Our love affair with the free market

On January 5, 1914, Henry Ford announced an eight-hour day for his workers and doubled the daily wage. This came after the previous year’s radical innovation on the shop-floor: the moving assembly line concept that would revolutionise factory output and the working class itself.

Five months later, in June, Gavrilo Princip, a young Serbian “nationalist”, pumped several bullets into the ample chest of Archduke Franz Ferdinand, heir apparent to the Austro-Hungarian empire, and Sophie his wife, and set off World War I.

Both Fordism, as the assembly line innovations came to be known, and the Great War were to profoundly change life as it had been lived till then. The age of modernity decisively rushed into the vacuum created by the collapse of the Austro-Hungarian and Ottoman empires.

But both events also introduced the new century to the age of extremes, of social ferment and fascism, and another World War.

In such an age of large-scale violence and opposing ideologies path came social democracy in Labourite Britain and Weimar Germany, both dealing with human displacements from the war.

It was in the inter-war years that the early experiments in social democracy acquired urgency and teeth; revolutions, organised working class strikes, war refugees and veterans called for the intervention of the state on a host of issues.

In the US, the Great Depression created its own circumstances for state intervention, soup kitchens, social security and the New Deal with its emphasis on employment generation through public investment.

The ethos of state-led intervention, both to correct market failures and to provide critically needed safety nets for those unable to buy from the private sector, gained momentum in post-colonial societies with a weak private sector and a large, even weaker population expecting the state to deliver them from accumulated poverty.

That model of development had its own discourse around a set of principles implemented with varying degrees of fidelity.

One was the notion of a common as opposed to private good. It was held important for certain services and goods to be made available through the state’s initiative for the enjoyment of the public at large. So subsidies, state expenditure on medicine and education, the arts and, in India, public sector enterprise, seemed a reasonable and workable model for a developing economy.

The second was the idea that economic growth was a matter of both production and distribution of resources and goods; growth without equity could obliterate the distinction between common and private good and benefit only a few. So the pursuit of profit by private corporate enterprise needed to be regulated.

In The Wealth of Nations , Adam Smith may have talked of a world of buyers and sellers driven by their own interests.

But in The Theory of Moral Sentiments he took another view of man driven by a shared sympathy that breeds altruism and associative behaviour.

Not many may have read Smith’s latter work, but the distinction between common and private good, the former driven by those shared sympathies, inspired another: between cooperative and corporate forms of economic conduct with laws to temper the excesses of both.

Regulation ensured that society could maintain the distinction between the common or public domain and the private or corporate. That process involved much more than simple policing, for it meant that laws were needed to protect not just the common good in the here-and-now, but in the future. Faith in the doctrine of public trust inspired legislations to protect the environment not just for ourselves but for our progeny as well.

The history of the last 30 years reflects the unravelling of social democracy in the West, the dismantling of regulatory mechanisms in the 1980s in the US and Britain, and a spurt in growth that was to end in two financial meltdowns.

But with the collapse of Soviet-type communism around the same time, it seemed as if free market economics had spelt the end of history; the culmination of two millennia of struggle for an earthly paradise. And the route to heaven’s gates lay in the marketisation of just about everything.

A hundred years after Ford’s innovations and the Great War created the modern age, the urban middle class in India is eager to embrace the anxiety-free logic of a post-modernism driven by its new discourse honed on Wall Street.

The elements of that new discourse seem like an overturn of the old but they are more profound than that. It’s not just the belief that in India the old statist interventionist model has failed. It is that we have finally come to our senses and recognised a truth: there is no alternative to the market, to the notion of greed and “animal spirits” as the driving force of all endeavour. Corporate behaviour is the most efficient, private greed far better than common associative good.

The Indian middle class is ready to adopt the market idea of selfish egos meeting as buyers and sellers to maximise their respective returns: the co-operative is a joke, corporatisation of the elephants will turn them into tigers — the metaphors simply flew around conference halls.

Not just in the arena of economic goods and services such as telephony or automobiles but everything else in our lives can be privatised, turned into a business-for-profit. Charity, love and education are best served by private enterprise as are medicine, hospitals, even the police. (What else is the Aam Aadmi Party’s devolution plank other than a form of urban vigilantism, of private armies patrolling the streets, raiding houses hurling charges of criminal activity at women?)

This election will therefore be a vote for post-modernity’s market-driven, value-free charms. The party that can offer the middle class the best deal to make more money, to pursue the individuated goals of gated communities, super highways and manicured lawns will win.

This election will be a victory for the discourse that has patented prosperity as its exclusive proprietary product; a discourse in which fiscal balance takes precedence over food security, special economic zones or townships over forests and common grazing grounds, the gated jogging track over public parks, the automobile over the public bus.

A party that can promise to set a price on every service, condemn laws protecting forests and sacred groves as obstacles to highways and power under the strong hand of a charismatic leader, will have the middle class eating out its hand.

Unless some party remembers the large section of people who cannot pay the price for marketable services and for whom this country’s policymakers in a last bow to social democracy put a string of rights-based legislations on the statute books. That party may be able to talk to the entire nation.