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The Hindu
a day ago
- Politics
- The Hindu
Ideas on trial, critical thinking in retreat
'Freedom only for the supporters of the government, only for the supporters of one party — however numerous they may be — is no freedom at all. Freedom is always and exclusively the freedom of the one who thinks differently.' — Rosa Luxemburg In an era marked by heightened geopolitical tensions and global scrutiny, nations are compelled to not only safeguard their territorial integrity but also uphold their moral foundations. For countries, characterised by their profound diversity of languages, cultures, and faiths, such moments present an opportunity to reaffirm their commitment to democratic principles and pluralistic values. The projection of national strength tempered by restraint and public reassurances, stands out as indispensable components of this endeavour. However, the alignment of democratic values at home with the image projected abroad is equally crucial, necessitating the nurturing of freedom and open discourse domestically. An erosion of intellectual freedom Regrettably, a growing chasm exists between this ideal and the prevailing realities on the ground across the world. The sanctity of intellectual freedom is being steadily eroded across institutions, particularly universities and academic spaces, due to pressures of conformity and control. The consequences of this trend are far-reaching, with professors facing reprimand or dismissal over minor comments, and students being subjected to punitive action for raising critical questions. This phenomenon constitutes a pressing global concern, albeit one whose repercussions are particularly pronounced in nations that have historically valorised open discourse and intellectual freedom. The United States, during Donald Trump's presidency, exemplifies this trend. Philosophers such as Hannah Arendt have warned against these dangers of banality in oppressive regimes and the slow numbing of thought, where citizens retreat into private lives and abandon the public realm. Understandably, the assault on freedom is not only about censorship but also about inducing this kind of silence, where fear replaces inquiry, and conformity takes the place of imagination. In such a climate, society's capacity for critical self-reflection and growth is severely impaired, leading to stagnation and intellectual rigidity. For instance, when curricula are rewritten to reflect ideological imperatives rather than pedagogical or historical rigour, when scholarly work is attacked for political reasons, and when free speech on campus is framed as sedition, we are witnessing the slow erosion of academic advancement. We have witnessed this phenomenon on campuses across the U.S., particularly in the context of pro-Palestinian demonstrations. Democratic backsliding is visibly accompanied here by an assault on intellectuals and independent media. In such times, it becomes easy to imagine that freedom of speech is a luxury or a liability, something to be curtailed for the sake of national unity or cultural pride. But, this is a false choice. An intolerance of voices that question At the heart of this crisis lies a growing intolerance with voices that challenge prevailing narratives, offer nuanced historical perspective, or simply ask inconvenient questions often painted as suspect. It must be taken for granted that democracy, by definition, demands disagreement and requires the ability to listen to those who think differently, to be challenged, and to evolve. The silencing of scholars, intimidation of writers, and discouragement of free inquiry do not merely target individuals; they diminish the society as a whole. Noam Chomsky, whose work on propaganda and power remains seminal, noted that the destruction of independent culture is among the gravest abuses of authority. When knowledge itself is politicised, when truth is decided by decree, and when the university becomes a site of ideological performance rather than learning, we find ourselves perilously close to what he called 'manufactured consent', or in other words, a democracy in appearance but not in substance. Historically, universities have served as spaces where civilisational questions are posed, where the past is interrogated, and where future possibilities are imagined. To reduce these institutions to sites of ideological policing is to betray their very essence. The danger today lies not only in the curbing of dissent but also in its systematic delegitimisation. When critical voices are branded as 'anti-national', when scholars are seen as threats instead of resources, and when academic inquiry is stifled by fear, society drifts toward intellectual repression. The result is a thinning of public discourse, a narrowing of thought, and a culture of self-censorship. The geopolitical irony of this situation cannot be overstated. At a time when nations face real external threats, internal cohesion is undeniably vital. However, cohesion cannot be achieved through the suppression of thought. Unity born of fear is not unity; it is coercion. What the world respects is not only a nation's economic or strategic clout but also its ability to be a vast, diverse, and argumentative civil society. This vitality, rooted in disagreement, debate and intellectual freedom is what defines a truly robust democracy. The erosion of this vitality has long-term consequences, including the alienation of a generation of students who once believed in the university as a space of exploration and growth, but now the evident discouragement of public intellectuals from speaking their conscience, and the undermining of the moral seriousness with which a nation historically addresses its internal complexities, has set in the steady decline of the very idea of democracy. Moreover, it sends a chilling message that intelligence must be policed, that critical thinking is unwelcome, and that freedom is conditional on obedience. But there is hope And yet, there is hope. History reminds us that the tide of suppression, however forceful, is always contested. Whether through protest movements, or the courage of individuals who refuse to be silenced, the spirit of free inquiry has always found ways to endure. Václav Havel, writing under the shadow of Soviet repression, reminded us that 'living in truth' was itself a political act and a refusal to join in the collective lie. In societies that valorise critical inquiry and unfettered debate, the capacity to confront and resolve complex challenges is significantly enhanced. A nuanced understanding of patriotism recognises the intrinsic value of constructive critique, acknowledging that loyalty to one's nation or institution is not predicated on unyielding conformity, but rather on a commitment to its betterment. The democratic ideals of freedom, justice, and equality are not merely aspirational, but are instead contingent upon the ability to challenge entrenched injustices and interrogate authority. When societies compromise academic freedom, they not only erode their moral authority, but also imperil their capacity for envisioning and implementing transformative change. Rosa Luxemburg's words serve as a poignant reminder that freedom means little if it is reserved only for the majority or the loyalist. Real freedom, the kind that nurtures innovation, empathy and justice, begins with the courage to listen to those who speak differently. This capacity for receptivity to dissenting voices constitutes a litmus test of democracy's vitality, and its failure to meet this test has far-reaching and deleterious consequences for the polity. Shelley Walia has taught Cultural Theory at Panjab University, Chandigarh
The Hindu
15-07-2025
- Business
- The Hindu
Why is corporate investment lagging behind?
India is going through a rocky terrain as far as industrial production and corporate investment are concerned. On June 30, the Ministry of Statistics and Program Implementation (MoSPI) released the monthly growth rate of the Index of Industrial Production (IIP), which has slowed to a nine month low of 1.2%. This piece attempts to explain why industrial activity has not really picked up in any meaningful way since the COVID-19 pandemic. To be fair, it is not as if the government has not tried. They have tried every trick in their book, starting with a significant corporate tax cut to the tune of eight percentage points in September 2019 (from 30% to 22%), then a significant capex-push over the last few budgets, and lastly an interest rate cut recommended by the Monetary Policy Committee (MPC) recently. The 2024-25 Economic Survey expressed its dismay by stating that 'in terms of financial performance, the corporate sector has never had it so good … (but) (h)iring and compensation growth hardly kept up with it … Private sector GFCF in machinery and equipment and intellectual property products has grown cumulatively by only 35% in the four years to FY23, (which will) delay India's quest to raise the manufacturing share of GDP, delay the improvement in India's manufacturing competitiveness, and create only a smaller number of higher-quality formal jobs than otherwise.' Determining investment There is a famous debate between two Marxist scholars, Rosa Luxemburg and Tugan Baranovsky, on what determines investment in a capitalist economy which might be valuable to this discussion. To appreciate this debate and to understand the current predicaments of the Indian economy, we would like to present a basic representation of GDP and its determinants in a 'pure' capitalist economy, that is, one without any State intervention or access to external markets (see Box 1 for such a representation). GDP can be measured in different ways. What we demand generates production in the economy, with the other side being the income generated for the producers. So, from the income side, the GDP is a sum of workers' wages and capitalists' profits and, from the expenditure/demand side, a sum of workers' consumption and capitalists' investment. The purpose of this piece is to explain the latter. To get to the meat of the matter, we make a simplifying assumption that workers consume all their wages and capitalists do not consume at all (the argument does not change even if we remove this strict assumption). As Box 1 shows, wages and workers' consumption cancel each other out. What we are left with are profits which must be equal to investment in such an economy. This equation, however, does not tell us whether profits cause investment or investment causes profits. This innocuous relationship has led to quite a debate in economics, which continues to this day. To resolve this apparent chicken and egg problem, Kalecki, a Marxist economist asked a simple question: of the two, which one can the capitalists decide/control? 'Capitalists may decide to … invest more in a given period than the preceding one, but they cannot decide to earn more.' In other words, investment determines profits in a given period, not the other way round. But if this is the case, what is the limit to investment? Why can they not invest any amount they like? In fact, why should there be a problem of a lack of investment at all? Baranovsky argued that there is no limit to investment provided a certain proportion is maintained between consumption and investment sectors. He went to the extent to say that investment decisions need not be tied to any final consumption demand. An economy where workers' consumption is kept suppressed may still flourish with higher investment and higher profits simply by the decision of the capitalists to accumulate. Since capitalism and accumulation of capital is driven by profitability, investment provides the market for itself. Machines can produce machines to produce more machines. However, Luxemburg countered by saying that while it's true that investment leads to profits, it does not mean that any amount of investment will necessarily be undertaken. That would be a gross misreading of the relationship represented in Box 1. If the corporate sector were to collectively decide to invest, they would all be generating markets for each other, thereby, generating profits. But, unfortunately, investment decisions under capitalism are made by individual firms/capitalists and their decisions would be driven by their own assessment of demand for the products they produce. For example, in situations where the economy is not growing, it would be foolhardy for an individual capitalist to invest because adding capacity, when the existing factories are not running to capacity, would entail more losses. At the same time, if they were to invest collectively, the economy would have actually recovered. But coordinated or collectively planned investment is an anathema to capitalism. Investment, first and foremost, depends on the demand for the goods (whether machinery, toys or cars) it produces. It does not, and cannot, have a life of its own. A pure capitalist economy, without exogenous stimuli, cannot provide an endogenous impetus for its own survival. It requires an exogenous stimulus to kickstart the cycle of more investment and profits. The situation is particularly grave when the economy is in a downturn/slowdown because demand is down. The only way there can be a turnaround is if there is a turnaround in demand itself. The other factor behind investment is finance — internal (retained profits) or external (debt, public offerings etc). Lagging corporate investment The government assumed that with tax cuts and higher post-tax profits in the hands of the corporate sector, investment would pick up. But they have perhaps read the profit-investment causality wrong. Even others, who believe there can be an investment-led revival, miss the crucial point that Luxemburg was making. Investment will follow if there is a revival in process; it cannot lead the revival under conditions of slowdown. Investment cannot be made for the sake of investment. It requires the exogenous stimuli that Luxemburg was talking about. Where can that come from? There are two such exogenous sources — government expenditure and external markets (see Box 2). With a slowing global demand, which is perhaps going to worsen with the 'reciprocal' tariff regime under U.S. President Trump, government expenditure is the most important lever to kickstart the investment cycle. But then has the government not done enough in the form of capex spending? Government indeed has spent but it has so far not succeeded as much as expected. Why? The idea behind capex spending is that it would crowd-in private investment. This crowd-in could happen through a direct impact on investment as a result of better infrastructural facilities or by generating demand for goods produced by the corporate sector. While there is no denying that there is a possibility of crowding-in, there are multiple factors at play here. First, the crowd-in of the first kind, which is through better infrastructure, may be delayed due to the gestation lags these big scale projects usually have. For example, a port takes time to build and become operational. Second, while it is true that all such projects, whether big or small, create an immediate demand, how much of it is domestic demand and how much it is for economies outside depends on the import component of this spending. In other words, a part of this capex may be spent on imports, which simply cancels out without providing adequate domestic demand. Third, even how much domestic demand such a capex would generate depends on the labour intensity of these projects. If most of the money is spent on heavy duty machines, the employment generating capacity will be low, which translates to lower consumption demand. As for the incentive to finance investment through lower interest rates or liquidity, both of which the RBI has been trying, it is like putting the cart before the horse. Capitalists would take loans only if they believe they will profit from such investment to pay the loans back. With sagging demand, low costs of finance is not enough. As Keynes had famously said, 'whereas the weakening of either [speculative confidence or the state of credit] is enough to cause a collapse, recovery requires the revival of both.' This simple lesson needs to be learnt by both the RBI and the Finance Ministry if they want the economy to revive. Rohit Azad and Indranil Chowdhury teach Economics at JNU and PGDAV College, Delhi University, respectively
The Guardian
21-05-2025
- Business
- The Guardian
Capitalism and Its Critics by John Cassidy review – brilliant primer on leftwing economics
Capitalism has a way of confounding its critics. Like one of those fairground punching bags, it pops right back up every time a crisis knocks it down. Friedrich Engels learned this the hard way. 'The American crash is superb,' he enthused in a letter to Karl Marx in 1857: this was communism's big chance. Well, not quite. The US Treasury stepped in, recapitalising banks with its gold reserves; in Britain the Bank Charter Act was suspended to enable the printing of money. The rulebook was torn up and capitalism saved. So it has always been. Every time we have teetered close to the precipice, big government has swooped down to save the day. The name of the game is 'managed capitalism' and it has been a going concern for more than 200 years. This is the theme of John Cassidy's new book, a marvellously lucid overview of capitalism's critics, written in good old-fashioned expository prose – if at times a touch workmanlike compared with some of his subjects, such as exhilarating stylists Marx and Carlyle. Half of the book is given over toMitteleuropa (where we meet Karl Polanyi and Rosa Luxemburg, both of whom are having a bit of a moment these days), India (JC Kumarappa, Gandhi's crony and pioneer of ecological economics), and Latin America (whose dependency theorists argued that the developed world was scooping up the benefits of rising productivity at the developing world's expense). Cassidy steers clear of the theoretical thickets of György Lukács and Louis Althusser as well as of the more idiosyncratic anti-capitalist paths taken by Milovan Djilas and José Carlos Mariátegui. Still, it would be churlish to complain about omissions in a book that finds room for 50 potted biographies. This is by far the best primer I have read on the luminaries of the economic left. Early socialists, Cassidy shows, had little faith in government and equated the state with upper-class corruption. Many of them were sentimentalists or oddballs. The utilitarian socialist William Thompson, for one, thought it was possible to kill the 'passion for individual accumulation' simply by substituting cooperation for competition; the humans he describes sound suspiciously like Sims characters. Carlyle's anti-capitalism ('Mammon-worship is a melancholy creed'), meanwhile, led him to a pro-slavery position. We owe the left as we know it to Marx and Engels, who railed against financialisation and monopolisation – the 'concentration of capital' – and defended planning and public ownership. The collapse of capitalism that they foresaw, however, never came to pass. From their vantage point of 1840, wages had flatlined even as profits had soared over the previous 50 years. This immiseration would surely bring about the system's downfall. Yet the following century reversed the trend: wages rose faster than profits, and capitalism found new champions among the workers. Unlike the factory-owning Engels, Keynes was no class traitor: 'The class war will find me on the side of the educated bourgeoisie.' His mid-century magic formula, low interest rates and tax-and-spend, led to astonishing growth and stability in the short run. Rachel Reeves could benefit from his counsel for countercyclical spending: 'the engine which drives Enterprise is not Thrift but Profit'. But Keynes, as Paul Sweezy complained, treated the economy as if it were a machine that could be sent for repair. There were 'political aspects of full employment' that Keynes had ignored, Sweezy's Marxist comrade Michał Kalecki elaborated. Low unemployment meant enhanced labour power, so more strikes and higher wages and inflation. A capitalist backlash would ensue, he predicted. That is precisely what happened in the 70s. Milton Friedman made the case for a 'natural rate of unemployment', by which he meant that more unemployment was needed in order to destroy labour power and push down wages. This confirmed Marx's observation that a 'reserve army' of desperate jobless workers was the best weapon capital had to cripple unionism. Where Nixon could call himself a Keynesian, his successors Carter and then Reagan turned to neoliberalism. High interest rates and anti-union legislation followed. After a brief mid-century egalitarian blip in which economic growth exceeded the rate of return on capital, the opposite has once again become true in our own gilded age. This was Thomas Piketty's insight, demonstrated with the sophistication of statistics, in his Capital in the Twenty-First Century. Sign up to Inside Saturday The only way to get a look behind the scenes of the Saturday magazine. Sign up to get the inside story from our top writers as well as all the must-read articles and columns, delivered to your inbox every weekend. after newsletter promotion Cassidy, a staff writer at the New Yorker, is generous in his judgments, and even in his indictments. There is not a single snide remark in these pages. He plays his cards close to his chest, but I suspect he might confess to being a Keynesian. A clue lies in his conclusion – 'capitalism can be reformed' – which reminded me of Fredric Jameson's witticism that it is easier to imagine the end of the world than to imagine the end of capitalism. Capitalism and Its Critics by John Cassidy is published by Allen Lane (£35). To support the Guardian, order your copy at Delivery charges may apply.
