is a momentous year for electoral politics, not just
in India, but in the world. Along with national elections
here in India,
there are important elections due in other parts of
the world - most notably in the United States. We have
all learned the unfortunate truth that the outcome of
the US elections matters to all of us and can even change
the course of global politics and economics, not to
mention destroy the lives of innocent people in the
opposite part of the globe. So we are forced to give
it some attention.
The news is that in the United States, just as in India,
the outcome of the elections is not as predictable and
self-evident as the current rulers in both countries
would like to think. And in both places, the rulers
appear to be oblivious to the real sources of discontent
– that is, the worsening material conditions faced by
Consider the following quotation: "We expect politicians
to place a positive spin on economic news, but to insist
that things are going great when many people have personal
experience to the contrary seems foolish. To justify
policies that more and more people call irresponsible,
he must claim that wonderful things are happening as
For a while, that famous 8 per cent growth rate seemed
to be just what he needed. But in the fourth quarter,
growth dropped to 4 percent. And as we've seen, the
jobs still aren't there."
You could be forgiven about thinking that this is a
reference to Prime Minister Vajpayee, the BJP-led government’s
focus on "India Shining" and the official rejoicing
at the 8 per cent GDP growth estimate the CSO has conveniently
produced for the current year. But no, this quotation
is not about Vajpayee – it is about President George
W. Bush, and the quotation is from the well-known American
economist Paul Krugman, writing in the New York Times.
Krugman takes issue with the recent claims made by the
US administration that employment has shown a healthy
increase in the current economic recovery in the US.
He points out that the recovery in the jobs in the most
recent quarter year was well below the rate of growth
of working age population. Over the past few years,
the picture is even worse. "Since the recovery officially
began in November 2001, employment has actually fallen
by half a percent, while the working-age population
has increased about 2.4 percent. By this measure, jobs
are becoming ever scarcer."
Despite this, the household surveys of unemployment,
on which the official unemployment rate calculations
in the US are made, suggest that unemployment has fallen
to 5.6 per cent of the labour force. How is this possible?
It happens, Professor Krugman says, because people are
not counted as unemployed unless they are actively looking
for work, and a growing proportion of the unemployed
population has simply stopped looking for work.
The reason they may have stopped looking for work is
because new jobs are very hard to find. Nearly half
of those who are defined as unemployed in the US have
been out of work for more than 15 weeks – and this number
does not include all those discouraged workers who have
simply "dropped out" of the labour force.
Even for many of those US workers who do manage to find
or keep their jobs, life has not got much better. Since
2001, real GDP in the US increased by 7.2 per cent.
But the increase in real wages and salaries since then
has been only 0.6 per cent, and for less skilled workers
there has been no increase at all. So the benefits of
growth have accrued to profits of corporations, not
to most of the people working for them.
Does all this sound vaguely familiar? Indeed, there
is much similarity between what is happening in the
country ruled by the current super-imperialist, and
the country ruled by one of that super-imperialist’s
most anxious and willing allies. In both countries,
the rulers are trying to put a positive spin on what
is essentially a bad economic situation.
The difference is that in the US the Bush regime has
gone in for major fiscal deficits to generate the economic
recovery, even if most of this has come in the form
of tax cuts which favour the rich. In India, by contrast,
the government has not used the current situation of
economic slack to increase its own investment, or to
increase pro-poor expenditures at all.
The point is the in both countries, economic recovery
has been mostly jobless. And this has been associated
with major deterioration in the bargaining power of
labour, and generally worse conditions for most workers.
But both sets of governments appear to have fooled themselves
into believing that they can use propaganda to counter
the evident reality.
12 years ago, George Bush's father lost the US election
(after a more successful war against Iraq) because he
was seen to be out of the touch with the economic reality
of most voters. There is a real chance that this particular
story will be repeated. The much-publicised backlash
in the US against companies outsourcing service work
to countries like India
is just one indication of the feelings of vulnerability
and frustration being experienced by the US working
Already, the major democratic contender for the President’s
job – John Kerry – is ahead of George Bush in the opinion
polls. It may be that both Bush and Vajpayee will find
that hype cannot overcome reality when people actually
have the power of the vote.