Crisis of Neo-Liberalism and Bourgeois Democratic Order: Return of ‘State Socialism’

Co-Written by Badre Alam Khan & Sanjay Kumar     

                                  capitalism and climate change cartoon

    ‘[The] Virus is a product of nature; the crisis is a product of neo-liberalism’

[(Salas and Silverman, 2020); Cited by Vijay Prasad, EPW, March 2020].


The ongoing COVID-19 pandemic (followed by the stringent national lockdown in India and elsewhere) is not only posing huge challenges in health and economic sectors, but also before the so-called bourgeois economic and democratic order based on ideology of the neo-liberalism in India in particular and western advanced countries in general. The Covid-19 lockdown, is not only having larger implications in health and socio-economic sectors, but also violates civil liberties and freedom of speech (especially dissenting voices of subaltern masses) in the so-called democratic and authoritarian regimes across the world.

According to the report of the Freedom in the World 2020, “established democracies are in decline” across the political boundaries. And it could be seen in both authoritarian and democratic regimes like China, Russia, Iran, the USA and India. However, erstwhile democratic regimes have had earlier good records of keeping human rights and civil liberties, as enshrined in their democratic Constitutions. “While protest movements in every region have illustrated widespread popular demand for better governance, they have yet to reverse the overall pattern of  declining freedom”, further adds the report. The report has also underlined that there is an erosion of values like pluralism, diversity, political rights and civil liberties which are essential characteristics of the liberal democracy. As a result, ethnic, religious and other minority groups are facing a flagrant violation of human rights often made by the ‘state apparatus’ in both democratic and authoritarian regimes, as pointed out by the Freedom report. In this respect, two most glaring examples are China and India. In case of former, Uighur’s Muslim minority and other ethnic groups (take, for instance, the case of Dalai Lama who is spiritual leader of the Buddhist monks and forced to live in an exile with their several followers in India and elsewhere) have been facing socio-cultural discrimination and exclusion for a long period of time. In a similar vein, India (which is the largest and most populous democratic state in the world) is also falling to protect the rights of social minorities like Dalit, Adivasis, women and religious minorities especially Indian Muslims, as several national and international reports have documented.

Ever since Hindu nationalist government led by PM Modi captured state power in 2014, discriminations, demonization, mob-lynching and attack on civil liberties and democratic rights of religious minorities continue unabated. Take for instance, under the false pretext of the Tablighi Jamaat for having organized a congregation knowingly and unknowingly at Nizamuddin Markaz (amidst-Covid-19); Indian Muslins and Islam as a whole have been attacked and demonized by a section of electronic media and communal leaders who are associated with the ruling establishment. In addition to this, the students and  social activists who registered their protested against an anti-constitutional discriminatory citizenship Act like CAA (which had been passed by Indian Parliament on 13th ,2019) and unnecessary exercise of the NPR-NRC; it is highly unfortunate to note that they are now being harassed and arrested under the draconian Act like UAPA, [Unlawful Activities ( Prevention)Act] for being allegedly involved in  Delhi riots, took place in February 2020, at a time when our country is passing through extremely difficult times. In this respect, Freedom in the World 2020 report rightly observes,

“as a part of the pattern of Hindu nationalist policies under Prime Minister Narendra Modi, India issued an exclusionary citizens’ register in one state and adopted a discriminatory citizenship law [take, for instance, anti-constitutional Act like CAA] at the national level, then used aggressive tactics to suppress the pretest that ensued’’. (See,Freedom in the World 2020’)

In short, recent decline of democratic institutions and civil liberties across the world including in the case of India (COVID-19 lockdown) has created more intense fear and distress in the minds of the vulnerable, destitute and migrant workers. Currently, citizenship rights (the present ruling dispensation and their leaders have often stressed on duties and responsibility rather than on citizenship rights of people, enshrined in the Constitution of India) and freedom of speech is denied and power of ‘state surveillance’ has been now rudely exercised by the ‘state apparatus’ such as by police forces and its investigating agencies including  through the  social media troll often have done by communal brigades of Sangh Parivar, to suppress the civil liberties and democratic rights of dissenting voices. Besides, Jamaat, Jamia and JNU’s students, just a few days back, the communal forces and a section of media have allegedly attacked on Dr. Zafarul Islam khan (who is currently holding the post of Chairman of the Delhi Minority Commission) under the false pretext of ‘internationalizing’ the Indian Muslims  problems especially in the Arab world. For targeting the honest, tolerant and socially committed personality like Khan by communal forces solely because of, he carried a Muslim identity, is an extremely unfortunate and must be condemned in the public domain.

The US and India are the largest democracies in the world which supposed to provide solutions related to lives and livelihood witnessed by migrant workers and poor in the realm of socioeconomic and health sectors, amidst the national lockdown. However, authoritarians and the countries having socialist orientations states like China, Vietnam, Cuba, Venezuela and state like Kerala ( located in India) etc., are doing well in comparison to the so-called ‘democratic regimes’(Indian and the USA could be taken as examples in this context) in the realm of the socioeconomic and public health sectors.

Keeping these hard facts in mind, in what follows, we argued that a kind of democratic form of state socialism, as put forward by Babasaheb Ambedkar in his book ‘State and Minorities’ around 1947, is much needed and better option especially to overcome socio-economic and health problems confronted by poor and underprivileged class. It is to be noted that Ambedkar’s idea of Constructional state socialism is not based on the crude orthodox Marxist understanding of the ‘base’ and ‘super-structure’ dichotomy and economic determinism. Babasaheb was committed to democratic, non-violent and  moral values to achieve an egalitarian society based on values like liberty, equality and fraternity- rather than the dictatorship of proletariat and annihilation of ‘class enemy’ by using violent means, as experienced in several erstwhile socialist and Marxists regimes.

Like Ambedkar, Nobel laureate Prof. Amartya Sen , Vijay Prashad and Kanwal Bharti have echoed almost similar views that democratic state based on ‘Constitutional democracy’ having a kind of socialist or robust welfare orientations (not bourgeois economic order based on neo-liberalism and unfettered capitalism) will be more relevant in the current scenario to fight against the socioeconomic and health crisis. For Amartya Sen, democratic regimes have had good records to fight against pandemic and ‘famine’ in the distant past rather than authoritarian regimes, as witnessed in colonial India when a massive feminine took place in 1942. In short, democratic form of state socialism with nationalization of industry, basic health, agriculture and farming (followed by taxations levied on super-rich) will be able to provide long-term solutions and actual material relief to India’s poor and migrant workers in the post-Covid-19 (rather than through the means of charity/philanthropy given by corporate and great India’s middle class).  In this respect, a left-leaning scholar Vijay Prashad rightly says, “what the world needs is taxation, not philanthropy. If somebody donates money to a hospital, you’re expected to pray to them, you have to name the hospital after them. Philanthropy is not democratic; it is monarchical. Taxation is democratic”. (See Prashad, “A Socialist Cry for Civilisational Change: COVID-19 and the Failure of Neo-liberalism”, EPW, dated 22 March 2020)

 Critique of Neo-Liberalism

 After corona pandemic, debates around the fate of neo-liberalism and unfettered capitalism based on the bourgeois world order has been now fiercely critiqued by left and progressive academics. Left minded economists are saying that neo-liberalism and global imperial capitalism as an economic system has now reached at zenith of crisis, amidst corona pandemic. To note that threat of Covid-19 is a universal in nature and humanity as a whole is facing unprecedented challenges in all walks of lives. The economist have underlined that the landscape of the current crisis is more dangerous than the ‘Great Depression’ and recession which took place in distant past during the 1930s and 2008. Hence, we cannot find solutions through adopting policy in isolation or at the individual state level. We need to forget for a moment to maximize individual interests and profits (as classical economists and utilitarian’s used to foreground) and it is high time to  take ‘collective actions’ (which is only possible through democratic state socialism not by under the neo-liberalism) to counter ‘coronashok’ that has created huge economic and social unrest among subaltern masses. As a result, migrant workers and homeless people have forced to leave to their respective homes; however, most of them are still stranded in the big cities like Delhi, Mumbai and Ahmadabad who are now waiting for the end of the national lockdown to move their respective villages. Given the huge challenges posed by the Covid-19 national lockdown which have raised the question of ‘lives’ and ‘livelihoods’ of millions of migrant workers and poor; it is relevant exercise now to search for an alternative path (that might be a kind of democratic state socialism and robust welfare state, as proposed by Babasaheb and left-leaning economists) to overcome crisis in the post-Covid-19.

It is a vital to underline that after four decades of neo-liberal economic policy; it has now reached the zenith of crisis (amidst Covid-19) which has created enormous amount of inequality across the world.

The neo-liberal economic policy based on ‘market fundamentalism’ has increased huge inequality in developed countries, for instance, in the USA and advanced European countries in general and developing countries in particular. For decades ago, India had also accepted neo-liberalism as the public policy during 1990 by then the Narsimha Rao’s government to implement the IMF and World Bank guidelines of free-market agenda which have had created more profits to the MNCs, corporate elites and in doing so, neo-liberalism has ruined the conditions  of the subaltern masses. The economic development based on neo-liberal agenda and unrestrained implementation of the LPG (liberalization, privatization and globalization) have so far provided more profits to big bourgeoisie and industrial class at the cost of subaltern masses. Under the guidelines of the IMF and the WTO, the respective states including India had adopted Structural Adjustment Programmes (SAP) to reform the economy (which was came under the crisis because of overt license ‘Permit Raj’ and due to corrupted bureaucratic fiefdom) on the lines of neo-liberalism to achieve economic growth, however, sans social development and equity. After four decades of neoliberal economic policy, it is plausible to say that said public policy has undermined greatly the idea of ‘substantive democracy’ (to note that during the neoliberal times, the so-called electoral democracy has been continued unabated but, it has not delivered and benefited substantially to poor and vulnerable), equity, social justice and freedom from hunger and unemployment. As a result, material conditions of working-class like Dalits, Adivasis, Women and minorities have got further deteriorated to a large extent.

According to 2017 report, published by Oxfam, (an international Confederation of agencies fighting poverty) the richest 10 per cent in India used to control nearly 80 per cent of the nation’s wealth. Besides, the top 1 per cent used to own 58 per cent of our country wealth. In 2020, the ILO (International Labour Organization) has reported that around 1.25 billion people are currently out of work.  Moreover, 2.7 billion people or 81 per cent of ‘global workforce’ have been severely affected by the recent stringent national lockdown, as declared by respective countries (India is also included), as reported by the ILO. The gap between the developed and developing nations have also widened due to neo-liberalism and accumulation of wealth through dispossession under the hegemony of global imperial capitalism.

Amidst widening of inequalities especially in developing countries, several international capitalistic institutions such as the IMF and the World Bank have managed to the politico-corporate elites and served their interests. Keeping sad experience of the Great Depression and recession in mind (which took place around the 1930s and 2007-08), one could argue that the bourgeois-democratic states have managed for a short period of time (for instance, by adopting Keynesian’s welfare model of economy which advocated ‘state interventions’ in the economy within the broad capitalist structure) but have not completely overcome economic crises in the long run. In both developed and developing countries, currently neo-liberalism and bourgeois economic order are facing huge challenges because; the Covid-19 (followed by unplanned national lockdown) has created a situation like ‘Coronashock’, as reminded by Vijay Prashad. (See Prasad, op., cit, EPW, dated 22 March 2020)

  Return of State Socialism

In a globalised world, international organizations like the IMF (International Monetary Fund), World Bank and WTO (World Trade Organization) have had continued to advocate the neo-liberal economic policy which has been based on “maximum market freedom and minimum state intervention”. The governments across the world willingly and unwillingly have tried to “maintain the interests of the well-off” who controlled the government economic activities and defend the neoliberal economic policy and private property for their vested interest. To sharpen the agenda of the LPG (Liberalization, Privation band Globalization) under the pressure of the MNCs (Multinational Companies), India had also adopted the New Economic Policy (NEP) in 1991 which has been pursued with full commitment by the successive governments over the last four decades. The neoliberal economic policy was initially adopted by then the PM P.V. Narasimha Rao and subsequently followed by A.B. Vajpayee (NDA) and Dr. Manmohan Singh government led by then the UPA (it was Dr. Monmohan Singh who as a Finance Minister in 1991 had played a vital role in reforming economy on lines of the neo-liberal economic policy with the so-called human face).

Currently, PM Narendra Modi government has been following neoliberal economic policy even more aggressively than the earlier regime. As a result of this unfettered economic policy adopted by the successive governments since 1991, the socio-economic inequalities have enormously increased with unintended social consequences. With the introduction of the NEP in 1991, the larger implications have now become starkly obvious in the public sphere. It is not exaggerated to say that neoliberal economic policy has now widened the ‘economic fissures’, as a result of this, numbers of billionaires in India have increased dramatically. Indeed, the conditions of subaltern masses (mostly include, Dalits, Tribals, and minorities) that constitute more than 70 per cent of India’s population (who used to earn even less than Rs 20 per day), as pointed out by Dr. Arjun Sengupta report in 2007.

During 2014 general elections, PM Modi had put forward the Margaret Thatcherite’s rhetoric of ‘minimum government and maximum governance’ which was one of the central planks of his elections campaign. Currently, the Bharatiya Janata Party (BJP) led Modi government is pushing towards the corporate-led model of the economy by initiating the programmes like Jan Dhan and Mudra loans for small enterprises that strengthened the process of digitalization of financial services.  In this respect, the BJP government has articulated its plan to link ‘cultural nationalism’ with the economic policy and the slogans like ‘one nation’ and ‘one market’ (in the post-Covid-19, it is reported that the current government is planning to implement, one nation and one ration card policy at the national level) is currently put forward in the public domain.

Given the huge scale of the crisis, amidst Covid-19 lockdown, the status-quo and existing pattern of neo-liberalism and bourgeoisie economic order will be no longer continue further. We have to search for an alternative to counter the current ‘irrational capitalist’ and ‘bourgeois economic’ order based on neo-liberalism. In doing so, we must put forward the agenda of democratic state socialism (that advocates an egalitarian social and economic order, as reminded by Babasaheb during the Constituent Assembly debates) which have been now foregrounded by several left-leaning scholars like David Harvey and Vijay Prashad, amidst Covid-19 lockdown. While citing the arguments of Financial Times (2020), Prashad has highlighted huge limitations of neo-liberalism and emphasized the role of democratic socialism and its importance in reforming economy radically on the socialistic pattern, to dismantle the hitherto existing bourgeois order. To elucidates the point further Prashad writes,

“Radical reforms—reversing the prevailing policy direction of the last four decades—will need to be put on the table. Governments will have to accept a more active role in the economy. They must see public services as investments rather than liabilities, and look for ways to make labour markets less insecure. Redistribution will again be on the agenda”.  (Financial Times 2020, this para is cited by Vijay Prasad, in his piece titled, “A Socialist Cry for Civilisational Change: COVID-19 and the Failure of Neo-liberalism”, EPW, dated 22 March, 2020).

  While emphasizing the relevance of socialism over global capitalism amidst the spread of the lethal virus, Prashad writes,

“In a pandemic, a rational person would much rather live in a society governed by the norms of socialism than of capitalism—a society where people rally together to overcome a virus. A society where fear pervades and where stigmatization becomes the antidote to collective action cannot be the norm”. (See Prasad, op., cit, EPW, dated 22 March 2020).

   To note that Babasaheb proposal for state socialism was not seriously considered during the making of Indian Constitution especially in the Constituent Assembly. However, for a section of Dalit capitalists including the Hindu Right who often misinterpreted that Babasaheb was not against capitalism and therefore, it is good for Dalits to follow the path of capitalism because it will help to reduce caste discriminations and untouchability. Hence for them, Babasaheb was not indented to nationalize lands, industry, health, agriculture and farming rather he was in favour of the’ free market’ economic policy. However, these arguments have been heavily criticized by scholars like Anand Teltumbde, Prof. Gopal Guru and by Kanwal Bharti in their writings.

Contrary to the Hindu Right and Dalit Capitalism (, DC), Kanwal Bharti writes,

     “On 15 March 1947, Dr. Ambedkar gave a Memorandum to the Constituent Assembly for implementing “state socialism” through the Constitution. He wanted the Indian Constitution to mandate the nationalization of industry, agriculture, land and insurance, and collectivization of farming. But the Constituent Assembly did not let this happen” (See K. Bharti “Why Constituent Assembly disagreed with Ambedkar’s democratic socialism”, FORWARD PRESS, December 21, 2018, accessed on 1st May 2020).

  While elucidating the Babasaheb’s idea of socialistic model of economy advocated by him during the making of India’s Constitution to improve the socio-economic conditions of the Untouchable, Bharti further pointed out,

  “Dr. Ambedkar imagined a socialist model for the Constitution. He believed that without accepting a socialist model, it was not possible to improve the conditions of the Untouchable in India, because social uplift was possible only if there was improvement in the economic status of person. Economic progress was possible only through a system of state control and not through a system of privatization”.

(See K. Bharti, op., cit, FORWARD PRESS, December 21, 2018, accessed on 1st May 2020).

It is to be noted that after one month of the stringent national lockdown, experts have expressed that the positive outcome of the lockdown is gradually getting surface because of the curve is expected to get flatten possibly in coming days. However, the oppositions and even ruling party are not in agreement with whether lockdown should continue or not. On the basis of indications and inputs which have been provided by the various states to the Central government, one could say that after 3rd May, 2020, the Central the government will chalk out, the national strategy to contain the spread of the virus and announce to resume economic activities soon at least in few essential sectors. In this respect, three zones will be identified by respective states and the Central government such as, ‘Red Zone’ will remain under strict lockdown, ‘Orange Zone’ will be given limited relaxations and ‘Green Zone’ will be given more relaxations so that economic activities will be put on the track. Meanwhile, norms like social distancing (However, Dalit-Bahujan thinkers are uncomfortable with the phrase like social distancing, instead they want to replace this phrase with ‘physical distancing’) and wearing masks, washing hands and sanitizing etc., precautionary measures will be put in place. Let us wait for the final decision and hope something positive measures will be taken by Central government to ease the tensions of migrant workers and poor on May 3.

To conclude here, given the world-wide increasing tendency of ‘protectionism’ and ‘economic nationalism’ mainly pursued by developed countries (rather than building common solidarity among nations in the post-Covid-19), India must seriously considered the proposal put-forward by Babasaheb in his book ‘State and Minorities’ around 1947. However, his proposal was not accepted by then the Constituent Assembly (henceforth CA) because of most of the CA members were elected not on the basis of ‘universal franchise’ but by the limited franchise only given to property owing class.,  To note that subaltern masses were not having voting rights till 1952 when first general elections took place. In short, CA was  dominated by landed gentry who belonged to upper caste of the Congress party.

In short, given the international and national socio-economic crisis amidst COVID-19, in our view, we need to return towards a kind of democratic ‘State Socialism’ as proposed by Ambedkar long ago (however, his proposal was not accepted by the CA members because it was opposed by the upper-caste members who were associated with mostly then the Congress Party) and currently put-forward by scholars like Vijay Prasad and Kanwal Bharti in their writings is now extremely relevant in the post-Covid-19 world. Moreover, to address the material and non-material questions (such as do not demonize unnecessary and targeting Indian Muslims based on religious identity and communalizing discourse around coronavirus, as also reminded by our Prime Minister and the RSS Chief Mohan Bhagwat too) of subaltern masses, Dr. Ambedkar’s idea of ‘State socialism’ must be now taken seriously in the post Covid-19 world for the sake of the larger humanity in general and India’s poor people in particular. Let us end this essay by underlining the relevance of Ambedkar’s idea of ‘State socialism’ for the emancipation of Dalits, as underlined by Anand Teltumbde in his writing.  In this respect,  Teltumbde writes,

“given the worsening situations of the vast majority of Dalits, the people for  whose emancipation he ( Ambedkar) devoted his entire life, it is time for all who curve for radical change in India to review Ambedkar,s ideas, particularly of socialism”.(See Teltumbde, “Ambedkar’s Socialism: Some Reflections”, Seminar, 701,)

 Badre Alam Khan is Research Scholar University of Delhi and Sanjay Kumar was formerly Post-Doctoral Fellow at JNU.




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