Wal Mart, Capitalism and Child Labour in India

Just over a year ago, the US retail monopolist Wal-Mart, that also owns ASDA in the UK, did a deal with India's leading telecoms company, Bharti Enterprises Ltd.,to open hundreds of stores in India over the next several years. According to Investor.com,

"Under the deal, Wal-Mart and Bharti Enterprises will set up a joint venture to manage procurement, inventories and logistics, while stores will be set up under a franchise agreement, said Sunil Bharti Mittal, the chief executive of the Indian company."

India's retail market is worth about $200 billion and growing about 30% a year. Until recently major retailers like Wal-Mart have not been allowed to exploit this huge potential for profits. India's government has tried to protect the small domestic retail owners that make up nearly all of India's entire retail sector.

This development reflects the growing domestic market in India following on from the huge economic development in production of the last few years. In many ways it is reminiscent of the process described by Lenin in his "The Development of Capitalism in Russia", and goes alongside the same kind of differentiation of India's huge peasant population. A similar process has been taking place in China. As Lenin pointed out in relation to Russia, at the end of the 19th century, the country suffered not from capitalism, but from not enough capitalism, from the restrictions that Tsarism placed upon its rapid development. The removal of restrictions in India, to open up the retail sector, should be welcomed in the same terms that Lenin supported the moves to speed up the process of capitalist development in Russia.

That is to say, as socialists, we have no truck with policies designed to slow down such development, however, we do within that process argue at all times for the interests of the working class. A rapid development of capitalism means a more rapid development of the working class, a higher demand for labour and better conditions in which labour can fight for its interests. In the case of Wal-Mart, that is particularly significant. In the US, it is well known as an anti-union employer. The GMB had to take it on in Britain, and had some success, so it can be beaten. In India Wal-Mart will no doubt try to strong arm the workforce. Socialists here should offer what support they can to Indian workers, and, in particular, the GMB should make contact with Indian workers and their unions to plan a campaign to ensure that the Indian workforce is unionised from the beginning.

But, more than that. This development by Wal-Mart is no doubt just the beginning of similar developments, reflecting the growth of the Indian domestic market, as more and more of the population become wage workers rather than peasants. It will involve some huge economic developments. Stores will have to be built, and, for each, roads will need often to be built as stores spring up on greenfield sites as they have done in the UK, and elsewhere. Huge amounts of infrastructure will go along with this process. The laying of water, gas and electricity supplies, drainage etc. In short, in addition to these retail developments and jobs for retail workers will go further jobs in construction, engineering jobs at utility companies etc., and the same kinds of problems and opportunities will open up. The international trade union movement has a duty and responsibility to give whatever assistance it can in this process to Indian workers and their trade unions.

India, China and other parts of Asia are undergoing the same kind of process that occurred in Western Europe towards the end of the 19th century. It comes similarly at a time when the world has entered a conjunctural long wave upturn. That presents huge opportunities for Marxists to educate and develop a brand new working class, and workers movement. As I have written elsewhere, it is the nature of that upturn, which manifests itself always in the particular development of previously less developed economies, as the process of combined and uneven development plays out, that will lead to the major new developments in the class struggle arising in such countries, whereas, particularly during the current recession, workers in the developed economies will more frequently have to fight defensive struggles as the value of labour power is increasingly determined on a global market, and to the detriment of relatively highly paid workers in the West.

The world’s eyes are mostly focussed on China. But India will shortly have a larger population than China. It has the advantage of an established bourgeois democracy, which gives workers some advantages over their Chinese comrades in respect of political organisation, democratic rights, the diffusion of ideas and so on. Having said that reports from China also show increasing self-assertiveness from Chinese workers, the development of illegal workers organisations, unofficial strikes, demonstrations, and as new technology makes censorship more difficult the spread of alternative ideas to those of the Stalinist State. In addition, where China has focussed largely on developing itself as the world’s workshop, India’s development has been more focussed towards the high-end, towards intellectual labour most noticeable in the number of IT related companies based in India, and even to some extent the number of call-centres based there. Where most people are pressed to name any globally recognised Chinese companies – though there are a number such as Lenovo – India has several well-known companies such as Mittal, Tata, Infosys and so on.

The nature of this development also has advantages for socialists in India. As I have written elsewhere, See: Thinking Outside he Box and Porn Free many new types of modern production such as IT, the Media – and of course India has a huge media industry not only in Bollywood – do not conform to the old industrial forms which had a high organic composition of capital i.e. lots of fixed capital and materials required to the amount of labour used. On the contrary, they tend to require relatively small amounts of constant capital, and be reliant on skilled, often intellectual labour. You can, as some activists in China have shown, run an alternative TV service over the Internet from your bedroom. Especially given the tradition of the Indian village prior to British and French colonisation, India has great opportunities for workers to establish their own co-operative industries in the highest value, cutting edge, and most profitable areas of economic development, in one of the fastest growing economies in the world. India has another advantage over China; its links back to Britain. Not only should such links be used to forge strong ties between the British and Indian labour movements as suggested above in relation to Wal-Mart, but quite a significant number of Indians are returning to India from Britain as the British economy sags, and India roars ahead. Those traditions of the British labour movement, the lessons learned by British workers in 200 years of class struggle can be more easily physically transported back to India.

But, we should not forget that process of combined and uneven development. Alongside rapid economic growth, alongside world beating industries, and high-tech development, India still possesses vast reservoirs of poverty and deprivation and squalor. As Lenin said, it is suffering not from capitalism, but a lack of capitalism. That is demonstrated by the number of sweatshops that exist side by side with the most developed industries, and by the large number of children employed in those sweatshops. But, it is important for socialists, particularly western socialists, not to react to that as petit-bourgeois moralists, as many do, demanding an end to child-labour and so on that can be a cover for a form of protectionism, and cultural imperialism.

Every major capitalist economy went through such a process of terrible working conditions, and of the use of child-labour on a large scale. They could not have developed, or at least not so rapidly, if they had not. To demand that economies that already face many obstacles on their path to development in a world economy dominated by the existing imperialist powers, also do so by rejecting the very means by which those imperialist powers developed, demanding that they offer up the same wages and conditions as those already developed economies, has little to do with Marxism.

When I was about 12, like many other kids of my age, I worked delivering papers and as a butcher’s boy. The few shillings a week that I earned allowed me to buy the things my parents couldn’t afford to buy me, to go to the pictures and so on. That was in the 1960’s in one of the richest countries on the planet. Had I been a 12 year old in the back-streets of Mumbai it would rather have been the difference between eating or not eating. It would be the difference between having a job from which some tiny speck of self-respect could be derived, or else of having to fall into beggary, thievery or prostitution. Western socialists in their relatively comfortable surroundings should remember that when they oppose child labour in places like India, and other less developed economies. The alternative is not child labour or some decent home and schooling for these kids, but work or destitution and depravity. The idea that the state in these economies will pick up the tab for these kids is pie in the sky, and given current conditions neither western labour movements nor the labour movements in these economies can force these states to do so. Only an overthrow of those states would enable that to happen, and even then, in many of them, even a workers state would be hard pressed to find the necessary resources to lift everyone immediately out of poverty.

Marx spelled out, what the Marxist response to this was in opposition to petit-bourgeois moralising. He said in the Critique of the Gotha Programme.

"Prohibition of child labour." Here it was absolutely essential to state the age limit. 

A general prohibition of child labour is incompatible with the existence of large-scale industry and hence an empty, pious wish. Its realization -- if it were possible -- would be reactionary, since, with a strict regulation of the working time according to the different age groups and other safety measures for the protection of children, an early combination of productive labour with education is one of the most potent means for the transformation of present-day society.”

Marx is effectively repeating in part here his comment that “Right can never be higher than the economic structure of society and its cultural development conditioned thereby”. He would have had nothing in common with those petit-bourgeois moralists of today who seek to further pauperise the workers and their children of developing economies through a ban on the employment of child labour. Rather, Marx seeks to organise a working class struggle to put such employment in appropriate conditions, to locate it as an essential aspect of class struggle. Moreover, if workers develop co-operative industry, then as Marx argues, what better way to incorporate the class lessons learned there with the general education of the child other than through a combination of education and work. Even where children are employed in private industry what better way of developing class-consciousness can there be than that the experiences gained in the workplace of the private capitalist as they are discussed and analysed within the school in a structured manner. How better could Marx’s argument in his letter to Ruge be accomplished, “We merely show the world what it is really fighting for, and consciousness is something that it has to acquire, even if it does not want to.”