OPE-L message, Re: [OPE-L] Caste system and ambedkars social democracy

Ranganakayamma criticizes Ambedkars state socialism in her book. In 1947 Ambedkar had proposed a program of nationalization of land and all major industries, and the proposal was that the former owners of land and industry were to be compensated by debentures.

Ranganakayamma criticizes this on the grounds that

a) it recognized land ownership as something legitimate the deprivation of which was entitled to compensation

b) it left the labouring classes of India with the burden of continuing to support their former landowners etc by having to pay the interest on the debentures

These are legitimate criticisms, and reveal Ambedkars program for the ending of exploitation as being no more than social democracy.

It is probably no coincidence that he put forward these ideas in 1947, since they coincide with the program of the Labour Party Government in the then colonial power. There too the nationalization of the key industries ( but not land ) was proposed with the owners being compensated by state bonds. When put into practice it meant that miners, for instance, went on working part of the day to earn the interest to pay the old mine owners long after nationalization.

How should we view the idea of nationalizing industry and paying compensation in the form of bonds?

In favour of it one can say that it may make it politically easier to push through nationalizations. Against it is the burden it places on the state and indirectly on the workers to pay interest on the bonds.

If it were envisaged as a strictly temporary measure, then the objections would have less force.

Suppose the socialist government issued the debentures, and then deliberately allowed the currency to depreciate. The burden of paying the bonds would rapidly fall. Something like this actually occurred in the 1960s an 70s in the UK when Labour governments allowed the pound to depreciate at a rate much more rapid than the rate of interest that they were paying on the bonds issued to former owners of industry. Not surprisingly this engendered a vituperative hatred of inflation on the part of the rentier class.

I believe that the Chinese government in 1948 followed a similar initial program, compensating the old bourgeoisie for the factories that the state took over. Only during the cultural revolution in the 1960s were they deprived of their bonds.

A third alternative would be to issue bonds and then a few years later have a plebiscite on a law cancelling all debts. It seems likely that such a plebiscite would go through since the mass of the population would benefit.

In the end it comes down to the balance of political force. The Czech govt in 1948 simply nationalized without compensation, but Gottwald was secure in power.