BackA country for middlemen
India is at an interesting juncture where caste and class have combined to produce regressive economic results
Premium
It does not take much thinking to agree with the economic rationale of permitting foreign direct investment (FDI) in multi-brand retail. The logic has been debated and analysed for years now. From that perspective, the debate last week in the Lok Sabha and the Rajya Sabha was superfluous. What is interesting was the broad support from different ends of the political spectrum—the Bharatiya Janata Party (BJP) and the Left parties—in support of middlemen and petty traders in India.
It is not unusual in most developing countries to have a thick layer of middlemen intervening between primary producers (farmers, to give one example) and end consumers. Usually, this is a function of lack of organizational innovations and, at the same time, the prevalence of what Marxists call the “petty bourgeois" mode of production. This state of affairs prevails in newly decolonized countries where agriculture is the dominant activity. But this is highly unusual in economies of India’s size and stage of development.
A host of ills in the Indian economy today—inflation acquiring structural proportions, the inability to invest in modernizing the country’s agricultural marketing infrastructure and the fleecing of consumers who have little or no consumption choices (except in the case of higher income groups)—are due to the existence of this class of middlemen.
In the case of the BJP, support for this class is largely due to these traders being a core constituency of the party due to caste and other reasons. In the case of the Left, support for small traders is due to more complicated reasons. On the one hand, it is due to a misreading of what Marx wrote about the “pauperization" in society. On the other hand, the Left parties have truly become parties of the middle class and petty traders are certainly part of this class. It is one of those interesting junctures in India’s history where caste and class have combined to produce regressive economic results. These motivations are, of course, different. But the end result is the same: political support for the middleman, trader, rent-seeker.
There is nothing unusual in what the BJP is doing. But for an ostensibly progressive force such as the Left, one can only say this is wrongheaded understanding of both economics and politics.
What explains the Left’s support for middlemen and petty traders?
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
