india - comprador bureaucratic capitalism and national capitalism

8/10/2019 india - Comprador Bureaucratic Capitalism and National Capitalism

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Bureaucratic Capitalism and National Capitalism: The IndianExperience

Amit BhattacharyyaProfessor of HistoryJadavpur UniversityKolkata, INDIA

It is a reat honour for me to !e invited to Bra"il !y the Universidade DePernam!uco, !y Prof# $oises Dini" de Almeida, Director da UP%, &ampusPetrolina to speak at this 'ifth International (eminar on Bureaucratic&apitalism# I thank Prof# $oises, 'aculty mem!ers of the University ofPernam!uco, &ampus Petrolina and other friends for this kind invitation# )his

invitation has iven me the opportunity to visit Bra"il aain and stand !eforeyou today to share my thouhts *ith you a!out the Indian situation#

)he title of my paper is +Bureaucratic &apitalism and National &apitalism)he Indian %-perience.# )his paper is divided into t*o parts# )he /rst partdeals *ith the nature of Bureaucratic &apitalism and the second part *iththe nature of National &apitalism# )he e-perience that *e have in India hascertain features some *hich could !e common *ith other countries havinsimilar historical developments *hile some could !e speci/c to the Indianreality# Before oin into the Indian reality, *e propose to deal, ho*ever!rie0y, *ith the &hinese e-perience as e-plained !y $ao )se1tun#

Bureaucratic Capitalism and National Capitalism in China

2et us !ein *ith the de/nition of 3comprador45oriinally a Portuuese *ordthat *as later introduced into the %nlish voca!ulary, thanks to the *ritinsand activism of $ar-ist thinkers, revolutionaries and social scientists ofcountries across the *orld# A note at the end of the essay +Analysis of&lasses in &hinese (ociety. *ritten !y $ao )se1tun states +A comprador, inthe oriinal sense of the *ord, *as the &hinese manaer or the &hinesesenior employee in a forein commercial esta!lishment# )he compradorsserved forein economic interests and had close connection *ith imperialism

and forein capital.6

# A comprador has thus come to stand for a !oureois*ho serves forein capital and has its interests closely tied up *ith itsinterests#

&omprador capitalism has often !een identi/ed *ith !ureaucratic capitalismparticularly in relation to )hird 7orld countries# $ao )se1tun spoke of the&hinese compradors as the !i !oureoisie and of the national !oureoisieas chie0y the middle !oureoisie of &hina# &ompradors emered as 3o1


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!et*een1dalals4 or middlemen and !rokers in countries *hich *ere eithercolonies under one imperialist po*er or semi1colonies under severalimperialist po*ers# &ompradors re* !i !y servin imperialist !oureoisieas conditions in a colony or a semi1colony are detrimental to the ro*th of anindependent national !oureoisie# In his article +Analysis of &lasses in

&hinese (ociety.869:;?

+Durin their t*enty1year rule, the four !i families, &hian8&hianKai1shek


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imperialist capital and forein personnel># It *as this 3unholy alliance45thealliance of the imperialists, the comprador !i !oureoisie and the feudalclass111that did not allo* the potentialities of capitalist development to !ereali"ed and acted as a !rake on the development of productive forces in&hina#

In an article entitled +(ome %-periences in our Party4s History. *ritten in69=;, $ao also made the follo*in enerali"ation# He stated +In countriesunder imperialist oppression there are t*o kinds of !oureoisie5the nationaland the comprador !oureoisie# Do these t*o kinds of !oureoisie e-ist inyour countriesE Pro!a!ly,yes.=#

7hat is $ao4s criterion for diFerentiatin the comprador from the national!oureoisE It is the nature of the economic relationships *ith imperialistcapital and its ties *ith domestic feudal interests# (peakin of the comprador!oureoisie he pointed out that it is +a class *hich directlyserves the

capitalists of the imperialist countries and is nurtured !y them, countless tieslink it closely *ith feudal forces in the countryside.;# )he !oureois in acolony or semi1colony, *hether commercial or industrial or !oth, is acomprador if it serves imperialist capital directly and helps intensifyimperialist economic and political aression aainst its o*n country#

)he role of the national !oureoisie, on the other hand, is not complimentaryto that of the imperialist !oureoisie# Despite its likely dependence onimperialist capital in some respects, e#, capital oods and market, theirinterests are not intert*ined# Its aspirations for independent developmentare often frustrated !y imperialist and comprador !oureoisie, the

prevalence of feudal interests and policies of the state *hich mostly servestheir interests# Ho* did $ao de/ne the national !oureoisieE )he national!oureoisie is +a class *ith a dual character# Gn the one hand, it isoppressed !y imperialism and fettered !y feudalism and conseuently is incontradiction *ith !oth of them# In this respect, it constitutes one of therevolutionary forcesBut on the other hand, it lacks the courae to opposeimperialism and feudalism thorouhly !ecause it is economically andpolitically 0a!!y and still has economic ties *ith imperialism and feudalismIt follo*sthat at other times there is the daner of its follo*in thecomprador !i !oureoisie and actin as its accomplice in counter1revolution.?# 7ith this preliminary discussion on the &hinese e-perience, let

us no* pass on to the Indian situation#

Bureaucratic Capitalism in India

It is enerally kno*n that British colonial rule in India destroyed much of theindienous industry e## cotton *eavin and spinnin, iron, shippin etc# Itshattered the old union !et*een ariculture and industry and convertedIndia primarily into a ra*1material1supplyin appendae to and a market for


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the British factory industry and secondarily into a market for e-port ofcapital# India4s e-ternal and internal trade came to !e dominated !y theimperialist British !oureoisie# )hat *as accompanied, on the one hand, !ythe decline of a section of the old independent merchants and, on the other,!y the transformationdeeneration of the other section into a class of

comprador merchants dependent for their ro*th on the forein imperialist!oureoisie#

Here t*o important features should !e kept in mind# 'irst, industrialcapitalism emered and developed in India in conditions *hich *ere!asically diFerent from those in *hich it had developed in the 7est# It arosein a dependent country coloni"ed !y a forein po*er and so *as una!le todevelop alon independent lines# &olonial rule transformed Indian economyinto an appendae of the metropolitan economy of Britain#

(econd, in Britain, the appearance of industrial capitalism *as preceded !y

strules of ne* social classes aainst feudalism since the 7ars of the osesin the late 6=thcentury, formation of the Ne* $onarchy, dissolution ofmonastic lands and the rise of the landed class of the entry *ith capitalisttendencies and the su!seuent defeat of feudalism# In India, on the contrary,industrial capitalism re* not !y defeatin feudalism !ut !y adCustin itselfto it# In India, feudal princes like those of Baroda, $ysore, Indore and)ranvancore themselves set up factories and encouraed and helpedindustrialists in various *ays# In Benal also, at the !einnin of the :thcentury, "amindars8landlords< like $#Nandi, BroCendra Kishore oy&houdhury, Bipradas Pal &houdhuri and others invested part of their money,procured from land, in indienous enterprises#

)hus industrial capitalism did not emere in this country in the course of thenormal evolution of industry as in the countries of the 7est# Gn the contrary,it *as transplanted from an advanced capitalist country to a dependentfeudal country to further the interests of the former# It is also evident that nosocial revolution or technoloical development in this country had preparedthe *ay for its emerence# In fact, factory industry in India *ith its capitaloods and technoloy developed else*here represents an importation,rather than an evolution#

&ompradors in India had handled diFerent types of oods in diFerent

countries and periods accordin to the demands of their %uropean masters#'or instance, in the era of %uropean merchant capital, Indian compradors in(urat, $um!ai8Bom!ay


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oods like cotton te-tiles, Indian compradors supplied to %uropean /rms ra*cotton, Cute, foodrains etc and sold British factory1produced oodsespecially cotton te-tiles on the domestic market and minted millions in lieuof their service# Gpium *as also a maCor commodity *hich *as e-portedmainly to &hina !y British8Jardine, $atheson L &o< and Indian

merchants8J#N#)ata, M#D#Birla, &o*asCi Jehanir, Harduttarai &hamaria, toname only a fe*


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produced yarn not so much for the domestic market as for the foreinmarkets5Britain4s imperial markets in %ast Africa, Hon Kon and &hina# Infact, Indian te-tiles *ere sold a!road particularly in &hina under the um!rellaof British po*er and in0uence9# )he other Indian industry set up !efore the'irst 7orld 7ar *as iron and steel# 'or this, JamsetCi Nusser*anCi )ata

depended on the feudal rulers and British support for many thins# )heentire *orkin capital *as provided !y the $aharaCa of M*alior8feudal rulerof M*alior?, Indian industrial capitalism

sa* the e-pansion of the cotton and iron and steel industries and theinvestment of Indian !i capital in paper, suar, cement, Cute etc and theemerence of ne* roups of the Indian !i !oureoisie5the Birlas,(inhanias, Moenkas, )hapars, uias, 7alchands and others# %ven thouhthe Indian !i capital *as forced, due to 7orld 7ar I, to turn its attention tothe domestic market, its comprador ties *ith forein imperialist capital *erenot only kept intact, !ut strenthened further# In fact, the /rst imperialist *ar!rouht to the fore the need to rely on India as an ordinance !ase forprotective operations in %astern theatres of *ar in vie* of the temporaryinterruption of sea communications# In fact, *hen all supplies of machinerythrouh sea1route from Britain *ere cut oF, the )I(&G *as converted into a

plant for production of *ar material so that the British could *in the *ar#Besides supplyin 6= miles of rails to the colonial overnment forcampains in $esopotamia, %ypt, %ast Africa and other places, the )I(&Gfor the /rst time produced !ullet1proof armoured plates, armoured vehiclesmade of special alloy steels, special steels for armour1piercin !ullets andshells for machine1uns, ri0es and machine1un maa"ines etc6# 'or thisthe )I(&G *as iven discriminatin protection !y the colonial overnment#)he )I(&G also served the interests of British capitalists in India at thee-pense of Indian interests# It sold steel to British enineerin /rms at lo*concession rates *hile the indienous enineerin concerns had to purchasethis industrial ra*1material at much hiher prices66# )he Delhi &loth

$ills8D&$< of the (hri am House, another representative of the comprador!i !oureoisie, secured from the overnment lare orders for the supply oftents for troops durin the *ar that fetched them a pro/t of millions ofrupees6:#

)he (econd 7orld 7ar created hihly favoura!le conditions for the selectclass to *hich (hri am !eloned# )he draconian Defence of India ulesmade strikes illeal and kept *aes lo*, *hile prices of oods soared#


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Ho*ever, as reards pro/ts, especially te-tile mills, these *ent !eyond the*ildest dreams of the industrialists# He *as re*arded for his loyalty invarious *ays !esides !ein a*arded knihthood# 7alchand Hirachand, thefounder of another !i !usiness roup, *on his /rst fortunes as a militaryand rail*ay contractor durin 7orld 7ar I# His Premier Automo!iles 2imited

promoted durin 7orld 7ar II, entered into a colla!oration areement *iththe &hrysler &orporation of the U(A to !uild motor vehicles for the defenceforces# 'inanced !y Indians, it *ould actually !e a &hrysler unit to ful/ll theneeds of the British Indian army6# Gne can multiply such instances#

An important reason *hy the Indian !i !oureoisie felt enamoured of +theBritish connection. *as that they had a lare stake in the British colonies insouth1east Asia and Africa# Indian !i capital not only played the role of anunderlin to forein capital *ithin India !ut *ent out to e-ploit other Britishcolonies under the um!rella of British po*er as a sub-exploiter# )he totalcapital invested in Burma alone !y 69>6 amounted to s# := crore8:=

millions

# )he Nattukottai &hettiars of )amil Nadu *ere usurers and traders*hose tentacles had spread to such countries of (outh1%ast Asia as &eylon,$alaya, (inapore and especially Burma# )heir total assets rose to s#Omillion in 69 accordin to one estimate and s#6> million accordin toanother6=# (ome of the &hettiar !usiness roups *ere knihted !y the Britishfor their services to the forein rulers# As (BD de (ilva puts it, +2ike theremora *hich travels lon distances !y attachin itself throuh its dorsalslicker to the !ody of a shark, Indian capital *ent alon *ith Britain4soverseas e-pansion.6=a#

It is not that only forein capital *as invested in Indian1o*ned industries

there *ere a lot of forein1o*ned industries in *hich Indian capital *as alsoinvested# )he Indian capital invested in forein1controlled companiesconstituted investments !y such feudal lords as the $aharaCa8feudal kin< ofDar!hana as also !i !oureoisie and auent petty !oureoisie# Bi!usiness houses like the Moenkas, Birlas, Banurs, Jalans, BaCorias, Jatias etcstarted as !rokers or !anians8middlemenaent for %ast India &ompany4sservantsuaranteed !rokers< of %uropean companies and came to havelare /nancial stakes in them# $any of them served on the !oards ofdirectors althouh they did not have any control over them#

'orein and Indian !i comprador capital *ere tied up in another *ay# )he

cement units5!oth Indian and British1o*ned5formed uasi1monopolisticorani"ations, the Indian &ement $anufacturers4 Association in 69:; and the&ement $arketin &ompany of India 2td in 69# 2ater, in 69;, a larenum!er of cement companies includin those under the manain aenciesof Killick Ni-on and )ata (ons, *ere amalamated to form the Associated&ement &ompanies8A&&6 formed a Cointsyndicate *ith the Dalmia Jain !i $ar*ari !usiness roup# )hat *as follo*ed!y the formation of the Indian (uar (yndicate, on *hich !oth Indian and


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British capital *as represented, !efore the (econd 7orld 7ar6;# @#I#Pavlovo!served +India4s colonial capitalist sector developed in indissolu!le unity*ith British capitalism relyin on the latter4s po*erful support.6?#

)hus India !ecame one of the most important supply !ases for the British

east of (ue"# 7ith the entry of Japan into *ar India not only provided menand material for *ar in 7est Asia, Africa and %urope, !ut she herself !ecamea !ase of military operations, not only of British troops !ut also of Americantroops# )he British depended on the Indian !i !oureoisie for procurementand production of certain ra*1material for the successful prosecution of the*ar and the Indian !i !oureoisie, true to its comprador character, providedall military and political support# In fact, *hile the *ar *as the *orst of timesfor the people, it *as the !est of times for the !i !oureoisie# )hey mintedmillions at the cost of the !lood and s*eat of the people#

After 7orld 7ar II *as over and the transfer of po*er *as in siht, there *as

much talk a!out Plannin for future India# 2eadin representatives of theIndian comprador !i !oureoisie such as (ir J##D# )ata, M#D#Birla, (irPurushottamdas )hakurdas, (ir (hri ram, Kastur!hai 2al!hai and othersformulated their plan popularly kno*n as the +Bom!ay Plan869>>


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and forein imperialist loan and private capital5in future69# )hus the !asis of(tate &apitalism or Bureaucratic &apitalism for India *as laid#

)he Indian !i !oureoisie had !y then reached the crossroads of history andrelied on t*o pillars for its further ro*th5imperialist capital and (tate

capitalism# (tate capitalism, in the *ords of $aurice Do!!, means +(tate1enforced monopoly5monopolistic restriction and monopolisticarandi"ement *ith the sanction and !y the arm of the la*.# Do!! addedthat the various species of (tate &apitalism have a common element *hichis +the coe-istence of capitalistic o*nership and operation of production *itha system of enerali"ed controls over economic operations e-ercised !y the(tate, *hich pursues ends that are not identical *ith those of an individual/rm.:# 2et us no* pass on to the phase that !eins *ith the +transfer ofpo*er. in 69>?#

India since Independence!"ost 194 on#ards$

)he economic ties *ith imperialist capital !ecame stroner after the transferof po*er in 69>?# In the memorandum attached to the Indian overnment4sIndustrial Policy resolution of April 69>O, it *as stated that there should !efull freedom for forein capital and enterprise in Indian industry# 7hen Prime$inister Nehru *ent to the U(A in 69>9 in uest of food, capital andtechnical help, he assured U( capitalists that private capital *ould !e ivenfreedom to operate in India# )he mem!ers of the Indian !i capital such asM#D#Birla and (ir Homi $ody of the )ata house *ere no less enthusiastic in*elcomin forein monopoly capital# It is nota!le that the %nineerinAssociation of India on *hich the tycoons *ere represented, placed the

responsi!ility of makin India +industrially reat. on the shoulders of theBritish and American monopolists# )hat *as needed for another crucialfactor, that is, the appearance of ed &hina# In fact, in its *ritten evidence!efore the 'iscal &ommission869>91=


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industry *as an adCunct to their !asic activities as traders# %ven e-patriateBritish capital, *hich operated throuh British manain aency /rms anddominated India4s forein trade, industry, !ankin, insurance etc, *aspredominantly merchant capital# Here it *as commerce that ruled industryrather than industry rulin commerce#

%ven *hen direct colonial rule came to an end, the !asic *eakness of India4scapitalist class lay in t*o thins one *as its failure to su!ordinatemerchants4 and usurers4 capital to productive capital the other *as thevirtual a!sence of one of the t*o maCor departments of capitalist production5the production of the means of production# As $ar- pointed out, the totalsocial production is divided into t*o maCor departments a< $eans ofProduction8Department 6< and !< Articles of consumption8Department II?

sinaled the !einnin of the process of imperialist domination in a ne* *ay#In the name of !uildin an independent and advanced economy, the Indianrulin classes have made it more dependent on the capital and technoloy ofimperialist countries# In the name of development and industriali"ation, theyhave helped the comprador !i !oureoisie to develop uickly to serve it!etter in the ne* situation, strenthened the stranlehold of imperialismover the Indian state, country4s economy, politics and culture and have madeno fundamental chane in the feudal relations# In the name of non1alinmentin forein policy, they have, in fact, pursued a policy of !i1alinment *ithAnlo1American and (oviet po*ers# In the name of democracy and eualopportunities for all, they have trampled underfoot democratic rihts of the

people and tried to sti0e the strules of various nationalities for autonomyand self1determination# 7hat *as a colony !efore 69>? no* !ecame a semi1colony after the transfer of po*er#

India thus !ecame a formally independent country# It *as in such a conditionthat (tate capitalism in India made its appearance# It *as a situation *henthe Indian comprador !i !oureoisie5!asically mercantile in orientation5havin feudal linkaes and closely tied up *ith state po*er and maCor


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political parties !oth at the central and state levels, promotes imperialistcapital and helps in its penetration into the economic and political lifelines ofthe country at a tremendous cost to the people and nature# )he introductionof 'ive1year Plans played a crucial role in developin Bureaucratic capitalism#

)here *as another important development# )he top political representativesof the Indian !i !oureoisie such as Ja*aharlal Nehru, @allav!hai Patel, theformer, in particular, nourished !i1po*er chauvinism and in his feveredimaination conceived of a multinational state stretchin from 7est Asia tothe Paci/c reion *ith India as its centre and hitched their *aons to theAmerican star# In their *ild am!ition to !ecome a superpo*er, they follo*eda policy of !i1alinment either tiltin to*ards the Anlo1American po*ers orto*ards the (oviet po*er until the dismem!erment of the (oviet Union *henthey turned to*ards U( imperialism and !ecame its clients# Ho*ever,despite its *ild am!ition, India did not have the capacity to !ecome a !ipo*er either in the past or at present, a reality into *hich *e *ould not enter

at present# America, on its part, *hetted the appetite of the Indian rulinclasses !y ivin the false impression that it had that capacity and !rouhtthe Indian state further under its all1round control# )he 3&ommunityDevelopment ProCect4, the 3Mreen evolution4, intervention !y the $I) &entreetc formed part and parcel of the American stratey to remould Indian policyin its o*n imae#

An important aspect of Bureaucratic capitalism is the dependence onimperialist capital# In fact, from the very !einnin, India4s plans have !eenheavily dependent on loan1capital and investment, technoloy and technical3e-perts4 from forein countries, in short, the a!Cect surrender to forein

capital# 2oans led to the pilin up of e-ternal de!ts, interests multiplied andIndia took more loans to pay oF old de!ts, thus makin itself more inde!tedthan ever !efore# Another form of loan *as 3aid4 *hich *as responsi!le forthe continuous, severe drain on India4s surplus to advanced capitalistcountries# )he International 2a!our Grani"ation8I2G< stated in report of 69??that for every dollar iven to a third1*orld country to continue !uyin fromthe 7est, the 3donors4 received three dollars in return:6# )he amount of drainmultiplied since then# )he 3aid4 fores not only economic dependence andsu!servience, !ut also political dependence# It helps in e-ercisin astranlehold on !ureaucracy, overnment ocials, leaders of political parties5rulin and others5and others, in short, the state machinery as a *hole#

Policies of state control *ere rela-ed one after the other for the entry offorein capital and the conseuent plunder of the country4s resources#

$ean*hile, the advanced capitalist countries, hit !y recession since 69?O1?9,*ere an-ious to e-port more capital oods and lu-ury consumption oods toIndia and other )hird 7orld countries and the *ithdra*al of all the e-istinrestrictions on their e-ports !y the Indian overnment# Interestinly, theirinterests convered *ith those of the Indian Bureaucratic capitalists# 2ike the


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forein imperialists they *ere also critical of various overnment controlssuch as the industrial licensin system, controls over capital, import control,import controls etc# *hich no* came in the *ay of their operations# )he ironyis that these very controls had earlier ena!led the !ureaucratic capitalists to*hat they !ecame and created for their industries a monopolistic market#

But no* these same controls have !ecome fetters for them# )hus there *asno* no need of those for them# )hey had a lare amount of capital *ithin thecountry and many more kept in forein !anks *hich they *anted to !rin!ack as *hite money for further e-pansion as Cunior partners of trans1nationals !ased in imperialist countries# )hat led to a chane in policy53li!erali"ation, privati"ation and lo!ali"ation45the dismantlin of controlsand restrictions, !oth of *hich *ere essential instruments of plannin# It *asthis plannin that made the emerence of (tate capitalism possi!le in Indiaand it *as these aain *hich the !i !ureaucratic capitalists souht to doa*ay *ith *hen these hindered their e-pansion#

)he 7orld Bank and the I$', the *atchdos of imperialist interests, putfor*ard the prescriptions for Indians# )hat led to the devaluation of the rupeethat made imports dearer and e-ports cheaper and the repayment of foreinloans much heavier# (econdly, the Indian rulin classes pleded to remove*hatever restrictions on direct investment of imperialist capital stillremained# Accordin to U( ocial reports, the annual direct foreininvestment rose from a!out R6 million in 699 to R:#> !illion !y 699;::#

In fact, it is forein capitalism that the Indian rulin classes and their politicalrepresentatives in successive central overnments have !een promotin onIndian soil more aressively than ever !efore# )o them, national interests,

national sovereinty, national dinity and their o*n dinity do not matter atall#

Another feature of !ureaucratic capitalism in India is that pu!lic sectorenterprises, even pro/t1makin enterprises, *ere sold out to foreincorporate capital and their Indian colla!orators at thro*1a*ay prices# )he7orld Bank and the I$' are keen on dismantlin all measures to protectdomestic national industry and demand an open door for imperialist capitaland other forein oods# 87e *ill deal *ith National capitalism in a separatesection


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sector and the openin up of pro/ta!le sectors such as telecommunicationshitherto closed to private /rms#

'irst, virtually all partial disinvestment of shares in pu!lic sector /rms has!een carried out consciously at prices *hich are 3attractive4 to investors#

Suite naturally, these sales have attracted *ide criticism, includin from the&omtroller and Auditor Meneral8&AM< *hich spoke of ross irreularities evenfrom the /rst round8699619:>: crore onreceipts of Cust s#,O crore:# In the most recent period, the ne*ly formedsecond National Democratic Alliance8NDA< overnment led !y Narendra $odihas initiated a mea sale of three maCor pu!lic sector undertakins5Gil andNatural Mas &ommission8GNM&R< investment in physical infrastructure8electricity,rail*ays, roads, ports, airports, irriation, ur!an and rural *ater supply andsanitation< durin the period :?16:


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tacit policy of privati"ation of health, education and transport for this hasforced the poor to spend more on these services, leavin less for food#

It is interestin to point out that !ureaucratic capitalism in the neo1li!eralphase condemns su!sidies such as those on food and fertili"er, and the

supposed su!sidy on petroleum# Ho*ever, it provides an array of su!sidies tothe private corporate sector# 'irst, there are lare transfers disuised in formof sums o*ed to the (tate !y the corporate sector *hich the (tate makes noserious attempt to collect# 2are !orro*ers *ith 66, individual accountsaccounted for as much as s#>, crore of total !ad de!t of !anks !y:61:# Amon pu!lic sector !anks too hih value defaults involvin 6,?>6accounts of over s#= crore amounted to s#::,O;; crore# )he second maCorsu!sidy is ta- concessions# Here the total of ta- revenue foreone oncorporation ta-, e-cise duty and customs duty *as estimated at a massiveamount5s#:;,>O crore:;#

Another important feature of Bureaucratic capitalism is the forin ofpolitical, military and strateic tie1ups *ith imperialist countries# Durin theIndia1&hina !order *ar of 69;:, the Indian overnment +souht full defensiveintervention. !y America, as Mal!raith noted in his diary:?# )he period of thelate 69;s and the early 69?s characteri"ed !y the Na-alite &ommunistrevolutionary movement led to e-chane of vie*s to com!at it amon India,U(A and UK#

'rom the late 69Os, the U(A had !een tryin desperately to seek its lon1cherished dream of *orld domination, *hat it calls its 3manifest destiny4# )*odevelopments had *hetted its appetite# 'irst, the socialist &hina led !y $ao

)se1tun, *hich *as a source of inspiration for the freedom1lovin peopleevery*here, had deenerated into a capitalist state# (econd, the U((, or*hat is kno*n as (oviet social imperialism !roke do*n due to its internalcontradictions# )he U(A no* dreamt of !ecomin the only super1po*er sothat +no super1po*er emered in 7estern %urope, Asia or areas of former(oviet Union. and the U( Coint chiefs of staF hihlihted the need tomaintain a +headuarters element. in (outh17est Asia:O# )he Indian!ureaucratic capitalists and the central overnments that serve theirinterests *ere only too *illin to carry out U( plans of !uildin closeinteration !et*een Indian and American military esta!lishments# 7hat*ere the features of this militarystrateic colla!orationE )hese are the

upradin of Indian military euipment *ith U( help the strenthenin ofarmy1to1army and navy1to1navy 3co1operation4 !y holdin Coint seminars,Coint e-ercises etc com!ined trainin e-ercises the military ocers4e-chane proramme the settin up of steerin committees to *ork outvarious relevant proposals are some of the features of military and strateicties !et*een the t*o countries# An 'BI oce *as set up in Ne* Delhi manyyears ao and Cunle *arfare trainin school set up in $i"oram in north1eastern India *here American and Indian soldiers undero Coint Cunle


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*arfare trainin# )he Indian overnment is takin loistical support from theU(A and Israel8such as unmanned airplanesU(@s< to deal *ith the Indian$aoists#

)he Vision Statementthat set the seal for lon1term strateic dependence on

U( imperialism *as dra*n up !y imperialist aencies like $ckinsey L &o and*hich *as sined durin the visit !y U( President &linton in $arch :# )histook a maCor leap after the (eptem!er 66, :6 attack on the t*in to*ersand the Pentaon and the conseuent U( crusade aainst so1calledterrorism, of *hich the Indian rulin classes !ecame a maCor appendae# Itprepared the round of a U(1India1Israel military a-is#

In the /rst decade of the :6stcentury, the $anmohan1&hidam!aram com!inestarted *hat has !een descri!ed as the +Gperation Mreen1hunt.# Durin histenure as the central /nance minister, P#&hidam!aram8he *as alsoconnected *ith the @edanta roup as also leal advisor to %nron


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science# )he hue economic *ealth under the (tate directly or indirectlycomes in handy for the further ro*th of private !i comprador capitalists#)he (tate acts positively in providin ra*1material to them, hands oversources of ra*1material throuh8natural resources such as !au-ite, iron ores,coal etc< the sinin of $oUs *ith domestic corporate and forein imperialist

capital, place orders to !i capital, provides cheap electricity, mineralresources etc to the corporate houses5native and forein# As the (tateadopts a policy of militari"ation !y *hippin up *ar hysteria at reularintervals *ith neih!ourin countries like Pakistan and &hina, the demand fordefence oods ets a /llip and that is !ein met !y !i capital# In the nameof com!atin the $aoist insurency, the Indian state is procurin *armaterials from Israel, America in increasin uality# )hat fattens the !elly ofnative and forein imperialist capital#

(tate monopoly capitalism is further strenthened !y the control overindustry, transport, !anks, !y the sellin out of shares in the private1pu!lic

partnership# Privati"ation or disinvestment of pu!lic sector units at thro*1a*ay prices fattens the purse of imperialist capital and domestic !i capital#ules are rela-ed, even chaned in Parliament and (tate leislativeassem!lies in the interest of Bureaucratic capital#

An important uestion is 7ho are the !ene/ciaries of the surplus e-tracted!y Bureaucratic capitalismE It is mainly the domestic !i capital andimperialist capital that ra!s such pro/ts, directly throuh the !ackinprovided !y the !ureaucratic state to their industries, stock market1!asedincomes, disinvestment of pu!lic sector units devaluation of the rupee,chanin la*s to permit )N&s to operate *ith total control, handin over

lare tracts of land for the creation of (%Ts8(pecial %conomic Tones< etc#)he ne* trend of private1pu!lic1partnership8PPP< e-plicitly sho*s that themaCor portion of surplus oes to the domestic !i capital and imperialistcapital and the state !ureaucracy# (ide !y side, as no state can sustain itself*ithout elicitin the support of the people, a small portion of the surplus isalso distri!uted in various *ays amon the lo*er layers of society and is alsoset aside for the furtherance of various *orks of pu!lic utility#

In India, (tate capitalism or Bureaucratic capitalism sho*ed sins of itsemerence in the last years of colonial rule# 2ike the emerence of industrialcapitalism, it did not have any independent ro*th on the contrary, its !asis

of its emerence *as laid !y the British colonial masters themselves# )husfrom the very !einnin, it *as dependent in character# )here *as nothinunusual in it# Had India adopted the path of the Ne* Democratic evolutionthe essence of *hich *as an ararian revolution as taken up !y &hina under$ao, her history *ould have proceeded alon a diFerent course# )he (tatecapitalism that *ould have emered *ould have !een under the control ofthe Ne* Democratic India that had emered in course of /htin aainst anddefeatin feudalism and British imperialism# 2ater on, it *ould have


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underone the phase of socialist transformation as &hina did# 2et us no*pass on to a !rief account of National capitalism in India#

National Capitalism in India

Gne can have t*o sections of the !oureoisie11comprador !oureoisie andnational !oureoisie5in a colony or semi1colony# In a truly independentcountry *hich is neither coloni"ed !y nor dependent on imperialist countries,one can have only one section of the !oureoisie11the national !oureoisie#In a colony or a semi1colony, the nature of national capitalism is determined!y the concrete condition that prevails in the country# (peakin of &hina!efore 69>9, $ao )se1tun said that the national !oureoisie *as +oppressed!y imperialism and fettered !y feudalism.# )his *as also true of India4snational !oureoisie and is true even today# Because of the prevalence offeudal land relations in the vast countryside of India, the Indian market *asnarro*# (ide !y side, !ecause of the !ecause of the stranlehold over Indian

economy5domestic and forein trade, industry, /nance etc5!y imperialistcapital and its compradors5and the inimical policies of the colonial state,national capitalism could hardly ro* and survive# In fact, Nationalcapitalism had antaonistic contradictions not only *ith the imperialist!oureoisie !ut also *ith the compradors#

Colonial "eriod:

)he comprador !oureoisie *hich *as one of the main pillars of colonial rule,*as divided into three roups# )he /rst com!ined !ankin and tradinactivities the second acted as !rokers, !anias8mem!er of a tradin caste< or

contractors to the British raC and supplied provisions to the British Indianarmy at home and a!road the third *ere am!lers, speculators and !rokersof British /rms#

)he national !oureoisie on the other hand moved in totally diFerentdirections# It is possi!le to dra* clear lines of demarcation:9!et*een thecomprador!i !oureoisie and one part of the middle, and thenationalsmall and the other part of the middle !oureoisie of India# @ery!rie0y, *e propose to refer to their features under eiht !road heads (ocialoriin 7ays of Primary accumulation Kno*lede of productionprocessoriinal research (election of (ites and Buildin Plans

$anaement%-pertsDirectors, $achinery $arket Political Attitude#

6# (ocial Griin Unlike the compradors *ho oriinated from traders,!ankers, middlemen, !rokers, speculators and am!lers, the nationalcapitalists emered from educated middle1class8professor, chemist,physician, enineer


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contractors, speculators, the national capitalists depended on smallsavins from middle1class professions, land, donations and even theiro*n skill and con/dence in themselves#

# Kno*lede of the Process of ProductionGriinal esearch Unlike the!i !oureoisie *hich did neither have a thorouh kno*lede or any

kno*lede *hatsoever of the process of production, the Nationalcapitalists ained in such kno*lede throuh e-perience as chemists,medical personnel, kno*lede a!out enineerin and directparticipation in the process of production#

># (election of (ites for factories and Buildin plans Unlike thecompradors *hich depended on forein e-perts for the selection ofsites for their factories as also for makin plans for !uildins, thenational section relied on themselves for all these#

=# $anaement%-pertsDirectors Unlike the !i !oureoisie *hichdepended to a very lare e-tent on foreiners, the small and middle!oureoisie depended on themselves#

;# $achinery Unlike the compradors *hich depended entirely onforeiners for machinery, spare parts, capital oods etc, the national!oureoisie, despite dependence on forein machinery in manysectors, also manufactured machines !oth for the use in their o*nfactories as also for the market#

?# $arket Unlike the !i !oureoisie *hich depended on the imperialistseven for the market, particularly overseas market, the small andmedium entrepreneurs sold their products throuh deshi8indienous# Qen Pin Hao, The Comprador in Nineteenth Century China; The Bridge

between ast and West, &am!ride, $ass, 69?, pp#61:#=# $ao )se1tun, 3(ome %-periences in our Party4s History4 in SW, @ol#@,

Pekin, 69??, p#:?#;# $ao )se1tun, 3)he &hinese evolution and the &hinese &ommunist

Party4, SW, @ol#II, Pekin, 69?=, p#:#?# $ao )se1tun, ibid, pp#:1:6#O# #$#2ala, The Creation o! Wealth, Bom!ay, 69O6, p#>#9# A#P#Kannanara, 3Indian $illo*ners and Indian Nationalism !efore

696>4, "ast and "resent, No#>, July 69;O, p#6;>#6# 'rank Harris,#$N$Tata % Chronicle o! his &i!e, Bom!ay :ndedition,

69=O, p#:6> #$#2ala, op$cit, p#:= see %ditorial in#ournal o! theCollege o! ngineering and Technology, @ol# VIII, No#:, Decem!er 69>6,pp#9O199#

66# (uniti Kumar Mhosh, The 'ndian Big Bourgeoisie 'ts (enesis)(rowth and Character, &alcutta, January :, p#699#

6:# Arun Joshi, &ala Shri *amn% Biography, Bom!ay, 69;O, pp#6;19#

6# (#K#Mhosh, op$cit, pp#:O19#6># Kastur!hai 2al!hai Papers, K1; cited in &laude $arkovits, 'ndian

Business and Nationalist "olitics, p#6O, fn#=#6=# (#K#Mhosh, op$cit, p#:6#


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6=a# (BD de (ilva, The "olitical conomy o! +nderde,elopment, 2ondon,69O:, p#6=#6;# A#I#2evkovsky, Capitalism in 'ndia, Ne* Delhi, 69;;, pp#61>#6?# @#I#Pavlov, @#astyannikov, M#(hirokov, 'ndia Social and

conomic .e,elopment/01thto 23thcenturies4, $osco*, 69?=, p#9:#

6O# P#A#7adia and K#)#$erchant, The Bombay "lan % Criticism,Bom!ay, 69>=, p#>,>=1?#69# 'or the full te-t, see%spects o! 'ndia5s conomy8Bom!ay< !y

UP%, No#66, January1$arch 699, pp#>:1;#:# $aurice Do!!, Studies in the .e,elopment o! Capitalism,

outlede Paper!ack edition, 2ondon, 69?:, p#O>#:6# conomic Times, Ne* Delhi, 6 $arch, 69??#::# &( Issue Brief for &onress India1U( elations updated $ay 9,

:, K#Alan Kronstadt, 6oreign %7airs) .e!ence and Trade .i,ision,pp#&( 6:16#

:# 'ndia5s *unaway 8(rowth5 .istortion) .isarticulation and

xclusionPart II, Aspects of India4s %conomy No#>=, UP%8esearchUnit 'or Political %conomy#

:a# P#&handrasekhar, 3An G!session to (ell4, 6rontline, Gcto!er 6O16,:6>#:># @# (ridhar, 3(cam accounts4, 6rontline, ;6;#:=# 'ndia5s *unaway 8(rowth5, op$cit, pp#>61>#:;# 'bid, pp#>1>>#:?# J#K#Mal!raith,%mbassador5s #ournal, 2ondon, 69;9, p#>O;#:O# conomic Times, 6:9: 6:>96#:9# 'or details, see Amit Bhattacharyya, Swadeshi nterprise in

Bengal 0920-:, (etu Prakashani, Kolkata, (eptem!er :?, pp#6O61

69=#

india - comprador bureaucratic capitalism and national capitalism

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