Thursday 2 January 2014

The 'race to the bottom'

This excerpt from Howard Richards and Joanna Swanger, Gandhi and the Future of Economics, ed. Ivo Coelho (Dignity Press, 2013) 279-80, gives us an idea of the social cost of current economic policies in India. The authors are here presenting the "New International Division of Labor" (NIDL) analysis of India's 'economic miracle.' The upshot of this interpretation is that the boom is merely temporary - India happens, at present, to be placed in a position to take advantage of capital flows, but will in the end lose out, as capital keeps flowing to where costs of production are lowest (the 'race to the bottom'):
It might be difficult for certain readers to take to heart the levels of physical exhaustion endured by and the emotional tolls exacted from people who cannot rely upon institutionalized social security programs to any significant extent and who must rely on long daily commutes or even seasonal migrations in order to have any hope of keeping themselves and their families alive, but Breman’s fieldwork notes offer a glimpse. He writes: M is a widow and only allows herself to be recruited for brickyards that she can reach from Chikhligam in a fairly short time. That is because her two children have to stay in the village. The eight-year-old daughter is old enough to work together with her mother, but not the four-year-old son. Both thus stay at home where the girl looks after her little brother. The neighbours keep an eye on them. M returns home once a month to put affairs in order and to bring money for the coming weeks. This year she is working near Surat, and travelling back and forth is a heavy charge on her meagre budget. She leaves the brickyard early in the afternoon, reaches Chikhligam in the evening, and then stays until late the following afternoon. In this way she loses as little work as possible. On the other hand, she has no breathing space in which to recuperate. When she returns at the end of the season, M is worn out.[1]

[1] Breman 70. The increasing labour market flexibility engendered by India’s neoliberal reforms has hit formal sector workers as well. Breman reports that although the Factory Act explicitly stipulates a working day of eight hours maximum, power loom operators in textile mills, paid piece-rate, feel they have little choice but to work shifts that are far longer, in order to make enough money to keep body and soul together and also simply in order not to be replaced by others willing to work the long shifts. Ibid. 124-131.

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