Deepening Crisis of Indian Rupee
In spite of three internationally recognised legendary economists being at the helm, there is deep crisis in the Indian economy and nobody knows what to do. Those who are in the seat of power, are holding international situation responsible for it and to hide their incompetence are citing example of the depreciation of the currencies of all the developing economies of the world. They have a simple solution, restraint and curtailment in consumption by the public. Those who are out of power, are holding responsible government's welfare policies and incapability to rein in corruption. According to them the solution of the problem is an early election and change of guards. And the leftists in their usual singsong are hammering the government responsible for its policy of liberalisation and corruption and according to them the solution for the problem is to establish socialism replacing capitalism.
People are at their wits' end. They are finding it difficult to make both ends meet, where to curtail. Those who are affluent, are already paying enough lip service, why should they curtail their expenditure. As far as demand for change of guards is concerned, people have already been fulfilling that very demand for last twenty five years, and know very well that power goes into the heads of those who occupy the seat of power and they enforce those very policies which are in the interest of capitalism. And socialism is being presented in umpteen different shades and flavours. There are as many different kinds of socialisms as there are left parties, and as many capitalisms. Every thing is in such a mess that people fail to understand as to which ism is to be removed and which ism is to be ushered in.
'Philosophers have interpreted this world in many ways, question is how to change.' 'Dialectical materialism based on scientific outlook' or the dialectical method to understand laws of nature and materialist interpretation of nature is the only modus operandi to understand every thing in this nature, from living world, human and human society to consciousness and the laws of development. Following this modus operandi 'Surplus value produced by human labour' is identified as the basis of the organisation and development of human society and the examination of the chronology of the development of the society since inception till date authenticates that identification as 'Historical materialism'.
It is impossible, for bourgeois intellectuals because of their prejudices, and for so called protagonists of Marxism because of their revisionist thinking, to understand that this eternal theory of natural laws is the core content of proletarian consciousness, that is Marxism. There are innumerable unanswered questions before the people, but why did the Indian Rupee had such a free fall is a million Dollar question, so it's examination is urgent.
There is only one thing which is universally required to convert natural resources in usable form for human consumption (in one step or in many steps), and that is human labour. Real value of any product is the congealed socially essential average labour (labour power expanded during specific period, depending upon social conditions and level of development), which is integrated with it during production process.
With time collective knowledge of human society has kept on growing, and with this has kept on growing the division of labour and productive forces. With the growth of productive forces, the worker also starts producing, with in a given time, more value than that of the means which are needed by him to perpetuate his own life and that of the human race. In other words he starts producing surplus value. This surplus value accumulated in the form of products, collectively is the wealth of the society. But with the production of surplus value, the concept of individual property is also ingrained in the social consciousness and wealth started accumulating in individual hands. With this the purpose of production of usable goods for consumption and their barter was replaced by the purpose of production of commodities for trade and their exchange for money. Commodity is something outside the consumer which satisfies some need of the consumer, irrespective of whether that need arises out of the stomach or of the mind. Every producer is a consumer also in one form or the other. But in the exchange of commodities, besides the producer there appears in between a set of people, the intermediaries or the middle-class.
Value and capital are ideological entities, they do not have any physical entity of their own. Generally people lack theoretical thinking and understanding because of which they take price as value and property as capital. The value of a commodity is assessed differently by the consumer and by the intermediary. For the consumer the value is related to the utility of the product while the seller assesses the value of a commodity on the basis of the quantity of another product which he could get in exchange of a specific quantity of the commodity. Different products have different forms and utilities, therefore to compare exchange values of commodities, something is required which is universally inherent in all the products and can be used as a standard in terms of which values could be compared, and it is nothing but the socially necessary average useful human labour. As the inherent labour is abstract, something is required which is tangible and socially acceptable as a standard measure of labour. Historically developed, money has played that role. To begin with the physical form of money was specific amount of precious metal, gold or silver, the value inherent in it was the value represented by the money. But with passage of time money certified by the state which had no relation with its own value assumed the role of the standard of exchange of commodities and the form of money became more ideological rather than physical. Common man started comparing the value of commodities on the basis of universally acceptable certified value of money instead of on the basis of congealed labour in them, and started considering the price of the the commodities as the value of the commodities.
Before money assumed completely ideological form, the exchange of congealed labour was in the physical form of sale-purchase of goods, but as the money assumed ideological form, along with physical form congealed labour started being exchanged in ideological form as assurances and contracts.
With the accumulation and concentration of wealth in the hands of the middle class and with scientific and technological development in the field of manufacturing, communication and transportation, the middle class started getting production done in an organised manner on its own terms transforming itself into bourgeois class. Because of better productivity and organised production, cost of production was reduced which made it impossible for the workers and artisans to face the competition and a new era started in the field of production. Now the worker did not have any accumulated labour in the form of any commodity in exchange of which he could get goods needed by him. For exchange the only thing left with the worker was his labour power and which he was compelled to sell for sustenance to the purchaser of labour power on the terms of the purchaser, and with this evolved the new form of workman, the proletariate. With complete control over production, by accumulated labour in the form of wealth, in place of inactive form of accumulated labour came into existence the active form of accumulated labour, that is capital. Appropriation of surplus value is also completed with the completion of the process of production-consumption. During the entire process, various forms of capital keep on appropriating a part of the surplus value.
Capital is entirely a social consciousness whose form is completely ideological and which embodies as property or money. By taking control of the labour power of the proletariat for a definite period, in lieu of accumulated labour or of an assurance of the accumulated labour to be acquired in future, capital expands by appropriation of surplus value produced by the labour and self-aggrandisement. Capitalist is a carrier of this consciousness and not its master. Core character of capital is to create ever new demands by affecting the individual consciousness of the consumer and to provide ever new products to satisfy those needs, and to appropriate surplus value at different stages in different ways during the process of production-consumption. Capital has converted everything into commodity, not only all that is available in the nature, but everything human and social to the extent of even human body, mind, sentiments and human relations also. The entity of a demand could be entirely ideological, therefore the limit of ever new demands coming up is entirely dependent upon social consciousness, but every commodity, even if it has to satisfy a purely ideological demand, can be produced on a material base only, and hence the extent to which such demands can be met is limited by the capacity of the society to exploit natural resources.
You may call capital by any name, industrial capital, mercantile capital, international finance capital, crony capital, fictitious capital or any other name that can be coined, but as a part of social consciousness, capital is synonymous of one thing only and that is, an ideological conscious entity which does not have any physical entity of its own but resides in the subconscious of human beings and whose inherent quality is self-aggrandisement by appropriating congealed labour in the form of surplus value. Those revisionist who say that capitalism of twenty first century is qualitatively different from that of twentieth century, they probably do not know that first capitalist state came into existence in Italy seven hundred years ago at the beginning of the fourteenth century, and capitalism had reached it's highest stage, imperialism, five hundred years ago.
Because of presence of money not only in physical form but in ideological form also as assurances, presence of proletariat with division of labour as physical labour and mental labour, presence of surplus labour in the form of commodities capable of satisfying physical as well as ideological needs and in the form of instruments and objects of production physically and capital Ideologically, with in capitalist Socio-economic formation the economy has split into two parts. One is Ideological economy whose field of activity is in the ideological world, and the other is physical economy whose field of activity is the physical world, but there is no clear line of demarcation, yet the Ideological economy stands on physical economy only.
Because of its core character of more and more self-expansion through extraction of surplus value from the process of production, capital tries incessantly to increase demand and supply. With in the physical-economy, because of physical laws, there are limitations on increasing the demands and supply, but with in the ideological-economy there is no limit to enhance demands, yet because the basis of the commodities which satisfy these needs is physical, therefore the supply of such commodities is not unlimited, and because of this, rational relationship between demand, supply and price ceases to exist.
By affecting the mentality of consumers in various many ways, capital creates ever new demands, and by acquiring labour power on the basis of assurances about the value to be made available in the future, produces more and more and continuously raises the purchasing power of consumers. For fulfilment of ideological demand pressure increases on material resources also. A situation comes when production is not able to meet the demands then prices of commodities start increasing and the assurance based value, that is the value of money in the hands of the people starts devaluing relatively. Apprehending further reduction the consumer tries to convert as quickly as possible the available assurance based value into physical assets. In spite of all efforts to bring situation under control, collective confidence in the assurances of the controllers of capital starts diminishing and a panic situation pushes economy into crisis. After some time the artificial value created by assurances gets out of the hands of the consumers and a new cycle starts.
Capital may be confined with in the boundaries of any nation state, but its nature and modus operandi remains same. All capitalist systems are destined to pass sooner or later through this cycle. People, because of lack of theoretical thinking, in general are not able to distinguish between physical and ideological dimensions of value and money, and in the increase of the prices of the commodities can not see the relative decrease in the price of money.
To deal with the problem arising out of non availability of a uniform standard for exchange of goods as the trade and commerce achieved international level with passage of time, first money started being traded on the basis of promissory notes of banks and then after Breton Woods Agreement in 1944 Dollar having been accepted as universal standard in international trade, leaving its physical form, money in its ideological form has transformed itself into a commodity. With technological development and e-banking, money at national level also is assuming completely ideological form leaving its physical form. Economies, initially divided with in the boundaries of nation states, are transcending boundaries transforming into global economy and boundaries are becoming meaningless for capital and commodities.
In such a situation the depreciation in the value of money named Rupee, which itself has transformed into a commodity, or its devaluation in relation to Dollar is nothing surprising. And Non-Marxists and Revisionist-Marxists both are cursed not to be able to understand the depreciation in the value of the Dollar itself.
Suresh Srivastava
1st September, 2013
