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Delhi’s ‘Regional’ Capitalism

Rana Dasgupta (rana@ranadasgupta.com) is a novelist based in Delhi.

The regional capitalism of Delhi described in this article is not a minor energy in the world today. It has abandoned some of its more provincial ways and also realised that the particular skills it possesses—the skills of infiltrating the political machine, the skills of using licit and illicit money, or legal and extralegal techniques— open up an immense zone of economic operation that is largely closed, say, to American corporations.

Nearly three years ago, I published a book called Capital: The Eruption of Delhi, which was a meditation on the changes wrought in the city of Delhi by the new economic forms which emerged after 1991. One of the arguments the book made was that the spirit of north Indian business is shaped by profound forces of local history, and that the capitalism that has emerged around the capital city is very much a local form.

What kind of forces am I talking about? The first and most obvious is partition, which was the foundational experience for the majority of those million or more people who came to settle in the new capital after August 1947. It was these people who would come to dominate the city’s economy in the ensuing decades, partly because of the extremity of what they had lived. The lessons of partition to those who had been turned upon by neighbours, lost property, livelihood and relatives, witnessed rape and murder on a vast scale and finally turned up in Delhi as refugees were: cherish property and security above everything else, scorn everything that is not tangible, never rely on others and these lessons made for a very successful business community. Their “Punjabi culture” was in many ways a post-traumatic culture, very much altered from the expansive culture of pre-1947 Punjab. The slaughter of Sikhs in 1984 only confirmed the city’s population in its paranoia, which after that was expressed in a more fervent fixation with physical walls and barriers, which is one reason Delhi is so extraordinarily a gated city. But paranoia and insecurity never hurt a businessperson. And as businesses established after 1947 are handed over to the third generation, the driving force often remains the same: Our historical wounds are infinite and can never be healed, but the endless accumulation of money and property will do a lot to help.

The second major force, and the one I am more interested in today, was the pre-1991 command economy, particularly as it emerged under Indira Gandhi. The extreme controls she put in place—of bureaucracy over business, and of centre over state—made it difficult for sizeable business concerns to operate anywhere in the country without some foothold in Delhi. Business persons from the South and West began to keep houses in the capital so they could meet regularly with Delhi bureaucrats. Many businesses from the North moved their headquarters wholesale to Delhi so as to be on top of the action—as did several large Kolkata concerns, many of which were set up by North Indians during the British era, and now found themselves paralysed by West Bengal shut-downs.

This migration led to a profound corruption of the capital’s culture. The people who moved there were not the ones with new and startling ideas—India’s software companies, for instance, which were set up in the same era, were set up far from Delhi, and that was not an accident. No: the people who were drawn to Delhi in those years were the ones looking to elbow others out of basic resources—real estate, minerals, petrochemicals; to get monopolies over highly regulated assets—such as telecoms or media; or to sell stuff to the state—construction, heavy industries, etc. They were looking for partners and patrons in the political and bureaucratic system, and they inaugurated that fervour of networking, soliciting and kickbacks which persist in the capital’s social life.

All this is to say that there was a long prehistory to the sudden emergence, after 1991, of Delhi’s oligarchic elite. Just as in Moscow, a set of people had been gathering there for 20 years for whom infiltration of the political establishment, and the elimination of competition, was a key part of their business strategy—and what they did after 1991, when the prizes grew larger by many orders of magnitude, was only more of the same. But the sudden rush to transfer public assets into private ownership did further intensify Delhi’s magnetism. More provincial elites, people who had made fortunes in Lucknow or Jaipur or Chandigarh, now moved to Delhi—or sent their sons there—to play the bigger game. With great amounts of foreign capital now passing through Delhi, the advantages that could be harnessed there relative to these other centres were massively increased.

It was in Delhi, too, where the nature and purpose of these backroom relationships was redefined. The 1970s model—approvals in return for cash—was no longer productive enough for either party. In the 1990s and 2000s, politicians, for their part, were under stark new pressures. They did not have the know-how or the capital to develop the new infrastructure and systems which globalisation suddenly required of them, and their corporate partners therefore took on a far greater importance. To say nothing of the fact that the cost of fighting elections rose dramatically in the same period, which meant that politicians needed to pull in much greater revenues—and the business of politics, like all other business, needed to be expanded and professionalised. On the other side, business owners, who had access to valuable capital and know-how, could do little with them if they did not have access to basic things like land. The only way to secure this access in the urgent time frames of the post-1991 scramble was to secure the resources of the state—to get land signed over to you by the bureaucracy, for instance, and to have its former owners evicted by the police.

What these partnerships could now deliver in terms of profits and development was seen first and most spectacularly in the village of Gurgaon where, once again, developer K P Singh had been preparing things since long before 1991. When he began to acquire land in the Haryana countryside, it was a dry, inaccessible place where very little happened beyond the wanderings of goat-herders on the baked earth. There were about eight cars in the whole village and one had to book a phone call to Delhi an hour in advance. By the early 2000s, Gurgaon was the largest private township in Asia, a booming expanse of hypertrophic, high-security apartment complexes which looked down on a landscape of pure commerce. In 2007, Singh listed his company on the Indian stock exchanges, and the 2008 Forbes list estimated him to be the world’s eighth-richest man, with a fortune of $30 billion.

The point I have been trying to make so far is that these Delhi eruptions, epic as they could become, arose from very local forces. The contemporary commercial logic for Delhi’s real estate industry, for instance, should not conceal the fact that they emerged also from the centuries-long history of Punjabi land dispossession, of which partition was but a recent instalment.

The question now arises: so what? Is the point interesting? Do we need to spend time arguing that capitalism takes on regional forms? Whoever believed otherwise? Every businessperson knows how different are negotiations in Boston and San Francisco, in Paris and Frankfurt, in Shanghai and Beijing. So why do we need to assert so energetically that Delhi’s capitalism is “regional,” and different from Mumbai’s or Chennai’s? Is it not just a pedantic footnote to the big story? Especially, as the regional distinctiveness I describe above is diminishing by the day—as many family businesses exhaust their own potential, seek outside shareholders, bring in professional managers, and so give way to the general ethos.

Transnational ‘Region’

As long as we regard the story of “regional capitalism” as the story of the world’s small and fading energies it is prone to some charge of insignificance. So let me declare my real interest in the idea of “regional capitalism.” It is that the region is not always small. It is not necessarily even smaller than the world. The region may be as large as the world, or even larger. And this, I shall argue in the second half of this essay, is the case today. The world—if we take that to mean the zone in which capitalism functions “normally”—has shrunk to a size smaller than the region—if we understand the region to be where capitalism functions according to local eccentricities and irrationalities. And this is not only because of the obvious contraction of the former. It is also because of the enormous expansion of the latter. In fact, an enormous transnational “region” has opened up which rewards precisely those attributes described above as belonging to Delhi business persons. And in this sense, the region is rising and taking over the world.

The obsessive national preoccupation of so much postcolonial culture-making and scholarship has helped to convince us that every postcolonial nation’s story is extremely special and unique. This obscures the fact that many of the broad currents are amazingly consistent across this majority of the world’s countries, which also happen to be producing most of the world’s economic growth right now. The feeling of historical wrong is common to so many of these places, and produces similarly belligerent commercial energies. And so is the heritage of 20th-century socialism, and the accompanying command economy structures, which I discussed above in the context of Delhi.

They repudiated not only the imperialist tendencies of great powers, but also the international capitalist system on which these tendencies were blamed. We need only to think back to the Bandung Conference to remember how, for so many postcolonial leaders than and afterwards, any independence worth the name was socialist independence. The wording of the Bangladeshi constitution was characteristic:

it shall be a fundamental aim of the State to realise through the democratic process, a socialist society free from exploitation, a society in which the rule of law, fundamental human rights and freedoms, equality and justice, political, economic and social, will be secured for all citizens.

Compare Libya:

The aim of the state is the realization of socialism through the application of social justice which forbids any form of exploitation.

The story of socialism’s rise and subsequent collapse is the story of the majority of the world. In one form or another, Indians share this heritage with most of the world’s population: with China and with the former Soviet Bloc, and with much of Africa, Asia and West Asia. And let us not discount too quickly the enormous moral, anti-capitalist project that this entailed. For several decades of the 20th century, more than half the world was told every single day that capitalism was evil: it was theft, it was spiritual death, it produced a small elite which enslaved everyone else. By the 1980s and 1990s, when so many failing projects of centrally planned national development were finally curtailed—often under the auspices of the International Monetary Fund (IMF) and World Bank, if not the Central Intelligence Agency (CIA)—a global generation or two had grown up convinced that capitalism represented the purest form of moral degradation.

Many of these billions kicked socialism cheerfully aside, but this does not mean that their doubts about capitalism simply disappeared. They entered into capitalism fully convinced of its evil. And capitalism—whether in India or Russia, in Ghana or Indonesia—usually lived up to their expectations. Socialist propaganda had told them capitalism produced great suffering and inequality, and indeed that is what they saw. They had always heard that capitalism produced greed and selfishness and moral breakdown, and this too turned out to be true. The point is that none of the social ills that visited the formerly socialist world from the 1990s onwards created any metaphysical disturbance, because they were exactly what was supposed to happen. Ministers were supposed to use the authoritarian systems built up under socialism to amass billion-dollar fortunes, business persons were supposed to despoil nature and ruin the people who lived close to it, and anyone who did okay was supposed to buy a nice apartment and look after their kids and shut their eyes to the rest. All this was the bargain you made when you accepted capitalism, which would always remain a foreign and somewhat mystical force.

Loss of Credibility

This is one of the reasons that capitalist reformism remains rather weak across this zone. In America, Germany and England, which created capitalism, it remains “our” system, and there is a fervent attachment to the better world it can make. Setting limits to capitalist excesses, and punishing behaviour which destroys credibility in the system, is a loftily pursued enterprise. But in the countries which suddenly in the 1990s succumbed to capitalism, like an illness, after all their defences had been exhausted, there is no such idealism about this system. The enormous pain and destruction it has created are just the way things are, and there is very little one can do. The only thing you can do, in fact, is ensure you are one of the winners rather than one of the losers—to throw your lot in with everyone else, which is the only virtue that counts anymore. All the old socialist pieties have been thrown out, and with them the very idea of ideals themselves. If there is such corruption in these countries—if state resources can be ransacked to the extent they are in several countries today—it is not just because it is possible. It is because the state itself—and the political community it represents—has gone through a catastrophic loss of credibility. No reason, anymore, therefore, for elites to defer their own desires in the name of the state’s old pieties: “the people,” “the poor,” “the national interest,” etc. They have found a new faith: markets, private wealth and instant gratification—and all they want from the state is that it keep the masses out of their profits, property and way. Socialism is dead, and all its tedious virtue too. “Self-interest” is too tame a term for the gleeful bonfire of class assertion that has erupted in its place.

This is why the regional capitalism of Delhi, which I described above, is not a minor energy at all in the world today. Of course, on the one hand, it has learned well how to interface with United States business and capital, and in this sense it has abandoned some of its more provincial ways. But on the other hand it has realised that the particular skills it possesses—the skills of infiltrating the political machine, the skills of using licit and illicit money, or legal and extralegal techniques—open up an immense zone of economic operation that is largely closed, say, to American corporations. North Indian business persons have understood that their “region” is in fact most of the world—and precisely that part of the world that is growing the fastest—and they have found it is even easier to get locals kicked off land in Ethiopia than it is in Uttar Pradesh.

Updated On : 17th Nov, 2017

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