Nos. 70 & 71, April 2018

Nos. 70 & 71 (April 2018)
India's Working Class and its Prospects

India's Working Class and its Prospects

VIII. Different forms of capital in India, reflected in the working class

So the working class in this country, created under colonial rule, today presents a complex picture. Let us see to what extent the different contingents of the Indian working class reflect the qualities of the proletariat observed by Marx, on the basis of which he considered it the revolutionary subject – the conscious agent which acts on the objective situation to transform it. 

We began by quoting  Marx’s statement that “In proportion as the bourgeoisie, i.e., capital, is developed, in the same proportion is the proletariat, the modern working class, developed”. However, a question arises when we examine the case of India: what form of capital is being developed, and what are the implications of this for the development of the working class? It turns out that different forms of capital (i.e., different forms of the relation between the capitalist class and the labourer) co-exist in India. And this finds its reflection in the composition of the working class.

Marx lays out the trajectory of the emergence of the capitalist mode of production in Capital: he follows the development of the industrial capitalist from the stage of cooperation, through manufacture, and finally modern industry, which employs machinery and the latest developments in science. In the first two phases above, the labour process, seen from the technological point of view, continues exactly as it did before, except that now it is a labour process subordinated to capital. This is called the ‘formal subsumption of labour to capital’. The capitalist exploits the worker by extracting ‘absolute surplus value’, i.e., by simply prolonging the working day beyond the point at which the worker has produced the equivalent of his wages.

The final phase, however, is a new mode of production – the capitalist mode of production. This mode is specific technologically and in other ways, and transforms the real nature of the labour process and its real conditions, applying the latest developments in science and working on a large scale and working on a large scale which corresponds to these advances. Only at this point does the ‘real subsumption of labour under capital’ take place. With this, the capitalist shifts principally to the extraction of ‘relative surplus value’ (i.e., reducing the share of the worker’s working day going to wages by raising the productivity of the worker).30 At this stage, capitalist production tends to conquer all branches of industry it has not yet taken control of, where there is as yet only formal subsumption. Once it has taken control of agriculture, the mining industry, the manufacture of the main materials for clothing, etc., it seizes on the other spheres, where the subsumption is as yet only formal or there are still even independent handicraftsmen.

While Marx depicted the above trajectory on the basis of England, a very different process unfolded in India. Marx describes how colonial plunder, the slave trade, commercial wars, and so on played a critical role in launching capitalism in Europe, but in countries like India, no such bounty for capitalist development was available, and in fact the reverse was true, since such countries were the victims of that same plunder which helped launch capitalism in Europe.  

Thus capitalism did not develop in India organically, through the development of native capitalist elements in the main. It was imposed from without, by a colonial ruler, according to the interests of dominant British capital. This externally-imposed form of capitalism did not, as in England, eliminate the earlier mode of production. Rather, it retained the earlier mode to a large extent, albeit in a modified form. Describing the impact of colonial rule, the Comintern in 1928 made an important distinction between pauperisation and proletarianisation: “the drawing of the village into the sphere of monetary and trading economy is accompanied here by a process of pauperisation of the peasantry, destruction of village handicraft industry, etc., and proceeds at a much more rapid rate than was the case when the same process took place in the leading capitalist countries. On the other hand, the delayed industrial development in the colonies has put sharp limits to the process of proletarianisation.” (CI 1928, emphasis added)

As a result, India did not become an integrated capitalist economy, nor is the labour market unified. Different types of capital co-exist and are reproduced, and the labourers are divided into different contingents.

Industrial capital in modern industry is itself split between large corporate firms, medium enterprises, and small enterprises, with barriers to capitalists moving from one to the other. In China, Mao linked the division between the big bourgeoisie, on the one hand, and the medium and small bourgeoisie to the impact of imperialism. The ‘comprador’ big bourgeoisie served the interests of imperialism, whereas the ‘national’ bourgeoisie, largely to be found among medium and small industry, objectively was placed in contradiction with imperialism.

In India, State policy, including bank credit, taxation, import policy, monopoly regulation, provision of infrastructure (electricity, transport, land), and so on, discriminates overwhelmingly in favour of large firms. (The latest and starkest example is the Goods and Services Tax.) This policy plays havoc with the viability of, and employment in, small and medium firms. Secondly, large firms have increased outsourcing to small and medium units over the years, a form of penetration of big capital in the small and medium sector of industry. This has made it a more complex and intricate task to draw a line of demarcation between the two sectors. Nevertheless, the principle of the need for demarcation remains valid.

This division of industry according to the character of the capital in different segments has implications for the working class movement. In a day to day sense, trade unions routinely pursue differentiated policies according to the capacity of the capitalists to pay, and so pitch their economic demands lower in small and medium firms. More basically, while workers have a contradiction with capitalists as such, their policy toward different segments would depend on the immediate stage and tasks of the revolution, and the position each segment of capitalists would occupy during that stage. The classic example is that of the Chinese Communist Party, which made such differentiations at various twists and turns of their long revolution. (In the present issue, one article describes how a Chhattisgarh Mukti Morcha-affiliated union attempted to pursue such a differentiated policy with small steel units in Bhilai.)

Apart from industrial capital proper, there is a large sphere of petty production, which merchant capitaldominates. Merchant buys the output of petty producers and distributes it. Through buying commodities at below their value (unequal exchange), merchant capital extracts surplus from petty producers. Basu and Basole sum up:

the particular type of capitalism found in Indian informal manufacturing is characterized by a large number of very small firms locked in unequal exchange relationships with merchant and finance capital. Broadly speaking formal rather than real subsumption of labor to capital, and extraction of absolute rather than relative surplus value characterizes many firms. Surplus extraction via the “conventional” wage-labor route is compounded by unequal exchange, unpaid domestic labor, labor bondage, contingent or casual labor, and gender and caste hierarchies. (Basole and Basu, 2009)

Indeed merchant capital in India subordinates a larger number of labourers than does industrial capital, though it does so at much lower levels of output per worker. It exploits not only self-employed workers, but even small industrial enterprises, since they are starved of capital and lack direct links to the market. In Europe, merchant and usury capital were transitional forms to industrial capital, but in India they are deeply entrenched in agriculture and informal industry. The large sphere of petty production in India offers ground on which they can flourish.

Self-employment: According to NSS data (NSSO 2016), there are nearly 20 million unincorporated manufacturing units in India, employing roughly 36 million persons. Of these manufacturing units, 86 per cent are Own Account Enterprises, which do not hire even one worker on a regular basis, but rely on family labour. These account for 26 million workers, or about 63 per cent of the workers in all such units.     

However, some of what appears to be self-employment may in fact be (disguised) wage employment on a piece-rate basis. Srivastava points to the growth of “homeworkers” among the self-employed:

The predominant mode of homeworking among the manufacturing sector self-employed
workers is that of vertical sub-contracting or the most dependent relationship, accounting for about 70 percent of the total in 1999-00.... These macro results are well corroborated by industry-specific and micro studies which provide evidence of increased ‘home-workisation’ among female workers, especially in export oriented global value chains such as those in apparel manufacturing, which connects together different forms of waged labour and ‘self-employment’ across the value chain. (Srivastava 2012)

Srivastava finds that by 2009-10, homeworkers accounted for 12.5 per cent of all ‘self-employed’ workers outside agriculture. This is particularly so among women in manufacturing: in self-employment in manufacturing, more than half of women workers were homeworkers. In the decade ending 2009-10, the number of homeworkers engaged by the apparel industry rose by more than five times, to 2 million. Marx described the same process operating a century and a half ago:

Besides the factory worker, the workers engaged in manufacture, and the handicraftsmen, whom it concentrates in large masses at one spot, and directly commands, capital also sets another army in motion, by means of invisible threads: the outworkers in the domestic industries, who live in the large towns as well as being scattered over the countryside. An example: The shirt factory of Messrs. Tillie at Londonderry, which employs 1,000 operatives in the factory itself, and 9,000 outworkers spread over the country districts. (Marx 1990, 591)

Among the reasons Marx says exploitation is more shameless in such so-called domestic industries is the fact that it is harder for dispersed workers to resist, and that “a whole series of plundering parasites insinuate themselves between the actual employer and the worker he employs.” (Ibid.)

Hired workers: The remaining unincorporated manufacturing units, which hire at least one worker, are called ‘establishments’. They employ less than 10 million hired labourers in all, at an average of only 3.4 workers per enterprise.

Apart from manufacturing, there are units in ‘trade’ and in ‘other services’. The average size of the workforce in ‘other services’ units is similar to that in manufacturing, and units in ‘trade’ are even smaller.

The total of hired workers in unincorporated enterprises for all three (manufacturing, trade, and other services) together is 29 million, of which 21 million are in the urban areas and 8 million in the rural areas. (NSSO 2016) It appears the owners of these units generally work in the units themselves.31 As such, most of them cannot be called capitalists.
As Basu and Basole point out, “The sheer  diversity of production relations, including independent commodity production, putting-out and wage-labor, described by Marx, calls to mind contemporary conditions in Indian informal industry.” (Op. cit.) But these forms continue to exist in India a century and a half after the beginnings of modern industry here.

From the fact that the proletariat develops in proportion to industrial capital, and that all other classes disappear into it, Marx and Engels asserted that the proletariat was the only revolutionary class. However, the above discussion shows the large scale persistence of petty producers outside agriculture. From this it follows that there exist other revolutionary classes as well, particularly the peasantry and other petty producers, with which the working class needs to unite.



30. In any real historical process, of course, the demarcation of different phases is never so neat, and Marx’s own historical accounts take care to preserve this complexity. He also shows how forms that reigned in a now defeated mode may later be kept alive or revived to one extent or another, for specific reasons. Nevertheless, these earlier forms become secondary to the new forms. Thus any capitalist would extract absolute surplus value, too, if it be possible, but the main form of extraction under the new mode switches to relative surplus value. (back)

31. The total number of workers in establishments which hire workers is 42 million; the number of hired workers in these same establishments is 29 million. That is, over 13 million non-hired workers, presumably the owners and their family members, also work side by side with hired workers in these small units. (back)



NEXT: A composite proletariat


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