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Monday February 6th, 2023

Bipin Chandra Pal: ‘Socialism’ in India’s past and future

This is an excerpt from Chapter 3 of Mark Hager’s recently published book, ‘Elusive Ideology: Religion and Socialism in Modern Indian Thought,’ currently available through Kindle, Barnes and Noble, Barefoot Cafe and Expographic in Pelawatte. The book’s Introduction and its Chapter 1 on Swami Vivekananda appeared in the August 2022 issue of Echelon entitled ‘What Should Modern Independent India Be and How Can It Get There?’ A different portion of Chapter 3, focusing on Sri Aurobindo, appeared in the September issue of Echelon and the Oct. 7, 2022 issue of Economy Next, entitled ‘Sri Aurobindo: Mystical Awareness Supplants Production.

Alongside his early compatriot Aurobindo, Pal first reaches public prominence during the 1890s as radical critic of Congress policies. He characterizes the Congress approach as one of “reform” and finds it lacking in two key respects: 1) failure to press for prompt independence from British rule, and 2) failure to visualize and pursue India’s transformation into a non-oppressive social order.

Like Aurobindo, Pal in his early career portrays imperial rule as a “despotism” of exploitation directly antagonistic to India’s economic interests:

Our economic interests are in perpetual conflict, under existing conditions, with the economic interests of the British nation and the British Government. And our loss economically is England’s gain; our gain economically is England’s loss.

We will examine below in detail how Pal analyzes India’s economic predicament. Pal likewise worries about imperialism’s cultural influence, oriented toward consolidating British rule, destroying Indian practices and values, putting nothing worthwhile in their place.

India’s progress requires “complete autonomy”: overthrow of imperial rule. Pal criticizes Indian reformers in a paradoxical vein reminiscent of Vivekananda. Reformers, he writes, “can never he true lovers of their country,” because they dwell on native ills of Indian life and glorify Britain as prototype of the good society. Reformers think India’s well-being requires British tutelage. Like Vivekananda, Pal rebukes such “reform” for a more radical spirit, affirming rather than denying India’s greatness. The first demand of this “New Spirit” is political freedom. Freedom cannot come through slavish acquiescence to and imitation of British institutions. It is only through “struggle for freedom itself,” Pal writes, that freedom can be learned.

As Pal sees it, this radical affirmation of India, so contrary to reformist spirit, will unleash patriotic energy spurring changes more sweeping than those visualized by the Congress establishment. In contrast to Congress agitations for government reforms, competitive service exams and the like, Pal summons a new agenda, a “new synthesis”: abolition of all hierarchical social dominance. This requires a complex forward-looking affirmation of India’s own genius, which Pal hopes to provide.

In view of his early radical anti-imperialism, it is striking to find Pal just a few years later advocating continued Indian participation in the British Empire. The shift, though not so contradictory as it may sound at first, marks transition in concern away from nationalist activism toward philosophical reflection on larger principles of sound social order resembling what overtakes Aurobindo.

From around 1910 onward, Pal’s writings show increasing fascination with the phenomenon of imperialism as “unification of humanity to an extent and upon a measure that is impossible under any known form of human organisation or association.” He outlines a vision for reformulated Empire, wherein India and other dominions enjoy national freedom in “Federal Constitution,” equal with Britain. “Federal imperialism,” he writes, is the “highest and the most practical Ideal for the Indian Nationalists.” It is an idea whose time has come, though this got missed “in the earlier years of our Nationalist agitation.” To have advocated continued association with Britain in 1905-1908 would have been “suicidal.”

Pal distinguishes between two imperialisms. One, exemplified by then-prevailing British rule, is political “domination” by “central suzerain authority” over subjugated dominions. The other “true empire-idea” is “co-operative partnership” among equals. This true empire-idea is not political, but essentially social. Its value lies in offering:

…the largest formula of human fellowship, so far dis-covered by our social movements and speculation, and that it is, therefore, the largest vehicle and instrument of that Universal Humanity towards which social evolution is always moving as its ultimate ideal end.

Like Aurobindo, Pal visualizes society evolving through progressive federalization toward ever-more-inclusive community. Like Aurobindo and seemingly Hegel—he assigns moral value to this.

Values of association, Pal stipulates, diminish with degrees of coercion. Free self-restraint, not coercion, is the crux of morality and community. “Freedom,” he writes, “is the very soul and essence of all human fellowship and co-operation.” It is the free quality of association that gives “real moral value.” Rousseau-like, Pal concludes that the moral quality of community resides in participatory democracy: “selfgovernment in the administration of the common affairs.” He echoes Rousseau’s notion that freedom lies in living by self-imposed laws through democratic participation in making them. Freedom is “submitting yourselves to the laws that you helped make and submitting yourselves to the regulation that you helped to impose upon yourselves and upon the community at large.” Again like Rousseau, Pal finds essential antagonism between “autocracy” and “public spirit.” Despotism kills all public life and “civic enthusiasm,” driving community members into selfish private life, “sordid” and “parochial.”

To embody freedom, association must represent “real community of interests,” not forceful imposition of some upon others. India’s participation in Empire must therefore transform into that of “co-partner,” “equal among equals.” India must become a “self-governing unit” before it can participate in “commonwealth.” This is what he thinks sometimes at least. Strange in light of his ardent nationalism, he meanwhile verges on positing that British conquest of India has been dialectically necessary, opening possibilities for new and higher association. It is not always clear that he thinks total independence as first step is the only way forward.

How can conflicts of interest between India and Britain transform themselves toward community, especially since conflicts at stake are recalcitrantly material and economic? At times, Pal resolves the conflict with Hegelian metaphysical flourish. Some “reconciliation of opposing interests” must be possible because every “synthesis” is the fruit of some “antecedent antithesis.” Force of the moral idea will resolve material conflicts, he suggests. At other times he sticks to material analysis, suggesting that “pure, even vulgar, self-interest” will soon move Britain toward a cooperative, non-exploitative posture. He does not coherently identify what “self-interest” might move Britain this way.

Pal distinguishes between two imperialisms. One, exemplified by then prevailing British rule, is political “domination” by “central suzerain authority” over subjugated dominions. The other “true empire idea” is “co-operative partnership” among equals. This true empire-idea is not political, but essentially social”

The solution to this puzzle, if there is one in his thought, emerges only in detailed economic analyses examined below.

Like Aurobindo, Pal visualizes the good society as a federated association and differentiated unity. In this regard, Hindu religion and society are prototypes in several ways of the world’s ideal future. Hindu religion, for example, is no unitary dogma or creed but a federation of “diverse theologies and dogmas and disciplines and rituals and worships, all moved, however, by one common spirit and pursuing one common ideal.” Hindu social economy is similarly federal, with autonomous caste groups cooperating interdependently. Likewise, Hindu polity is “federal type” with communal villages organized into larger confederacies while preserving “all local autonomies.”

Federalism is not the only way Hindu culture represents the world’s future. Hindu experience and values incubate democratic community. Pal praises democratic habits and procedures in India’s ancient states. An even larger theme is Hindu genius for disciplining passion. A democratic community requires disciplined passion so that people find it possible to place a common good ahead of private satisfactions. Pal coins the term “Divine Democracy” to indicate an “essentially modern” democracy holding true to Indian spirituality and culture. He interprets Hindu ascetic discipline as “moral education” in material self-restraint.'” Like Vivekananda, he interprets Hindu freedom as what Kant could applaud: freedom from slavery to passions, not freedom to satisfy them.

BHAKTI SOCIOLOGY

Though their views converge in many ways, Aurobindo and Pal diverge sharply in theological preference. As Aurobindo leans increasingly toward Advaita, Pal leans increasingly toward Bhakti.

To be sure, Pal sometimes writes in the idiom of Advaita. His non-Advaitic approach emerges, however, in his general philosophy of religion, which rivals Aurobindo’s in scope and ambition. The history of religion, Pal writes, lies in human attempts to grapple with the “not-me,” that which is strange and external to the self in nature and in society. Self and notself relate through three persisting modalities—knowledge, emotion, and will—each requiring subject and object. This dualistic scheme removes Pal from Advaitic non-duality.

Pal offers several further reasons for preferring theistic formulations over Advaitic ones. Like Aurobindo, he portrays the activity of ultimate reality, Brahman, in Hegelian language. Brahman moves from unconscious simple unity through diversity to self-differentiated conscious unity. For both Aurobindo and Pal as for Hegel, social evolution manifests and reflects this process. As Pal explains it, however, Hindu thought contains two basic schools that view Brahman’s cosmic action differently from each other. The Advaitic or “Samskara” school emphasizes Brahman as simple, undifferentiated unity while the Vaishnavite school sees Brahman as “self-differentiated unity.” The Vaishnavite conception as differentiated unity corresponds more closely than does the Advaitic conception to Pal’s notion of society:

The Ultimate Reality does not exist in himself as undifferentiated unity or consciousness but as self-differentiated congeries of relations there in his own being… As we are domestic and social beings here, realising ourselves in organised society so stands the Lord, an organised spiritual society of His own, composed of the endless multiplied forms of his Prakriti.

Ultimate Reality is not only society, according to Pal, but society perfected. All social relationships have two aspects, the progressively realising and the eternally realised. In this world, they exist as progressively realising, moving from less to more perfect, but in God’s absolute being they exist in a perfect and eternally realized state. God is human society idealized: perfectly harmonious differentiated unity.

In Pal’s interpretation, Vaishnava theology portrays God not only as perfect society but also as perfect personality. There is no surprise because Pal, like Aurobindo, sees all societies imbued with distinctive “personalities.” As Divine Personality, God resembles the social nature of human beings. Humans grow and realize themselves as personalities only through intercourse with other personalities. Without plural personalities, there can be no personality at all. As Personality, God too needs other personalities in order to grow and attain self-knowledge. This explains God’s eternal self-differentiation into multiple human personalities with whom to have relationships. This implies the divine nature of all humans who stem from God’s ongoing process of self-differentiation. Vaishnava theology pushes the analogy between human and divine still further by conceiving the Absolute, in the form of Krishna, as “Perfected Man.” In sum, Vaishnava theology sets up for Pal complex equivalents among God, society, and human personality. This equivalency emerges once again in his discussion of Mother Worship, a theme explored below.

In still another argument, Pal sees Vaishnavism, allowing for differentiation in unity, as less world-negating than Advaita. Advaita portrays both senses and normal human relations as distractions from undifferentiated insight into reality. It therefore lays exaggerated stress on suppressing sensations and human relations. Vaishnavism, by contrast, seeks not to expunge but to regulate sensual appetite, which it sees as an aspect of Godhead, not merely illusory distraction. Senses are neither indulged nor repudiated, but regulated and consecrated. Normal social relations are not devalued but transvalued as relationships with God.

On another issue also, Pal praises Vaishnavism over Advaita. In Advaita, he argues, the Ultimate is approached solely through insights, while Vaishnava Bhakti approaches God also through passionate emotion and willing activity. This passion and will Pal finds more humanly engaging than mere insight.

Pal praises Vaishnavism not only as theology but also as social movement. The spirit of Krishna (incarnation of Vishnu) Bhakti is democratic because it delivers a “new social message,” the Divine presence in all persons and society. Vaishnavism provides ideology for “mass movement” against caste hierarchy. In Bengal, according to Pal, medieval Vaishnavism sought lower-caste emancipation from social and religious disability so as to create a “new and reformed community” with a “new set of Vaishnavic laws” targeted toward equality. Regrettably, this transformative project proved short-lived and ineffectual, with Vaishnavism captured by high-caste Hindus steeped in the old attitudes. Nevertheless, the early spirit of Bengal Vaishnavism foreshadows and partly embodies the transformative spirit Pal praises for modern times.

VARNASHRAMADHARMA AND SANNYASA: RECONCILING SOCIAL ENGAGEMENT AND MORAL AUTONOMY

Though Pal defends Vaishnavite Bhakti in particular, he also extolls other aspects of Hindu religion and society. Sometimes his comprehensive praise makes him hard to interpret. Pronouncements on caste, for example, manifest ambivalence. His Vaishnavite sympathies reveal distaste for hierarchical dimensions. Pal lays little or no stress, however, on caste as system of economic exploitation. Moreover, he perceives certain virtues. First, as mentioned, he praises the caste system as a social economy composed of autonomous but federated communities, combining virtues of freedom and cooperation. Second, within any particular caste he finds “essentially democratic institutions,” though he fails to elaborate.

Pal also urges that criticism of caste often misses the mark. First, caste divisions contradict equality and fraternity no more than social divisions elsewhere, such as class divisions in Europe. Caste should not be singled out for condemnation when shortcoming is universal. Second, Pal finds much of modern Indian anti-caste sentiment illmotivated. Indians who repudiate caste do so primarily because it irksomely restrains eating and sexual appetites, not because they hold lofty aspirations for human fraternity. To abolish caste restrictions for the sake of free appetite satisfaction is for Pal—because he believes that appetite restraint undergirds all true community—a negative step, especially if, as is likely, caste divisions may quickly be replaced by class divisions.

Despite these qualified defenses of caste, Pal shows little sympathy with caste as system of hierarchy. He sometimes suggests that the out-ward hierarchy of caste was not in the Hindu past consciously experienced in terms of superiority and inferiority. The spiritual detachment cultivated by traditional Hindu culture blocked any such sense of superiority or inferiority. Pal explains this spiritual detachment in terms of traditional embeddedness of caste in the varnashrama system. The varnashrama system softened outward inequalities by submitting practitioners from all castes to the equalizing inward spiritual disciplines of the four sequential life stages: student, householder, mendicant and renouncer. This system of life stages, thinks Pal, promoted a sense of “spiritual democracy” among all ranks. He seems unaware of or untroubled by low-caste exclusion from Sanskritic culture in which the ashramadharma of sequential life stages was normatively practiced. What counts is the ideal, perhaps imperfectly realized, of inward spiritual discipline and democracy cutting across merely outward divisions of caste.

Pal defends ashramadharma not only as spiritual equalizer of caste, but also on another ground, as odd in its way as the first. The strict social discipline of the ashrama system has as its paradoxical purpose liberation of each individual as sannyasin in the final renouncer life phase. As Pal notes in many contexts, higher forms of freedom require restraints upon lower forms of action. “Through subjection to freedom,” he writes, is precisely the “key-note of Hindu culture.” He describes the sannyasin as having been cured of the “natural conceit of self ” by the “rigid laws and disciplines” of his early-life “social obligations.” The future sannyasin, through the practice of these disciplines, renders himself devoid of “self-regarding” desires, “his will freed from all individualistic impulses.” Kantian overtones lie in Pal’s description of the sannyasin as a “law unto himself,” willing the “Universal,” with “his intellect established in the verities of Reason.” Self-subsistently moral, the sannyasin stands free of all social ties. He is, Pal suggests, “super-social,” meaning “beyond social.”

This conception of the sannyasin is commonplace. More surprising is that Pal himself should endorse this vision of an asocial state as supreme moral achievement. How does this lit with his view that human morality and freedom thrive best through communal engagement and commitment? Only paragraphs after explaining his Kantian sannyasin, Pal writes that human personality “realizes and perfects it-self, not through individualistic isolation but through increasingly larger “associations.” Pal’s criticism of “individualistic isolation,” though directed at Western individualism, seems relevant also to the Kantian sannyasin he seems to applaud. The paradox partly dissolves by recognizing that Pal’s Kantian sannyasin and his socially moralized person resemble one another in selfless orientation, cultivated self-discipline and transcendence of narrow appetite. A striking difference remains: the sannyasin is moral and free after and separate from his associative life, while the socially embedded person is moral and free during and within social experience.

Pal does not seem to notice or address this paradox, much less resolve it. We can perhaps resolve it for him, however, if we take as the crux of his vision the moral life of social engagement and work from there.

In this light, Pal’s social ideal might be an order in which two ‘moments’—the life of social engagement and restraint over here, the life of autonomous moral fulfillment over there—become more closely and subtly harmonized. The traditional Hindu scheme of ashramadharma Plus sannyasins could be thought a crude first approximation of Pal’s ideal. In the classical progression through ashramadharma toward sannayasa, social restraint and autonomous moral fulfillment fall into distinct and separate life phases, rather than harmonizing and intertwining. Just as ‘moments’ of restraint and autonomy are segregated, so are the ‘geographies’ of those experiencing them. Sannyasins live as isolated “supersocial” beings while everyone yet to reach sannyasa lives in webs of social engagement. In both time and space the ashrama/sannyasin scheme combines social engagement and moral autonomy more crudely than an order in which moral autonomy exemplifies itself all along through social engagement.

Pal might well applaud the ashrama/ sannyasin scheme and yet con-cede its crudeness, preferring a subtler scheme harmonizing the two moments and geographies—social engagement and moral autonomy—that the classical scheme separates.

This interpretation is borne out by Pal’s essay on Tolstoy called “Civic Freedom and Individual Perfection.” It rebukes Tolstoy for a vision of moral transformation Pal finds excessively “individualist.” By this, he means that Tolstoy imagines moral and spiritual life as private spiritual endeavor, divorced from “social and civic” effort. This fails to recognize “organic unity between the individual and the social organism.”

Personal character and social institutions “act and re-act” together. Individual and social transformation require each other. Pal accuses Tolstoy of an aspect of what I call “pure religious ideology”: artificial separation of “spiritual” issues from “material” ones. Pal ridicules this, calling it “medieval.” In both Europe and India, he argues, medieval thought visualizes private self-realization as distinctly “spiritual,” separate from the “material” life of social action. His critique of this medieval tendency seems to bespeak dethronement of the sannyasin ideal. His praise is for the mythically democratic life of ancient India, when the “Hindu” lived as “free citizen” seeking the “highest self-realization not through the denial and negation of social and civic rights and responsibilities but through a due discharge of these.”

CIVIL RELIGION AND THE MOTHER

To heal the medieval split between spirituality and social engagement is a task of civil religion. Like Aurobindo, Pal pictures India’s rising nationalism as “religion.” Indian nationalism, he argues, should exist as an “organised cult” with “patriotic rites” and “sacraments of our civic life.” This will alleviate the artificial medieval split between “cult of patriotism” and “religion specifically so-called.” Though conceding that India’s civil religion should not lie with any particular religion, Pal sees ways in which Hinduism already represents a veiled but powerful form of civil religion.

Pal takes pains to interpret what he calls the “Cult of the Mother” in radical Indian nationalism. The rhetoric concerning Mother India, though surely patriotic, goes beyond the “mere civic sentiment” of European “secular patriotism.” The Cult of the Mother is a truly religious devotion, through which Indians actually worship their own society. The Mother worshipped, writes Pal, is “the idealisation and spiritualization of the collective life and functions of our society.” Durkheim applauds.

The symbolism of Motherhood, Pal explains, is appropriate because “society” provides its members with the “mental and spiritual nourishment” they need to thrive as humans. In sustaining life and providing nurture, society resembles both God and actual human mothers. Around Motherhood Pal organizes a religious conception of dependence and devotion simultaneously theological and sociological.

For Pal as for Aurobindo, it is not just the nation that stands as an object of worship. “The Cult of the Mother” links to what Pal calls the “Cult of Humanity.” Humanity itself stands as God and mother to all human beings. All human beings and collectives exist as equal manifestations of the Divine. Human society represents and embodies the differentiated unity of the Divine. The Cult of the Mother is therefore a sort of federal religion in which the Divine can be worshipped at various levels from the most particular to the most universal, no focus of worship excluding others. There is, in particular, no contradiction be-tween worship of God in her transcendent dimension and devotion to society as immanent manifestation. As Pal argues, Hinduism denotes both Humanity and Divinity by the same word, Narayana. “Humanity and Divinity are, indeed, one,” he writes.

By the same token, there is no contradiction between devotion to one’s particular society and devotion to humanity at large. One’s particular society, valuable in its own right, finds meaning and fulfillment beyond itself as contributor to humanity at large. As Pal tirelessly repeats, the life of any social entity completes and fulfills itself through service to larger totalities in which it participates.

Hinduism, to Pal, bears special affinity to the sociological religion he has sketched out. First, as a federal religion Hinduism lends itself to the complex orientations that sociological religion implies. It provides an appropriate basis not only for Indian national religion but for a religion of humanity. It has been “the purpose of God in India,” he thinks, to develop the “federal idea” and to “lead humanity” into a religiously-bonded “universal Federation.

There is a second respect also in which Hinduism fits perfectly in simultaneous roles as Indian national religion and universal religion. Forms of religion, Pal argues, typically evolve through stages: ethnic, creedal, and universal. Hinduism is distinctive because it has no creed and therefore skips the creedal stage, developing directly into a universal religion without losing its ethnic dimension. Hinduism exists as religion “both national and universal,” aptly suited as sociological religion of both Indian nationalism and wider human universalism where nationalism fulfills its destiny.

As Pal explains, the Cult of the Mother in Hinduism has prominently served as India’s civil religion. “Our history is the sacred biography of the Mother,” he writes. The Divine Mother has been worshipped in various forms. Different names and forms of the Goddess represent different stages and aspects of India’s national life. Jagaddhatri, for example, stands for primitive struggle with nature, while Durga represents conscious national unification Lakshmi stands for economic life, Sarasvati for intellectual life, Karttikeya for military life, and so on. In short, Goddess worship represents an elaborate civil religion. Different incarnations of the Goddess have “deeper meaning” as “different manifestations of Mother India.

Pal’s sociological religion bespeaks influence from Durkheim. It recalls Durkheim’s notion of “organic solidarity” when Pal speaks of society as “organic unity,” cemented by “solidarity.” Like Durkheim, Pal visualizes society as organism, functioning through interdependent sub-parts making distinct contributions to the whole. Pal equates “organic unity” with “federal organisation,” meaning “freedom of the parts in the unity of the whole.” In society, this means that separate sub-parts and individuals should enjoy “legitimate freedom” but pursue well-being through “larger collective ends.”

Pal contrasts his social vision with European liberal individualism where people pursue only their “natural instincts and appetites” in “perpetual antagonism” to fellow humans. Pal links liberal individualism to capitalism, speaking of “the doctrine of the survival of the fittest” and “conflicts of economic competition.” This “individualistic social philosophy” must yield to an organic conception that Pal calls “socialism”.

Pal stipulates that the socialism he favors should not be confused with what he calls “pagan socialism.” Pagan socialism stifles individual freedom and self-fulfillment so as to achieve collective ends. This stifling, perhaps Durkheim’s primitive “mechanical solidarity” returning as communist zombie, is as faulty as exaggerated liberal individualism in the modern West. Socialism should “reconcile individuality with social unity, freedom with subjection.

FRAGMENTS OF A HINDU SOCIAL ECONOMY

Close scrutiny of his detailed economic analyses confers some credit on Pal but also highlights shortfall at the end of the day. India’s native social economy, writes Pal, based itself on “co-operation” and “socialism,” not competitive and exploitative Western principles. Meanwhile, India’s attitude toward material life has been one of “renunciation,” not “appropriation” as in the West. Habits of co-operation and renunciation are, of course, precisely what Pal deems necessary for constructing a satisfactory socialist order. Such views are of a familiar stripe by now. Hinduism is good values and socialism, while the West is bad values and capitalism.

Pal differs from thinkers examined so far, however, in the degree to which he grasps capitalism as an economic system, not mere moral perversity. His taste and aptitude for economic analysis bring him close to discussing socialism too as an economic system, not merely as correct moral outlook. In the end, however, he fails to engender more than vague germs of socialist theory for India.

Pal’s 1920 publication, The New Economic Menace to India, sets out a sustained discussion of India’s predicament. Pal attempts to formulate an economic philosophy and strategy for India. The core of India’s economic predicament has been and remains subjugation to imperial British capital.

Like Aurobindo, Pal insists it is not imperialism’s administrative drain but British capital itself that most threatens Indian wealth. This occurs in several ways.

First, once-thriving native industries such as textiles have been destroyed by policies designed to maintain India as Britain’s captive market for manufactures. Devastating consequences of this de-industrialization include massive dis-employment, poverty, population pressure and permanent agrarian crisis. Meanwhile, Indian wealth drains abroad to pay for manufactured imports.

Second, new industries on Indian soil are foreign-owned such that drained-off profits are unavailable for domestic investment and development.

Third, Indian natural resources are exploited for foreign purposes rather than those of India’s own development.

Fourth, labor laws have been enacted ensuring, plentiful cheap work forces for British enterprise.

Pal’s analysis, though hardly exhaustive, paints a general picture of retarded, distorted development and rising poverty due to foreign control. Exploitation is one of Britain’s avowed goals in India, Pal argues, quoting a remark he attributes to Lord Curzon that “exploitation and administration” were unified parts of Britain’s “duty” in India.

India requires independence, as Pal contends at this point in his career, so that its government may follow policies conducive to India’s own economic well-being rather than that of British capital. A free national government could regain domestic ownership of land and resources, drive tougher bargains with foreign capital on matters of wages and other economic benefits, and enact a protective tariff to foster domestic industrialization. Such a government could also borrow foreign capital, paying interest and retaining a share of profits from effective investment, rather than losing all profit abroad.

India’s short-term prognosis, Pal writes, is not bright. British capital has moved into a new phase. Formerly, the British state, though favorable to capital, was not engaged with it in outright collaboration. As capital has grown more massive, however, a new era emerges in which British state policy and the interests of big capital fuse together. The British state, including the government of India, will initiate direct wealth transfer to big capital, through tax-financed research and revenue subsidies, forcible land acquisitions and so on. The state may also enter profit-sharing monopoly enterprises with capital. It may even launch profit-making enterprise in its own right. All in all, Pal foresees emergence of higher symbioses between state and big capital that some call “late capitalism.” Pal calls it “State Socialism,” with “capitalistic spirit.” We will call it “state capitalism” to conform with our discussion of Das and distinguish it from “state socialism” understood as a system of state-centered public ownership.

Pal imagines British state capitalism transforming both India and Britain. India faces a more unified and aggressive imperial capitalist program under which Indian markets, labor and resources will lie ever more savagely exploited. The ensuing enrichment will help British capital transform the situation at home, where militant labor has begun to agitate for transfer of the economy into public hands. New infusions of wealth from the colonies may allow British capital to take the steam out of this militancy, bribing labor with higher wages and benefits, thus siphoning off mounting pressure for public ownership. In fact, socialist unrest at home is prime driver for newly aggressive state capitalism in the empire. Capitalism’s ruthlessness at home, having provoked labor’s militancy, must be reined in, but also replaced by heavier ruthlessness abroad.

India’s only hope is to forge alliance with Britain’s socialism against its capitalism. The combined power of such an alliance will secure the true interests of both British labor and Indian development in a unified anti-capitalist strategy. British labor cannot long rest in any “deal” with imperial capital for higher living standards. Modern capital is mobile so as to flow always to fields of highest profit. British capital will flow away from home so long as Indian labor remains ill-paid, un-unionized and devoid of rights. Formerly British jobs will flow into India while wealth will flow increasingly in reverse from India to British capital. With fewer jobs available, British labor’s bargaining power and living standards will decline. India will meanwhile become more and more a mere workforce for foreign owners.

British labor’s best strategy is not junior partnership with British capital in colonial exploitation. It lies rather in promoting India’s independence and a unionized Indian workforce pressing for parity with British labor’s living standards. According to Pal, this would secure British labor’s own living standards against threat of capital mobility induced by the lure of cheap Indian labor. If conscious enough of these considerations, British labor could push policy in helpful directions: independence for India and unionization of its workforce. If not, all is lost.

Pal’s keen sense of capitalism as international system matches up with his sense of socialism as a force for international cooperation.

It is here, if anywhere, that Pal solves the puzzle of transforming the British-Indian relationship from exploitation to cooperation. British capital is a “particularistic” interest, holding captive the true interests of both Britain and India. An alliance of the subjugated could trans-form the Empire from a structure of dominance toward a co-operative federation. Pal seems to imagine abolishing capitalism as part of this transformation, establishing a co-operative socialist federal empire.

After analyzing India’s imperial predicament, Pal tries to outline a vision of India’s post-independence economy. “Socialism,” he writes, “represents the most advanced thoughts and speculations of modern economics.” Though Pal clearly intends his vision to be progressive and socialist, his suggestions are too random and scattered to provide a unified socialist viewpoint. He never comes squarely to grips with what patterns of ownership and productive organization India should adopt.

At some moments, expanded industrialization seems to be key. India must become “not only an agricultural but a manufacturing nation also,” Pal writes. Much of his displeasure with Britain’s rule, as we have seen, is that it stifles India’s industrial development. In various passages, he offers strategies such as tariffs, capital imports, and national industrial research aimed at fostering rapid development. Moreover, Pal often seems to imagine India’s industrialization occurring within a largely capitalist framework. The national industrialization strategy will provide Indian capitalism with needed opportunities for growth. The well-being of the masses, meanwhile, lies in stiff taxation on capital’s “Excess-Profits” in order to finance social spending for benefit of the poor. Pal does not speak explicitly of a publicly-owned Indian economy, though he is well aware that public ownership is on the agenda for British socialism.

The strands in Pal’s thought just mentioned seem to contemplate India’s economy not as true socialism but as a sort of nationalist industrial capitalism, combined with a progressive social welfare state. There are other strands in his thought, however, quite at odds with such a vision. Over and over, he criticizes both capitalism and large-scale industrialization, which he equates too simplistically with each other. “Capitalist industrialism” for India, he suggests, is simultaneously impossible, unwise and immoral.

First, large-scale capitalist production requires imperially captive markets, such as India has provided for Britain, in order to sell mass-produced commodities at a profit. Because it does not command such captive markets, India cannot effectively rely on large-scale capitalist production. Second, overly capital intensive industrialization will displace workers, exacerbating India’s already massive problems of unemployment and overpressure on agrarian land. Third, capitalist industrialization will degrade the moral tenor of Indian life, replacing it with the “corroding evils” of capitalist culture.

Pal’s critique of capitalist industrialism, though not erroneous, suffers from failure to articulate a non-capitalist model of industrialization that might alleviate the ills he points out. Pal fails to distinguish capitalism from industrialism and shows no familiarity with theories of how socialism, through investment according to priority needs rather than profit, might achieve industrialization without market imperialism or mass unemployment. His critique of capitalist industrialization there-fore verges on a backward-looking and romantic anti-industrialism.

Pal’s rejection of “capitalist industrialism” integrates poorly with his image of an industrializing capitalist welfare state. Perhaps he sees the capitalist welfare state as a transition to something beyond capital-ism or envisions capitalist enterprise as a limited component of a larger socialist economy. He specifies no position. His rejection of “capitalist industrialism” implies that he would perhaps tolerate a “socialist industrialism,” but he provides only meager hints of what a socialist industrialism might look like.

Tension between Pal’s advocacy of industrialization and rejection of large-scale “capitalist” industrialism can perhaps best be construed as sympathy for light decentralized industry. We might infer that Pal envisions continuity with what he calls the “communistic” organization characteristic of traditional Indian craft-style production, prior to imperial depredations. In that system, according to Pal, craft workers typically owned land to ensure their subsistence and organized themselves on a “co-operative” worker-ownership basis with no wage labor class of subservient non-owning workers. This may be something of what Pal imagines for India’s future. India’s industrial development, Pal writes, “will have to follow the lead of her own genius” in accord with her “past historic evolution.” Pal does not, however, outline what modern industrial forms India’s past might prefigure.

Pal recognizes overpopulation on land as India’s most massive problem, with its consequent underemployment and poverty. Industrialization must seek to relieve this by soaking up excess agrarian labor, not exacerbate it by displacing still more non-agrarian workers, forcing them to seek subsistence on the land. To absorb surplus agrarian labor, India’s best bet might be a scheme of light and laborintensive village industry, perhaps along principles of co-operative ownership.

Pal sets out to reconstruct India’s villages as autonomous democratic communities. Even prior to independence, he argues, villages can organize themselves to function in relative autonomy from the imperial structure, introducing a grass-roots germ of Indian independence and democracy. Through collaborative self-organization and self-taxation, villages can improve themselves in medicine, education, safety and sanitation. Into this scenario Pal dribbles hints of socialized production, suggesting that villages “combine” for purposes of “industrial advancement” and that public works be constructed and operated through “co-operative labour of the villages”.

In the past, writes Pal, village communities existed as “isolated units, without any wide outlook or outside concern.” Pal envisions that “history will…work itself back” to an Indian regime based on democratic village communities. In such a dialectical recovery, not unlike what Aurobindo villages will not be isolated but integrated into larger federal associations. Pal offers little to nothing by way of detail.

Pal also fails to offer actual strategy for ameliorating hierarchy and neglect of the downtrodden. He speaks of a “new synthesis” to abolish hierarchy and praises Vaishnavism for its “massive movement” and socially transformative dimensions. No suggestion emerges, however, as to how India’s social and economic hierarchies might actually be dissolved.

Pal’s work, in short, contains only tentative hints of how to build a worthwhile Indian social economy. By imagining resolutions of paradoxes in his thought and extrapolating from hints, we can piece together vague but plausible scenes of decentralized and labor-intensive, workerowned industrial production, closely coordinated with agrarian life”

Pal’s work, in short, contains only tentative hints of how to build a worthwhile Indian social economy. By imagining resolutions of paradoxes in his thought and extrapolating from hints, we can piece together vague but plausible scenes of decentralized and labor-intensive, worker-owned industrial production, closely coordinated with agrarian life. Possible roles for larger-scale production, capitalist ownership, national planning. and social welfare policy receive hazy mention while methods of transformation remain unexplored. This disjointed quality in Pal’s strategy disappoints because he musters serious competence in economic thinking. His aptitude applies better in criticizing what he dislikes than in explaining what he favors. In the end, he is less interested in describing strategies and arrangements for modern Indian socialism than in contemplating the “socialist” spirit in traditional Hindu order.

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Sri Lanka to address SME tax problems at first opportunity: State Minister

ECONOMYNEXT – Problems faced by Sri Lanka’s small and medium enterprises from recent tax changes will be addressed at the first opportunity, State Minister for Finance Ranjith Siyambalapitiya said.

Business chambers had raised questions about hikes in Value Added Tax, Corporate Income Tax and the Social Security Contribution Levy (SSCL) that’s been imposed.

It should be explored on how to amend the Inland Revenue Act, Siyamabalapitiya said, adding that the future months should be considered as a period where the country is being stabilized.

Both the VAT and SSCL are effectively paid by customers, but the SSCL is a cascading tax that makes running businesses difficult.

In Sri Lanka SMEs make up a large part of the economy, accounting for 80 per cent of all businesses according to according to the island’s National Human Resources and Employment Policy.

(Colombo/ Feb 05/2023)

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Sri Lanka revenues Rs158.7bn in Jan 2023 up 51-pct

ECONOMYNEXT – Sri Lanka’s government revenues were 158.7 billion rupees in January 2023 but expenditure and debt service remained high, Cabinet spokesman Minister Bandula Gunawardana said.

In January 2022 total revenues were Rs104.5 billion according to central bank data.

Sri Lanka’s tax revenues have risen sharply amid an inflationary blow off which had boosted nominal GDP while President Ranil Wickremesinghe has also raised taxes.

Departing from a previous strategy advocated by the IMF expanding the state and not cutting expenses, called revenue based fiscal consolidation, he is attempting to do classical fiscal consolidation with spending restraint.

President Ranil Wickremesinghe has presented a note to cabinet requesting state expenditure to be controlled, Gunawardana told reporters.

State Salaries cost 87.4 billion rupees.

Pensions and income supplements (Samurdhi program) were29.5 billion rupees.

Other expenses were 10.8 billion rupees.

Capital spending was   21 billion rupees.

Debt service was 377.6 billion rupees for January which has to be done with borrowings from Treasury bills, bonds and a central bank provisional advance of 100 billion rupees, Gunawardana said.

Interest costs were not separately given. (Colombo/Feb05/2023)

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Sri Lanka’s Ceylon Tea prices down for second week

ECONOMYNEXT – Sri Lanka’s Ceylon Tea prices fell for the second week at an auction on January 31, with teas from all elevations seeing a decline, data showed.

“In retrospect, the decline in prices would be a price correction owing to the overall product quality and less interest from some key importers due to the arrival of cargo at destinations ahead of schedule,” Forbes and Walker tea brokers said.

The weekly sale average fell from 1475.79 rupees to 1465.40 rupees from a week ago, according to data from Ceylon Tea Brokers.

The tea prices are down for two weeks in a row.

High Growns

The High Grown sale average was down by 20.90 rupees to 1380.23 rupees, Ceylon Tea Brokers said.

High grown BOP and BOPF was down about 100 rupees.

“Ex-Estate offerings which totalled 0.75 M/Kg saw a slight decline in quality over the previous week” Forbes and Walker said.

OP/OPA’s in general were steady to marginally down.

Low Growns

In Low Grown Teas, FBOP 1 was down by 100 rupees and FBOP was down by 50 rupees while PEK was up by 150 rupees.

The Low Growns sale average was down by 8.55 rupees to 1547.93 rupees.

A few select Best BOP1s along with Below Best varieties maintained.

OP1                     Select Best OP1’s were steady, whilst improved/clean Below Best varieties maintained.   Others and poorer sorts were easier.

PEKOE                 Well- made PEK/PEK1s in general were steady, whilst others and poorer sorts were down.

Leafy and Semi Leafy catalogues met with fair demand,” Forbes and Walker brokers said.

“However, the Small Leaf and Premium catalogues continued to decline.

“Shippers to Iran were very selective, whilst shippers to Türkiye and Russia were fairly active.”

This week  2.2 million Kilograms of Low Growns were sold.

Medium Growns

Medium Grown BOP and BOPF fell by around 100 rupees

The Medium Growns sale average was down by 33.40 rupees to 1199.4 rupees.

“Medium CTC teas in the higher price bracket witnessed a similar trend, whilst teas at the lower end were somewhat maintained subject to quality,” Forbes and Walker brokers said.

“Improved activity from the local trade and perhaps South Africa helped to stabilize prices to some extent.”

OP/OPA grades were steady while PEKOE/PEKOE1 were firm, while some gained 50-100 rupees at times.

Well-made FBOP/FBOPF1’s were down by 50-100 rupees per kg and more at times.

(Colombo/Feb 5/2023)

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