Neo-liberalism, which emerged as the default logic, blurred the boundaries among the market, civil society and the State

The country is celebrating three decades of economic reforms. These three decades witnessed a transformation, in theory, and practice, of the welfare state. A considerable commentary came out on the occasion but was confined to the broad trends in the economy at the macro level. It is, however, yet to focus on the changing nature of the welfare State.

The welfare state gained traction during and after the Great Depression which led to a considerable decrease in rates of profit for the corporate sector. The ascendance of the neoliberal state gained over the years is in the process of reshaping the welfare state to suit the market logic. The welfare state that was in vogue till the 1990s clearly differentiated boundaries between state, civil society, and market.

But neoliberalism, which emerged as the default logic, blurred the boundaries between the market, civil society, and the state. The pre-neoliberal welfare state focused on integrated and community development through universal program structures whereas the neoliberal welfare state resorted to targeted programs in choosing the beneficiaries. Similarly, under the pre-neoliberal welfare state, the onus of overall development was on the State whereas under a neoliberal welfare state, this onus has gradually shifted to the individual.

There is another important differentiation between the pre-neoliberal welfare state and the neoliberal welfare state. The former, though attuned to market forces, developed some structures that worked as buffer zones for those who are falling behind in catching up with the market logic. The neoliberal welfare state is smashing these buffer zones through its explicit commitment to the unregulated working of market. In this process it shunned its primary goal, i.e, taking measures to counteract the deleterious effects of the market logic.

In 1848, Karl Marx wrote in The Eighteenth Brumaire Louis Napoleon: Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past. This force of history is better understood by the rulers than their subjects. Marx’s understanding of history as an undeniable force in shaping people's ability to act will lend us a helping hand in understanding how the neoliberal welfare state negotiated with the pre-neoliberal welfare state.

The neoliberal fundamentalists though wanted to create an altogether new form of a state that was expected to play a subordinated role to capital, but they could not. The welfare state had become institutionalized and became the default logic of the system across the world. Its policies had acquired their own path of dependency that generated a positive policy feedback. It also helped to develop a patron-client relationship between citizens and the state. Those who are accustomed to the benefits they gained from relying on the welfare state, became more politically supportive of maintaining these policies.

Thus, the neoliberal fundamentalists did not find any possibility of going back from it without developing a new discourse that became a default logic of public policy framework. As the welfare state could not be repealed to reinstate market fundamentalism, the next best thing would be to marketize the state. Over time, this has come to be a hallmark characteristic of neoliberalism, perhaps more than monetarism, deregulation, and tax cuts. Instead of repealing the welfare state, neoliberalism involves marketizing welfare state operations so they run more like a business in the name of getting everyone involved in them, policymakers, program administrators, and clients to act in market- compliant ways.

This is what happened with the pre-neoliberal welfare state in India as well. These three decades’ efforts to marketize the welfare state can be divided into three phases. In the first phase, the government shifted from a universal welfare program structure to targeted welfare program structure. This lasted till the beginning of 2000s. In this period only the neoliberal think tanks developed a discourse which in substance argued that socio-economic development can be and should be achieved with individual efforts without path dependency. Towards this, they developed a cultural apparatus and pedagogy that is instrumental in creating a new condition for generalized acceptance of market system and its eternity. The whole debate surrounding TINA (There is No Alternative) factor is a result of this.

The second phase spans out for a decade under the United Progressive Alliance government in which, compelled through mass mobilizations, the state attempted to go back to its universal nature of welfare state. As a progression from the earlier structure, in this tenure, we can also witness the efforts to create a legal basis for welfare measures. The enactment of Mahatma Gandhi National Rural Employment Guarantee Act, Right to Education, Right to Information, Food Security Act, and Forest Rights Act come under this category.

The third phase of consolidating the neoliberal welfare state began in 2014. This was being constructed in two parallel ways. First, taking all measures to develop a neoliberal welfare state with the market as default logic and secondly, by creating a new pedagogy and culture in defense of this default market logic. During this period the marketisation of welfare reached its pinnacle through the campaigns to voluntarily relinquishing gas subsidies to progressive elimination of cross-subsidization of petrol and diesel to converting delivery of welfare goods in a tangible material form to intangible currency form. The evolution of new pension policy and targeted public distribution system are the best examples of this.

The pre-neoliberal welfare state developed its own bulwark to continue the universal welfare measures through developing a pedagogy and cultural apparatus that supports the same.

Presenting white papers on subsidies and highlighting the losses to oil marketing companies because of cross-subsidization of gas, diesel, and kerosene and highlighting the percentage of subsidies spent on social sectors in every budget is nothing but constructing the cultural apparatus and new pedagogy only. Surprisingly no budget document carries details about the non-performing assets and accumulated value of tax concessions doled out to the corporate sector as it goes against the default logic of market supremacy. But at the same time, as the government and neoliberal economic policy framework too needs its own bulwark to shout down the opponents, it is creating new clients who can play the role of vocal supporters. Mudra loans are one such an example.

The three decades of economic reforms led to the development at the top of a limited stratum of upper-class and upper-middle class people who benefited from the positions of corporate oversight and professional occupations. The bottom 90 per cent has been increasingly deemed as not eligible for state's attention. The reason being their deemed failure to position themselves as successful participants for the marketized economy and becoming a burden for the corporate sector. At the extreme, those in poverty are cast aside as disposable populations who are to be monitored, surveilled, disciplined, and punished more than they are to be helped. The linkage of jandhan yojana account, adhaar number, and mobile number became a powerful tool to surveil those individuals and communities who are prone to deviate from socially acceptable behavior for market forces.

(The writer is a former CWC member, All India Agricultural Workers Union. The views expressed are personal.)