History 100, Economics 0
Over the last few months, for the first time since Independence, the CPI and the CPM have been exercising political and administrative power at the national level. But far from earning their spurs and inspiring confidence, their antics have once again brought an old mystery to the fore: whats wrong with these people, why do they behave so peculiarly?
On my part, for a little over 25 years now, I have been looking for a Marxist who will tell me how the Marxists, having got their interpretation of history so right and thereby gained intellectual legitimacy, managed to get their economics so outstandingly wrong and lose political legitimacy. How could an intellectual system which was so accurate in its diagnosis, be so spectacularly wrong in its prescription? How could such a sophisticated view of history spawn such a crude version of economics?
And, over the years, I have come across four types of responses from the Marxists. The first consists of simple denial. We havent got the economics wrong. Its just that the whole world is against us and is constantly conspiring to show that we are wrong. These Marxists form the herd-like majority and, intellectually, they are at par with the VHP-Bajrang Dal type who brought down the Babri Masjid. Faith, in their case, wholly excludes reason, which is seen as a capitalist plot.
The second response is a bit more thoughtful. In an inversion of the market-failure related arguments, they say that its not the economics itself that is wrong but the way in which it has been practised. For instance, there is really no contradiction between the public ownership of all productive assets and allocative efficiency. You can have both and, better still, you dont need the price system to achieve it.
The third response is still in favour of public ownership but doesnt deny the role of prices any longer. Somewhat grudgingly, this view favours more autonomy for the public sector, at least in the matter of prices if nothing else. A sub-set of this group goes so far as to allow the public sector the power to make its own investment decisions. But it is in a miniscule minority. Interestingly, the older bureaucracy, though it will deny it hotly, is an unwitting subscriber to this view.
The fourth response is the one currently fashionable amongst the younger politbureau members of the CPM. Public ownership is still extolled but not of all productive assets. Selectivity has replaced the old holdall approach. (However, the supreme irony, of Marxists wanting to sell off bread factories while retaining financial companies whose output is not regarded as real output in true-blue Marxian economics, is lost on them. Ignorance combined with a single-minded pursuit of the partys interest is largely responsible for this). As for prices and the role that they play, these Marxists