Saturday, 10 September 2022

PROBABLE SCENE OF LABOUR MARKET DUE TO TECHNOLOGY

PROBABLE SCENE OF LABOUR MARKET DUE TO TECHNOLOGY

THE FEAR

The increasing sophistication of robots and the progress of artificial intelligence has generated considerable anxiety

1. about what would happen to our societies if only a few people had interesting jobs and everyone else had either no work or had a horrible job,

2. and inequality ballooned as a result.

Especially if this happened because of forces largely out of their control. This has already happened—in the United States since 1980.

IMPACT OF NEW TECHNOLOGY-AI AND AUTOMATION ON LABOUR MARKET

In their book The Second Machine Age, our MIT colleagues Erik Brynjolfsson and Andrew McAfee offer a bleak view of the impact of digitization on the future of employment in the United States.

1. Digitization, they suspect, will make workers with “ordinary” skills increasingly redundant. As tasks from car painting to spreadsheet manipulation are done by computers or robots, highly educated workers who are adaptable and can program and install the robots will become more and more valuable, but other workers who can be replaced will find themselves without jobs unlessthey accept extremely low salaries.

2. In the first IT revolution, as David Autor has shown, jobs involving routine repetitive tasks were the ones that went. Jobs that required quickjudgment and initiative stayed put. The number of typists and assembly-lineworkers diminished, but executive assistants and burger flippers kept their jobs.

3. Artificial intelligence will be the final nail in the coffin of these ordinary workers.This time, many say, it is different. Artificial intelligence means machines can learn as they go and are therefore able to carry out increasingly nonroutine tasks, such as playing Go or folding laundry. InJune 2018, a restaurant offering robot-made burgers opened in San Francisco. Humans are still taking the orders and cooking the sauces, but the robots cook the gourmet burgers, such as the Tumami Burger (“Smoked oyster aioli, shiitake mushroom sauce, black pepper and salt, pickles, onion, butter lettuce—Designed by Chef Tu, Top Chef Season 15”5), in five minutes and for $6. Esther’s sister Annie Duflo, the CEO of a large NGO, does not have a human assistant; she relies exclusively on an AI-powered assistant named Fin. Fin books her hotels and her plane tickets, manages her calendar, and takes care of her travel reimbursements. Annie is, sadly, much happier with Fin than she was with her human assistants. She pays him (her? it?) much less and gets much more reliable service. To be sure, there are some humans behind Fin, but fewer and fewer, and the business model is clearly to move away from them.

4. The AI revolution is thus poised to hit people across a wide spectrum of jobs. Accountants, mortgage originators, management consultants, financial planners, paralegals, and sports journalists are already competing with some form of artificial intelligence or, if not, will soon. Cynics might say it is precisely because these more high-end jobs are on the line that we are finally talking about this, and they may be right. But AI will also hurt shelf stackers, office cleaners, restaurant workers, and taxi drivers. Based on the tasks they perform, a McKinsey report6 concludes that 45 percent of US jobs are at risk of being automated, and the OECD estimates that 46 percent of the workers in OECD countries are in occupations at high risk of being either replaced or fundamentally transformed.

5. Of course, what this calculation misses is that as some tasks get automatized, and the need for humans gets relieved, people can be put to work elsewhere. For the time being, humans have not been made redundant. Unemployment in the United States, as we write this book in the first quarter of 2019, is at a historical low and falling.

6. With more and more women joining the labor force, the share of the population in the labor force rose substantially until about 2000 (when it started to plateau or reverse). Jobs were found for all those who wanted to work, despite rapid laborsaving technological progress.

7. Of course, it is true we are probably just at the very beginning of the process of AI-fueled automation. The sense that artificial intelligence is a new class of technology makes it hard to predict what it might do.. Like AI today, the spinningjenny, the steam engine, electricity, computer chips, and computer-assistedlearning machinery all automatized and relieved the need for humans in the past.

8. What happened then is very much what one might have expected: by replacing workers with machines on some tasks, automation has a powerful displacement effect. It makes the workers redundant. This is what happened to the skilled artisans spinning and weaving at the dawn of the industrial revolution. They were replaced by machines. We are told that in the long run everything wasfine, but the long run was very long indeed. Real blue-collar wages in Britain were almost halved between 1755 and 1802. Although 1802 was a particularly low year, they were on a declining trend between 1755 and the turn of the century, and it is only at the turn of the century that they started increasing again. They would recover their 1755 level only in 1820, sixtyfive years later.

9. This period of intense technological progress in the United Kingdom was also an era of intense deprivation and very difficult living conditions. The economic historian Robert Fogel showed that boys in England during this period were significantly undernourished compared even to slaves in the US South. The literature of the time, from Frances Trollope to Charles Dickens, describes what was happening to the economy and society with acertain amount of unmitigated horror. Those were Hard Times indeed.

10. We know that eventually there was a turnaround in the UK. Even as some workers lost their jobs, the labor-saving innovations raised profitability of other inputs, and hence the demand for workers producing them. Improvements in weaving technology, like John Kay’s flying shuttle, for example, increased demand for yarn, creating jobs for people to produce yarn. And the burgeoning wealth of those profiting from these innovations increased demand for new products and services in a range of sectors (more solicitors, accountants, engineers, bespoke tailors, gardeners, etc.), which created more jobs.

11. However, nothing tells us the rebound is guaranteed to happen. There may well be no rebound from the fall in demand for labor resulting from this wave of automation and AI. Sectors that become more profitable may invest in new labor-saving technologies instead of hiring more workers. The new wealth may be used to purchase goods made in another country. We don’t know what will happen this time around, since we haven’t seen the very long run yet, but the impact of the current wave of automation (which started in 1990, giving us a perspective of more than twenty-five years) appears so far to be negative.

12. In a study on the impact of automatization, researchers computed, for each region, a measure of exposure to industrial robots, capturing the spread of robots in the industries in that region. They then compared the evolution of employment and wages in the most affected areas to that in the least affected areas. The study found, to the surprise of the authors, who had written a previous paper emphasizing the forces that should lead to a rebound, large negative impacts. One more robot in a commuting zone reduces employment by workers and also depresses wages. The employment effects are most pronounced in manufacturing and they are particularly strong for workers with lower than a college education, especially those who do routine manual tasks. However, there are no offsetting gains in employment or wages for any other occupation or educational group. These local impacts of robots on employment and wages are reminiscent of the impacts of greater exposure to international trade. They are surprising for the same reasons. As many tasks in a particular industry get automatized, we might have expected displaced workers to find employment in new businesses that would have come to the region to take advantage of the freed-up labor, or to move elsewhere. It is also worrying that the automation of simple tasks did not lead to the hiring of more engineers to supervise the robots. The explanation is probably similar to why competition with China hurt low skilled workers; in the sticky economy, seamless reallocation is anything but guaranteed.

13. For some of these reasons, we suspect the current drive toward replacing human actions with robots cannot be prevented from taking a serious toll on the already dwindling stock of desirable jobs for low-skilled workers, first in the rich countries but very soon everywhere. This will add, to a greater or lesser extent, to what the China shock and the other changes described in previous chapters have done to the working class in much of the developed world. It could lead to a rise in unemployment or a multiplication of poorly paid, unstable jobs.

14. Now it is true that even if a business adopts a highly productive new technology that displaces labor, the increase in productivity also creates new resources that could be deployed to find new uses for the freed labor. The technologies most dangerous for the workers are what some researchers have described as “so-so” automation technologies; they are just productive enough to be adopted given the distortions in the tax code, and displace workers, but not productive enough to raise overall productivity.19 Unfortunately, notwithstanding the grandiose talk about singularities, the bulk of R&D resources these days is directed toward machine learning and other big data methods designed to automate existing tasks, rather than the invention of new products that would create new roles for workers, and hence new jobs. This may make economic sense for the companies, given the financial gains in replacing workers with robots. But it distracts researchers and engineers from working on the truly pathbreaking innovations. For example, inventing new software or hardware health workers could use to assist patients in doing their rehabilitation therapy at home after a surgery rather than in a hospital could potentially save insurance companies lot of money, improve well-being, and create new jobs. But the bulk of the automation effort today in insurance firms goes toward searching for algorithms that automate the approval of insurance claims. This saves money but destroys jobs.

15. This emphasis on the automation of existing jobs increases the potential for the current wave of innovation to be very damaging for workers. This specific force of automation is exacerbating what is always a concern. When a worker is fired, the firm is done with him, but society inherits the liability of his continued well-being. Society does not want him to starve or his family to be homeless; it wants him to find another job he likes. We fear his anger, especially if it leads to a vote for the many lurking extremists in today’s world, whereas the firm does not have to pay for the retraining, the welfare payments, or the social costs of the anger. This kind of argument has traditionally been used to justify making it difficult to fire workers. Some labor laws, like India’s, make it virtually impossible to fire anyone in larger firms. Others, like the French laws, make it difficult and uncertain. The worker can appeal and possibly be reinstated with back pay. The problem with such firing costs is that they can make life very difficult for a manager faced with a nonperforming worker or an urgent need to downsize in order to survive. As a result, firing costs may discourage hiring in the first place, which would exacerbate unemployment.22

16. Even if the total number of jobs does not fall, the current wave of automation tends to displace jobs that require some skills (bookkeepers and and accountants) and increase the demand, either for very skilled workers (software programmers for the machines) or for totally unskilled workers (dog walkers, for example), which are both much more difficult to replace with a machine. As software engineers become richer, they have more money to hire dog walkers, who have become relatively cheaper over time, since there is little alternative employment for those with no college education. Even if people remain employed, this leads to an increase in inequality, with higher wages at the top and everyone else pushed to jobs requiring no specific skills; jobs where wages and working conditions can be really bad. This accentuates a trend that has taken place since the 1980s. Workers without a college education have increasingly been pushed out of mid-skill jobs, such as clerical and administrative roles, into low-skill tasks, such as cleaning and security.

WHY AUTOMATION?

So should we try to stop the push toward automation? There are in fact good reasons to suspect that some of the recent automation is excessive; corporations seem to decide to automate even when robots are less productive than people. Excessive automation reduces GDP instead of contributing to it.

1. TAX REBATE

One reason is the bias in the US tax code, which taxes labor at a higher rate than capital. Employers have to pay payroll taxes (used to finance social security and Medicare) on labor, but not on robots. They get an immediate tax rebate when they invest in the robot, since they can often claim “accelerated depreciation” for a capital expenditure, and if they finance it with a loan they also get to deduct the interest from their earnings. This tax advantage gives employers an incentive to automate, even if it would otherwise cost less to keep the workers.

2. FREEDOM FROM LABOUR RELATED ISSUES

Moreover, even without subsidies from the tax code, the many frictions in the labor market may make managers dream of factories without workers. Robots won’t demand maternity leave or protest a wage cut in a recession. It is probably not an accident that automation in the retail sector (such as automatic checkout lines) started first in Europe, where the labor unions are stronger.

3. MONOPOLISTIC BUSINESS AND INDUSTRY

The increase in industry concentration and monopolies could also reinforce this tendency. A monopolist does not fear competition. It has no reason to constantly reinvent what it is offering its consumers. Therefore, the monopolist will tend to focus more on cost-cutting innovations, which will increase its profit margins. In contrast, a competitive firm might go for a moonshot to try to take over the market.

HOW CAN EFFECTS OF AUTOMATION BE MITIGATED

1. ROBOT TAX

The alternative to restricting firing or banning the use of robots in some sectors is a tax on robots, large enough to prevent them from being deployed unless the productivity gains are sufficiently high. This is now the subject of a serious discussion. Bill Gates has recommended it. In 2017 the European Parliament considered, but ultimately voted down, a proposed “robot tax,” citing concern over stifling innovation. Around the same time, however, South Korea announced the world’s first robot tax. The Korean plan reduces tax subsidies for businesses investing in automation and combines it with a tax on outsourcing, so that the tax on robots does not lead to outsourcing.

PROBLEMS IN CONTROLLING THE IMPACTS OF AUOMATION

1. The problem is that while it is easy to ban self-driving cars (whether or not it’s a good idea), most robots do not look like R2-D2 in Star Wars. They are typically embedded inside machines that will still have human operators, just fewer of them; how does the regulator decide where the machine stops and the robot begins? A robot tax would likely lead companies to find new ways around it, further distorting the economy.

For some of these reasons, we suspect the current drive toward replacing human actions with robots cannot be prevented from taking a serious toll on the already dwindling stock of desirable jobs for low-skilled workers, first in the rich countries but very soon everywhere. This will add, to a greater or lesser extent, to what the China shock and the other changes described in previous chapters have done to the working class in much of the developed world. It could lead to a rise in unemployment or a multiplication of poorly paid, unstable jobs.

2. This perspective deeply worries the elites who feel responsible for, and also threatened by, this state of affairs. This is why the idea of a universal basic income has become so popular in Silicon Valley. Most tend to think, however, that robot-induced despair will become a problem in the future, after technologies have improved even further. But the problem of high and rising inequality has already been staring us in the face in many countries, nowhere more so than in the United States. The last thirty years of US history should convince us that the evolution of inequality is not the by productof technological changes we do not control: it is the result of policy decisions.

ANALYSIS OF GROWTH OF INEQUALITY WITH PARTICULAR FOCUS ON TECHNOLOGY

THE GREAT REVERSAL ERA OF REAGAN -THACHER

In the 1980s, while growth remained sluggish, inequality exploded. Thanks

to the outstanding and painstaking work of Thomas Piketty and Emmanuel

Saez, the world now knows what happened:

CONCENTRATION OF INCOME AND WEALTH AND INEQUALITY

1. FROM 1928 TO 1979 CONCENTRATION OF WEALTH AND INCOME DECLINED

USA

In 1928, at the end of the Roaring Twenties, the richest 1 percent captured 24 percent of the income. In 1979, that number was about a third as big.

The story for the UK is very similar. Before. 1979, the top income share falls steadily from 1920.

CONTINENTAL EUROPE

In continental Europe the pattern is strikingly different. Before 1920, the top income share in France or Germany, Switzerland or Sweden, the Netherlands or Denmark was not too different from that in the US or UK. But sometime after 1920, inequality crashed in all of these countries, like in the United States, and stayed down, unlike in the United States.

2. FROM 1980 CONCENTRATION OF INCOME AND WEALTHA INCREASED

1980 is the year Reagan was elected. It is also almost exactly the year the share of national income that goes to the richest 1 percent reverses fifty years of decline and starts a relentless climb in the United States.

In 2017, the last year to be included at the time of writing, that ratio was almost back where it was in 1929. The increase in income inequality was accompanied by a rise in wealth inequality (income is what people earn every year; wealth is their accumulated fortune), although wealth inequality has not yet reached its early 1920s level. The top 1 percent wealth share in the United States rose from 22 percent in 1980 to 39 percent in 2014.

The turning point, like in the US, is somewhere very close to 1979, the year Mrs. Thatcher took over. After 1979, there is a similar rise, interrupted briefly by the global financial crisis of 2009. Unlike in the United States, inequality has not yet reached the 1920s levels, but it does not have that far to go.

CONTINENTAL EUROPE

There are small ups and downs, and Sweden actually has a significant upswing starting somewhere in the 1980s, but the levels remain very low by US standards.

INCREASE IN WAGES STOPPED FROM 1980

At the same time, around 1980, wages stopped increasing, at least for the least educated. The average hourly wage adjusted for inflation for US workers who were not managers rose through the 1960s and 1970s, reached its peak in the mid- to late-1970s and then drifted down through the Reagan-Bush years, before slowly turning around. As a result, the average real wage in 2014 was no higher than in 1979. Over the same period (from 1979 to today), the real wages of the least educated workers actually fell. Among high school dropouts, high school graduates, and those with some college, real weekly earnings among full-time male workers in 2018 were 10 to 20 percent below their real levels in 1980.33 If there had been any trickle-down effect of lower taxes, as its advocates claimed, one would expect wage growth to have accelerated in the Reagan-Bush years. But the opposite happened. The labor share (the share of revenues used to pay wages) has continuously declined since the 1980s. In manufacturing, almost 50 percent of sales were used to pay workers in 1982; it had fallen to about 10 percent in 2012.

CAUSES OF GROWTH OF INEQUALITY

The fact that this great reversal takes place during the Reagan and Thatcher years is probably not coincidental, but there is no reason to assume Reagan and Thatcher were the reason it happened. Their election was also a symptom of the politics of the time, dominated by anxiety about the end of growth. It is not impossible that if they had lost, whoever won would have gone some distance along the same path.

Thomas Piketty, squarely blaming changes in policies, while most economists emphasize that the structural transformation of the economy, and particular changes in technologies, also had a lot to do with it.

1. NEW PLAYERS

The reason why this is not an easy question is that this was also a period of momentous changes in the world economy. Starting in 1979, China launched market reforms. In 1984, India started taking baby steps toward liberalization. These countries would eventually become two of the largest markets in the world. Partly as a result, world trade expanded relative to world GDP by about 50 percent over this period, with the consequences we discussed in chapter 3.

2. ADVENT OF NEW TECH OF COMPUTERS

The advent of computing was the other characteristic feature of the era.

(A)Microsoft was founded in 1975;

(B) in 1976, the Apple I was released, by the much more widely sold Apple II in 1977;

(D) Also, in 1979, NTT launched the first widely distributed handheld cell phone system in Japan. Mostly on the strength of selling cell phones, Apple became the first trillion-dollar company in August 2018.

To what extent do technological change and globalization explain the pattern of increase in inequality in the US and the UK? To what extent did policy, tax policy in particular, play a role?

(a) With computerization came other technological change. This may not have been a revolution in the sense that the steam engine brought in a revolution, as Robert Gordon argued, but like the steam engine and its love child, the internal combustion engine, it killed a lot of jobs. No one probably makes a living by being a typist now.

(b) And this technological progress was to a large extent skewed against the less qualified. This skill-biased technological change clearly explains the increase in the return to college education.

But it cannot explain what happened at the very top of the income distribution, unless we think skills were suddenly transmogrified just for the very richest. We usually think of skills increasing relatively continuously with education and wage levels. So, if the explosion of top income inequality was just due to technological progress, the widening of the distribution of wages should have been not just for the ultra-rich but also for the merely rich. But, in fact, those making, say, between $100,000 and $200,000 a year have seen their pay increase only slightly more rapidly than the average, while those who are making more than $500,000 have seen their incomes explode. This suggests that plausible changes in technology are unlikely to explain the stratospheric increase in incomes at the very top. Nor, for that matter, can they explain the difference between United States and continental Europe; technological change has been similar in all rich countries.

WINNER TAKE ALL?

HIGHER INCREASE IN WAGES AT THE HIGHEST LEVEL : RISE OF SUPER BIG ULTRA TECH COMPANIES

## However, technology has also changed the organization of the economy. A lot of the most successful inventions that came out of the high-tech revolution were “winner take all” products;

## there was no point in being on Myspace when the whole world was on Facebook, and Twitter is meaningless unless someone is retweeting your tweets. Technological innovations have also transformed existing industries, and created large benefits from being connected to industries where they used to be largely absent, like hospitality or transportation. For example, if drivers know that all passengers use a particular ride-sharing platform, they will choose to stay on that one. Conversely, if passengers know that all drivers use a particular platform, that is where they will go. These network effects explain in part the dominance of giant tech companies like Google, Facebook, Apple, Amazon, Uber, and Airbnb, but also of “old economy” behemoths, such as Walmart and Federal Express. In addition, the globalization of demand has increased the value of brands, as rich Chinese and Indian customers can now aspire to the same goods. And the ability to browse, compare, and boast on Facebook has made consumers more aware of differences in prices and quality, but also more sensitive to fads. The result is a winner-take-all (or if not all, most) economy, in which a few firms capture a large part of the market. As we saw in the chapter on growth, in many sectors sales have become more concentrated, and we see the increasing dominance of “superstar firms.” And in sectors that have become more concentrated, the share of revenues going to pay wages has gone down more. This is because those firms, which are monopolies or near monopolies, make more profits, and those tend to be distributed to shareholders. The increase in concentration thus helps explain a part of why wages are not keeping pace with GDP.

## The rise of the superstar firms also offers an explanation for why overall wage inequality has been rising: some firms are now much more profitable than others and they pay higher wages. It is also true that profitability is more variable than it used to be, with more clear winners and clear losers, even outside the set of superstars. In fact, in the United States, the increase in inequality between the average salaries at different companies can explain two-thirds of the overall rise in inequality (increase in inequality between workers within the same company explains the rest). A lot of this increase in inequality between firms seems due to changes in who works where; the highest-paid workers in low-paying firms are moving to those that pay more. If one assumes that higher earnings reflect higher productivity (which is probably true on average), then the more productive workers are increasingly working with other high-productivity workers.41 This is consistent with a theory in which superstar firms attract both capital and good workers.42 If more productive people benefit more from being paired with other productive people, then the market should drive such people to come together to form high-productivity firms that would, as a result, have higher wages and salaries than other firms. Moreover, once a firm has invested in a galaxy of talents, the CEO of such a firm is in a position to make a big difference; if he pushes them down the wrong path, he would waste a whole lot of productive capacity. Therefore, such firms should strive to get the best CEO possible even if that requires paying him or her what some may feel is an obscene salary.43 The rise in top incomes, in this view, is just the flip side of the rise of superstar firms that value getting the best top management and are willing to pay a lot for them.

## That the economy is sticky also contributes to the rise in inequality between firms. As production in some sectors gets concentrated in superstar firms, other firms in those sectors all over the country are shutting down (think the local department store versus Amazon), in addition to those that shut down because of the effect of new technology or trade. Since workers do not move out, wage growth in the affected area flattens or gets reversed, and rents do the same. This is good news for the surviving firms in those pockets, especially if their clients are elsewhere. The resulting windfall in profits may lead to greater investment in these companies, but probably not enough to halt the overall decline of the area. In other words, part of the distinction between good firms and bad firms may be purely happenstance. If you are a firm in a failing local economy lucky enough to be able to continue to sell to the national or world economy, you can do very well, at least for a while, until the overall drain in talent from these places, as the young and the ambitious move out, starts to hurt.

In other words, globalization and the rise of the infotech industry, combined with the sticky economy, and no doubt with other important but perhaps more local changes, created a world of good and bad firms, which in turn contributed to an increase in inequality. In this view, what happened may have been unfortunate, but it probably could not have been stopped.

TAXATION AND INEQUALITY

The other way the rich will surely try to react to a tax rise, however, is by finding ways to not pay taxes.

EXAMPLES

1. One thing the absence of caps in European soccer and the resulting astronomical salaries does is encourage players to evade taxes. In 2016, Lionel Messi (who made more than €100 million in 2017) was found guilty on three counts of defrauding tax authorities of €4.1 million and given a suspended jail sentence. In July 2018, the Spanish government and Cristiano Ronaldo signed a deal in which he agreed to pay a fine of €19 million and receive a suspended prison sentence. He was accused of four counts of tax fraud worth €14.7 million, resulting from the use of shell companies outside Spain to hide income made from image rights from 2011 to 2014. Moreover, many of those who do not actually cheat shop around for lower taxes.

2. Comparing countries in Europe that raised or lowered taxes at different points in time, a study found that when the tax rate in a country increases by 10 percent, the number of foreign players goes down by 10 percent. In 2018, Ronaldo left Spain for Italy to lower his tax bill.

3. The exposé of the so-called Panama papers, which revealed the efforts of Panamanian law firm Mossack Fonseca on behalf of the global plutocracy in setting up hundreds of thousands of shell companies for them to evade taxes, showed just how pervasive tax evasion had become. The list of names included former prime ministers of Iceland, Pakistan, and the UK. Even in famously honest Scandinavia, only 3 percent of personal taxes are evaded on average, but the very rich are much more serious offenders. A study estimated that those in the top 0.01 percent in the wealth distribution of Norway, Sweden, and Denmark evade 25–30 percent of personal taxes they owe.

TAX INEAFFECTS QUALITY

If taxes go up a lot, so will tax evasion. The question is, by how much? In the short run, the response will surely be substantial. We already mentioned this in the context of the Reagan tax cuts. When taxes go up, we expect to see the reverse: a sharp drop in taxable income as those who can hide their incomes do so right away, but a smaller effect afterward.

In part for this reason, a small number of politicians in the United States and some economists are pushing for a progressive wealth tax applicable on worldwide wealth (in 2019, Elizabeth Warren proposed a 2 percent wealth tax on Americans with assets above $50 million, and a 3 percent wealth tax on those who have more than $1 billion). The idea is not new. After all, most Americans who own a home already pay a tax on the value of their home: the real estate tax they pay to their municipal government. But this tax is regressive. Suppose you own a house worth $300,000 and pay 1 percent property tax ($3,000). Then you will effectively pay 10 percent of your net wealth if you have a mortgage of $270,000 (since your net wealth is then $30,000) but 0.1 percent of your net wealth if you have financial assets of $2.7 million and no mortgage (since your net wealth is then $3 million).

The wealth tax would be progressive and apply to all forms of wealth, not just real estate. The advantage of a tax applied on very high wealth, from the point of view of fighting inequality, is that very wealthy people do not consume the vast majority of the income they derive from their wealth. Instead, they take a small fraction of the wealth income in the form of a dividend, and they plow the rest back into their family trust or whatever structure has allowed their wealth to accumulate. In the current tax codes in

most countries, they do not pay any taxes on the amount that goes back into the trust. This is part of the reason why Warren Buffet, as he likes to remind us, pays very little in income taxes. It is difficult to have a redistributive income tax if most of the top incomes are effectively (and legally) shielded from taxation in this way. Moreover the tax advantage gets compounded. The new wealth generates new investment income, most of which is again untaxed for the same reasons, making the rich even richer.

A wealth tax on very high fortunes solves this problem. The best way to think about it is not, as the economic press and the politicians try to explain it, as a way for the wealthy to make a special effort to “give back” (though if that makes them feel better maybe it’s okay). Instead, it is simply a convenient and administratively (relatively) simple way to ensure they pay a tax on all

their income, regardless of what they chose to do with it: someone whose $50 million in wealth makes at least $2.5 million in investment income in the average year. A 2 percent tax on wealth ($1 million) amounts to a 40 percent tax on this income, which is not outrageous. Unlike estate tax, which got a bad rap after being called the “death tax,” the idea of wealth tax is very popular. In 2018, percent of respondents to a poll conducted by the New York Times were in favor, including 50 percent of Republicans.

So it even may be politically feasible. Yet in recent decades many countries got rid of their wealth tax if they had one, and few countries have put one in place (Colombia is an exception). In France, getting rid of the wealth tax was one of the first actions of the centrist Macron government after his election in 2017. As we saw, this was a very dangerous political move; the abolition of the wealth tax and the attempt to put in place a surcharge on fuel was the original motivation for the Yellow Vest protest movement. In an attempt to quell it, Macron promised a number of giveaways, but did not reinstate the wealth tax.

There are two reasons why wealth taxes are so politically difficult.

First, because of effective lobbying. High-net-worth individuals finance the

campaigns of politicians on the left and on the right, and few are in favor of

wealth taxation, even when they are otherwise quite liberal.

Second, it is easy to avoid the taxes, legally or not, particularly in small European

countries where people can move or park their wealth abroad.

This gives rise to a race to the bottom on tax rates.

SOLUTIONS TO TAX EVASION AND AVOIDANCE

1. We should not lose sight of the fact, however, that all of this happens in part because the world tolerates tax evasion: most tax codes have loopholes galore and the penalties for parking money abroad are ineffective. As we saw, countries with a simple tax code with few loopholes lose less from evasion when taxes go up than the United States.

2. Identifying a set of steps is of course not sufficient. There needs to be the political will to implement them.

TAX COMPETITION

Preferential tax schemes for high-skilled foreign workers have been introduced in Belgium, Denmark, Finland, the Netherlands, Portugal, Spain, Sweden, and Switzerland. In Denmark, for example, high-earning foreigners pay only a 30 percent flat tax for three years (against a top rate of 62 percent for the Danish). This was very effective in attracting high-income foreigners to Denmark, which may be good for Denmark, but bad for other countries. Now they have the choice between taxing their top earners less or pushing them to leave. This tension between country welfare and global welfare in the design ofindividual income tax policy has loomed large in the debate about tax competition.

But the point is that these are political problems, not economics

impossibilities.

there are no iron laws of economics keeping us from building a more humane world, but there are many people whose blind faith, self-interest, or simple lack of understanding of economics makes them claim this is the case.

WORLDWIDW REND OF LESS TAX ON THE SUPER RICH AND POPULIST UPRISINGS

CITIZENS UNITED?

From the strict point of view of economic efficiency, therefore, the evidence suggests that nothing stops a government from having a very progressive tax schedule with extremely high top marginal rates.

The difficulty of raising top tax rates is a political one. Indeed, we seem to be in the midst of a vicious cycle of concentration of political and economic power. As the rich become richer, they have more interest and more resources to organize society to stay that way, including financing the campaigns of legislators willing to lower taxes at the top.

The “Citizens United” decision of the US Supreme Court, which ruled as unconstitutional legislative limits on corporations’ ability to fund electoral campaigns, has formally legitimized the unlimited power of money in influencing elections.

But it seems unlikely that this state of affairs can continue unfettered without generating a massive backlash. High tax rates on the top earners are already quite popular.

To some extent, the recent populist uprising in the United States is the beginning of this backlash. Behind it is a profound sense of disempowerment, a feeling, right or wrong, that the elites always decide, and in any case what they decide makes no difference for the average Joe or Jean. In the United States, Trump, for all his wealth and elite connections, was elected on his promise to undermine business as usual, but the Republicans lined up behind him because they were confident he was as pro-rich as any of them. Indeed he did deliver the tax cut.

But it is not clear how long this game of bait and switch can continue without it all exploding. The rich may eventually see that it is in their self-interest to argue for a radical shift toward real sharing of prosperity, or it may end up being imposed on them in even less favorable ways. The reason is that the increase in inequality has been at the root of a deep increase in social anxiety and unhappiness.

INEQUALITY-TAXATION -HAPPINESS

KEEPING UP WITH THE JONESES

Social scientists have long suspected that people’s sense of self-worth is related to their position in the groups they see themselves as part of—their neighborhoods, their peers, their country. If this were true, inequality would of course directly affect well-being.

Given how plausible this seems to us, it has been surprisingly difficult to prove beyond doubt. For example, evidence suggests that, at any given income level, people tend to be less happy when the average income in their locality is higher than their own. But it could be because they live in an expensive neighborhood where everything, from housing to cups of coffee, costs more. In other words, the facts can be explained without reference to inequality per se.

STUDY

A recent study from Norway shows that increased awareness about one’s place in the distribution of income increases the extent to which a person’s happiness depends on their income. In Norway, tax data has been publicly available many years, but the records were kept as hard copies and were therefore hard to access. This changed in 2001, when they were put online, and it became possible to snoop on your neighbors or your friends with just a few clicks of your mouse. This was very popular, to the point it was dubbed “tax porn,” and everyone seemed to know exactly where they stood. What we saw right after the data went online was that

the poor were sadder and the rich happier. The awareness of one’s place on the totem pole does seem to affect well-being.

CONSEQUENCES

THE AMERICAN NIGHTMARE - ISSUE OF MOBILITY

DECLING MOBILTY IN TH USA

Americans have another peculiar problem of their own. Fed a steady diet of the “American dream” along with their breakfast cereals, Americans tend to believe, in spite of everything, that although their society is unequal, it rewards industry and effort. In a recent study, researchers asked people in the United States and in several European countries their views of social mobility. When asked, “Out of 500 families divided in 5 groups of 100, how many of the children born of parents in the poorest group will stay in the poorest group, move one group up, two groups up, or make it to the richest group?” Americans are more optimistic than Europeans. They believe, for example, that out of one hundred poor children, twelve will make it to the richest quintile and only thirty-two will be stuck in poverty. In contrast, the French believe that out of one hundred, nine poor children will make it to the top, and thirty-five will be stuck in poverty. The rosy American view does not reflect reality today in the United States. Along with the general stagnation at the bottom, intergenerational mobility has declined sharply in the US. Mobility is now substantially lower in the United States than it is in Europe. Within the OECD, the child from the bottom quintile most likely to remain stuck in the bottom quintile is from the US (33.1 percent), while the least likely is from Sweden (26.7 percent). The average for continental Europe is below 30 percent. The probability of moving to the top quintile is 7.8 percent in the US, but close to 11 percent on average in Europe. The places within the United States most likely to cling to the outdated notion of American social mobility, a.k.a. the dream, are actually those least likely to experience it. Americans also generally believe effort is rewarded (with the corollary that the poor must be in part responsible for their own plight), and probably for this reason, those who believe mobility is high also tend to be suspicious of any government effort to address the problems faced by the poor.

RISE IN ANGER AND DESPAIR

When overoptimistic perceptions of mobility clash with reality, there is a strong urge to avoid the awkward truth. The majority of Americans whose wages and income have stagnated, and who confront an ever-widening gap between the wealth they see around them and the financial woes they are experiencing, face a choice between blaming themselves for not benefitting from the opportunities they believe their society offers and finding someone to blame for stealing their jobs. That way lies despair and anger. By all measures, despair is on the rise in today’s America, and it has become deadly.

CONSEQUENCES --LESS EDUCATED HEIGHER MOBILITY There has been an unprecedented increase in mortality among less-educated whites in middle age and a decrease in life expectancy. Life expectancy declined in 2015, 2016, and 2017 for all Americans. This grim trend is specific to US whites, and in particular to US whites without college degrees: in all racial groups in the US except the whites, mortality is falling. Other English-speaking countries that have pursued a broadly similar social model to the US, namely the UK, Australia, Ireland, and Canada, are also going through a similar change, albeit in slow motion.

Anne Case and Angus Deaton have shown that the increase in mortality is due to a steady rise of “deaths of despair” (such as deaths from alcohol and drug poisoning, suicide, alcoholic liver disease, and cirrhosis) among white middle-aged men and women in America, combined with a slowdown in the progress against other causes of mortality (including heart disease). Self-reported health and mental health follow a similar pattern. Since the 1990s, middle-aged whites with low education are increasingly likely to report themselves in poor health, and they are more likely to complain of various pains and aches. They are also more likely to report symptoms of depression.

This is probably not so much a result of low (or unequal) incomes perse. After all, blacks did not fare any better economically over the period, and they are not affected by this trend.

LESS EDUCATED LESS MOBILITY In all the other wealthy countries, on the other hand, mortality is going down, and going down faster for the uneducated (who had higher mortality to start with) than for the educated.

In other words, when the rest of the world saw convergence between mortality levels of the college educated and the rest,

the United States went the other way And there was no uptick of mortality in Western Europe, even after incomes stagnated during the Great Recession. On the other hand, Russia’s mortality exploded after the breakup of the Soviet Union in 1991, and like in the United States, most of the increase was due to changes in mortality from vascular disease and violent deaths (mainly suicides, homicides, unintentional poisoning, and traffic incidents) among young and middle-aged adults.83 Case and Deaton also point out that although the increase in mortality in the United States started in the 1990s, it capped a trend that had begun long before that. After the cohort that entered the labor market in the late 1970s, each subsequent cohort fared worse than the preceding one in many different ways.84 At every age, among less-educated white Americans, each subsequent cohort was more likely to have difficulty socializing, to be overweight, to experience mental distress and symptoms of depression, and to have chronic pain. They were also more likely to kill themselves or die of a drug overdose. It is the accumulated weight of these deprivations that eventually led to the increase in mortality. Any number of slow-moving factors could have caused this erosion of the well-being of less-educated Americans. Every single one of these cohorts was also less likely than the preceding one to be in the labor force. For those who worked, their real wages were no higher than those of previous cohorts, and sometimes lower, and they were less likely to have a strong attachment to a particular job or company. They were less likely to be married or in stable relationships. All in all, the white non-college educated working class collapsed after the 1970s, and this was probably a product of the specific kind of unequal economic growth the country experienced.

DIFFRENT TYPES OF REACTION TO INEQUALITY

RAGING AGAINST THE WORLD

The alternative to despair is anger. Becoming aware of the lack of social mobility does not necessarily make people more willing to support redistribution. In the study we discussed above, after eliciting the views of Americans, the researchers presented some of them with an infographic suggesting mobility was much lower than they thought (and the others with another infographic showing the same data, but with a rosier angle). For respondents who originally identified with the Republican Party, this made them even less likely to agree that the government could be part of the solution.

An alternative is to rebel against the system, potentially at great personal cost. In an experiment in Odisha, India, when employees in a firm felt the pay varied arbitrarily, they rebelled by working less hard, and being absent more often, than in comparable firms where the wage was kept constant, and since they were paid a fixed salary for every day they came to work, they hurt themselves by doing so. Workers in firms with unequal pay were also less likely to cooperate to achieve a collective goal tied to a reward. Workers were willing to tolerate pay inequality, but only when it was clearly tied to performance.

In the United States, there is another possible reaction. Because many believe the American market system is fundamentally fair, they must then find something else to blame. If they don’t get that job, it must be because the elites have somehow conspired to give it to an African American, a Hispanic, or at one remove, to a Chinese worker. Why would I trust the government of those elites to redistribute to me? More money for the government is more money for “those other guys.” Therefore, when growth either fails or fails to benefit the average guy, a scapegoat is needed. This is particularly true in the United States, but is happening in Europe as well. The natural foils are immigrants and trade. Behind the anti-immigrant views, as we argued in chapter 2, are two misconceptions: an exaggeration of how many migrants are coming in, or about to come in, and a belief in the nonfact that low-skilled immigrants depress wages.

More international trade, as we saw in chapter 3, hurts the poor in rich countries. This has provoked a backlash not only against trade, but also against the existing “system” and the elites. Autor, Dorn, and Hanson found that in US electoral districts more affected by the China shock, moderate politicians were replaced by more extreme ones. In counties originally leaning Democratic, centrist Democrats were replaced by more liberal ones. In counties originally leaning Republican, moderate Republicans were replaced by conservative Republicans. Counties highly affected by trade tended to be in traditionally Republican states, and therefore the overall effect of this was to push many districts toward more conservative candidates. This trend started well before the 2016 elections.87 The problem of course is that since conservative candidates tend to be against any form of government intervention (and redistribution in particular), they then exacerbated the problem that little was done to compensate those hurt by trade. For example, many trade-affected states governed by conservative Republicans refused federal funds to expand Medicare expansion. And this in turn fueled the resentment against trade. A similar negative cycle may emerge as people gradually understand that they live in a society that has much more inequality and much fewer opportunities than they previous believed. As in the study mentioned above, they may become even more upset with the government and even less likely to believe it can do something to help them. This has two implications. First, the obsession with growth at the root ofthe Reagan-Thatcher revolution, and that no subsequent president has taken issue with, has caused lasting damage. When the benefits of economic growth are largely captured by a small elite, growth can be a recipe for a social disaster (like the one we are currently experiencing). We argued before that we should be wary of any policy sold in the name of growth because it is likely to be bogus. Perhaps we should be even more scared if we think that such a policy might work, because growth will benefit onlythe happy few.

The second implication is that if collectively we as a society do not manage to act now to design policies that will help people survive and hold on to their dignity in this world of high inequality, citizens’ confidence in society’s ability to deal with this issue might be permanently undermined.This underscores the urgency of designing, and adequately funding, an effective social policy.

Thursday, 18 August 2022

Hard truths about India’s labour reforms

BASED ON

Hard truths about India’s labour reforms

Hard truths about India’s labour reforms: https://www.thehindu.com/opinion/lead/hard-truths-about-indias-labour-reforms/article65784627.ece

THE PROBLEMS

1.The country’s democratic Constitution created the world’s largest democracy. Sadly, 75 years later, political liberties and freedoms of speech are being curbed in India. 2.Social equality amongst castes has not been achieved. Lower caste citizens continue to live in great indignity. 3.Lower caste poor women live in abject poverty in India’s villages. They are among the most oppressed humans on the planet.

4.India’s gravest socio-economic problem is the difficulty a vast majority of citizens have in earning good livelihoods. Their problem is not just employment.

5.It is the poor quality of employment: insufficient and uncertain incomes, and poor working conditions, wherever they are employed — in factories, farms, service establishments, or homes.

THE ADOPTED STRATEGY

1.The dominant ‘theory-in-use’ to increase employment is to improve the ease of doing business, with the expectation that investments in businesses will improve citizens’ ease of earning good livelihoods. In this theory, large and formal enterprises create good jobs, and labour laws must be ‘flexible” to attract investments.

2.Reforms were begun by the United Progressive Alliance government. Their principal thrust was to improve administration by simplifying procedures and digitisation.

SCOPE OF LABOUR LAWS

1.Labour laws cover many subjects —

A.payment of wages,

B.safety conditions,

C.social security,

D.terms of employment, E.dispute resolution.

2.Labour laws are only one factor affecting business investment decisions. Investors do not go out to hire people just because it has become easy to fire them. An enterprise must have a growing market for its products, and many things must be put together to produce for the market — capital, machinery, materials, land, etc. not just labour. Therefore, it must be worthwhile to employ more people before firing them.

IMPACT:The V.V. Giri National Labour Institute’s interim report, “Impact Assessment Study of the Labour Reforms undertaken by the States”,

(2004-05 TO 2018-19)

1.The overall story is hardly better. The share of employment in plants employing more than 300 people increased from 51.1% to 55.3% between 2010-11 to 2014-15 (the period when the emphasis was on administrative reforms),

2.and then increased less, from 55.3% to 56.3%, in 2017-18, when some States made the bolder reforms favourable for employers.

3.Though overall employment is affected by many factors, the bolder reforms post 2014 were designed to promote larger factories.

4.Reforms of labour laws have had little effect on increasing employment in large enterprises. The report says that the effects of labour reforms cannot be revealed immediately: they will take time. Therefore, it is telling that Rajasthan, the first State to implement the reforms, seems to have benefited the least from them.

5.In fact, the report says, employment in formal enterprises is becoming more informal. Large investors can afford to use more capital and are also employing increasing numbers of people on short-term contracts, while perversely demanding more flexibility in laws.

WHO WERE BENIFITTED BY LABOUR REFORMS

The question the report leaves unanswered is whether the reforms have benefited workers. After all, the primary purpose of labour laws is to protect the rights of workers, not promote the interests of investors. Surely, the benefits of reforms should be assessed from workers’ perspectives too. It is sad that the report includes a long chapter on the views of employer associations about the benefits of the reforms, and nothing about the views of employees and unions. The employers’ associations say the reforms have been beneficial. The question is, beneficial for whom?

EMPLOYMENT GENERATION AND GDP GROWTH:Praveen Chakravarty, “Whose GDP is it anyway?” ( The Hindu, July 27, 2022),

1.between 1980 and 1990, every 1% of GDP growth generated roughly two lakh new jobs; 2.between 1990 to 2000, it decreased to one lakh jobs per per cent growth;

3.and from 2000 to 2010, it fell to half a lakh only.

more GDP does not automatically produce more incomes at the bottom. And the paradigm driving employment and labour policies must also change to enable the generation of better-quality livelihoods for Indian citizens, now and in the future.

FUTURE PLANNING

To achieve this, fundamental reform is required in the ways policies are made. If the benefit of reforms is supposed to be the improvement of ease of earning, better livelihoods for all citizens and with more dignity, whether they are farmers, factory workers, or service employees, should they not be listened to most of all, within their enterprises, and in the process of shaping policies?

Monday, 25 July 2022

Modi’s capitalist dystopia: How liberal market stokes new India’s illiberal democracyRAVINDER KAUR

Modi’s capitalist dystopia: How liberal market stokes new India’s illiberal democracyRAVINDER KAURPublished in THE CARAVAN(2 Nov. 2020)

July 25, 2022

Modi’s capitalist dystopia: How liberal market stokes new India’s illiberal democracy

RAVINDER KAUR

Published in THE CARAVAN(2 Nov. 2020)

A BREAK-UP STUDY

1. IDEA OF LIBERAL POLITICAL ECONOMY

(Popular belief is) liberal politics cohabits with liberal markets or that capital boosts democracy to shape a world of unrestricted freedoms.

2. CONTRADICTION OF THE IDEA OF LIBERAL POLITICAL ECONOMY

Instead, capital appears to be leveraged to establish a heavy-handed majoritarian rule that can restrict freedoms. The lure of markets can be deployed as a bargaining chip to preempt any potential condemnation from the rich and the powerful.

Example-

A. when Jammu and Kashmir’s special status was abrogated last year: investors were expected to overlook internal repression for the tantalising prospect of gaining access to new markets.

B. the open-ended promise of economic growth and the restoration of a Hindu civilisational past—is what brought him electoral success in 2014.

3. CONSEQUENCES AND CONTRIBUTIONS OF ILLEBERAL POLITICAL ECONOMY

A.It is also a chance to acquire a strong economic muscle that in turn can bring legitimacy to the political establishment. Consider, for example, how global capital inflows or the increase in foreign exchange reserves are projected as a form of global recognition of Modi government, often as a testament of his strong personal leadership.

B.An inflow of capital investments also redraws political power dynamics such that the management of the nation’s domestic affairs remain a no-go territory for external actors.

Example

The bargain is this: the state controls the territory and puts it at the disposal of investors, and in turn, the investors legitimise the sovereign power of the state. This narrative of economic development and the attendant political dynamic was evident when the BJP government revoked Jammu and Kashmir’s special autonomous status on 5 August 2019.

In the face of severe backlash and accusations of repression, the BJP government chose to argue that the move would not only root out terrorism and nepotism, but also pave the way for development in the Valley. It held out the change in Kashmir’s constitutional status as an opportunity to realise its economic potential. An official announcement of an “Investor Summit” to be hosted in the erstwhile state featured on several news portals around the same time. The potential investors were invited to come and see first-hand “the business friendly policies of the government, assess infrastructure, natural resources, raw material, and skilled and unskilled manpower, and identify business opportunities in the state.”

4.REASONS FOR RISE OF ILLEBERAL POLITICAL ECONOMY

A. (This shows) this neoliberal script of economic growth has not just been disentangled from secular democratic politics, but firmly harnessed to the project of Hindu nationalism.

B.The key to this messy politics is the formula of pitching a nation as an investment destination

C. The ongoing global debates about the crisis of liberalism—erosion of liberal values, freedoms and institutions—fall short in explaining the emergence of illiberal politics in many parts of the world.

D. The rise of populist authoritarianism is often seen as a politics of resentment in the post-communist world or the left-behind regions in Euro-America as capital moved to the emerging markets. E. What these views fail to consider is that it is hardly a coincidence the phenomenon of illiberal democracies or illiberal majoritarianism is especially prominent in nation-states that also position themselves as attractive investment destinations for global capital.

F. the pandemic has worsened the economic opportunities of a variety of social groups in formal and informal sectors. Economic forecasts for India currently project a shrinking economy that will potentially corrode the country’s growth story. But, in surprising ways, the logic of the nation-as-investment-destination model continues to shape the pandemic geo-economics. As China is dislodged from its erstwhile position as the factory of the world, several nation-markets including India are making bids to become the next factories in the ongoing speculation.

5.PARADOX OF ILLEBERAL POLITICAL ECONOMY

This intense, uncertain time also reveals the strange paradox of Modi’s new India. Erected upon a scaffolding of unfulfilled promises, it continues to open its territory to capital mobility even as it restricts freedoms of those deemed the internal other.

what keeps it afloat is not actual economic gains or prosperity for its citizens, but the cruel promise of good times, a permanent state of hope without a deadline.

RAVINDER KAUR is the author

CURRENT ISSUE

JULY 2022

Comments

Wednesday, 13 July 2022

A key dimension of India’s influence was that it was seen as a society that while fractious and riven by hierarchy and inequality, was also open and accommodating of multiple faiths and traditions and largely peaceable in orientation

Tuesday, 5 July 2022

Hindu Nationalism: From Ethnic Identity to Authoritarian Repression Pratap Bhanu Mehta

Hindu Nationalism: From Ethnic Identity to Authoritarian Repression Pratap Bhanu Mehta

Baed on :-

Hindu Nationalism: From Ethnic Identity to Authoritarian Repression Pratap Bhanu Mehta

1. Every strand of politics that tried to think outside of the majority/minority framework was relegated to the margins. Two strands that could have been possible alternatives to the majority– minority framework.

( 1) One was simply thinking in terms of equal individual rights and freedoms for all citizens, protected by constitutional guarantees that did not require thinking in terms of a permanent majority/minority framework in politics. But this strand, which could have taken a liberal form, was seen as an ‘anti-minority’ strand, because it aimed at dissolving the significance of group identities for political purposes. It did not, so to speak, take the problem of power sharing between groups qua groups seriously.

(2) The second strand to dissolve the majority–minority framework was to pluralize the notion of ‘minority’. India has too many cross-cutting cleavages. It is a collection of minorities (Ambedkar, 1945). At a descriptive level, depending on the identity you choose to privilege, this might be true. But this move had its own political limitations. The first is that the idea of cross cutting cleavages of caste and region was never thought to be sufficient to displace the importance of ‘Muslim’ identity as a political category (Ambedkar, 1948). By the 1940s this was becoming clearer. Ironically, then the attempt to see India as a collection of minorities was then seen as a covert assault on Hindu identity; an attempt to deny that despite plurality, cross cutting cleavages, regional and ideological variations, there could be such a thing as Hindu identity

2.Why the idea of power sharing failed

From 1857 to 1947, one of the challenges of democracy was framed as the sharing of power between Hindus and Muslims, through the representative process (Shaikh, 1989; Singh, 1987). But the problem was that there was never an equilibrium solution to the problem of power sharing, through the process of representation.

1. If representation to minorities was given in excess to their numbers; or they were given ‘veto’ powers, the ‘majority’ felt aggrieved.

2. If representation was not given in ways that gave minorities effective power, perhaps even a ‘veto’ on certain issues, they would feel disempowered.

In a tragic irony, the negotiation over power sharing, increased rather than decreased the gulf between the political leadership of the two communities in two ways.

a. It reinforced the premise that the communities had some distinct interests that could not be adequately protected through a language of individual rights and common citizenship. And it probably failed to build trust, and put the communities in a competitive dynamic in relation to each other.

b. It also highlighted the fact that emphasizing strands of ‘common culture’, the emergence of a civilization that had the imprint of all religions on it, was pretty weak gruel with which to combat an actual political problem of power sharing. Appeals to shared culture cannot be an answer to the problem of political power sharing.

3. State of affairs from 1947 to 2014

1. After partition, the question of power sharing between Hindus and Muslims through the formal process of representation was put off the agenda.

2. But in an informal way, the argument continued through the electoral process. It was important to Congress self-image that it be seen as representative 4 Studies in Indian Politics of Muslim interests at any rate.

3. Until 2014, it was almost an article of faith that any ruling dispensation in Delhi would require either the electoral support of Muslims, or of parties that claimed to respond to their interests. In some senses, the mathematics of the electoral system would provide the conduit by which Muslim interests were protected. Political coalitions would, given the fragmented nature of Indian politics, seek out electoral support of Muslims. It led to creation of what might be called ‘electoral secularism’, where parties had no particular concern about representing or empowering Muslims, but needed them to forge electoral coalitions.

4.This kind of minimal political responsiveness was quite compatible with social, political and economic marginalization of Muslims. The Congress, secular parties and the Indian State were Janus faced. On one hand, they were symbolically solicitous towards Muslims, by selectively directing benefits that protected their identity interests: protecting minorities from some forms of targeted violence, overturning judicial scrutiny of personal laws, or preventing Salman Rushdie’s Satanic Verses from being circulated, for example. On the other hand, the same parties could also selectively benefit from targeted communal violence at the local level, often to reinforce the message that Muslims could not rely on the rule of law, but needed the discretionary

4. Consequences for Muslims

This created a vicious circle:

1. the less Muslims could acknowledge public economic and political life as their own, the more they fell behind other communities on a range of empowerment indicators. But the more they fell behind, and were alienated, the more it was used as a sign against them; they were figured as a community singularly uncooperative when it came to integrating into India’s modernity. In the case of Muslims, the resources of the state, when they were directed towards them, were meant to reinforce their status as a distinct minority, not to fully empower them in the political process. Muslims remained locked in a dilemma not quite of their own making.

2. The more Muslim leadership (which in its lack of political imagination was willing to oblige those who were constructing them as a supplicant minority), emphasized their status as a minority, the more the conditions were created for a majoritarian backlash.

3.On the other hand, the wider political culture was doing its best to prevent Muslim integration into wider society, in the same breath as it was demanding it. This account is a simplification, one that obscures the complex realities of Muslim politics in India. But the net result was the majority-minority framework got reinforced even more strongly in Indian politics (for splendid accounts of the complexity, see Ahmed, 2019; Wahab, 2021).

4. Arguably with a significant Muslim political elite having migrated to Pakistan, elite level interaction of the two communities in common institutions was probably even less in the 70s and 80s than pre-partition India. The partitions of the mind were also becoming deeper sociological realities, allowing Hindu Nationalists to construct the ‘Muslim’ as an abstract figure, an object of suspicion. The deep roots of Hindu nationalism were not in the overt triumph of the BJP. It was in the covert commitment to deepening the majority/minority framework.

5. The year 2014 was a watershed in this respect, for it showed that minorities could be made electorally irrelevant. While other political parties may not go so far as to target minorities, marginalizing them will become the default mode, the common sense of Indian politics. All parties will, to varying degrees, emphasize majority cultural privilege.

5.Consolidation of Hindu Identity

1. In the nineteenth century ‘Hindu’ began to become a consolidated legal identity as a result of two processes:

(a)the process of codification and (b) the process of reform.

(a) The process of Codification

☝The logic of imperial rule, was to govern communities partly indirectly, through what they understood to be their own systems of personal law. But these systems of law began to be codified in news ways in the nineteenth century, partly as a result of the British need to understand an administer these laws. But the process of codification itself created a more homogenous legal identity for Hindus—or even more broadly for Hindus, Jains, Buddhists and Sikhs, who were grouped under a single legal identity largely to contrast it with Muslim and Christian personal law. But the process of social reform, the slow correction of caste and gender injustices in these traditional systems of law by the state, meant that the state and the legal identities of the communities got increasingly entangled (Larson, 2002; Menski, 2008).

👆When the state enacted reforms of Hindu law, it was performing a dual function. On one hand it was acting as a modern state trying to nudge Hindu law into reform. It was able to do that because of the organizational character of Hinduism. With no central authority, no central text, the only ways in which Hindus could settle their need for reform was through democratic institutions, which happened to be institutions of the state. The Indian State was acting not just as a secular state reforming Hindu law, it was acting as a State of the Hindus who were, collectively through its institutions reforming their own laws.

👆This applied even to matters of temple administration, for example, where the state could take over, reform administer and supervise the running of temples. The spectre of a secular state, managing thousands of temples, through properly organized government departments, is an anomaly from the point of view of secularism (Smith, 1953). The distinction that the state manages the secular aspects of the temple and not its religious aspects can be hard to maintain. Hindu nationalism is partially correct that liberals sometimes worry too little about the statism implicit in the state running temples.

👆If democratic institutions of the state, parliaments, and state legislatures were going to be the forums through which Hindus would govern their legal identity, and undertake the process of reform, what is the relationship of these institutions to minorities and their legal identities? Did parliament have exactly the same authority to reform personal laws of other communities? Formally, in a constitutional sense it does. But politically the answer was always fudged. Would a parliament exercising authority over Muslim Personal Law or Wakf Boards be an instance of a majority exercising power over a minority? Or would it be an instance of a secular parliament exercising authority in these matters over all communities, as it should? (Chatterjee, 2008). Hindu nationalism accused the secular state of acting in bad faith: acting as if it had only jurisdiction over Hindus. So, the process of Hindu legal consolidation through the democratic state led to the emergence of a Hindu legal identity. But is also allowed that identity to play victim by claiming that the state had asymmetrically exercised authority over the majority.

👆This bland rendering of the political project of Hindu nationalism does not of course do justice to the underlying furies that fuel it. At the core of its sensibility is the idea of victimhood, and the community of memory required to nourish that sense of victimhood. Hindus are perpetual victims, a status that can be overcome only by consolidating Hindu political power. They were first the victims of Islamic invasions, which Hindu nationalism sees as one monolith subjugating Hindus. Then they were victims of British colonialism that at one stroke invalidated all the knowledge claims of a rich and complex civilization. They were then victims of the Nehruvian State. Hindu nationalism sees its marginalization at the hands of the Nehruvian State as an even deeper affront, because it was marginalization at the hands of a state where power was in Hindu hands. The vehemence against the Nehruvian State is even deeper than against the British State, not just for the obvious reason that the Congress Party is still an active political force, and the attack on Nehru is also an attack on its provenance. The Nehruvian State is seen as an act of multiple betrayal of Hindus. It was not a state that in the dominant discourses of the time, which could even acknowledge the reality of past Hindu subjugation; it actively repressed these popular memories and narratives. It presented Medieval India as a tale of the emergence of a syncretic civilization rather than seeing it for what it was: an era of conflict and Hindu subjugation, which a few episodes of liberality and syncretic patronage could not negate (Dasgupta, 2019; Naipaul, 1988). The mistake of the Nehruvian imagination was that it played on the territory that Hindu nationalism wanted to play: the territory of history. For a secular nation it was important to tell the history of the past as a secular history. The problem with this move was that it was always going to be empirically contestable.It also legitmized the idea that beliefs about the past or debates in historiography have to serve the function of legitimating present political identities (Bhattacharya, 2008). It provided less space to acknowledge a history of conflict, and believe at the same time that a new social contract has been written, in which past conflicts are irrelevant. The larger debate about the lens through which India’s past is understood will remain an animating impulse on Hindu nationalism.

(b) Theory of Victimhood- Idea of Victimhood as a tool to achieve the aim of Hindu Rashtra

👆While it(BJP) adopts the cultural grammar of Hinduism, its main interests are neither religiosity, culture theology or the deep variety and capaciousness of Hinduism.

👆Its main interest is the construction of a unified ethnic identification with Hindutva.

👆The core of this identity is the sense of victimhood, and acquiring political power over other communities.

👆The victimhood has a number of tropes, in addition to a sense of being historically colonized. It is reinforced by partition, the vivisection of India’s sacred geography.

^_^ It was then reinforced by the perception that the Nehruvian State, in its fidelity to constitutional values and its concern to prevent further political violence after partition, was simply not pushing the logic of partition to its ultimate conclusion.

The truth is it is hard to argue that Hindus or Hinduism were victimized by the state in post-independence India. But victimhood narratives of nationalism just need pivotal and symbolic events on which to hang onto the psychological comforts of victimhood. And the state did oblige them from time to time. For example, the Shah Bano case, the expulsion of Kashmiri Pandits, the global discourse on terrorism, and the alleged marginalization of Indian knowledge systems were all strung in a narrative of victimhood.

👆This kind of victimhood is that requires a perpetual diet to nourish it. Which is why Hindu nationalism will not rest content with settling a limited set of issues. For instance even after the triumph at Ayodhya, the matter of reclaiming sites on which Mosques were built is not a closed matter, as the demands for Kashi and Mathura indicate. The purpose of reclaiming these shrines is not religiosity. The purpose of claiming it back is to claim that Hindus have power qua Hindus and they can now show Muslims their place. It is to use a sacred place of worship as a weaponized tool against another community (Mohan, 2008).

6.Hindu nationalism - a product of democratic process

Hindu nationalism is, in some senses, born with the modern Indian democratic project. It is not an aberration, but accompanies it like a shadow. It can operate within the uneasy secular political settlement of 1950, just as easily as it can decide to smash it open. The only question is what are the conditions under which the shadow becomes long enough to ominously darken the horizon of democracy? A full analysis of what enabled the rise of the BJP would require a more complex analysis of the conjunction in 2014 and 2019: the economic context, global political trends, changing preferences of Indian capital more willing lean on authoritarian repression, the nuts and bolts of political organization, the availability of new information technologies and many other contextual factors. But two points are worth making in a way that speak centrally to Hindu nationalism’s complex connection with forms of democratic empowerment.

7.Role of the Congress Party in rise of Hindu Nationalism

(a)The rise of the BJP was facilitated by the decline of the Congress, which arguably declined due to its own internal contradictions (Vaishnav & Hintson, 2019).

(b) In the 1970s, Congress crafted the first major legitimization of the RSS by declaring the Emergency. There was some support for the Emergency in the RSS, but it was the anti- Congress front during the Emergency that rehabilitated the RSS.

(c)In the 1980s, Congress’ dalliance with Hindu nationalism in the 1980s alienated minorities; its undemocratic party structures did now allow it to incorporate newly mobilized political groups like Dalits into its fold.

(d) It managed to come to power in 2004, and then in 2009 as the head of the United Progressive Alliance (UPA) alliance. But it could not use the decade in power to regenerate the party. From 2004 to 2009, it had a remarkable economic record, and made even modest steps towards regenerating institutions of the state. But in its second term it could not shake off the charge of being a closed plutocracy.

(e)The BJP’s victory in 2014 itself took place against an overwhelming concern with plutocracy. The anti-corruption movement, which now turns out to have been a of the BJP, delegitimized the Congress and the BJP stepped into the breach.

(f) An honest introspection requires us to concede that the Left was right in pointing out the destruction Modi could bring. But, equally, it must be conceded that India’s ancien régime had also been so delegitimized that it was bound to collapse, in the absence of serious party and leadership reform. The Congress had a governance record it could build on; but the party had no will for institutional regeneration left.

(g) The BJP managed to convert anti-Congressism into an effective political syndrome, where the contempt for Congress far trumps their fear of anything else. In this sense, a consistent and thorough going anti-Congressism is the bete noire of Hindu nationalism.

8.Role of caste in rise of Hindu Nationalism

(a) . For secular parties, extolling caste-based mobilization became a kind of mantra. The idea was that these cross-cutting cleavages of caste would prevent the consolidation of a more unified Hindu political identity; Mandal would prevent Mandir. But this valorization of caste politics, paradoxically, created the conditions for the rise of the BJP.

(b) But the BJP did not so much as do away with caste politics, but subtly and fairly effectively repositioned it within a Hindutva framing, keeping on board its social justice impulses, while enlisting it in a larger identity. In part it was able to do this because of the availability of a leader who could do this more credibly. Narendra Modi’s personal biography, as a leader who did not come from privileged circumstances in economic or social terms, allowed the possibility of sections of marginalized groups identifying with him in a way that would have been impossible a decade ago. The vote concentration of the BJP amongst the upper castes is still the higher than amongst any other group, but Narendra Modi allowed the BJP to expand its social base quite dramatically.

(c) (I) Parties like the BSP, SP, and Rashtriya Janata Dal (RJD) were consolidating different jatis (castes) into an agglomerative political consciousness defined by larger categories like Scheduled Caste (SC) and Scheduled Tribe (ST). But this strategy had run its course.

(II) With rolling back of reservations now off the agenda, there was no focal point for this mobilization. But the internal differentiation of these groups also caught up with the politics of caste. Partly as a result of economic growth and some occupational change, different subcastes were differently positioned to gain benefits from reservation or from economic growth more generally. This greater internal differentiation, made the agglomerative logic of caste movements more difficult to sustain.

(III) Now the logic was pointing towards deagglomeration—distributing benefits within these caste formations, through sub-quotas for instance. This allowed the BJP to wean away particular subgroups within these otherwise potent caste formations. Larger economic and cultural changes are slowly disembedding voters from fixed social formations and making them available for new forms of mobilization (Narayan, 2021)

9. CONSOLIDATION OF IDENTITY AS A SOURCE OF HINDU NATIONALISM

( a) The BJP, on the other hand, has a generative conception of identity. Identities can be reconfigured through the work of propaganda, outreach, providing services and political mobilization.

(b) It also understands that political violence can alter political identifications by creating the conditions where one identity can be suddenly made more salient.

(c) It also has the advantage of organizations like the RSS, whose agenda is certainly electoral. But it is also more than electoral. It is to bring about a long-term cultural shift in people’s default identifications, to generate new forms of identification which might not have existed. On this front, the BJP’s ground strategy has been long term, subtle, and more effective.

(d) Two recent books on the BJP document this in full measure. Tariq Thachil (2014), for example, argued that the social service wings of the BJP were responsible for creating almost a silent revolution in generating new forms of identification with the BJP by providing services. and Arkotang Longkumer’s brilliant book, The Greater India Experiment: Hindutva and the North East (2020), also makes a similar argument about the BJP’s unlikely success in the Northeast. There in addition to providing services, making themselves part of the cultural fabric, the RSS tapped into local memories of victimization and violence to create new identities

(e) The lazy assumption that caste would check Hindutva was a product of a sociological imagination that did not understand either caste or Hindutva.

(f) The sociologist M. N. Srinivas had in almost Brahminical vein argued that there were two competing models through which traditional caste social mores would be overcome: Westernization or Sanskritization (Srinivas, 1962). It was always assumed that the BJP or RSS would prefer Sanskritization: the imbuing of high caste sensibilities and mores in the general population.

(g) While this still remains an ambition for Hindu nationalism, it has in practice settled for something more capacious: Ethnicization. This simply involves identifying as a Hindu in demographic terms, and becoming part of the project of political Hindutva. It is compatible with a wider cultural grammar—which is why it has been so easy for the RSS to incorporate everything from local forms of worship of Dalit communities, to every member of the nationalist pantheon from Ambedkar to Vivekananda.

10. Role of Hindi in consolidation of Hindu Nationalism

(a) The one final element that has to be taken into considerations is the role of Hindi in the ideological imagination of the Hindu nationalism.

(b) there is a profound sense that Hindi has been marginalized at least in terms of status. ......... But in Hindi speaking areas, the sense of resentment that English was a marker of political privilege, that Hindi was no longer a conduit of knowledge production, or that one signalled status by a distance from Hindi is quite acute. This is why, even without the grand ambition of imposing Hindi on the rest of the nation, the question of the status of Hindi is not without political resonance.

(c) The marginalization of Hindi, always meant that there was room for a party to occupy that vernacular space. This is something the BJP did with aplomb in Uttar Pradesh (UP)

(d) In fact, one simpler explanation of Congress’ decline in UP is that it does not have even a handful speakers who can command an audience in Hindi. The marginalization of Hindi could then be mobilized as a sign of the marginalization of a whole vernacular culture.

11. Distinction between Hindu Nationalism and Hindu Rashtra

Arguments in favour of the theory

It is a commonplace to argue that Hindu nationalism is a theory of the Nation, not a theory of the State. As RSS ideologues from Ram Madhav (2020) and Swadesh Singh (2019) like to put it liberal critics of Hindu nationalism do not get the distinction between Hindu Rashtra (nation) and Hindu Rajya.

(1) Hindu nationalism is no different from other nationalisms that are legitimized all over the world. Most nations in the world often appeal to potent principles of cultural unity. The basis of India’s unity is not simply an allegiance to constitutionalism; it requires recognition of our common identity as Hindus.

(2) Hindu nationalism is not reactionary; it is a way of reassuring modernist Hindus that the project of producing cultural unity does not imply a regression to a religious or a theocratic state. In fact, a Hindu Rashtra can have as modern a state as it wants.

(3)to reclaim the story of India’s identity and to posit the existence of a Hindu nation back into the deep recesses of India’s history, one that transcends the flow of time, the changes in political regimes, and the existence of social division.

Arguments against the theory

But this distinction between a Hindu Rashtra and a Hindu Rajya is ultimately unsustainable. What it requires of citizens, especially minorities, is not just an allegiance to the terms of the social contract as set out in constitutional principles, or to the institutions and processes of the state.

(1) It requires everyone to acknowledge the symbols of Hindu unity, such as the sacredness of territory, the importance of symbols such as Ram, and the overall glory of Hindu civilization.

(2) What it requires of citizens, especially minorities, is not just an allegiance to the terms of the social contract as set out in constitutional principles, or to the institutions and processes of the state. It requires everyone to acknowledge the symbols of Hindu unity, such as the sacredness of territory, the importance of symbols such as Ram, and the overall glory of Hindu civilization.

(3) But where the distinction between Hindu Rashtra and the Hindu Rajya is blurred is that the enforcement of the script of nationalism requires the deployment of state power. The project of Hindu Rashtra is articulated, enforced, and propagated through the aegis of the State. The project of Hindu Rashtra cannot be realized without the state curbing freedoms or in some cases institutionalizing discrimination.

Examples:--

(a) The laying of the foundation stone at Ayodhya was both the apotheosis of Hindu Rashtra, but also its alignment with state power through majoritarian assertion.

(b) The Citizenship Amendment Act and accompanying discussion on the National Register for Citizens made explicit the idea of India as a homeland for Hindus. The purpose of the Citizenship Amendment Act was to grant persecuted minority refugees from neighbouring states a fast track to citizenship status. This aim was reasonable enough. But the Act enshrined a principle of religious discrimination in India law by excluding the possibility that persecuted Muslims could also seek citizenship through this particular law. The surrounding political discourse raised the spectre of creating a National Register of Citizens where all citizens would be asked to prove their citizenship. But everyone understood that this process would involve a differential burden of proof for Muslims and non-Muslims

(c) Several states are enacting what are now known as ‘love jihad’ laws. Many states already had laws regulating religious conversion. But the new laws break new ground. Amongst other things, they require a two month notice to the state before any religious conversion can take place. They shift the burden of proof on the citizen to demonstrate that their conversion is not a result of force or fraudulent means. They allow the annulment of marriages where the state comes to the conclusion that the objective of the marriage was to convert the woman. In effect, the purpose of these laws is to severely discourage interfaith marriages. These laws are an incredible infringement on individual freedom and give the state the power to regulate the most consequential and intimate choices human beings make about their own lives. But these laws illustrate that the distinction between Hindu Rashtra and Hindu Rajya is bogus. These laws alter the character of the Indian State, not just the character of the Indian Nation. The function of the state now is to give expression to the core anxieties of the Hindu Rashtra. It gives expression to the vilest ideological trope in Hindu nationalism, of young Muslim men, being a threat to the nation, since they might seduce helpless Hindu women. This idea has moved from being a cultural trope to being the basis of state policy.

(d) Many states had cow protection laws. Cow protection, like personal laws, has always been one of the many ambiguous compromises the Indian Constitution the secular state made with religious identities. There are attempts to justify cow protection on secular grounds, but there is no doubt in anyone’s mind that the ban on cow slaughter is underpinned by the ideology of Hindu Rashtra.

(e) , the normative case for the abolition of triple talaq, on liberal grounds is quite strong. The BJP brought legislation to this effect. But by criminalizing, and not merely invalidating triple talaq, the BJP not just wanted to reform; it also wanted to use the case to stigmatize Muslims.

(f) ......scrapping Article 370. But doing it, while at the same time partitioning Jammu and Kashmir without the consent of the Assembly and, for the first time in Independent India’s history, downgrading the state, and depriving its citizens of civil rights, was again meant to be a show of majoritarian power. Incidentally, the subtle majoritarian assertion on federalism is manifest in the fact there every proposal to divide the one state that needs to be broken down into smaller states, UP (which has a population the size of Brazil), is shot down for fear of creating a state in western UP, where Muslims might, because of the demography, be able to exercise more representative power than they do in a large state.

(g) India’s free speech jurisprudence has always been fraught with inconsistencies. It has to be admitted that the politics of free speech was in part shaped by interpretations of Section 295 of the Indian Penal Code, which gives the state the power to ban speech that intentionally offends religion. This has functioned as a version of blasphemy law in India. It was first enacted by the Punjab Legislative Assembly, in response to the Rangila Rasool case, a book that was an offensive depiction of the Life of Muhammad. The detailed history of the applications of section 295 need not detain us here. But the political dynamic of the section is interesting. It encourages political mobilization on behalf of censorship, since you know there is already an acceptance of the principle, and you can expect the government to respond. In a society comprised of different group identities, this identity has a competitive dynamic. If you have three religious communities ‘X’, ‘Y’ and ‘Z’, and if a piece of art or novel offensive to ‘X’ is censored, ‘Y’ and ‘Z’ will also often measure their recognition of their community identity by asserting similar claims. If offensive novels or cartoons about the Prophet Mohammed can be proscribed, why not about Basavanna, Shivaji or Nanak? If Satanic Verses can be deemed offensive why not the Kannada novel Dharamkaarana? Communities begin to measure their power—and comparative self-esteem—by what they can silence or have banned. It is striking in the politics of censorship, how little people are interested in theology or ideas. But the idea is to provoke a demand for censorship or retaliation by a community to put them in bad light or stigmatize them. In the politics of free speech, Hindu nationalism argues, it is the assertion of community power, not just legal standards that have governed the regulation of speech. This is an area, where the state was also accused of giving minorities a veto—the claim was that Indian free speech jurisprudence has not had the courage to be liberal in order to accommodate Muslim concerns over Mohammed. Again, there might be a plausible liberal argument to be made here. But Hindu nationalism uses this as a pretext not to expand the boundaries of free speech but to expand the circumference of offense (Mehta, 2015). The Indian state’s track record of impartial dispensation of justice after communal riots has always been patchy. The judicial and investigative aftermath of the horrible pogroms of 1984 and 2002 are the most striking examples of this dismal failure. Riot and terror investigations have often been communalized or been conducted through a partisan frame. All of this is facilitated by the fact that the investigative agencies, the police, and the prosecution are often not independent. If the evidence of the aftermath of the Delhi riots of 2020 or the probes after recent lynchings are any indication, we will see an eve

12 The Authoritarian Moment

(1) India is, at this moment, haunted both by the twin spectre of majoritarianism and authoritarianism. These have a deep elective affinity, but they are not identical.

Hindu nationalism—and the threat it poses to democracy

(a) Anti-Muslim prejudice

The one constant element to its articulation is an anti-Muslim prejudice that gives it a propelling power.

(b) Control and violence

There is a deeper transformation of the political culture that threatens to unleash a combination of control and violence that is unprecedented in Indian democracy.

(c) control the information order

.Hindu nationalism has a compulsive desire to control the information order. In some ways it is consistent with its political style to insist that command of the information order is central to its political project. Hindu nationalism managed to control significant sections of the broadcast media in ways that are unprecedented to be conduits of its ideology. A lot of this would not have been possible without the willing cooperation of Indian capital.

It exercises control over and mediates all of civil society. It will exercise this mediating power over media, academia, non-governmental organisations (NGOs) even possibly the professions.

Its governance style are that it would love to embrace a party state model—where the party becomes the final arbiter of right and wrong.

(d) ‘Moral Cretinism’ (The term ‘moral cretinism’ was perhaps first used by Alan Bullock in his biography of Hitler (Bullock, 1952).

It referred to a condition where our ordinary sense of compassion and decencies get immobilized. They get immobilized to the point where a total inversion of values becomes possible: the ‘other’ is demonized to the point where their basic humanity disappears from plain sight, the truth is an object of contempt. The ordinary moral terms that should be positively valued—pity, compassion, sympathy, civility—become terms of contempt, supplanted by new virtues like pitilessness, indifference, antipathy, and incivility.

What is distinctive about Hindu nationalism under Modi is that cretinism itself becomes a high moral standard. It is hard to imagine a time in recent history where political leaders openly support a culture of violence without compunction or any trace of self-consciousness, public discourse routinely carpet-bombs fine distinctions with a view to making any nuanced moral responses impossible, and sympathy is routinely so partitioned along partisan lines that the possibility of any human response to tragedy and atrocity seems like a distant gleam.

(g) Cult of Personality

👆 He(Modi) displayed, like all authoritarian characters, the sheer will to power, a ruthlessness that is itself part of the attraction. He came across as effective for the sheer energy and single-mindedness he put into his political pursuits. Confronted with opponents who had, it seems, almost lost the will to pursue power, his will stood out. The second element was his ability to produce affective identification. He managed to portray himself as India’s success story, the everyman who could fight adversity and rise to the top on his own effort.

👆 He had a visceral dislike of the Gandhi dynasty but, in the critique of dynastic politics, he positioned himself against a corrupt and entitled order. The more moral and intellectual contempt that was heaped on him, the easier that identification became.

👆 Third, he positioned himself as a moral paragon—in whom self-interest was not even possible. In India, it is very common for kinship relations to override any conception of public and private. But paradoxically, it makes the appeal of someone who stands apart from kinship—and who thereby claims to have no self-interest, only a concern for the general good—all the more resonant. This is not simply the virtue of the allegedly celibate pracharak, it is the virtue of a leader who did not inherit a family mantle and will not leave one.

👆 Fourth, this was a speaker for whom identification was created by his locutionary campaign. The truth is made through the act of speaking; it is not an independent test of veracity. The very thing that commentators find a weakness, the refusal to answer questions or seriously face a press conference, was the very thing that shored up his power. acknowledge someone else’s questions is to cede possibility to the idea that someone else might have the truth. The fusion of truth and conviction is the hallmark of Hindu Nationalists politics: the perfect antidote to liberals who cannot take their own side in an argument.

👆And finally, there was at least in 2014 the ability to cleverly craft messages, the ability to tell different audiences that he was speaking to them. He made himself the Representative of the Nation, with all his contradictions enfolded within him. His followers made him the ultimate apotheosis of the Indian nation.

(h) Populism

👆 Hindu nationalism has, under Modi, latched on to the language of populism. These two languages have an elective affinity.

👆 Both posit an already constituted people in whose name the leader or the party speaks. Both operate on the assumption that there is a singular account of the public good, and the leader or the party is the custodian of that good.

👆 Any disagreement, is to be therefore understood as a betrayal. Dissent is closer to act of treason.

👆 Both have a suspicion of the fragmentation of power: they say it as a ruse to prevent the consolidation of a singular purpose or identity.

👆They are therefore contemptuous of all checks and balances, all formal constraints on power. Almost all the important checks and balances of Indian democracy have been eroded. Independent institutions like the Supreme Court have not held the state accountable in basic matters of civil liberties and habeas corpus; anti-terror laws and sedition laws continue to be used against dissenters; academic freedom is increasingly in peril, and almost all the formal constrains of constitutional and administrative procedure can be put aside at will.

👆 Hindu nationalism’s biggest casualty has been the Indian Constitution. The interpretation of the constitution, and its custodianship by important institutions, is now so capricious that no one can tell you with a straight face what the Indian Constitution actually is.

12 Can it be defeated?

(1) At one level, this is an easy question. Electorally defeating Hindu nationalism depends on contingent political conjunctures. One can overtheorize this question. But the mathematical truths of Indian politics still afford opportunities to defeating the BJP. Simply put, states where the opposition can provide a single or united alternative to the BJP are states where the BJP will struggle. Its vote share to seat conversion ratio has been facilitated by the fragmentation of the opposition. So in part, the answer to this question depends on opposition electoral strategizing and capabilities.

(2) The BJP could weaken because of its own lack of performance. Its economic performance before the pandemic was middling at best, on the most generous interpretation.

13. Dangers ahead

(1) Hindu nationalism’s transformation of Indian civil society is deep and far reaching. The open justification of communal prejudice, the empowering of right-wing vigilante groups, and susceptibility to a moral cretinism are not going to be easy to put back in the bottle. It is hard to estimate this, but it might also be the case that Hindu nationalism has now made enough inroads into the state, planting enough committed elites in key positions that even the hue of the state might not be as easy to change with just an electoral defeat.

(2) What is Hindu nationalism’s commitment to electoral democracy? If electoral democracy ceases to legitimize Hindu nationalism, how will it respond? The structure of the party, and the fact that a kind of violent vigilantism is institutionalized in the party especially in states like UP should alert one to the prospect that a transition of power may not be entirely peaceful. Or even if there is, there may be constant attempts to subvert constitutional democracy by extra-constitutional or even violent means. Will such defeat inflame the victim complex that Hindu nationalism trades on, to the point that all bets are off in terms of the kind of communal polarization possible? Hindu nationalism has tested Indian democracy to a dangerous point while in power; it might test it even more in days to come. But defeating nationalism will require engaging with the long arc and deep fissures of Indian history since the nineteenth century.

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