like Kharagpur. But one of the difficulties is that Calcutta has such a huge attraction that it is very much easier to attract engineers and managers to an industrial base near Calcutta for the Tatas than in Kharagpur. And this is a dominant factor. Because Calcutta has such reputation.
I recently wrote in a book edited by Gopal Gandhi on Gandhi and Bengal about Gandhi’s relationship with Bengal. Interestingly, the first day he arrived in Calcutta in 1896, he went to see a play. In his stay of six days, he went to see another play. So here is a Gujarati arriving here, but he is so interested in the cultural life of Calcutta that he goes to see two plays in six days. So you just can’t say that because it is fertile land, you cannot allow managers and industrialists to be based in Calcutta and they have to be based in district towns. So the locational decision of Singur was probably not wrong.
Q: What are your views on the compensation paid for land?
Sen: The government paid much higher price than the value of the land in the free market. From that point of view, it was fair. Had there been no industry, they would have got the best value for the land. (Had the land not been taken for industry, the price they got would have been considered the best value, Sen explained.)
Where there is a mistake in the government’s thinking, and I think it is a big mistake of a tactical kind, is not to recognise that if this land were available for industry in general, and not just for the Tatas, the value of the land would have been much greater. While the compensation paid is greater than the value of the land seen as agricultural land, the compensation paid by the government is less than what the value would have been had it been free for competition with industries. If you are part of the market economy, then you have to take into account what the value of the land would have been had it been freely available for industry. So there is an issue to be addressed. I think it is a mistake, an honest mistake and it can be corrected in the future.
Nandigram is a much more complex issue. There is a question whether that kind of operation was needed, whether it was the right place. But I have not studied it in the way I have studied Singur. So I won’t comment.
Q: What, according to you, are the other issues here?
Sen: It is now very important for both the government and the Opposition to avoid violence. There is never a case for violence. The government’s policing has been in some cases over-strong. I understand that some Opposition parties have now created ‘free regions’ where they would not allow anyone to come in. That is also violent activity. It is not in line with Indian tradition of non-violence. The government and the Opposition have to recognise that. It is possible that in the past, the violence committed by the government was greater, but from what I hear, it is possible the opposite might be the case now.
Whichever way it may be, we don’t have to judge. But it is extremely important that in a free country, any people can come in and go out from any place they like and you cannot establish restriction of movement either by the government or the Opposition. This is a subject for rational discussion, which has become so impossible as everything is politicised now. Ultimately, those who want to prevent industrialisation of Bengal do not look enough at the interest of the people of the state. They may intend well, but they are not serving the interest of Bengal’s working class or peasantry. The prosperity of the peasantry in the world always depends on the number of peasants going down. That is the standard experience in the world.
It is not that historically agricultural production goes up so much that they become hugely rich on that basis. Bengal has done very well in terms of agriculture compared to other states. But that has not made Bengal immensely prosperous. In countries like Australia, the US or Canada, where agriculture has prospered, only a very tiny population is involved in agriculture. Most people move out to industry. Industry has to be convenient, has to be absorbing.
When people move out of agriculture, total production does not go down. So per capita income increases. For the prosperity of industry, agriculture and the economy, you do need industrialisation. Those in effect preventing that, either by politically making it impossible for an industrialist to feel comfortable in Bengal or making it difficult to buy land for industry, do not serve the interest of the poor well.
The Communist Party made a mistake earlier when it drove industries out by union action, which was intended to create benefits for workers but ended up making the workers having no job. Second time it is happening now, not from the Communist Party but from the Opposition, preventing industrialisation, which is not in the interest of Bengal in general and the poor in particular. So if Bengal is to regain what it used to be — being one of the richest in the world — industrialisation has to happen.
Prohibiting the use of agricultural land for industries is ultimately self-defeating.
Q: Why not develop other areas in Bengal where land is less fertile and build infrastructure so that industry goes there?
Sen: You have to bring industry everywhere. But there is no way in which you will be able to avoid industrialisation around Calcutta, any more than you could have avoided it in London, Lancashire, Manchester, Berlin, Paris, Pittsburgh. You will find industry will come up where there are advantages of production, taking into account also the locational preferences of managers, engineers, technical experts as well as unskilled labour.
But we should not make the mistake of thinking that somehow while you are trying to attract business based on the market that the government can say: ‘I want you to go to Siliguri and that is where you are going to be.’ That is not the way the market economy works. The market economy has many imperfections, on which I have written extensively. But it also creates job and income and if the income goes up, government revenues go up, so there is money available for education and healthcare and other things.
So in order to do that, you have to give the market economy the operational rational of choosing one location over another, depending on their market-based calculation. You cannot be governed by the market but nor can you ignore the logic of the market if you want to use the market as one of the instruments in advancing the country. So the whole idea of thinking in highly bureaucratic terms that ‘I want it in Siliguri and Bankura but not here’, that is not going to work. That is not the way industry functions in a market economy.