Reflections on Jagan Reddy’s Wealth: What Elites Own is an Indicator of Society’s Dominant Production Relations

April 15, 2011

By Deepankar Basu

It is interesting what a recent report in the Times of India has to say about the wealth of Jagan Reddy, one of the richest politicians in India today. Quite apart from the obscene amounts of wealth that he (going back to several generations of his forefathers) has managed to accumulate, it is interesting to note that “[m]ajority of Jagan’s assets are in the form of bonds and shares in various private firms, including Bharati Cements and Sandur Power Project company.”

Why is this important? The form in which the ruling elite hold wealth changes as the dominant relations of production in society changes. In a situation dominated by feudal or semi-feudal relations of production, members of the ruling class would hold a major share of their wealth in the form of landed property. That is only to be expected: in a fedual setting, the lion’s share of surplus labour is extracted from those working on the land (through rent or direct labour services, for instance). Land is the primary asset of the ruling class in a feudal context.

But things start to change as the economy is gradually brought under the domination of capitalist relations of production. Slowly, members of the ruling class start changing the forms in which they hold their wealth. They start owning their “assets … in the form of bonds and shares in various private firms” as Jagan Reddy is noted to do in the TOI report. This is not fortuitous, and arises because with the spread and domination of capitalist relations of production the major share of surplus labour in society is extracted through the institution of wage-labour that is organized by these “private firms” (fractions of social capital). The relative rates of return on land gradually falls, going hand in hand with the relative decline of feudal power in the ruling coalition. Thus, wealth holders gradually increase their share of non-landed property holding. Two considerations must be added to this simple but interesting story.

First, wealth is what economists call a stock variable (think of the level of water in a tank as a stock and the water flowing out of the tap as a flow variable), and while it is interesting to note how that stock is distributed between different forms (landed property versus stocks & bonds) at a point in time (and the dominant relations of production at that point in time), it does not give much indication of the flows of surplus labour that went into building up that stock (and thereby the history that lies behind the development of capitalism). Capitalist wealth is not built de novo. It is, in fact, the case that a whole history (of hundreds of years) of feudal and semi-feudal exploitation carried out by Jagan Reddy’s forefathers, whereby the surplus of peasants was ruthlessly pumped out by landlords, has gone into making up this stock of wealth today.

Second, under neoliberalism in contemporary India, capital accumulation through the institution of wage labour has been robustly and enormously bolstered by primitive accumulation whereby peasants are forcibly thrown off their land, and other forms of common property resources (like water bodies, forests, mineral wealth, grazing grounds, etc.) are just “acquired” by capital for free. The rise of mining corporations in recent times is a case in point, where the land is vacated by brute force and the mineral wealth incorporated into the circuits of capital. For instance, Jagan Reddy’s connections with the Obalapuram Mining Corporation (of the notorious Reddy Brothers’ fame) is extremely well known and possibly forms a chunk of his assets (I would like to thank Prathamesh for drawing my attention to this).

And thus we have today in India not only suave and slick capital standing behind the numerous malls, but also capital “dripping from head to foot, from every pore, with blood and dirt.” And every kind of capital in India reeks of the hundreds of years of semi-feudal exploitation of the peasantry, especially the tribals and dalits.

1 Comment »

One Response to “Reflections on Jagan Reddy’s Wealth: What Elites Own is an Indicator of Society’s Dominant Production Relations”

  1. KvRao Says:
    August 23rd, 2011 at 19:51

    Y Samuel Reddy is the richest politician in the world.

    Brother Anil Kumar runs a multi-billion dolar empire of conversion after marrying his sister

Leave a comment