From The Archives: What Is Socialism?

A foreign official appears to have asked Sri Kamaraj what he understood to be socialism for which he along with other Congressmen stood. Kamaraj is reported to have replied that socialism meant that everyone must have bread, that is, adequate food. Food is the essential basis for life and everyone should have it in adequate measure and this is socialism, said Kamaraj.

Not only Kamaraj but, most people who like him, campaign for socialism campaign for socialism the same way. They do not realize that this is now what socialists in particular want, but what every politician wants and every political party aims at achieving. A goal is one thing and the means to attain it another. It is the means and not the goal that is matter of controversy. Socialism in politics means a package of governmental policies that are believed to produce the result of every man having adequate food, shelter and clothing—the basic necessities of life. There are other things including in the political policy known as socialism, such as equality and absence of disparity among citizens, all to be reached by the State exercising authority to the maximum though reducing in effect the freedom of the citizen to the minimum.

If one asks a Hindu, “What is your religion?”, his answer is not “My religion is moksha,” but the means conceived in Hinduism for attaining moksha. Similarly, socialism is not bread for everyone, but what government policies, positive and negative, are conceived as likely to produce bread for everyone. The point is not what is wanted but how to attain it. It is this confusion of understanding between aims and means that enables socialists to get votes from political illiterates. Votes are begged for the aim but used for the practice of ineffective and harmful means conceived to attain that aim.

The question therefore about socialism is whether the means associated with that policy by socialist politicians are likely to produce the results desired. Nationalization of industries is one of the socialist policies. Experience has shown that Government management, which socialists prefer to private management, has miserably failed. The failure was not mere misfortune, but the natural consequence of inevitable defects of nationalization of those industries which should not be nationalized. Nationalization is the main slogan of socialism though it has been amply demonstrated that it is not likely to produce the results aimed at by socialists.

If everyone must have adequate bread, shelter and clothing, it does not mean that food, shelter and clothing should be obtained by all men from the State gratis and that citizens should be pensioners under socialism. Socialism, on the contrary implies that everyone should have a job in which he works hard and earns his food, shelter and clothing, not that some unknown others should somehow produce these and supply them free for distribution among the happy citizens.

The question is how we can bring into being jobs in plenty so as to enable everyone to work productively. It can only be done by decentralization of all productive industries and by installing efficient and interested managements to take charge of them, reserving for bureaucratic State management only those services which are essential for all industries and which are, or should be non-profit making concerns like Post and Telegraph, Railways, Roads, etc. To convert these public services into profit-making concerns would increase the cost of private and corporate production and do no good.

Efficient management of productive concerns results best from the personnel involved having a direct interest in good management. Bureaucratic management fails for lack of this personal interest even when, as rarely happens, the men managing are competent for the special tasks which the productive concerns involve.

Corporate production demands not only efficient management and personal interest in the managers; what comes out of efficient management as profit should not all be spent off on dividends and taxes, but a good part of it, should be reserved for being ploughed back for improvement and expansion of the concern. This means that Government should not indulge in laying over-heavy taxation on corporate production. Over-heavy taxation for spending on the people and getting votes is killing the golden goose. Unearned doles do not uplift the poor. They harm them by reducing them to the status of beggars. The increasing of productive jobs for the people is the greatest good that Government can do for the people. And this is Swatantra. Jobs created should be in productive concerns, not for unproductive work in government offices. Parkinsonian proliferation of government jobs spreads the spirit of laziness in government offices and outside.

The Socialists holding on to outdated propositions act on the assumption that men's interests are essentially and always antagonistic to one another. The Swantantraites believe in the necessary and progressive harmonization of men's interests. National progress as well as the happiness of workers depend on the harmonization of the interests of the investors and those of the workers. Conflict reduces the scope for the expansion of concerns. Harmony enlarges the scope for expansion, which means more jobs and better paid jobs. Harmony increases profits, which should not be a matter for envy but should be welcomed. Profits are necessarily followed by expansion of business. The profit which appears to accrue to the investor is the source of more and better jobs. Short-sighted workers create conflicts. Intelligent and farseeing workers aim, even as the investors do, at the growing prosperity of the concerns.

Bombay Letter: A Momentous Visit

Bombay, November 26: After his week-long tour, the World Bank President, Mr Robert McNamara, gave the assurance that the World Bank "intends to play its part" in seeing that India's needs “are met fully", even as India plays its part by seeing that "domestic resources are fully mobilized". He ended the tour with a hectic day of discussions in Bombay with Reserve Bank and industrial finance officials, industrialists, bankers, economists, officers concerned with the development of the Bombay-Poona metropolitan area, and the Deputy Prime Minister.

From all these and his meetings in Delhi, Calcutta, and Madras, the World Bank chief must have had a fair idea of the developmental and social tasks that the country faces as it slowly emerges from three years of industrial recession. His final statement, however, indicates that rather than helping industry as hitherto, World -Bank aid will concentrate on agriculture and agro-industries, family planning and some other overheads.

In Mr McNamara's statement there is only one line which refers to industry-- that the break-through in agriculture should support a jump in industrial production. Thus the World Bank favours first things first, a home truth that the Planners themselves have come to accept after the wrong direction taken by the three Plans.

"I have great hopes for India's future," said Mr McNamara. Underlying this was his highly optimistic assessment of the progress made in agriculture already, and the further growth in productivity that can be achieved by using high-yielding seeds, fertilizers, pesticides, tractors, and irrigation. He was impressed by the "successful agricultural revolution which is taking place, with some stops and starts, all over your subcontinent", and noted that this will give a stimulus which should move industry out of its recession. But this, brief reference carries with it a recognition of the need for continued non-project assistance to finance imports of raw materials and the maintenance needs of industry.

The point was emphasized—and acknowledged by Mr McNamara—by the Industrial Credit and Investment Corporation, the main industrial financing agency in the private sector. The ICICI has already, taken from the World Bank seven lines of credit aggregating $165 million. The ICICI stated that it expects in the near future a 50 per cent expansion in its lending activities, and will seek an eighth line of credit from the World Bank next year.

The World Bank is interested in helping to finance the development of the metropolitan areas. Mr McNamara met civic and Government officials in Calcutta and Madras. In Bombay he was given an idea of the worsening problems of the highly industrialized Bombay-Poona area. Drinking water, road and rail arteries, slum clearance, satellite towns, etc., are estimated to cost Rs 1,000 crores in the next two decades. A Regional Metropolitan Board is at work, and its plans were submitted to the World Bank President for foreign exchange assistance.

There was some publicity from Delhi that the Commerce Minister, Mr Dinesh Singh, would fly to Bombay at the week-end to tackle the crisis in the cotton industry. More than 80 mills have closed, and over 80,000 men are out of work. The Minister did come, but the talks lasted hardly an hour and ended in a "damp squib", as an industry source put it. This disappointment is reflected in a further fall of mill shares.

Official spokesmen have lately shown some recognition that the crisis is not all due to mismanagement and frittering away of profits, but to high cost of cotton, wages, etc., and waning purchasing power due to inflation. On top of this, excise levies have risen to Rs 117 crores per year, from almost nil when planning began. As Mr Naval Tata, head of the Tata mills, has said, "It is a classic example of killing the goose that lays the golden eggs".

None of these problems has moved an inch towards amelioration. The Commerce Minister did not propose any short-term remedy, and he rejected the industry’s demand for decontrol or an increase in controlled prices. That costs of production have gone up by 15 per cent since the last price revision was ignored. The only sign of hope is that there is a slight upward trend in the wholesale offtake of cloth. If this continues, sales will provide some funds. A consumer survey by the official Textile Committee hopes that demand will rise on account of the increase in farm incomes.

The Minister indicated that some long-term remedies are under consideration, but they will form part of the fourth plan. They will help the industry to modernize itself over a period, and will promote exports. Since incentive schemes have been re-introduced, textile exports have risen for the first time since devaluation. They are likely to reach Rs 106 crores this year and may go up to Rs 120 crores in 1969-70. The Minister said that being the oldest and largest industry in India, it is vital to the economy, and therefore the Government and the industry should work together for its progress. Well, this noble sentiment coming from Mr Dinesh Singh is welcome.

This article was authored by C Rajagopalachari and was published in the 7 December 1968 edition of Swarajya.