All over the world, people have been vaccinated against the COVID-19 virus without having to pay a dime, but not in India. All over the world, the historical landmarks that define a nation, which form the warp and weft of a nation’s consciousness, are considered sacred and left untouched in their original form, but not in India. All over the world, public goods that provide basic services, or cultural and educational services, to the population are practically free, but more so in India.
Behind this bizarre Indian exceptionalism lies the particular program of Narendra Modi’s government to transform all in one commodity. Nothing is sacrosanct, nothing is sanctified, nothing transcends the market; everything is for sale.
Consider the three examples mentioned above. Earlier, when private hospitals vaccinated people, they charged 250 rupees for the service, which itself should have been avoided, but was at least small enough to be manageable. Now, private hospitals are allowed to charge huge sums, Rs 780 for Covishield, Rs 1,410 for Covaxin and Rs 1,145 for Sputnik V, as they no longer receive these vaccines for free from the government. By not giving them these vaccines, the government clearly wants to convert the vaccines into commodities.
Likewise, take Jallianwala Bagh’s “beautification” project. This tragic event was a defining event in India’s anti-colonial struggle and therefore played a crucial role in the birth of a new India. The land where General Dyer ordered his troops to shoot down peaceful protesters until it ran out of ammunition is sacred ground to all Indians and should have been left completely untouched.
For example, in the island of Gorée off Dakar in Senegal from where millions of slaves were transported to America, and which brought tears to the eyes of Nelson Mandela when he visited it years later, the buildings, barracks and dungeons are left exactly as they were when these heartbreaking expeditions took place.
But, in India, the historic Jallianwala Bagh has been “embellished” by our upstart government, no doubt with an idea, quite imaginary and misplaced, that it would attract more foreign tourists. Jallianwala Bagh, in short, is becoming a commodity, and its merchant aspect has taken precedence over its sanctity to the nation.
Exactly the same mentality was visible in the “beautification” of the original approach via a historic narrow road to the Viswanath temple in Varanasi, for which very old adjoining houses and many small temples were demolished in this ancient city. The idea was to make the Viswanath temple and its immediate surroundings easily accessible to the tourist, especially the foreign tourist; the idea, in short, was to convert the temple into a commodity.
And now a series of public assets, from train stations, ports, airports to stadiums and roads, are being sought out to be “monetized,” meaning they would be turned into goods in the hands of private operators. The finance minister has vehemently argued that “monetization” is different from privatization; but this is pure fallacy.
“Monetization” means handing over the asset to private operators for a certain period; even if the asset reverts to the government at the end of this period (there will be a host of questions to be resolved at that time regarding the value of the investments made by the tenant in the meantime on the asset), it will likely be returned either to the same tenant or to someone else for a price. “Monetization” would then be no different from selling for a sequence of short periods of time, instead of a one-time sale; but, indeed, it would be a sale anyway.
In macroeconomic terms, the “monetization” of public assets is no different from a budget deficit to finance larger public spending. In the case of a public deficit, the government puts assets (in the form of government securities which are claims on itself) in the hands of the private sector, and the money it receives instead of doing so. is what he spends; in the case of ‘monetization’, it puts assets (in the form of roads, rail platforms, etc.) in the hands of the private sector and what it gets instead of doing is this. that he spends.
The economic difference at the macroeconomic level relates only to the nature of the assets that the government puts in private hands; otherwise, the consequences of the two modes of financing, by public deficit and by “monetization” are exactly identical.
As long as it is so, what happens later is not the same in both cases. The macroeconomic consequences of the private sector exploitation of the public good are much worse than those of a public deficit, since the private sector which leased the asset, did it only to profit from it; and for that, it would increase the user charges, reduce the wage bill on the exploitation of the asset, etc.
These measures amount to an increase in the average profit margin in the economy, that is to say, a shift from wages to profits. Since the consumption / income ratio of employees is much higher than that of employees, this means, for a given level of overall investment, a reduction in the level of consumption, and therefore in aggregate demand.
This method of financing public expenditure is therefore less expansionary than a public deficit or a tax on profits or a wealth tax as a means of financing public expenditure. In an economy struggling with massive spare capacity as well as unemployment, it is significantly lower. This regardless of the fact that the regressive distribution of income that it entails is reprehensible in itself.
Regardless of all of these effects, however, it also involves a shift in policy direction that is undemocratic in a fundamental sense going beyond mere economics. In a modern society, the government provides a range of goods and services, more or less free, to the people as a right, in their capacity as citizens. A whole range of public assets produce such goods and services. The goods and services produced by these assets are generally intended to be appreciated by people in their capacity as citizens.
Economists have long believed that these goods and services should, as far as possible, be free. A government-provided bench in the park is intended for everyone to use without any payment. A railway platform is intended to be used by everyone, subject to payment, at most, of a symbolic sum (for the purchase of a platform ticket). A public museum is intended for everyone to visit, either for free or with a nominal payment. True, the government has compromised on this principle and increased most user fees, but even now the principle that these fees can only be nominal has been more or less accepted.
The absence of a royalty, or the perception of a royalty at most symbolic, for the goods and services produced by these public goods reflects the fact that the users are all equal, and therefore co-owners of the asset in their capacity as citizens, on whose behalf the government nominally holds the asset. A large number of public goods therefore belong to the public domain, the domain of rights, and are therefore meant to be enjoyed by all citizens on an equal basis.
In contrast, the market is inherently unequal, where the importance of a person depends on the extent of his purchasing power. Passing a public good from a public good to a private operator therefore implies that the good produced by this asset passes from the public domain where everyone benefits equally as a citizen, to being a commodity where some alone (with higher purchasing power) have access to it. It is a passage from the domain of public goods to the domain of goods, or from the domain of rights to the domain of purchasing power.
It is an abridgment of democracy, the exclusion of a large number of people from the public goods which they enjoyed by right. The fact that such “monetization” results in a regressive distribution of income is well known and discussed above. But alongside such a regressive distribution, it also means a limitation of rights, the impossibility of using a road, the impossibility of accessing a railway platform, which until now has been enjoyed without restriction.
Any act of commodification entails such an exclusion, such a narrowing of the domain of citizenship. Thus, the current government is embarked on a frenzy of commodification that would substitute economic apartheid for equal democratic rights for citizens.