Line and length: Indian capital is an orphan, and so is Indian labour

Exactly two years ago, I had written that Indian capital was an orphan. Now it turns out that so is Indian labour.

We have to thank Indian liberalism which has been weaponised by the Congress party and its multi-hued camp followers who understand the many complex and counter-intuitive political and philosophical concepts that go into it. That’s good.

But what’s bad is that our liberalism’s understanding of hard economic realities is non-existent. These were strangled at birth.

In consequence, India is a textbook example of a contradiction of Hegelian proportions: a highly desirable liberal political world view that has led to highly undesirable and utterly illiberal economics. In the rest of the world it has been the other way round.

Nothing illustrates this better than the recent debates on labour and its lockdown experience. I have followed labour issues for 45 years because of friends who champion labour’s cause, and hop between inductive and deductive logic to make their case. They go from the general to the particular and from the particular to the general remorselessly.

Also, I studied for a law degree — which I did not complete — where one of the papers was labour law. No principles of any kind were taught. They had to be gleaned from the case law in major judgments.

The result is that Indian labour law is now entirely bereft of economic sense, leave alone the requirements of commerce. It is solely about an emotional — and politically expedient — view of fairness and equity for one side.

Our labour rights, at least in the ‘formal’ sector have become very well defined, as indeed they should be. But labour efficiency, which ought to be labour’s responsibility, is given short shrift.

Thus in India labour is not viewed as a factor of production. This is Left liberalism at is goofiest: all heart, no brain. And of course no economics.

Worse, in the last 50 years, labour in India has become the domain of politicians, judges, bureaucrats, economists, activists, union leaders and thugs. Everyone has an agenda of private gain that harms only labour’s interests.

The screw-up is so monumental that now labour is made to play a zero-sum game with itself! One part of it pays for the other.

Miyan Bibi razi…

Like all previous governments since 1991, this one too has been trying to sort this out. But unlike the six or seven governments since 1991, it has made a much more determined start and is therefore taking a lot of flak from all sorts of people who don’t have any skin in the game, just varied emotions and agendas.

We saw one result of this during the lockdown: no one was responsible but everyone stuck his or her oar in. In the end the main point was overlooked. This is that whether it’s organised labour or unorganised labour, it counts for nothing without capital and management, just as they too count for nothing without labour.

For economics and business there are only two issues that count: how much is to be paid to labour and how much is to be demanded by it. It’s very much a conjugal arrangement based on a delicate balance. There’s no place for a third party.

Or as the saying goes, miyan bibi razi, toh kya kar raha hai quazi? (If the husband and the wife are agreed, what’s a third party doing there?)

Same team

The harm that Marx did was to convince everyone that labour and capital were antagonistic. In 2014 this is what the Congress — which has now become a group of articulate dynastic losers — summed up in its sharp jibe of ‘suit-boot ki sarkar’. Mr Modi took fright and took his eye off market-friendly labour reforms.

But we have come a long way since 1948 and the institutions of the state should stop interfering in the labour market in such a one-sided way. Towards this end many reforms have been suggested. They are all available to the government.

All those interventionist acts like the Bonus Act, the Factories Act, the Shops and Establishments Act etc need to be junked in a single repeal. Each state can then have its own version.

Indeed some steps in such decentralisation have already been taken. But much is needed to make labour a bilateral matter between employers and employees.

For this the most important reform is the abolition of the labour ministry, which, like several other ministries, has become redundant. Like the DGTD which was abolished in 1992, this ministry also serves no useful purpose. No one, least of all labour, will miss it.