Buying into Demonetisation- the Popular Ideological Receptors of Creeping Fascism: Sanjay Kumar

Guest Post by SANJAY KUMAR

The withdrawal of eighty six percent of currency notes by the Modi government has been an administrative fiasco. It is clear that little economic thought, and only a political urge has gone into the exercise. Informal sector of the economy, which accounts for 80% of the employment and 40% of the national output, has suffered short to medium term damage. All cash dependent transactions, wages, wholesale and retail trade, agricultural purchase and sale, are at a crawl. Workers are not getting wages, factories are closing, mandis are empty. Crores of young and old working people are spending hours in queues at banks and ATMs to withdraw their own money now gone scarce.  Press reports count more than eighty deaths. Parliament of the country is in a limbo, because the prime minister thinks it below his worth to reply to charges by the opposition party MPs. While ordinary people are suffering, the Nero like rulers are trumpeting the arrival of the nirvana of a cash less economy as the answer to India’s economic ills.

Even while Mr Modi’s government is solely responsible for this needless and widespread suffering, it would be naive to expect an automatic popular backlash against it. The politics of the ruling party does not fit into the patronage or identity driven models of its competitors. Its closest template is fascist politics, which  is a very particular kind of authoritarianism. What distinguishes a fascist regime from other modern authoritarian regimes like military dictatorships is the popular support it is able to garner for its policies and depredations. This is achieved by carefully working upon popular anxieties, prejudices, desires and fears, and refashioning them as grounds for aggression against selected minorities, and a belief in an imminent deliverance under the personalised rule of a leader.Fascism is marriage of demagoguery with powers of the modern state, which make it different from other forms of right wing populism. It should also not be confused with orthodox conservatism. It is a blatant dance of state power, which hides its brutalities by invocation of novelty and a continuous disruption of what society has come to accept as normal. It is the spectacle of fast change, which disorients people and encourages them to willfully suspend every day rules of judging right from wrong, and truth from falsehood. Many elements of fascist template are visible in the ruling party discourse on demonetisation: the shock and awe of sudden announcement by the PM himself in a national broadcast at TV prime time, praise for the ‘broad shoulders’ of a courageous and decisive leader (as the finance minister put it in a speech recently), a ‘new normal’ that will deliver Indians from the seventy year old evil of black money, etc.

A common conceptual mistake is to limit analysis of fascism to explaining what it does.  What gives it popular appeal are not its actions per se, but the way fascist discourse draws upon already present elements of popular ideologies. The ‘banality of (fascist) Evil’, as Hannah Arendt called it, appears striking only as long as it is seen as the result of a political event, rather than an ongoing socio-political process. In the Indian context, communalism, casteism, patriarchy and national chauvinism as parts of everyday common sense of Indians have formed the ideological support base for the RSS work over decades. Anti fascist democratic forces have rightly attempted to counter these by directly challenging them, and by drawing upon other inclusive elements of popular ideologies. Fascism, however also feeds upon ideologies about state and economy. These have remained outside the radar of democratic forces so far. The discourse and politics over the recent demonetisation open up a window to the latter. Many of the elements of popular ideologies used by Modi government to create support are an enduring feature of Indian political formation, used by other political forces too. Anti fascist democratic forces need to identify and challenge these roots urgently.

State over Society: A deep rooted assumption of the victim hood and helplessness of people of India runs through its popular political ideology. True, occupants of the political pinnacles of state have to pass through periodic electoral tests, and the country has witnessed a number of popular mobilisations and even armed rebellions. However, none of them have even remotely been able to establish the practice of citizenship of people as rights bearing agents, as the classical liberalism of Indian constitution imagined; or, as makers of their own social world, the idea at the core of revolutionary left. Even the ‘aspirational classes’, products of neo-liberal political economy, which are the main cheerleaders of Mr Modi, see their agency primarily in terms of making good of the available economic opportunities. The obverse of the victim hood of people is the non-negotiated legal power of state over society.

Even if the government of the day has a legal right to withdraw currency notes, the unprecedented move of the Modi government on 8th Nov, without any monetary crisis in sight amounted to a unilateral retraction of the promise a currency note gives its bearer. By forcing people to deposit their notes in banks, and allowing only stringent withdrawals under confusing and ever changing rules, it palmed off people’s money from their very hands. Modern state does not simply print money and give it to people as a ‘social service’. A currency note enters the economic flow as payment by the state to non-state actors for services and goods rendered, or to fulfill its legal obligations. In strictly economic terms, Modi government’s step is a legal loot, correctly seen thus by the former PM Mr Manmohan Singh. Yet that is not how even the political opposition to Mr Modi is looking at it. Hardships to common people standing for hours in ATM and bank queues, collapse of informal economy, etc. are highlighted. The immorality of the very act which brought forth these difficulties is rarely the point of criticism.

Indian political ideologies support suspicion of leaders, parties, and governments when a ‘scam’ for personal benefit is sniffed; not when the state fails to honour its part of the bargain with citizens, or even when it violates its own laws. There is a lack of popular moral compass to judge the state. This weakness of society against state is related to deeper and long term features of Indian society. The failure to ‘annihilate caste’, as Ambedkar imagined, has meant that a sphere of society wide moral concern has not evolved. This, for instance, is manifest in exceptional levels of every day cruelty. Even many poorer and war torn societies would not countenance the treatment meted out to weak, child workers, old, infirm, and destitute, which is taken as normal in India. It is not surprising that in the moral morass of India, the public immorality of Modi government is little noted.

Moral Rage, Myths and State Power: Fascism projects itself as a project for moral regeneration. Classic forms of fascism stoke moral rage against targeted minorities held responsible for real or imagined national failures and humiliations. Myths play an important role in this tactic, as glues to form a particular aggrieved ‘people’, targeted minorities as figures of Evil, and dreams of national and civilisational greatness.  Even while Modi government’s demonetisation does not as a whole fit into the ideal type of a fascist maneuver, its elements come straight out of the script.

The moral story behind demonetisation has been sustained in popular discourse because of widely shared myths about black money and corruption. Myths are neither true, nor false. They select and amplify part of a reality, provide frameworks to help make sense of the world, and give common referents for moral judgments. In a rapidly changing economy with gross inequalities, corruption and mass anxieties about the future, the notion of Black Economy performs many functions. Technically it refers to a real sector of the economy with source in corruption, crime and untaxed income. Different estimates of the black wealth in India put it at about 25% of the GDP. Data from income tax raids show that about 95% of this wealth is non-cash, mainly as real estate, gold and different forms of benami financial assets. There are also indications that the major chunk of the unaccounted wealth accumulated by Indians is actually held outside the country. A Global Financial Integrity study of post independence India, puts the latter at 72% of the unaccounted wealth. However, stashed currency notes as fruits of crime and corruption is an old trope in Indian popular culture. The image of notes stashed in pillows, used in 1978 during the demonetisation by Morarji Desai government, has now ballooned to notes stashed in mattresses, the image used by the current government. Recurrent reinforcements are occurring even in the midst of demonetisation drive, in the form of news flashes about stacks of even new currency discovered by Income Tax department. The idea of demonetisation as an attack on corruption has traction in popular imagination because of the displacement in the image of black wealth away from its actual forms to currency notes.

Why are currency notes the most suspicious form of wealth for Indians, despite being the essential fluid for every day market transactions? As a form of wealth, paper currency is abstract and depersonalised. While other forms of black wealth like the real estate, gold, ostentatious display on marriages, etc. have emotional appeals as objects of desire. Capital is wealth/stock in motion. The popular ideology of wealth in India sees it as static. The moral rage against stashed cash, assiduously used by BJP to sell demonetisation, is actually a pre-capitalist hold over.

Like the cash being imagined as the prime form of black wealth, popular ideas about generation of this wealth are also very selective. Corruption at high places in governments, which has been the focal point of many popular movements, is actually only one of the sources of black wealth. Huge amounts of untaxed income are created alongwith legal and regular economic activity by corporates, in the form of over-invoicing, round tripping, P note investments in stocks via Mauritius, shell companies in tax havens, etc. Many of  these practices are integral to the workings of global capitalism. Even US corporates have stashed more than two trillion dollars outside in low tax countries. The recent penalty against Apple, the most profitable company in the history of capitalism, imposed by the European Union is related to its global operations routed through Ireland to avoid paying tax in the US. A big chunk of NPAs lying with Indian public sector banks have also been translated to black wealth. It is a measure of the lack of popular class consciousness about capitalist operations in India, that corruption is seen as the prime source of black wealth.

The popular moral judgments on corruption have some unique features making them specifically amenable to anti democratic populist appeals. First is the lack of self reflexivity. It is always the ‘other’ who is corrupt. The mal-exercise of power of discretion by politicians and high bureaucracy is seen as corruption, but paying household maids less than the minimum wage, or even not paying them their wages with the excuse of lack of currency notes, as is happening in many middle class homes after demonetisation, is not seen as corruption. Second is the ‘hush hush’ mystery created about corruption, which makes discourses about it similar to soap-operas. Figures beyond imagination are bandied, (‘every Indian will get so many lakhs if the money from ‘this’ scam is recovered!’, etc.), however directly experienced concrete instances of corruption, the hafta rate local police station charges hawkers, bribes given when a property is registered below its market value, or traffic violations, are not targets of popular discourses on corruption. Third, discourse on corruption confuses symptoms with the cause, and this confusion directly leads to popular desire for a ‘strongman/woman’ who will clean its dirt. Corruption by state functionaries is a result of lack of democratic accountability; that by corporates and smaller capitalists is a manifestation of power of money over public authority. Focus on particular parties and individuals, rather than systemic causes, opens the way for strongmen/women to walk in claiming instant relief.

Institutional Degradation: Institutional autonomy is a unique feature of the liberal mode of governance. It is the life blood of latter’s decentered authority structure. The centralising thrust of fascism degrades institutional autonomies. Despite the last governor Raghuram Rajan’s monetarist prejudices, much loved by international finance, the RBI under him was jealous in guarding its turf. Hence it was not surprising that he was forced out by the Modi government at the first opportunity. The new governor, Mr Urjit  Patel was either not taken into confidence on the demonetisation move, or he acquiesced meekly. In either case the autonomy of RBI has been badly mauled. Subsequent to the demonetisation announcement also, the job of forming and announcing new rules regarding restrictions on withdrawals etc. which fall in RBI’s juridriction, was taken over by finance ministry. The 1978 demonetisation by the Morarji Desai government was implemented through an ordinance. Modi government has done away with even that nicety of parliamentary procedure, and pushed demonetisation through an executive order. As the washout of the recent winter session of the Parliament shows parliamentary deliberations are the other big casualty.

However, it should be noted that institutional and legislative degradation is a long standing aspect of Indian political formation, which is linked to the character of political power in society. From Panchayat gram sabhas to the parlilament, India has over 2.5 million citizens elected to different state institutions. It is the largest body of elected representatives ever in the history of humanity. The expansion and depth of representative institutions have changed the social bases of political power, and is much valued by erstwhile excluded groups. However, this expansion has not made the character of political power more democratic, and even while elected by the people, representative bodies lack popular legitimacy.  This scenario is ideal for a politician like Mr Modi. The floor of a representative body like the parliament at which a leader has to listen to, or spar with opposition members on an equal footing, and which in the age of direct TV relay is effectively a public arena, is the last place any leader with fascist inclinations would like to be. By speaking on demonetisation in jan sabha, rather than Lok Sabha, as he claimed in a rally in Surat recently, Mr Modi is only making a virtue out of the dire straits of representative bodies in the country, for his kind of politics.

A common understanding is that only if a regime indulges in large scale violence and violation of citizens’ rights, it can be fascist.  This understanding mistakenly takes state violence, which all states indulge in more or less, as a defining property of fascism, rather than its political character. The actual violence of fascism depends on the state of a society, and strength of its political opponents. Nor can the arrival of fascism be dated with the electoral success of a party, or a leader. It is more fruitful to look at it as a socio-political process driven by specific parties and leaders. Success of a fascist politics should be seen in the direction it is able to give to the character of state power, and how deeply it can draw support from popular ideologies. At stake is not any specific state policy, but the way popular classes imagine the society and their role in it.

Sanjay Kumar teaches Physics at St Stephen’s College, Delhi, and is associated with New Socialist Initiative and People’s Alliance for Democracy and Secularism.

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