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  • Cinema as a tool of National narratives and Geopolitics

    Cinema as a tool of National narratives and Geopolitics

    ABSTRACT

    This paper aims to understand how world politics, the geopolitical environment in the international arena, and economic relationships between countries are portrayed in films and entertainment media. This paper attempts to understand the portrayal of the themes through varied parameters, namely, the geopolitical timeline of when the film was released, the theme or the event that the film is trying to address, the region the movie was produced in and the audience it would cater to. As films are pretty nuanced and very interpretative, these themes might overlap. Nevertheless, it will attempt to identify and understand the themes as best possible. This paper also aims to understand the active relationship between films and the various global interactions among nation-states. It will also examine the impact of these films on the foreign policy decisions made by the State and how the narratives change with changing leadership. This paper will understand films through the lens of international politics and not just as a medium of entertainment.

     

    INTRODUCTION

    Beyond the fiction of reality, there is the reality of the fiction.

    – Slavoj Žižek

    Let’s ask a simple question. How much of the reality that we live in do we see in fiction? This question seems to have a complex answer. The main reason for the existence of films is their ability to transport viewers to a world of imagination or fiction where anything can happen, unlike the rigid realities we live in. However, upon closer examination, one might find that fiction interacts with present, everyday realities and fosters an ideology within itself. Films and ideology have a deep-rooted connection, and it is impossible to analyse films without encountering the ideology they inevitably promote. This is particularly evident in films that fall under the genre of politics or political commentary. Politics is often described as a struggle for power, where ideology plays a crucial role. Films have the power to influence the masses, making them a potent tool for those in power to wield. This is why ideology is embedded in films. According to Slavoj Žižek’s documentary ‘The Pervert’s Guide to Ideology’, ideology is a socio-economic and political apparatus that is created and propagated by humans. He argues that ideology is a social reality, and attempting to escape it is also an ideology.

    Ideology has a significant impact on the superstructure, shaping our perception of political reality. Unfortunately, this often results in a distorted or biased portrayal of events that goes unchallenged due to the disclaimer that it is a work of fiction. This allows ideologies to spread without being acknowledged. Films with political themes are particularly susceptible to this, as they are shaped by the prevailing ideology of the time and place in which they are created and discussed. These films serve as a means of propagating state-sponsored ideologies, which can then be used to legitimise state propaganda. They are essentially used as a trial run to measure the public’s reaction to certain ideas before implementing them. These films function as a symbolic order, swaying public opinion in line with the desired political narrative. The depictions in these movies, being fictional, are often exaggerated and used to evoke feelings of patriotism and nationalism, making it easier for political leaders to shape the status quo in their favour.

    Films are generally regarded as a source of entertainment, but they also have a profound impact on the realities of our lives. Even movies with superhero themes, which are purely fictional, have the power to shape political realities. For instance, the Marvel Cinematic Universe, a franchise that features individuals with exceptional abilities, highlights the inability of governments to address significant issues or credible threats. These governments tend to view those who can effect change as a greater threat than the aliens themselves. This commentary reflects on the governments’ and leadership’s propensity to prioritize personal insecurities and power politics over the greater good. This, in turn, questions the relevance of democratic institutions and government, which is ironic given that the films originate from a country that has historically promoted democracy. This paper aims to explore how these films portray global politics and economic relations, and the rationale behind these depictions.

    RELATIONSHIP BETWEEN POLITICS AND THE FILM INDUSTRY

    Before examining the portrayal of political institutions in films, it is important to consider the extent to which these institutions influence the film industry, as this relationship will greatly determine the narrative or nature of the films. It is crucial to understand the independence of the film industry when it comes to politics. During the Cold War era, also known as the era of ideological conflict, films played a significant role in fostering a sense of nationalism among the population. They served as an effective means of disseminating an ideology that would advantage the host country. Films became a tool of soft power, and both sides utilized them to the fullest.

    Independence Day, a motion picture released in 1996 and starring Will Smith, exemplifies the interconnection between politics and cinema. The film centres around an alien assault on Earth and the United States of America’s leadership and military’s endeavour to exact retribution and obliterate the extraterrestrial ships, thereby preventing further attacks. This reflects the ‘saviour of the world’ narrative that the United States of America champions and takes pride in. The movie’s portrayal of the United States as the epicentre of the world is strikingly evident. The Cold War period in Hollywood was greatly influenced by the United States’ aspiration for global dominance. It sought to establish US supremacy across the globe. The Cold War was a critical juncture in US political history, and it was essential to emerge victorious in ideological warfare. Consequently, the United States utilised film as a medium to rally the masses and legitimise its actions through an exalted portrayal of patriotism and nationalism. Depicting the US as the only state capable of addressing global threats was a recurring theme in these films. Although the movie is more than a decade old, it accurately portrays the nature of the international arena. It depicts the US at the centre, emphasising that the US is a superpower today and an economically advanced nation with immense financial resources and the ability to carry out military operations. However, compared to the present reality, this portrayal might not be entirely accurate, as the US is currently grappling with enormous debt and bearing significant costs for its interventions around the world.

    Nonetheless, it maintains a significant influence and directs economic ties in some manner or form. Hence, one can argue that the depiction is a fictionalized exaggeration of reality, despite the presence of some factual elements. How autonomous is the film industry -from any location or time frame- in creating or presenting narratives that challenge the established order? This study will delve into specific films as case studies and scrutinize them meticulously to glean a clearer understanding of the portrayal and to what extent it reflects the true picture of the global arena.

    Analysis

    Part 1 of the paper examined films as tools of ideological expression and explored the relationship between the film industry and the State. Moving forward, the paper will delve into regional cinema to investigate its narratives and discourses. Entertainment media has emerged as a powerful socio-political institution that wields influence over the state and individuals through the stories and ideologies it presents. Media has the capacity to depict social realities in accordance with the norms, values, and laws of society at a particular time (Zelizer and Allan, 2011). By comparing and contrasting films from different eras with the social realities of their respective times, it becomes possible to uncover the interconnections between reality and representation. During the Cold War era, films were utilized to foster domestic patriotism, thereby granting the State the legitimacy to pursue its ambitions and achieve greatness. Independence Day is an illustration of this phenomenon.

    The way in which the domestic audience receives information about foreign policy through portrayals of interstate relations is complex, and these portrayals are often influenced by state-centred bias and ideology, which can result in the transmission of biased information (Baum, 2007; Cohen, 1963; Entman, 2004; Chomsky, 1989; McChesney, 2008; McQuail, 2005). The role of the media as a discourse-producing entity and as an entity that defines the complex but symbiotic relationship between the government and the media is central. However, while the media should work independently, it is often commercially motivated and, therefore, promotes the ideas and beliefs of the status quo due to the intertwining of vested interests with the corridors of power (Bagdikian, 2004; Bettig and Hall, 2003; Norris, 1990; Vivian, 2006). This results in the media and government submitting to the interests of a small section of the community being propagated, rather than serving the socio-cultural aspect of the institution.

    In the 21st century, propaganda and ideology have become increasingly pervasive. This is due to the rise in content production that aligns with state agendas and the status quo. In India, the movie “The Kashmir Files” has sparked debates regarding whether it is a right-wing propaganda. The movie recounts the exodus of Kashmiri Pandits in Kashmir and the bloodshed that occurred during the 1990s. In today’s context, where right-wing ideologies are gaining momentum, it is evident that ideology and statecraft are interconnected. The portrayal of world and domestic politics is not devoid of an underlying ideological intent. For instance, Bollywood movies like “Raazi” and “LOC Kargil” play a crucial role in propagating India’s foreign policy stance within the domestic political arena. These movies depict India as a progressive global entity, while also propagating the Indian “Big Brother Syndrome” towards its neighbours.

    In the movie “Raazi,” released in 2018 and starring Alia Bhatt and Vicky Kaushal, an undercover RAW agent is married to a Pakistani army official to retrieve crucial information regarding Pakistani moves in Bangladesh and India in 1971. The movie portrays India as a superior state trying to liberate Bangladesh (then East Pakistan) from the “Enemy.” This theme of Indian superiority among its neighbours is prevalent in most films that deal with world and domestic politics. Similarly, the developed West promotes capitalism through films and other visual media.

    Hollywood emerged as a centre for state-sponsored and ideology-driven content during the Cold War. Movies like Wall Street, released in 1987 during an ideological conflict between the United States and the USSR, reflected capitalist ideologies and demonized the USSR and its communist system. The film depicted the ruthless and often exploitative nature of capitalism that prevailed during the 1980s. One of the lead characters, Gordon Gekko, portrayed by Michael Douglas, advocated for the greed and highly capitalistic nature of businessmen. In the context of the Cold War, this promoted a specific type of capitalist ideology to counter the Soviet or communist threat. The glorification of the businessman and the discontentment of the businessman played a significant role in the domestic economic output. The 1980s glorified greed, and this movie accurately represented it. Wall Street explicitly conveyed the notion that morality should not be prioritized over money. The film also featured a speech by Gordon Gekko, in which he declared, “Greed is good.” Movies like this projected a sense of American exceptionalism in the political and economic sense.

    “Don’t Look Up” is a satirical film released in 2022 that critiques the global response to the impending climate crisis. Although the movie aimed to address the issue on a worldwide scale, it primarily focused on Western perspectives. A film that seeks to tackle an international issue should address it on a more comprehensive level. The film, produced in the United States and released on an Over-The-Top (OTT) platform, failed to address the problem it intended to address due to the country’s state-centred ideology and propaganda, which portrays the United States as the saviour of the world. Even though countries like Russia and India were mentioned, the film’s Western bias was evident in the portrayal of these countries as technologically inadequate in stopping the comet from colliding with Earth. This bias is also reflected in movies produced globally, where the notion that national interest takes precedence over all else is a recurring theme.

    Therefore, it can be asserted with confidence that when motion pictures address world politics and economic relationships either currently or historically, the narrative is not unconnected to the state’s agenda. It is permeated with ideology that continually resurfaces. The only solution is the establishment of an autonomous media institution. It is crucial to distinguish between art and the state, as art has proven to be revolutionary in the past. The art produced in India during its quest for independence embodies that essence of truth and authenticity which appears to be lacking in today’s profit-driven, capitalistic world. It is vital to view things objectively, removing the tint of ideology, and acknowledge reality for what it is. This is where the political economy comes into play, exposing the exploitative, biased, and dismissive workings of the industry and institution. Numerous academic studies have examined and concluded that films have significantly influenced the public’s perspective on the State and its actions, making a thorough analysis of contemporary films even more necessary. In a world where false information spreads rapidly, independent media is indispensable.

     

    Feature Image Credit:  Wikimedia Commons
    Scene from Dr Zhivago depicting the Cossacks attacking peaceful demonstrators, a prelude to the Russian Revolution.  Dr Zhivago was a book written by Boris Pasternack, with the plot set in the last days of the Second World War and the break out of the Russian revolution. The book was banned in the USSR, was smuggle out into Europe and translated into English and other European languages. It was made into a classic movie by David Lean during the peak of the Cold War. The movie became a weapon in the cultural component of the Cold War, for its depiction of a totalitarian tendency inherent in the Russian revolution from the start. Boris Pasternack was awarded the Nobel prize (for his book ‘And Quite flows the Don’) but refused to receive it due to the pressure of the ideological  contest between the communist USSR and the capitalist West.    

    Kashmir Files poster Image: koimoi.com

    Raazi poster Image: Mumbai Mirror  

     

    Bibliography

    Bagdikian, Ben H. 2004. The New Media Monopoly. Boston: Beacon. https://library.uniteddiversity.coop/Media_and_Free_Culture/The_New_Media_Monopoly-Ben_H_Bagdikian.pdf.

    BAUM, MATTHEW A. 2007. “Soft News and Foreign Policy: How Expanding the Audience Changes the Policies.” Japanese Journal of Political Science 8 (1): 115–45. https://doi.org/10.1017/s1468109907002502.

    Bettig, Ronald V., and Jeanne Lynn Hall. (2003) . Big Media, Big Money : Cultural Texts and Political Economics. Lanham, Md.: Rowman & Littlefield Publishers, Inc.

    Chomsky, Noah. 1991. “Necessary Illusions: Thought Control in Democratic Societies, Noam Chomsky. 1989. Sough End Press, Boston, MA. 432 Pages. ISBN: 0-89608-366-7. $16.00.” Bulletin of Science, Technology & Society 11 (3): 183–83. https://doi.org/10.1177/027046769101100328.

    Cohen, Bernard C. 1963. The Press and Foreign Policy. The American Historical Review. https://doi.org/10.1086/ahr/69.3.805.

    Entman, Robert. 2005. “Robert M. Entman. Projections of Power: Framing News, Public Opinion, and U.S. Foreign Policy. Chicago: University of Chicago Press. 2003. .Public Opinion Quarterly 69 (2): 324–26. https://doi.org/10.1093/poq/nfi017.

    Mcchesney, Robert Waterman . 2008. The Political Economy of Media : Enduring Issues, Emerging Dilemmas. New York: Monthly Review Press.

    McQuail, Denis . 2005. McQuail’s Mass Communication Theory. Sage Publications Ltd., London. https://www.scirp.org/reference/referencespapers?referenceid=1839060.

    Norris, Pippa. 2002. “Studying the Media and Politics in Britain: A Tale of Two Literatures?” The British Journal of Politics and International Relations 4 (2): 359–73. https://doi.org/10.1111/1467-856x.t01-1-00009.

    Vivian, John. 2006. The Media of Mass Communication. Allyn & Bacon.

    Zelizer, Barbie, and Stuart Allan. 2011. Journalism after September 11. Taylor & Francis.

     

  • The catastrophe of modern capitalism: Inequality as an aim in Neo-Liberal-Ideology

    The catastrophe of modern capitalism: Inequality as an aim in Neo-Liberal-Ideology

    Neoliberalism is the dominant form of capitalism that began in the 1980s as a way to promote global trade and grow all economies. That was a false promise, whereas in essence it supported individuals amassing massive wealth in the name of market forces, at the expense of common man by ensuring states minimise their role and eliminate welfare economics. It ensured least-developed and developing economies remained resource providers to developed economies, exemplifying extraction and exploitation. Neoliberalism is a top down economic policy that does not benefit those who are impoverished. The inequality we see on a global scale is mind-numbing. In 2006, the world’s richest 497 people were worth 3.5 trillion US dollars representing 7% of the world’s GDP. That same year, the world’s lowest income countries that housed 2.4 billion people were worth just 1.4 trillion US dollars, which only represents 3.3% of the world’s GDP. The situation today is far worse as Andreas Herberg-Rothe explains in his critical analysis below. The world is in urgent need of freeing itself from the clutches of neoliberal capitalism. 

     

    ..neoliberalism contains a general tendency towards an extensive economisation of society. Thus, inequality transcends the economy and becomes the dominant trend in society, as in racism, radical extremism, and hate ideologies in general: Us against the rest, whoever the rest may be.

     

    Following on from the initial question about Hannah Arendt’s thesis that equality must be confined to the political sphere, we must ask how democracy and human rights can be preserved in the face of social inequality on an extraordinary scale. By the end of this century, 1% of the world’s population will own as much as the “rest” of the other 99%. And already today, only 6 people own more property than 3.6 billion. Let us take a closer look at some of the ideas of the currently dominant neo-liberalism, which sheds some light on the acceptance of these current obscene inequalities. For this ideology, social inequality is a means to greater wealth. However, since it sets no limits on social inequality, it can be used to legitimize even obscene inequalities. We argue that neoliberalism as an ideology is the result of the spread of a specific approach to economic thought that has its roots in the first half of the twentieth century, when Walter Lippmann’s seminal book “An Inquiry into the Principles of the Good Society” (1937), followed by Friedrich August von Hayek’s “The Road to Serfdom” (1944), gave rise to neoliberalism. During the Cold War period, neoliberals gained more and more ground in establishing a global system. With the support of Milton Friedman and his “Chicago Boys,” the first attempt to establish a pure neoliberal economic system took place in Chile under the military dictatorship of General Pinochet in the 1970s. In the last decade of the Cold War, neoliberal architects such as Margaret Thatcher and Ronald Reagan began to impose the new economic model. Since the end of the Cold War, the final development was that neoliberalism became THE hegemonic economic system, as capitalism was de jure allowed to spread unhindered worldwide, and neoliberalism continued on its way to becoming the dominant belief system.

    The critical message in this sense is the following: This process is not limited to an economic dimension – neoliberalism contains a general tendency towards an extensive economisation of society. Thus, inequality transcends the economy and becomes the dominant trend in society, as in racism, radical extremism, and hate ideologies in general: Us against the rest, whoever the rest may be.

    When we talk about global inequality in the era of neoliberalism, we are referring to two other major developments: To this day, inequality between the global North and South persists. While the total amount of poverty has decreased, as seen in the World Bank’s report (2016), there is still a considerable gap between those countries that benefit from the global economy and those that serve as cheap production or commodity areas. The second development takes place in countries that are more exposed to the neoliberal project. In this sense, societies are turning into fragmented communities where the “losers of neoliberalism” are threatened by long-term unemployment, a life of poverty, social and economic degeneration.

    After three decades of intense global neo-liberalism, the result has been a significant increase in social inequalities, polarization and fragmentation of societies (if not the entire world society), not to mention a global financial crisis in 2008 caused by escalating casino capitalism and the policies of a powerful global financial elite.

    We are witnessing a global and drastic discontent of peoples, fears and anger, feelings of marginalization, helplessness, insecurity and injustice. After three decades of intense global neo-liberalism, the result has been a significant increase in social inequalities, polarization and fragmentation of societies (if not the entire world society), not to mention a global financial crisis in 2008 caused by escalating casino capitalism and the policies of a powerful global financial elite. We witness a global and drastic dissatisfaction of the peoples, fears, and anger, the feelings of marginalization, helplessness, insecurity, and injustice. After three decades of intense worldwide Neo-Liberalism, the result significantly intensified social inequalities, polarization, and fragmentation of societies (if not the entire world society), not to mention a global financial crisis in 2008 caused by escalating casino capitalism and the policy of a powerful global finance elite.

    The central critique is that neoliberalism includes social inequality as part of its basic theory. Such capitalism emphasizes the strongest/fittest (parts of society) and uses inequality as a means to achieve more wealth.

    Remarkably and frighteningly, the situation outlined does not provoke the oppressed, marginalised, and disadvantaged populations to turn against their oppressors and their exploitation. These people tend to sympathize with ideological alternatives, either with more triumphant (right-wing) populist movements and parties or are attracted by radical/fundamentalist religious groups such as the Islamic State. The result is an increase in polarization and violence, and even more protracted wars and religious-ideological disputes. Europe is not exempt from the trend toward obscene social inequality. We also find a polarization between rich and poor, between those who have good starting conditions and those who have little chance of prosperity, between those who are included and those who feel excluded. The fact that Europe has so far largely avoided populist parties gaining administrative power (although we have already witnessed this process in France, Hungary and Poland) may be due to the remnants of the welfare state. In this respect, at least a minimum of financial security remains and limits the neoliberal trend. In the United States, on the other hand, a flawless populist could reach the highest office. The people, stuck in their misery, fear and insecurity, voted for a supposed alternative to the neoliberal establishment, but above all against other social outcasts whom they blamed for their misery. This brings us to the central critique of neoliberalism, a system that has caused fundamental social oddities, the impact of which as an ideology has been highlighted above. The central critique is that neo-liberalism includes social inequality as part of its basic theory. Such capitalism emphasizes the strongest/fittest (parts of society) and uses inequality as a means to achieve more wealth.

    In an interview with the German magazine Wirtschaftswoche, Hayek spoke bluntly about the neoliberal value system: He emphasizes that social inequality, in his view, is not at all unfortunate, but rather pleasant. He describes inequality as something simply necessary (Hayek, 1981). In addition, he defines the foundations of neo-liberalism as the “dethronement of politics” (1981). First, he points out the importance of protecting freedom at all costs (against state control and the political pressure that comes with it). The neoliberals see even a serious increase in inequality as a fundamental prerequisite for more economic growth and the progress of their project. One of the most renowned critics of neoliberalism in Germany, Christoph Butterwegge (2007), sees in this logic a perfidious reversal of the original intentions of Smith’s (reproduced in 2013) inquiry into the wealth of nations in the current precarious global situation. The real capitalism of our time – neoliberalism – sees inequality as a necessity for the functioning of the system. It emphasizes this statement: The more inequality, the better the system works. The hardworking, successful, and productive parts of society (or rather the economy) deserve their wealth, status, and visible advantage over the rest (the part of society that is seen as less strong or less ambitious). The deliberate production of inequality sets in motion a fatal cycle that leads to the current tense global situation and contributes to several intra-societal conflicts.

    The market alone is the regulating mechanism of development and decision-making processes within a society dominated by neo-liberalism, and as such is not politics at all. This brings us closer to the relationship between neoliberalism and democracy. The understanding of democracy in neoliberal theory is, so to speak, different. Principles such as equality or self-determination, which are prominent in the classical understanding of democracy, are rejected. Neo-liberalism strives for a capitalist system without any limits set by the welfare state and even the state as such, in order to shape, enforce and legitimize a society dominated only by the market economy. Meanwhile there are precarious tendencies recognizable, where others than the politically legitimized decision-makers dictate the actual political and social direction (e.g. the extraordinarily strong automobile lobby with VW, BMW and Mercedes in Germany or big global players in the financial sector like the investment company BlackRock). Neoliberalism only seemingly embraces democracy. The elementary democratic goals (protection of fundamental and civil rights and respect for human rights) can no longer be fully realized. Democracy cannot defend itself against neo-liberalism if political decision-makers do not resolutely oppose the neo-liberal zeal for expansion into all areas of society. The dramatic increase in inequality coincides with the failure of the state as an authority of social compensation and adjustment, as neoliberalism eliminates the state as an institution that mediates conflicts in society. To put it in a nutshell: Whereas in classical economic liberalism the state’s role is to protect and guarantee the functioning of the market economy, in neoliberalism the state must submit to the market system.

    Our discussion of neoliberalism here is not about this conceptualization and its history, which would require a separate article. Nevertheless, we want to emphasize that in neo-liberalism, social inequality is a means to achieve more wealth for the few. Therefore, we argue that there must be a flexible but specific limit to social inequality in order to achieve this goal, while excessive inequality is counterproductive.

    As noted above, moderate levels of inequality are not necessarily wrong per se. In a modern understanding, it also contributes to a just society in which merit, better qualifications, greater responsibility, etc. are rewarded. The principle of allowing differences, as used in the theory of the social market economy, is a remarkably positive one when such differentiation leads to the well-being of the majority of people in need. However, neo-liberalism adopts a differentiation that intensifies inequality to a very critical dimension. The current level of social inequality attacks our system of values, endangers essential democracy, and destroys the social fabric of societies. Even if we consider a “healthy” level of inequality to be a valuable instrument for a functioning market society, what has become the neoliberal reality has nothing to do with such an ideal. Neoliberalism implies an antisocial state of a system in which inequality is embedded in society as its driving mechanism. Consequently, we witness a division between rich and poor in times of feudalism. A certain degree of social equalization through the welfare state and a minimum of social security is no longer guaranteed. The typical prerequisites today are flexibility, performance, competitiveness, etc. – In general, we see the total domination of individualism within neo-liberalism, leading to the disintegration of society. In one part of the world, mainly in the Global South, we observe the decline of entire population groups. In contrast, in other parts of the world we see fragmented societies in hybrid globalization and increasing tendencies towards radical (religious) ideologies, violence and war.

    It must be acknowledged that neoliberalism was one of the causes of the rise of the newly industrialized nations, but the overemphasis on individual property also contributes to obscene inequality and thus to the decline of civilized norms.

    The Polish-British sociologist Zygmunt Bauman summed up this problem by comparing it to the slogan of the French Revolution: “Liberté, Egalité, Fraternité”. According to the proponents of the time, each element could only be realized if all three remained firmly together and became like a body with different organs. The logic was as follows: “Liberté could produce Fraternité only in company with Egalité; cut off this medium/mediating postulate from the triad – and Liberté will most likely lead to inequality, and in fact to division and mutual enmity and strife, instead of unity and solidarity. Only the triad in its entirety is capable of ensuring a peaceful and prosperous society, well integrated and imbued with the spirit of cooperation. Equality is therefore necessary as a mediating element of this triad in Bauman’s approach. What he embraces is nothing less than a floating balance between freedom and equality. It must be acknowledged that neoliberalism was one of the causes of the rise of the newly industrialized nations, but the overemphasis on individual property also contributes to obscene inequality and thus to the decline of civilized norms. When real socialism passed into history in 1989 (and rightly so), the obscene global level of social inequality could be the beginning of the end (Bee Gees) of neo-liberalism, centered on the primacy of individual property, which is destroying the social fabric of societies as well as the prospects for democratic development. Individual property is a human right, but it must be balanced with the needs of communities, otherwise it would destroy them in the end.

     

    Feature Image Credit: cultursmag.com

    Cartoon Image Credit: ‘Your greed is hurting the economy’ economicsocialogy.org

  • Social automation and APT attributions in National Cybersecurity

    Social automation and APT attributions in National Cybersecurity

    Advanced Persistent Threats (APTs) are a prime concern in the formulation and implementation of national cybersecurity policies. These threats often also involve complex social engineering tactics which are undergoing a quantitative and qualitative revolution with burgeoning AI capabilities. However, the attribution of these APT activities can be mired with technical and political considerations. We analysed 142 APT groups’ attributions along with their use of social interaction vectors to ascertain the nature of the risk environment and the operational threat landscape of AI and social automation. We discover that close to 80% of APT activities could be chalked up to merely 20% of key nation-state threat actors competing with each other. We further discuss the implications of this political threat distribution for national cybersecurity environments.

    Keywords: cybersecurity, AI Policy, advanced persistent threats, automation, social engineering


    Read full paper here

  • Can a Muscular Response deter Chinese Aggression?

    Can a Muscular Response deter Chinese Aggression?

    The Sino-Indian War of 1962, which is seen as a humiliating defeat for India, continues to rankle all Indians. Clearly, it is seen as a result of poor leadership both at the political and military levels. In hindsight, many believe that the PLA could have been routed had India regrouped its Army and used the IAF in a massive counterattack. It was November, and with the onset of winter and the closing of the Himalayan passes, the PLA could have been demolished completely. That we didn’t even think of it shows the serious vacuum in strategic thinking. More than half a century later, and with the Indian military much stronger and battle-hardened, it is inexplicable why India’s leadership is shy of following an aggressive strategy, including the use of force proactively against China. Brigadier Deepak Sinha, a vetran and TPF’s Senior Fellow, raises this question while correlating the current situation with that of 1962.

    There is an urgent need for us all to shed our divisive politics, long-held dogmas and skewed perceptions, forget fanciful visions and face reality, especially when it comes to the question of national security. The last thing we need is for petty politics and fragile egos to control our nation’s destiny. Nothing can be more consequential, traumatic or shameful than being bested by a rival on the battlefield. The consequences of our “defeat” in the Sino-Indian Conflict of 1962 continue to rankle and haunt us to this day.

    Quite clearly, the fear psychosis that permeates our higher military and political leadership is palpable.

    Indeed, our reluctance, for fear of escalation, to launch a quid-pro-quo riposte and grab disputed territory elsewhere as a bargaining chip following the PLA’s blatant land grab of disputed territory in Eastern Ladakh is a clear indication of this. This was reinforced by an earlier interview with ANI by our Foreign Minister, who stated, “Look, they (China) are the bigger economy. What am I going to do? As a smaller economy, I am going to pick up a fight with the bigger economy? It is not a question of being reactionary, it’s a question of common sense….” Quite clearly, the fear psychosis that permeates our higher military and political leadership is palpable.

    On the other hand, the Chinese leadership has a very different perception of our capabilities as was reflected back in 1959 following the Longju incident. A declassified United States document of that time points out that “the late August clashes point to a mode of thought which has remained an ingredient in the Chinese leaders’ calculations on the border dispute: ‘When the Indians show a temperament to advance on the ground, we must alter their frame of mind by letting military action take over political caution. Besides, military risk itself is negligible because we are the stronger side.” Obviously, over the years, they have been given no reason to believe otherwise. In order to understand what ails us, it is worth briefly examining the course of the 1962 conflict to get a clearer idea of the extent of our loss at the hands of the Chinese. That should help us understand why, over fifty years later, we continue to remain so traumatised and fearful.

    The opening skirmish of that conflict occurred in the North East with the capture, on 8th Sept, of the isolated Assam Rifles post at Dhola, on the southern slopes of the Thag La ridgeline. This post was surrounded and completely dominated by PLA positions on higher ground, and its loss was a foregone conclusion. The actual conflict commenced at approximately 0500 hours on 20th October, when the PLA launched a massive infantry attack, supported by artillery, on the 7 Infantry Brigade positions. The Brigade was deployed in a tactically unsound manner on direct orders of GOC 4 Corps, Lt Gen B M Kaul, along the Southern banks of the Namka Chu River over a 20 Km frontage instead of on the heights overlooking the river.

    The battalions were deployed in platoon penny pockets, lacking mutual support, in temporary positions with no overhead cover. Artillery support was restricted to just one battery of Heavy Mortars and a troop of two field guns with limited ammunition. No intelligence was available to the Brigade Headquarters or any of the other higher headquarters as to PLA force levels or their intentions. The assault came as a surprise and just four hours later, by 0900 Hours, the Brigade ceased to exist as a fighting force. Within just another 96 Hours, the strategic border town of Tawang, approximately 100 Km in-depth, held by an understrength battalion, was attacked and captured without a fight.

    Almost simultaneously in the Northern Theatre, isolated forward positions at Aksai Chin and the Pangong Tso area were also cleared after a brief skirmish. After an administrative pause of approximately a month, the PLA launched the next phase of its offensive with its assault on the Walong positions on 16th Nov and on the main defences of the 4 Infantry Division at Bomdi La, Se La and on the Division Headquarters at Dirang Dzong. Simultaneously, on 20th Nov, Chushul came under attack by an Infantry Divison. On 21st Nov the Chinese announced a unilateral ceasefire and subsequently withdrew to positions occupied by them prior to the commencement of the conflict.

    There are three main deductions that can be drawn from an examination of the facts. Firstly, that the conflict was, in essence, extremely limited in terms of time, space and force levels involved. From an army of 550,000 personnel, approximately 20,000 personnel were committed into this conflict, primarily due to our limited logistical capabilities. The conflict was primarily restricted to the tactical level only, at battalion level and below. While the conflict itself was spread over one month, the tactical engagements themselves lasted a few hours at best, and on one or two occasions where stiffer resistance was put up, extending to 48-72 Hours. Unfortunately, given the terrain, lack of field fortifications, etc, casualties suffered were relatively high, with approximately fifteen hundred killed, similar numbers wounded, two thousand missing and another 4000 taken prisoner. The Air Force, which could have played a critical role in blunting the PLA attacks and destroying their lines of communications, was deliberately confined to the logistics role for reasons that are still not clear, while the Navy remained a bystander.

    Sadly, our military and political leadership exhibited an utter lack of moral courage, determination and willpower by quietly acquiescing to the unilateral ceasefire, thereby kicking the main irritant of the demarcation of borders further up the road, where it has once again come to bite us on our posteriors.

    Secondly, far from being a major defeat, as has been commonly made out, it was at best a temporary reverse that could, and should, have been countered with the use of fresh troops under a more determined and professional leadership. More importantly, the PLA understood this fact and, therefore, undertook a unilateral withdrawal to its earlier pre-war line of defences. It must have been fully cognisant that if hostilities were to continue, it would find itself in an increasingly untenable position with its supply lines already badly stretched and being further impacted with the onset of winter. It would only have been a matter of time before the Indian Army got over its shock, regrouped and reorganised itself and launched a counter-offensive to recapture lost territory. Sadly, our military and political leadership exhibited an utter lack of moral courage, determination and willpower by quietly acquiescing to the unilateral ceasefire, thereby kicking the main irritant of the demarcation of borders further up the road, where it has once again come to bite us on our posteriors.

    Thirdly, what continues to remain totally inexplicable is the reasons why our military and political leadership continue to remain so traumatised and scared to this day. The truth is that the narrative that emanated following the reverses was set by officers and men belonging to units that, for the most part, had withdrawn before coming in contact with the PLA. They were low on morale and had come to believe the Chinese were supermen who could not be stopped by mere mortals. It was from amongst the experience and perception of these personnel that pamphlets on the tactics and capabilities of the PLA were subsequently formulated that continue to be relied on to this day, thereby giving further credence to that distorted narrative.

    The fact of the matter is that in any future conflict, the PLA will be fighting over 2000 Kms away from its home bases, supported along communication lines that run over some of the most difficult and inhospitable terrain in the world. They are also easily susceptible to interdiction, given the nature of the terrain. In addition, they would have to contend with a hostile and badly oppressed population not just within Tibet but in Xingjian as well, which could revolt if a suitable opportunity arose. This would require the PLA to deploy additional forces for rear area security to prevent disruption of the lines of communication.

    Moreover, while there are sizeable disparities in aspects such as force levels and capabilities, infrastructure development and economic strength, one needs to be cognizant of the fact that we have also made tremendous strides with regard to infrastructure development, logistics and offensive capabilities. Our forces still hold the edge vis-à-vis combat experience and operating in mountains, while the Air Force continues to hold the upper hand in the TAR purely on account of terrain profile and radius of action. Most importantly, the availability of two Mountain Strike Corps gives us immense flexibility, if properly utilized, to grab the initiative and force a decision dilemma on the PLA. In the circumstances, the reason for our extreme reluctance to stand up against the Chinese bully must lie elsewhere. One distinct possibility is that our political leadership lacks faith in the military leadership and its ability to fight and win.

    This will seem at odds with the fact that the military has a splendid history of having always successfully completing any task given to it. If anything, it has been grossly misused by the Central and State Governments to carry out tasks that are not in their ambit, whether these be organizing the Commonwealth Games or construction of railway over-bridges, because the concerned departments and agencies have been unable to produce the requisite results. Clearly, this mistrust, primarily in the sphere of civil-military relations, has more pernicious roots and is very deeply embedded in the politico-bureaucratic psyche.

     Interestingly, in the Official History of the 1962 Conflict with China, available in the public domain but yet to be published, the Chief Editor, Dr S N Prasad, concludes that the chief reason for our defeat was that the political establishment was unable to avoid war while it was in the process of transforming the military establishment. Given Prime Minister Nehru’s apprehensions about the military taking control, he wanted to change it from being, as Mr Prasad puts it, a “close-knit professional body, deliberately isolated from the citizen. Its predominant motive force remained esprit de corps and not identification with the people… Perhaps he wanted to model it after the People’s Liberation Army of China, more egalitarian, flexible, closer to the people………Such basic changes required a committed, or at least a pliant, band of army officers in key positions. So mediocre Thapar was selected instead of the doughty Thorat as Army Chief, and Bijji Kaul was made CGS……. “

      He further goes on to add that “To carry out this transformation of the national defence set up, a decade of peace was absolutely essential. For establishing indigenous weapons manufacture, money had to be found by cutting arms imports. The armed forces would be short of equipment and stores for several years till the new arms factories started producing. The officer cadre was a house divided within itself till the new breed fully took over. A period of transition was inevitable, during which the fighting machine would not be fully efficient and would be vulnerable………Therein seems to lie the basic cause of the debacle of 1962. India failed to avoid a war during the transition period. Lulled by faulty political assessment and wrong intelligence forecasts, the country got caught in a war when it was least prepared.”

    With Mr Modi’s ascension to power, we came a full circle as he took it upon himself to steer it away from its apolitical and secular character towards a more ideologically compatible institution that would be in sync with his Party’s long-held vision of making India into a Hindu Rashtra.

    Fortuitously for the country, Nehru’s vision for a transformed military was stymied by the 1962 Conflict and the most important lesson that his successors assimilated quickly was to stay away from interfering in the internal affairs of the military as that could gravely damage internal cohesion and morale. With Mr Modi’s ascension to power, we came a full circle as he took it upon himself to steer it away from its apolitical and secular character towards a more ideologically compatible institution that would be in sync with his Party’s long-held vision of making India into a Hindu Rashtra.

    Towards this end Mr Modi has smartly used the concept of “deep selection” to ensure key senior appointments were filled by officers displaying an affinity for his government’s ideology, regardless of existing rules, seniority or merit. This, in turn, made them personally beholden to him, and he was thus able to use them to take ownership and deflect criticism from initiatives that were pushed through by his government regardless of their adverse impact on long-standing and cherished customs and traditions or on the operational capabilities of the Services. This has led to schisms within the institution, damaged the integrity and cohesion of the chain of command and cast a big question mark on the apolitical and secular character of the Services.

    In this context, a politically compromised Chief of Defence Staff and other senior officers shamefully endorsed the PMO, thrusting down the ill-conceived Agnipath Scheme on the military with not a single objection being raised. This scheme has all but destroyed the basic ethos of our fighting arms, ensuring that the deeply entrenched and effective Regimental System has been severed at the roots. Given their ignorance of matters military, they would have been ignorant of Winston Churchill’s wise advice that “Regiments are not like houses. They cannot be pulled down and altered structurally to suit the convenience of the occupier or the caprice of the owner. They are more like plants; they grow slowly if they are to grow strong…and if they are blighted or transplanted, they are apt to wither.”

    And wither they have, the resulting adverse impact on morale is not difficult to gauge. This is undoubtedly being further exacerbated by the considerable voids in manpower, with combat units reportedly functioning at less than 75% of their authorised strength, and truncated peace tenures to fill up operational voids in Eastern Ladakh, Manipur and Jammu & Kashmir. In addition, the government’s emphasis on the ‘Atman Nirbhar Abhiyan’ and ‘Make in India Scheme’ has resulted in deficiencies, even if temporary, in the holdings of weapons systems, ammunition and other warlike stores. Given all these factors, the military obviously finds itself in an extremely precarious situation, committed to its fullest capacity with limited options available. Ironically, a government that lays such a great emphasis on our Hindu origins, culture and history has managed to display a profound ignorance of statecraft and warfare, as brought out in Kautilya’s Arthashastra. In this classic, Chanakya points to the necessity for a strong army because, for all nation-states, there are only two states of being: either conquer or be conquered.

    …at the present time, we are once again confronted with an extremely turbulent geopolitical situation, with the world’s attention on the ongoing crises in Europe and the Middle East. The situation today, in many ways, is clearly reminiscent of the period on the eve of the 1962 Conflict. For reasons not very different from then, the Indian Military finds itself in a very similar situation as well.In these circumstances, the real question that we should be asking ourselves is not whether we can overcome our past traumas and face down the PLA, but more importantly, whether China will seize this opportunity to recalibrate the Sino-Indian relationship through the use of force.

    Interestingly, in 1962, China launched major operations against us at the end of the campaigning season, which could have been jeopardised by unseasonal snow. Obviously, this was because, at that time, the world’s attention was riveted to the Cuban Missile Crisis. Similarly, at the present time, we are once again confronted with an extremely turbulent geopolitical situation, with the world’s attention on the ongoing crises in Europe and the Middle East. In addition, the United States is deeply immersed in its own internal problems with presidential elections just around the corner and with little time for other matters.

    The situation today, in many ways, is clearly reminiscent of the period on the eve of the 1962 Conflict. Moreover, at that time, Chairman Mao was under intense pressure as his Great Leap Forward experiment had failed, and he had been removed from his appointment as State President. Today, President Xi also finds himself under similar pressure following his disastrous Zero Covid and hard-line economic policies that have tanked the economy. For reasons not very different from then, the Indian Military finds itself in a very similar situation as well.

    Undoubtedly, the political leadership and the military top brass must be fully cognizant of this state of affairs. Clearly, they are in no position to stare down the PLA. What makes matters worse is that following the General Elections, Mr. Modi’s authority and standing have been greatly diminished. Where does this leave those senior officers who have progressed by hanging on to his ideological coat-tails? Has the authority and credibility of the CDS, an out-and-out political appointee and loyalist, been affected within the Chiefs of Staff Committee of which he is the Chairman? What will be its impact on the move towards the establishment of theatre commands? In these circumstances, the real question that we should be asking ourselves is not whether we can overcome our past traumas and face down the PLA, but more importantly, whether China will seize this opportunity to recalibrate the Sino-Indian relationship through the use of force.

     

    Feature Image Credit: Border Clashes between India and China ‘regularly covered up’  The Telegraph

    Namka Chu and Dhola Post Picture credit: www.indiasentinels.com

  • Globalisation’s Sunset

    Globalisation’s Sunset

    Are we witnessing the end of globalisation and the rise of economic nationalism? Who is responsible for this state of affairs? For many, the villain is clearly the US and its allies in the West. The reason is the rise of China as the world’s manufacturing and technology superpower. China is beating the West at its own game, and the US is shaken by the visible signs of the end of its hegemony and the dominance of the West.  Globalisation is being throttled by the West in a futile attempt to end China’s rise. The result will be catastrophic for the Global South in its aspirations for accelerated development. Former Venezuelan ambassador and Princeton scholar Alfredo Toro Hardy analyses what he sees as the sunset of globalisation.

    – Team TPF

     

    Economic globalisation was the offspring of the neoliberal ideology that prevailed after the collapse of the Soviet Union. The globalisation process took off in the mid-nineties, as was identified by the firm support given to it by leaders such as Bill Clinton and Tony Blair, particularly the former, who commanded the world’s largest economy.

                Its most emblematic expressions would be the Washington Consensus, the creation of the World Trade Organization in 1995, and China’s entry into these organisations in 2001. The first resulted from the convergence of positions between the U.S. Treasury Department and International Financial Organizations based in Washington. It would translate into a ten-point recipe called to set in motion the economic liberalisation of distressed and closed economies, chiefly the previous communist ones. The second involved the global homogenisation of rules in matters as diverse as manufacturing, agriculture, services, labour standards or intellectual property, as well as the abandonment by its members of industrial policies and protectionism. The third represented the insertion into the global labour market of more than a billion human beings whose working costs were but a fraction of those in developed countries. This would be accepted and even promoted by the United States under the assumption that a China open to the world’s economy would eventually open itself to the values of liberal democracy as well.

                The importance of neoliberal ideology, as a determining factor of this process, would be key. As a matter of fact, for a long time the leading force in the world economy, America’s economy, was characterised by its industrial policies, protectionism, and vertical integration of its corporations. The federal government’s industrial policies became a catalyst for economic development, either through direct investments and engagement or through incentives for the private sector to follow a particular course of action. The countless products and services incorporated into the American technological repository resulting from NASA’s R&D efforts exemplify these policies. They still represent the broad shoulders on which the country’s private technological sector stands. Protectionism expressed itself through tariffs and non-tariff barriers to protect domestic production from foreign competition. Vertical integration, on its part, involved direct control by U.S. corporations in their production and distribution channels. Hence, outsourcing did not figure in their strategies. It is worth adding that even President Reagan, despite his deregulatory crusade, supported his country’s industrial policies and imposed protective barriers against Japanese competition (Foroohar, 2022).

    Globalization in question

                For decades, globalisation has represented an unchallenged paradigm. Under its course, China reached the anteroom of world economic supremacy, numerous cheap labour economies, particularly in Asia, emerged strongly, and large corporations relying on the revolutions in information technology, communications and transports outsourced and dispersed their production and services (again mainly in Asia). Actually, it was in the emerging Asian countries where, in nine of every 10 cases, the great beneficiaries of globalisation were concentrated. Moreover, it was estimated that between 2020 and 2030, the global middle class would jump from 3,300 million to 4,900 million people, with 80% of that jump taking place in Asia (Milanovic, 2018, p. 19; OCDE, 2010). However, for some time now, globalisation has been under serious questioning. Among the reasons behind this, the following should be outlined: the emergence of powerful populist movements in the Western World; climate change distortions upon trade and the impact on climate itself, resulting from maritime trade over long distances; and economic and political nationalism in China.

                Populism is, to a large extent, directly related to the immense social upheavals caused by the massive outsourcing of jobs to the cheapest labour economies. In 2000, Clinton predicted that globalisation would allow the export of products without exporting jobs. Exactly the opposite happened, though, seriously affecting the social fabric of the United States and its European counterparts. This significantly eroded their democratic systems. Climate change, with hurricanes, floods, and other incidents, has increased the risk of global supply chains, resulting in annual revenue losses of up to 35% for companies. (McKinsey and Company, 2020).

    Conversely, the massive mobilisation of supertankers worldwide generates up to 14% of the total greenhouse gas emissions affecting the planet. (Prestowitz, 2022). Indeed, “the ultimate buyer [of final products] remained an ocean or a continent away” (O’Neil, 2022, p. 113). In addition, contrary to what American promoters of China’s emergence had suggested, the country’s economic prosperity has led to an increasingly nationalistic and authoritarian model. Far from getting closer to U.S. values, China has emphasised its economic nationalism and geopolitical aggressiveness within the context of a growing rivalry with the United States.

    The triggering elements

                However, even if disappointment with globalisation continued to grow, the triggering elements that would end up clearly tilting the balance against it were still missing. COVID and Russia’s invasion of Ukraine took care of it. Twenty trillion U.S. dollars in goods rely on global supply chains. Especially so as the disaggregation of production translates into millions of components, parts and final manufacturers moving in every direction. (McKinsey and Company, 2020). This vertiginous dissemination of productive processes led to unexpected, sudden, and massive disruptions during the pandemic. As a result, global economic interdependence choked. The endless Zero COVID policy implemented in China, the geographic nerve centre for global trade, exponentially aggravated this situation. The result was none other than inflation that brought to mind the seventies and has not yet been controlled.

                This was joined shortly afterwards by the impact of the invasion of Ukraine by Russia. One that not only disrupted vital energy and food supply chains but fundamentally brought geopolitics back to the global scenario through the main door. As if the emerging Cold War between China and the U.S. had not already been enough to undermine faith in globalisation, events in Ukraine made security the central component of the international order. It was a sort of fall of the Berlin Wall in reverse. One that brought down the relevance of economics and propelled that of politics. Olaf Scholz’s “global zeitenwende” clarified that a new strategic culture and national strategy would become his country’s new priority (Scholtz, 2023). Under such circumstances, placing economic security in distant and potentially hostile hands was no longer a rational option.

    Back to the past

                Not surprisingly, the United States began reverting to policies that preceded globalisation. That is, to industrial policies, to protectionism, and the vertical integration of its corporations. Indeed, before losing the House of Representatives to Republicans in November 2022, Biden’s Democrats passed several laws that embody industrial policies. A perfect example is the so-called energy revolution, with 490 billion dollars being involved in incentives to guide private investment towards generating clean energy sources. It also allowed the federal government to intervene in medicine prices through direct negotiations with the pharmaceutical industry. In the same direction went the laws that stimulated competitiveness and innovation, the superconductors industry, and infrastructural development. In parallel, the “Buy American” policy, subsidies to the domestic industry, and the maintenance of the tariffs imposed by Trump represented an evident protectionist impulse. Meanwhile, American corporations, in tune with these policies and in reaction to the risks of dismembering their production and services on a global scale, are opting for vertical integration and direct control of their activities. This implies, by its very nature, a production centred on the local or the regional.

    Getting back home

                All of the above factors contribute to industries’ onshoring and supply chains. In 2021, of the 709 large U.S. manufacturing corporations consulted, 83% responded that they would very likely or probably return their production operations to the United States. (Ma, 2021). Numerous leading American and foreign corporations are opting to produce in the U.S. to benefit from the new incentives put in motion by the Biden administration. This list includes, among many others, Intel, GM, US Steel, Taiwan Semiconductor Manufacturing (TSMC), Toyota, Samsung and Micron Technology. The amount of their investments, in tens of billions of dollars in many cases, speaks for itself. The motivation behind this impressive move was well reflected in the words of the larger-than-life founder of TSMC, Morris Chang: “Globalization and free trade are almost dead and unlikely to return”. (Cheng, 2022; Doherty and Yardeni, 2022). However, together with this on-shoring move, there are also parallel movements of near-shoring or friendly shoring nature, where manufacturing and supply chains are being circumscribed to neighbours or traditional allies that do not represent a security risk. With the world’s largest economy becoming protectionist, it will be difficult for globalisation to retain its influence, especially as Europe rapidly evolves in the same direction.

    Globalization last hope

                Until recently, an area of globalisation seemed to be relatively protected from these kinds of upheavals: the digital ecosystem. According to a 2016 report, the rapid flows of international trade and finance that characterised the 20th century appear to have flattened (…), yet globalisation has not reversed. Indeed, digital flows are growing very quickly.” (McKinsey Global Institute 2016). However, a few months ago, Brookings published a highly pessimistic report regarding the future of this sector. According to it: “Historically, the arrival of the global web created an opportunity for the interconnection of the world under a global digital ecosystem. However, mistrust between nations has led to the emergence of digital barriers, which imply their focus on controlling their digital sovereignty (…). These developments threaten current forms of interconnectivity, causing high-tech markets to fragment and retract, to varying degrees, upon national states”. (Brookings, 2022). Thus, the last sector of globalisation, which still showed significant dynamism, is also reversing under the impact of geopolitics. Globalisation, no doubt about it, seems to be experiencing sunset.

     

     

    References

    Brookings (2022). “The geopolitics of AI and the rise of digital sovereignty”, December 8.

    Cheng, Ting Fang (2022). “TSMC founder Morris Chang says globalization is ‘almost dead’, Nikkei, December 7.

    Doherty, J. and Yardeni, E. (2022). “Onshoring: Back to the USA”, Predicting the Markets, February 5.

    Foroohar, Rana (2022). Homecoming. New York: Crown.

    Ma, Cathy (2021). “83% of North American Manufacturers are Likely to Reshore Their Supply Chains”, Thomas, June 30.

    McKinsey & Company (2020). “Could climate change become the weak link in your supply chain”, August 6.

    McKinsey Global Institute (2016). “Digital Globalization: The New Era of Global Flows”, March.

    Milanovic, Branko (2018). Global Inequality. Cambridge, Mass.: The Belknap Press of Harvard University Press.

    OCDE (2010). “The Emerging Middle Class in Developing Countries”, Working Paper Number 285.

    O’Neil, Shannon K. (2022). The Globalization Myth. New Haven: Yale University Press.

    Prestowitz, Clyde (2022). “Is the U.S. Moving Out from Free Trade? Industrial Policy Comes Full Circle”, Clyde’s Newsletter, December 12.

    Scholz, Olaf (2023). “The Global Zeitenwende”. Foreign Affairs, January/February.

     

    Feature Image Credit: worldcrunch.com (Globalization as Ideology is Dead and Buried).

    Image Credit: Gulliver’s Travails (Paresh Nath, The Khaleej Times, UAE) www.uncommonthoughts.com

  • The Perils and Promise of the Emerging Multipolar World

    The Perils and Promise of the Emerging Multipolar World

    The world economy is experiencing a deep process of economic convergence, according to which regions that once lagged the West in industrialisation are now making up for lost time.

    We are therefore entering a post-hegemonic, multipolar world.

    The World Bank’s release on May 30 of its latest estimates of national output (up to the year 2022) offers an occasion to reflect on the new geopolitics. The new data underscore the shift from a U.S.-led world economy to a multipolar world economy, a reality that U.S. strategists have so far failed to recognize, accept, or admit.The World Bank figures make clear that the economic dominance of the West is over. In 1994, the G7 countries (Canada, France, Germany, Italy, Japan, U.K., U.S.) constituted 45.3% of world output, compared with 18.9% of world output in the BRICS countries (Brazil, China, Egypt, Ethiopia, India, Iran, Russia, South Africa, United Arab Emirates). The tables have turned. The BRICS now produce 35.2% of world output, while the G7 countries produce 29.3%.

    As of 2022, the largest five economies in descending order are China, the U.S., India, Russia, and Japan. China’s GDP is around 25% larger than the U.S.’ (roughly 30% of the U.S. GDP per person but with 4.2 times the population). Three of the top five countries are in the BRICS, while two are in the G7. In 1994, the largest five were the U.S., Japan, China, Germany, and India, with three in the G7 and two in the BRICS.

    The core U.S.-led alliance, which includes the U.S., Canada, U.K., European Union, Japan, Korea, Australia, and New Zealand, was 56% of world output in 1994, but now is only 39.5%. As a result, the U.S. global influence is waning.
    As the shares of world output change, so too does global power. The core U.S.-led alliance, which includes the U.S., Canada, U.K., European Union, Japan, Korea, Australia, and New Zealand, was 56% of world output in 1994, but now is only 39.5%. As a result, the U.S. global influence is waning. As a recent vivid example, when the U.S.-led group introduced economic sanctions on Russia in 2022, very few countries outside the core alliance joined. As a result, Russia had little trouble shifting its trade to countries outside the U.S.-led alliance.
    The world economy is experiencing a deep process of economic convergence, according to which regions that once lagged the West in industrialization in the 19th and 20th centuries are now making up for lost time. Economic convergence actually began in the 1950s as European imperial rule in Africa and Asia came to an end. It has proceeded in waves, starting first in East Asia, then roughly 20 years later India, and for the coming 20-40 years in Africa.These and some other regions are growing much faster than the Western economies since they have more “headroom” to boost GDP by rapidly raising education levels, boosting workers’ skills, and installing modern infrastructure, including universal access to electrification and digital platforms. The emerging economies are often able to leapfrog the richer countries with state-of-the-art infrastructure (e.g., fast intercity rail, 5G, modern airports and seaports) while the richer countries remain stuck with aging infrastructure and expensive retrofits. The IMF’s World Economic Outlook projects that the emerging and developing economies will average growth of around 4% per year in the coming five years, while the high-income countries will average less than 2% per year.

    It’s not only in skills and infrastructure that convergence is occurring. Many of the emerging economies, including China, Russia, Iran, and others, are advancing rapidly in technological innovations as well, in both civilian and military technologies.

    China’s capacity for innovation and low-cost production is underpinned by enormous R&D spending and its vast and growing labor force of scientists and engineers.

    China clearly has a large lead in the manufacturing of cutting-edge technologies needed for the global energy transition, including batteries, electric vehicles, 5G, photovoltaics, wind turbines, fourth generation nuclear power, and others. China’s rapid advances in space technology, biotechnology, nanotechnology, and other technologies is similarly impressive. In response, the U.S. has made the absurd claim that China has an “overcapacity” in these cutting-edge technologies, while the obvious truth is that the U.S. has a significant under-capacity in many sectors. China’s capacity for innovation and low-cost production is underpinned by enormous R&D spending and its vast and growing labor force of scientists and engineers.

    Despite the new global economic realities, the U.S. security state still pursues a grand strategy of “primacy,” that is, the aspiration of the U.S. to be the dominant economic, financial, technological, and military power in every region of the world. The U.S. is still trying to maintain primacy in Europe by surrounding Russia in the Black Sea region with NATO forces, yet Russia has resisted this militarily in both Georgia and Ukraine. The U.S. is still trying to maintain primacy in Asia by surrounding China in the South China Sea, a folly that can lead the U.S. into a disastrous war over Taiwan. The U.S. is also losing its standing in the Middle East by resisting the united call of the Arab world for recognition of Palestine as the 194th United Nations member state.

    Yet primacy is certainly not possible today, and was hubristic even 30 years ago when U.S. relative power was much greater. Today, the U.S. share of world output stands at 14.8%, compared with 18.5% for China, and the U.S. share of world population is a mere 4.1%, compared with 17.8% for China.
    The trend toward broad global economic convergence means that U.S. hegemony will not be replaced by Chinese hegemony. Indeed, China’s share of world output is likely to peak at around 20% during the coming decade and thereafter to decline as China’s population declines. Other parts of the world, notably including India and Africa, are likely to show a large rise in their respective shares of global output, and with that, in their geopolitical weight as well.

    We are therefore entering a post-hegemonic, multipolar world. It too is fraught with challenges. It could usher in a new “tragedy of great power politics,” in which several nuclear powers compete—in vain—for hegemony. It could lead to a breakdown of fragile global rules, such as open trade under the World Trade Organization. Or, it could lead to a world in which the great powers exercise mutual tolerance, restraint, and even cooperation, in accord with the U.N. Charter, because they recognize that only such statecraft will keep the world safe in the nuclear age.

     

    This article was published earlier in commondreams

    Feature Image Credit: The World Financial Review

  • Artificial Intelligence vs The Indian Job Market

    Artificial Intelligence vs The Indian Job Market

    Artificial intelligence (AI) has become a ubiquitous presence in our daily lives, transforming the way we operate in the modern era. From the development of autonomous vehicles to facilitating advanced healthcare research, AI has enabled the creation of groundbreaking solutions that were once thought to be unattainable. As more investment is made in this area and more data becomes available, it is expected that AI will become even more powerful in the coming years.

    AI, often referred to as the pursuit of creating machines capable of exhibiting intelligent behaviour, has a rich history that dates back to the mid-20th century. During this time, pioneers such as Alan Turing laid the conceptual foundations for AI. The journey of AI has been marked by a series of intermittent breakthroughs, periods of disillusionment, and remarkable leaps forward. It has also been a subject of much discussion over the past decade, and this trend is expected to continue in the years to come.

    According to a report by Precedence Research, the global artificial intelligence market was valued at USD 454.12 billion in 2022 and is expected to hit around USD 2,575.16 billion by 2032, progressing with a compound annual growth rate (CAGR) of 19% from 2023 to 2032. The Asia Pacific is expected to be the fastest-growing artificial intelligence market during the forecast period, expanding at the highest CAGR of 20.3% from 2023 to 2032. The rising investments by various organisations towards adopting artificial intelligence are boosting the demand for artificial intelligence technology.[1]

    Figure 1 illustrates a bar graph displaying the upward trajectory of the AI market in recent years, sourced from Precedence Research.

    The Indian government has invested heavily in developing the country’s digital infrastructure. In 2020, The Government of India increased its spending on Digital India to $477 million to boost AI, IoT, big data, cyber security, machine learning, and robotics. The artificial intelligence market is expected to witness significant growth in the BFSI(banking, financial services, and insurance) sectors on account of data mining applications, as there is an increase in the adoption of artificial intelligence solutions in data analytics, fraud detection, cybersecurity, and database systems.

    Figure 2 illustrates a pie chart displaying the distribution of the Artificial Intelligence (AI) market share across various regions in 2022, sourced from Precedence Research.

    Types of AI Systems and Impact on Employment

    AI systems can be divided primarily into three types:

    Narrow AI: This is a specific form of artificial intelligence that executes dedicated tasks with intelligence. It represents the prevailing and widely accessible type of AI in today’s technological landscape.

    General AI: This represents an intelligence capable of efficiently undertaking any intellectual task akin to human capabilities. Aspiration driving the development of General AI revolves around creating a system with human-like cognitive abilities that enables autonomous, adaptable thinking. However, as of now, the realisation of a General AI system that comprehensively emulates human cognition remains elusive.

    Super AI: It is a level of intelligence within systems where machines transcend human cognitive capacities, exhibit superior performance across tasks, and possess advanced cognitive properties. This extends from the culmination of the General AI.

    Artificial intelligence has been incorporated into various aspects of our lives, ranging from virtual assistants on our mobile devices to advancements in customisation, cyber protection, and more. The growth of these systems is swift, and it is only a matter of time before the emergence of general artificial intelligence becomes a reality.

    According to a report by PwC, the global GDP is estimated to be 14% higher in 2030 due to the accelerating development and utilisation of AI, which translates to an additional $15.7 trillion. This growth can be attributed to:

    1. Improvements in productivity resulting from the automation of business processes (including the use of robots and autonomous vehicles).
    2. Productivity gains from businesses integrating AI technologies into their workforce (assisted and augmented intelligence).
    3. Increased consumer demand for AI-enhanced products and services, resulting in personalised and/or higher-quality offerings.

    The report suggests that the most significant economic benefits from AI will likely come from increased productivity in the near future. This includes automating mundane tasks, enhancing employees’ capabilities, and allowing them to focus on more stimulating and value-added work. Capital-intensive sectors such as manufacturing and transport are likely to experience the most significant productivity gains from AI, given that many operational processes in these industries are highly susceptible to automation. (2)

    AI will disrupt many sectors and lead to the creation of many more. A compelling aspect to observe is how the Indian Job Market responds to AI and its looming threat to job security in the future.

    The Indian Job Market

    As of 2021, around 487.9 million people were part of the workforce in India out of 950.2 million people aged 15-64, the second largest after China. While there were 986.5 million people in China aged 15-64, there were 747.9 million people were part of the workforce.

    India’s labour force participation rate (LFPR) at 51.3 per cent was less than China’s 76 per cent and way below the global average of 65 per cent.[3]

    The low LFPR can be primarily attributed to two reasons:

    Lack of Jobs

    To reach its growth potential, India is expected to generate approximately 9 million nonfarm jobs annually until 2030, as per a report by McKinsey & Company. However, analysts suggest that the current rate of job creation falls significantly below this target, with only about 2.9 million nonfarm jobs being added each year from 2013 to 2019. [4]

    During the COVID-19 pandemic, urban unemployment in India surged dramatically, peaking at 20.9% in the April-June 2020 quarter, coinciding with wage decline. Although the unemployment rate has decreased since then, full-time employment opportunities are scarce. Economists highlight a concerning trend where an increasing number of job-seekers, particularly the younger demographic, are turning towards low-paying casual jobs or opting for less stable self-employment options.[5]

     This shift in employment pattern occurs alongside a broader outlook for the Indian economy, which is projected to achieve an impressive growth rate of 6.5% by the fiscal year ending in March 2025. Despite this optimistic growth forecast, the employment landscape appears to be evolving, leading individuals towards less secure and lower-paying work options. This shift raises pertinent concerns about the job market’s quality, stability, and inclusivity, particularly in accommodating the aspirations and needs of India’s burgeoning young workforce.

    Low female labour participation

    In 2021, China boasted an estimated female population of 478.3 million within the 15-64 age bracket, with an active female labour force of approximately 338.6 million. In stark contrast, despite India having a similar demographic size of 458.2 million women in that age group, its female labour force was significantly smaller, numbering only 112.8 million.[6]

    This discrepancy underscores a notable disparity in India’s female labour force participation rate compared to China, despite both countries having sizeable female populations within the working-age bracket.[7]

    Along with unemployment, there was also a crisis of under-employment and the collapse of small businesses, which has worsened since the pandemic.

    AI vs the Indian Job Market

    The presence and implications of AI cast a significant shadow on a country as vast and diverse as India. Amidst the dynamic and often unpredictable labour market, where employment prospects have been uncertain, addressing the impact of AI poses a considerable challenge for employers. Balancing the challenges and opportunities presented by AI while prioritising job security for the workforce is a critical obstacle to overcome.

     The diverse facets of artificial intelligence (AI) and its capacity to transform industries across the board amplify the intricacy of the employment landscape in India. Employers confront the formidable challenge of devising effective strategies to incorporate AI technologies without compromising the livelihoods of their employees.

    As per the findings of the Randstad Work Monitor Survey, a staggering 71% of individuals in India exhibit an inclination towards altering their professional circumstances within the next six months, either by transitioning to a new position within the same organisation or by seeking employment outside it. Furthermore, 23% of the workforce can be classified as passive job seekers, who are neither actively seeking new opportunities nor applying for them but remain open to considering job prospects if a suitable offer arises.

    It also stated that at least half of Indian employees fear losing their jobs to AI, whereas the figure is one in three in developed countries. The growing concern among Indian workers stems from the substantial workforce employed in Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO), which are notably vulnerable to AI automation. Adding to this concern is India’s rapid uptake of AI technology, further accentuating the apprehension among employees.[8]

    India’s role as a global hub for outsourcing and its proficiency in delivering diverse services have amplified the impact of AI adoption. The country has witnessed a swift embrace of AI technologies across various industries, magnifying workers’ concerns regarding the potential ramifications of their job security.

    Goldman Sachs’ report highlights the burgeoning emergence of generative artificial intelligence (AI) and its potential implications for labour dynamics. The rapid evolution of this technology prompts questions regarding a possible surge in task automation, leading to cost savings in labour and amplified productivity. [9]

    The labour market could confront significant disruptions if generative AI delivers its pledged capabilities. Analysing occupational tasks across the US and Europe revealed that approximately two-thirds of the current jobs are susceptible to AI automation. Furthermore, the potential of generative AI to substitute up to one-fourth of existing work further underscores its transformative potential.

     Expanding these estimates on a global scale suggests that generative AI might expose the equivalent of 300 million full-time jobs to automation, signifying the far-reaching impact this technology could have on global labour markets.

    Recent advancements in artificial intelligence (AI) and machine learning have exerted substantial influence across various professions and industries, particularly impacting job landscapes in sectors such as Indian IT, ITeS, BPO, and BPM. These sectors collectively employ over five million people and are India’s primary source of white-collar jobs. [10]

    In a recent conversation with Business Today, Vardhman Jain, the founder and Vice Chairman of Access Healthcare, a Chennai-based BPO, highlighted the forthcoming impact of AI integration on the workplace. Jain indicated that AI implementation may cause customer service to be the sector most vulnerable to initial disruptions.

    Jain pointed out that a substantial portion of services provided by the Indian BPO industry is focused on customer support, including voice and chat functions, data entry, and back-office services. He expounded upon how AI technologies, such as Natural Language Processing, Machine Learning, and Robotic Process Automation, possess the potential to significantly disrupt and automate these tasks within the industry.

    While the discourse surrounding AI often centres on the potential for job displacement, several industry leaders argue that AI will not supplant human labour, but rather augment worker output and productivity.

    At the 67th Foundation Day celebration of the All-India Management Association (AIMA), NR Narayan Murthy, as reported by Business Today, conveyed a noteworthy message by asserting that AI is improbable to supplant human beings, as humans will not allow it to happen.

    Quoting Murthy’s statement from the report, “I think there is a mistaken belief that artificial intelligence will replace human beings; human beings will not allow artificial intelligence to replace them.” The Infosys founder stressed that AI has functioned as an assistive force rather than an outright replacement, enhancing human lives and making them more comfortable.[11]

    McKinsey Global Institute’s study, “Generative AI and the Future of Work in America,” highlighted AI’s capability to expedite economic automation significantly. The report emphasised that while generative AI wouldn’t immediately eliminate numerous jobs, it would enhance the working methods of STEM, creative, business, and legal professionals.[12]

     However, the report also underscored that the most pronounced impact of automation would likely affect job sectors such as office support, customer service, and food service employment.

    While the looming threats posed by AI are undeniable, its evolution is expected to usher in a wave of innovation, leading to the birth of new industries and many job opportunities. This surge in new industries promises employment prospects and contributes significantly to economic growth by leveraging AI capabilities.

    Changing employment Landscape

    Having explored different perspectives and conversations on AI, it has become increasingly evident that the employment landscape is poised for significant transformation in the years ahead. This prompts a crucial enquiry: Will there remain a necessity for human jobs, and are our existing systems equipped to ensure equitable distribution of the benefits fostered by this technology developments?

    • Universal Basic Income

    Universal basic income (UBI) is a social welfare proposal in which all citizens of a given population regularly receive minimum income in the form of an unconditional transfer payment, that is, without a means test or need to work, in which case it would be called guaranteed minimum income.

    Supporters of Universal Basic Income (UBI) now perceive it not only as a solution to poverty, but also as a potential answer to several significant challenges confronting contemporary workers: wage disparities, uncertainties in job stability, and the looming spectre of job losses due to advancements in AI.

    Karl Widerquist, a professor of philosophy at Georgetown University-Qatar and an economist and political theorist, posits that the influence of AI on employment does not necessarily result in permanent unemployment. Instead, he suggests a scenario in which displaced workers shift into lower-income occupations, leading to increased competition and saturation in these sectors.

    According to Widerquist, the initial effects of AI advancements might force white-collar workers into the gig economy or other precarious and low-paying employment. This shift, he fears, could trigger a downward spiral in wages and job security, exacerbating economic inequality.

     He advocates for a Universal Basic Income (UBI) policy as a response to the challenges posed by AI and automation. Widerquist argues that such a policy would address employers’ failure to equitably distribute the benefits of economic growth, fuelled in part by automation, among workers. He sees UBI as a potential solution to counter the widening disparity in wealth distribution resulting from these technological advancements.[13]

    A study conducted by researchers at Utrecht University, Netherlands, from 2017 to 2019 led to the implementation of basic income for unemployed individuals who previously received social assistance. The findings showcase an uptick in labour market engagement. This increase wasn’t solely attributed to the financial support offered by Universal Basic Income (UBI) but also to removing conditions—alongside sanctions for non-compliance—typically imposed on job seekers.[14]

    Specifically, participants exempted from the obligation to actively seek or accept employment demonstrated a higher likelihood of securing permanent contracts, as opposed to the precarious work arrangements highlighted by Widerquist.

     While UBI experiments generally do not demonstrate a significant trend of workers completely exiting the labour market, instances of higher payments have resulted in some individuals reducing their working hours. This nuanced impact showcases the varying effects of UBI on labour participation, highlighting both increased job security for some and a choice for others to adjust their work hours due to enhanced financial stability.

    In exploring the potential for Universal Basic Income (UBI), it becomes evident that while the concept holds promise, its implementation and efficacy are subject to multifaceted considerations. The diverse socioeconomic landscape, coupled with the scale and complexity of India’s population, presents both opportunities and challenges for UBI.

     UBI’s potential to alleviate poverty, enhance social welfare, and address economic disparities in a country as vast and diverse as India is compelling. However, the feasibility of funding such a program, ensuring its equitable distribution, and navigating its impact on existing welfare schemes requires careful deliberation.

    Possible Tax Solutions

    • Robot Tax

    The essence of a robot tax lies in the notion that companies integrating robots into their operations should bear a tax burden given that these machines replace human labour.

     There exist various arguments advocating for a robot tax. Initially, it aimed to safeguard human employment by dissuading firms from substituting humans with robots. Additionally, while companies may prefer automation, imposing a robot tax can generate government revenue to offset the decline in funds from payroll and income taxes. Another crucial argument favouring this tax is rooted in allocation efficiency: robots neither contribute to payroll nor income taxes. Taxing robots at a rate similar to human labour aligns with economic efficiency to prevent distortions in resource allocation.

    In various developed economies, such as the United States, the prevailing taxation system presents a bias toward artificial intelligence (AI) and automation over human workforce. This inclination, fueled by tax incentives, may lead to investments in automation solely for tax benefits rather than for the actual potential increase in profitability. Furthermore, the failure to tax robots can exacerbate income inequality as the share of labor in national income diminishes.

    One possible solution to address this issue is the implementation of a robot tax, which could generate revenue that could be redistributed as Universal Basic Income (UBI) or as support for workers who have lost their jobs due to the adoption of robotic systems and AI and are unable to find new employment opportunities.

    • Digital Tax

    The discourse surrounding digital taxation primarily centers on two key aspects. Firstly, it grapples with the challenge of maintaining tax equity between traditional and digital enterprises. Digital businesses have benefited from favorable tax structures, such as advantageous tax treatment for income derived from intellectual property, accelerated amortization of intangible assets, and tax incentives for research and development. However, there is a growing concern that these preferences may result in unintended tax advantages for digital businesses, potentially distorting investment trajectories instead of promoting innovation.

    Secondly, the issue arises from digital companies operating in countries with no physical presence yet serving customers through remote sales and service platforms. This situation presents a dilemma regarding traditional corporate income tax regulations. Historically, digital businesses paid corporate taxes solely in countries where they maintained permanent establishments, such as headquarters, factories, or storefronts. Consequently, countries where sales occur or online users reside have no jurisdiction over a firm’s income, leading to taxation challenges.

    Several approaches have been suggested to address the taxation of digital profits. One approach involves expanding existing frameworks, for instance, a country may extend its Value-Added Tax (VAT) or Goods and Services Tax (GST) to encompass digital services or broaden the tax base to include revenues generated from digital goods and services. Alternatively, there is a need to implement a separate Digital Service Tax (DST).

    While pinpointing the ultimate solution remains elusive, ongoing experimentation and iterative processes are expected to guide us toward a resolution that aligns with the need for a larger consensus. With each experiment and accumulated knowledge, we move closer to uncovering an approach that best serves the collective requirements.[15]

    Reimagining the Future

    The rise of Artificial Intelligence (AI) stands as a transformative force reshaping the industry and business landscape. As AI continues to revolutionise how we work and interact, staying ahead in this rapidly evolving landscape is not just an option, but a necessity. Embracing AI is not merely about adapting to change; it is also about proactive readiness and strategic positioning. Whether you’re a seasoned entrepreneur or a burgeoning startup, preparing for the AI revolution involves a multifaceted approach encompassing automation, meticulous research, strategic investment, and a keen understanding of how AI can augment and revolutionise your business. PwC’s report lists some crucial steps to prepare one’s business for the future and stay ahead. [16]

    Understand AI’s Impact: Start by evaluating the industry’s technological advancements and competitive pressure. Identify operational challenges AI can address, disruptive opportunities available now and those on the horizon.

    Prioritise Your Approach: Determine how AI aligns with business goals. Assess your readiness for change— are you an early adopter or follower? Consider feasibility, data availability, and barriers to innovation—Prioritise automation and decision augmentation processes based on potential savings and data utilisation.

    Talent, Culture, and Technology: While AI investments might seem high, costs are expected to decrease over time. Embrace a data-driven culture and invest in talent like data scientists and tech specialists. Prepare for a hybrid workforce, combining AI’s capabilities with human skills like creativity and emotional intelligence.

    Establish Governance and Trust: Trust and transparency are paramount. Consider the societal and ethical implications of AI. Build stakeholder trust by ensuring AI transparency and unbiased decision-making. Manage data sources rigorously to prevent biases and integrate AI management with overall technology transformation.

     Getting ready for Artificial Intelligence (AI) is not just about new technology; it is an intelligent strategy. Understanding how AI fits one’s goals is crucial; prioritising where it can help, building the right skills, and setting clear rules are essential. As AI becomes more common, it is not about robots taking over, but humans and AI working together. By planning and embracing AI wisely, businesses can stay ahead and create innovative solutions in the future.

    References:

    [1] Precedence Research. “Artificial Intelligence (AI) Market.” October 2023. Accessed November 14, 2023. https://www.precedenceresearch.com/artificial-intelligence-market

    [2] Pricewaterhouse Coopers (PwC). “Sizing the prize, PwC’s Global Artificial Intelligence Study.” October 2017. Accessed November 14, 2023. https://www.pwc.com/gx/en/issues/data-and-analytics/publications/artificial-intelligence-study.html#:~:text=The%20greatest%20economic%20gains%20from,of%20the%20global%20economic%20impact.

    [3] World Bank. “Labor force, total – India 2021.” Accessed November 12, 2023. https://data.worldbank.org/indicator/SL.TLF.TOTL.IN?locations=IN

    [4] McKinsey & Company. “India’s Turning Point.” August 2020. https://www.mckinsey.com/~/media/McKinsey/Featured%20Insights/India/Indias%20turning%20point%20An%20economic%20agenda%20to%20spur%20growth%20and%20jobs/MGI-Indias-turning-point-Executive-summary-August-2020-vFinal.pdf

    [5] Dugal, Ira. “Where are the jobs? India’s world-beating growth falls short.” Reuters, May 31, 2023. Accessed November 14, 2023. https://www.reuters.com/world/india/despite-world-beating-growth-indias-lack-jobs-threatens-its-young-2023-05-30/

    [6] Government of India. Ministry of Labour and Employment. “Labour and Employment Statistics 2022.” July 2022. https://dge.gov.in/dge/sites/default/files/2022-08/Labour_and_Employment_Statistics_2022_2com.pdf

    [7] Deshpande, Ashwini, and Akshi Chawla. “It Will Take Another 27 Years for India to Have a Bigger Labour Force Than China’s.” The Wire, July 27, 2023. https://thewire.in/labour/india-china-population-labour-force

    [8] Randstad. “Workmonitor Pulse Survey.” Q3 2023. https://www.randstad.com/workforce-insights/future-work/ai-threatening-jobs-most-workers-say-technology-an-accelerant-for-career-growth/

    [9] Briggs, Joseph, and Devesh Kodnani. “The Potentially Large Effects of Artificial Intelligence on Economic Growth.” Goldman Sachs, March 26, 2023. https://www.key4biz.it/wp-content/uploads/2023/03/Global-Economics-Analyst_-The-Potentially-Large-Effects-of-Artificial-Intelligence-on-Economic-Growth-Briggs_Kodnani.pdf

    [10] Chaturvedi, Aakanksha. “‘Might take toll on low-skilled staff’: How AI can cost BPO, IT employees their jobs.” Business Today, April 5, 2023. https://www.businesstoday.in/latest/corporate/story/might-take-toll-on-low-skilled-staff-how-ai-can-cost-bpo-it-employees-their-jobs-376172-2023-04-05

    [11] Sharma, Divyanshi. “Can AI take over human jobs? This is what Infosys founder NR Narayan Murthy thinks.” India Today, February 27, 2023. https://www.indiatoday.in/technology/news/story/can-ai-take-over-human-jobs-this-is-what-infosys-founder-nr-narayan-murthy-thinks-2340299-2023-02-27

    [12] McKinsey Global Institute. “Generative AI and the future of work in America.” July 26, 2023. https://www.mckinsey.com/mgi/our-research/generative-ai-and-the-future-of-work-in-america

    [13] Kelly, Philippa. “AI is coming for our jobs! Could universal basic income be the solution?” The Guardian, November 16, 2022. https://www.theguardian.com/global-development/2023/nov/16/ai-is-coming-for-our-jobs-could-universal-basic-income-be-the-solution

    [14] Utrecht University. “What works (Weten wat werkt).” March 2020. https://www.uu.nl/en/publication/final-report-what-works-weten-wat-werkt

    [15] Merola, Rossana. “Inclusive Growth in the Era of Automation and AI: How Can Taxation Help?” *Frontiers in Artificial Intelligence* 5 (2022). Accessed November 23, 2023. https://www.frontiersin.org/articles/10.3389/frai.2022.867832

    [16]  Rao, Anand. “A Strategist’s Guide to Artificial Intelligence.” PwC, May 10, 2017.https://www.strategy-business.com/article/A-Strategists-Guide-to-Artificial-Intelligence

     

  • The Centre is notional, the States the real entities

    The Centre is notional, the States the real entities

    Utilisation of the country’s resources needs to be decided jointly by the Centre and the States. The changed political situation after the general election makes this feasible.

    The results of the general election 2024 have thrown up a surprise. They portend greater democratisation in the country, with the regional parties doing well. These parties will share space on the ruling party benches as well as on the Opposition side in Parliament. This will help strengthen federalism, which is so crucial for a diverse nation such as India. It was badly fraying until recently.
    Centre-State relations became contentious during the general election campaign. The idea of’ 400 par’, ‘one nation, one election’, and the Prime Minister threatening that the corrupt (i.e., Opposition leaders) would soon be in jail were perceived as threats to the Opposition-ruled States.
    The Opposition-ruled States have been complaining about step-motherly treatment by the Centre. Protests have been held in Delhi and the State capitals. The Supreme Court of India has said that ‘a steady stream of States are compelled to approach it against the Centre’. Kerala has complained about the inadequate transfer of resources, Karnataka about drought relief and West Bengal about funds for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). The attempt seems to be to show the Opposition-ruled States in a bad light.
    The Supreme Court, expressing its helplessness, recently said that Centre-State issues need to be sorted out amicably. When the Bharatiya Janata Party came to power in 2014, it had talked of cooperative federalism. The introduction of the Goods and Services Tax (GST) in 2017 was an example of this when some States that had reservations about it eventually agreed to its rollout. But that was the last of it. With federalism fraying, discord has grown between the Centre and the Opposition-ruled States.
    There is huge diversity among the States—Assam is unlike Gujarat, and Himachal Pradesh is very different from Tamil Nadu. A common approach is not conducive to the progress of such diverse States. They need greater autonomy to address their issues in their own unique ways. This is both democracy and federalism. So, a dominant Centre forcing its will on the States, leading to the deterioration in Centre-State relations, does not augur well for India.

    Financing and conflict is one issue
    States face three broad kinds of issues. Some of them can be dealt with by each State without impacting other States, such as education, health, and social services. But infrastructure and water sharing require States to come to an agreement. Issues such as currency and defence require a common approach. The last two kinds of issues require a higher authority, in the form of the Centre, to bring about coordination and optimality.
    Expenditures have to be financed to achieve goals, and that results in conflict. Revenue has to be raised through taxes, non-tax sources and borrowings. The Centre has been given a predominant role in raising resources due to its efficiency in collecting taxes centrally. Among the major taxes, personal income tax (PIT), corporation tax, customs duty and excise duty are collected by the Centre. GST is collected by both the Centre and the States and shared. So, the Centre controls most of the resources, and they have to be devolved to the States to enable them to fulfil their responsibilities.

    The Centre sets up the Commission and has mostly set its terms of reference. This introduces a bias in favour of the Centre and becomes a source of conflict between the Centre and the States.

    A Finance Commission is appointed to decide on the devolution of funds from the Centre to the States and the share of each State. The Centre sets up the Commission and has mostly set its terms of reference. This introduces a bias in favour of the Centre and becomes a source of conflict between the Centre and the States. Further, there has been an implicit bias in the Commissions that the States are not fiscally responsible. This reflects the Centre’s bias — that the States are not doing what they should and that they make undue demands on the Centre.
    The States also pitch their demands high to try and get a larger share of the revenues. They tend to show lower revenue collection and higher expenditures in the hope that there will be a greater allocation from the Commission. The Commission becomes an arbiter, and the States the supplicants.

    Inter-State tussles, Centre-State relations
    The States cannot have a common position as they are at different stages of development and with vastly different resource positions. The rich States have more resources, while the poor ones need more resources in order to develop faster and also play catch up. So, the Finance Commission is supposed to devolve proportionately more funds to the poorer States. Unfortunately, despite the efforts of the 15 Finance Commissions so far, the gap still remains wide.
    The rich States, which contribute more and get proportionately less, have resented this. What they forget is that the poorer States provide them the market, which enables them to grow faster. The poorer States also lose much of their savings which leak out to the rich States, accelerating their development. It is often said that as Mumbai contributes a bulk of the corporate and income taxes, it should get more. But this is because Mumbai is the financial capital. So, the big corporations are based there and pay their tax in Mumbai. More revenue is contributed in an accounting sense, and not that production is taking place in Mumbai.
    The Centre allocates resources to the States in two ways. First, on account of the Finance Commission award. Second, the Centre is notional, while the States are real. So, all expenditures by the Centre are in some State. The amount spent in each State is also a transfer. This becomes another source of conflict. Expenditures lead to jobs and prosperity in a State. Benefits accrue in proportion to the funds spent. As a result, each State wants more expenditure in its territory. The Centre can play politics in the allocation of schemes and projects. For instance, it is accused of favouring Gujarat and Uttar Pradesh. The Opposition-ruled States have for long complained of step-motherly treatment.
    To get more resources, the States have to fall in line with the Centre’s diktat. This has taken a new form when the call is for a ‘double engine ki sarkar’, i.e. for the same political party to be governing at the Centre and the States. It is an admission that the Opposition-ruled States will be at a disadvantage. This undermines the autonomy of the States and also weakens federalism.

    State autonomy is not to be confused with freedom to do anything. It is circumscribed by the need to function within a national framework for the wider good. It implies a fine balance between the common and the diverse.

    Issues in federalism
    The Sixteenth Finance Commission has begun work. It should try to reverse fraying federalism and strengthen the spirit of India as a ‘Union of States’. This is not only a political task but also an economic one. The Commission could suggest that there is even-handed treatment of all the States by the Centre and also less friction among the rich and poor States when proportionately more resources are transferred to poor States so as to keep rising inequality in check.
    The issue of governance, both at the Centre and in the States, needs to be flagged. It determines investment productivity and the pace of development. Corruption and cronyism lead to resources being wasted and a loss of social welfare.
    To reduce the domination of the Centre over the States, the devolution of resources from the Centre to the States could be raised substantially from its current level of 41%. The Centre’s role could be curtailed. For instance, the Public Distribution System and MGNREG Scheme are joint schemes, but the Centre asserts that it be given credit. It has penalised States that have not done so.

    The Centre is notional and constitutionally created, while States and local bodies are the real entities where economic activity occurs and resources are generated.

    The Centre’s undue assertiveness undermines federalism. Funds with the Centre are public funds collected from the States and spent in the States. The Centre is notional and constitutionally created, while States and local bodies are the real entities where economic activity occurs and resources are generated. The States have agreed to the Centre’s constitutional position, but that does not make them supplicants for their own funds.

    It is time that the utilisation of the country’s resources is jointly decided by the Centre and the States on the basis of being equal partners. This has become more feasible with the changed political situation after the results of the 2024 general election.

     

    This article was published earlier in The Hindu.

    Feature Image Credit: rediff.com

     

  • In Amman, life moves in slow motion

    In Amman, life moves in slow motion

    Amman Protests in April in support of Palestinians. Image from Reuters.

    On a Tuesday evening outside the al-Kalouti mosque in Amman, Jordan, a crowd of men, women and children has gathered. They carry Palestinian flags and hold placards that read: “Food, Water and Medicine are Rights Not Privileges” and “Stop Ethnic Cleansing”. Some display images of Benjamin Netanyahu, Joe Biden and Abdel Fattah el-Sisi alongside condemnatory messages. In a voice close to breaking, a man yells: “We’re sorry, people of Gaza.”

    “It’s like my life is moving in slow motion. Looking at how the world is reacting and how people still justify the killing shows just how much our lives are worth in their eyes.” It triggers many emotions, she said, especially for the older generation that went through the Nakba, or the mass displacement and dispossession of Palestinians during the 1948 Arab-Israeli war.

    In Jordan, which shares a border with Israel and the West Bank, a heavy atmosphere has prevailed since October. Over half of Jordan’s population is Palestinian or of Palestinian origin, and in the capital of Amman, that number is far higher. Many have family in Palestine. “People are living in a ghost-like state,” said Jumana Abdin, a Palestinian Jordanian woman who lives and works in Amman. “It’s like my life is moving in slow motion. Looking at how the world is reacting and how people still justify the killing shows just how much our lives are worth in their eyes.” It triggers many emotions, she said, especially for the older generation that went through the Nakba, or the mass displacement and dispossession of Palestinians during the 1948 Arab-Israeli war.

    “In Germany, you have to wonder if you might get in trouble for expressing support for Palestine, but Amman feels like a refuge,” said David Ghannam, a Palestinian German working in the development sector in Amman, who travelled to Gaza in early 2023. “There’s a sense of unity in Amman. We’re all collectively mourning the loss of innocent lives.”

    Across Amman, signs of solidarity are ever-present: Palestinian flags hanging from shopfronts and in cafes; watermelon imagery on billboards, clothing and stationery; people donning keffiyehs; daily demonstrations near the mosque. Fundraisers are regularly held for Gaza, and businesses have carried out strikes in solidarity. Starbucks and McDonald’s stores across the city remain empty. In supermarkets, customers are embracing local products, a shift that stems from a refusal to purchase products from countries actively supporting Israel, such as the US and Germany.

    Another byproduct of the war has been a drastic drop in the number of tourists arriving in Jordan. Petra, which used to draw 4,000-5,000 daily visitors prior to October, has seen as few as 400 visitors on some days, according to the regional tourism authority. Bedouin-run shops in the famous archaeological site remain deserted. “We went through difficult days because the Bedouins’ main source of income is tourism,” said Hussein W, who runs the Harmony Luxury Camp in Wadi Rum. “Now the situation is better as visitors who did come spread the word saying things here are safe and stable. But we hope for an end to the war.”

    During the month of Ramadan, Amman’s streets usually come alive with decorations, and a festive air descends as people break their fasts at sunset with a variety of foods. This Ramadan, however, was different. “People are [hesitant] to exhibit any sense of celebration,” said Abdin. “Streets are less busy, restaurants are emptier, and people are staying at home more. On the other hand, fasting for over 14 hours heightened our sense of solidarity with our brothers and sisters in Gaza, who are going days without food or water.”

     

    Feature Image: al-monitor.com Jordanians keep up Ramadan Rallies for Gaza Ceasefire. 

    This article was published in April 2024 in mint lounge 

    The article can also be accessed from the author’s website https://yamunamatheswaran.com

  • Lessons for today? Why did Europeans conquer the world while other civilisations did not?

    Lessons for today? Why did Europeans conquer the world while other civilisations did not?

    There is no question that India, China, Egypt, and Persia, in particular, produced flourishing civilisations long before the Europeans. The axial period around which world history revolves, as constructed by Jaspers, between the 7th and 3rd centuries B.C., does not refer to Europeans but to the three great civilisations of China, India, and Persia.

    There is no question that India, China, Egypt, and Persia, in particular, produced flourishing civilisations long before the Europeans. The axial period around which world history revolves, as constructed by Jaspers, between the 7th and 3rd centuries B.C., does not refer to Europeans but to the three great civilisations of China, India, and Persia (see also Katzenstein). Nevertheless, Europeans conquered and colonised the world in the 18th and 19th centuries, not the other way around. There are essentially four explanatory approaches, which are not only mutually exclusive but also determine the self-image of large parts of the world to this day. Put simply, the twentieth century saw a political and, in large parts of the world, an economic decolonisation, but by no means a decolonisation of thought and self-understanding. Moreover, there is a danger that the Eurocentrism that needs to be overcome will only be replaced by ethnocentrism (as is currently the case in Russia and, to some extent, in Israel) or even a civilisational-cultural centrism that is no less problematic than Eurocentrism. China, in particular, is in danger of repeating the mistakes of the West.

    the twentieth century saw a political and, in large parts of the world, an economic decolonisation, but by no means a decolonisation of thought and self-understanding

    So, what are the four explanatory approaches mentioned above? There are two Eurocentric approaches: an Asia-centric approach and a globalist approach. The first Eurocentric approach explains the worldwide colonisation of Europeans in terms of an intellectual superiority that began either in the development of Greek thought or in the Middle Ages. However, since the European Middle Ages were extremely “dark,” there is no direct connection between Greek rationality and the supposed intellectual superiority of the Europeans. Rather, this connection was made possible only by the translations into Arabic of the most important Greek philosophers, such as Plato and Aristotle, and by further translations into Latin. From my point of view – and a little local patriotism is allowed here, as I live near Fulda – the rise of the Europeans began with a letter from Charlemagne to the monastery in Fulda, in which he praised the religious zeal of the monks, but harshly criticised their intellectual understanding of religion. This gave rise to the so-called Carolingian Renaissance of work, which for the first time saw physical and manual labour as equal value to spiritual development – although it is debatable whether this was the first time this happened. Still, the facts remain undisputed in this explanatory approach. As a result, inventions were made in ever-new waves, the sciences developed, and this ultimately led to spurts of individualisation, the struggle for freedom and human rights that characterised the entire 18th and 19th centuries in the European-American world. This intellectual advantage led to a military superiority that enabled the Europeans to colonise the world despite being vastly outnumbered. To this day, Euro-American civilisation considers itself superior to all others. As for violent colonisation, it is admitted that Europeans are “sorry” for it but that it has nothing to do with the essence of Euro-American civilisation, which is characterised by human rights, democracy, and freedom (see Kant, Hegel, Marx, Weber: for an overview see Stark).

    The second Eurocentric position also assumes European superiority but places it not in the intellectual but in the purely military sphere. The consequence is that Europeans owe their relative prosperity, democracy, and human rights not to themselves but to the violent exploitation of the entire world. Here, too, there are two variants, referring to the Spanish-Portuguese conquests and the Orange army reform in Holland. Since the Muslim armies’ extensive conquest of the Mediterranean region, the Iberian Peninsula had been engaged in a defensive struggle for almost seven hundred years, which ended with their conquest. This created a caste of highly skilled warriors who sought a new vocation after defeating the Muslim armies, which they found in the conquest of Central and South America. The reform of the Orange army, in turn, made modern warfare possible. Based on both, the Europeans first plundered the gold and silver in both Americas.

    Still, they soon introduced enslaved Africans, as they were more likely to survive the plantation work on the Caribbean islands than the indigenous peoples, who were nearly wiped out. The gold and silver shipped to Europe and the products of slave labour created a demand in Europe that was not met by Spain and Portugal but by England and the Netherlands – the Industrial Revolution was thus triggered by a demand created by the exploitation of large parts of the world, precious metals and the “black gold” of slave labour. “Incidentally, the discovery of the sea route to China and India also caused the decline of the Muslim empires and civilisations, as they were no longer the link between Europe and South and East Asia but stood isolated. Political decolonisation was eventually replaced by mostly indirect rule, in which the respective elites were supported militarily and economically to continue exploiting the population.

    In most cases, partial military intervention was sufficient for the industrialised states to maintain this system. In the world systems theory of Immanuel Wallerstein and Samir Amin, this practice was conceptualised by dividing the world into centres, semi-peripheries, and peripheries and defining it as a continuous influx of raw materials, goods, and people (brain drain) from the periphery to the mostly Western centres (Amin and Wallerstein).

     

                                                                                                                            

    A third explanation, however, is Asia-centric. In this view, the dominance of the Europeans and the hegemony of the United States are nothing more than an accident of world history. In this view, East and South Asia have always been the centre of the world economy and intellectual and civilisational development. More precisely, on the shores of the North Pacific and the Indian Ocean (including the Arabian Sea), a power shift has been taking place for thousands of years between China, India, and the Arab-Persian powers. Coincidentally, the retreat of China from about 1500 created a power vacuum in this area, into which the Europeans were gradually able to move. However, they could not compete with these civilisations. The current rise of the great empires and civilisations that were destroyed by European colonisation and Euro-American hegemony is nothing more than a return to the centre of the world, to the countries on the shores of the North Pacific and both parts of the Indian Ocean. In this view, the Europeans and the great powers that emerged from them are in no way superior, but rather the barbarians who caused an unprecedented bloodbath in colonisation and two world wars, including the Holocaust. Now, the centre of the world is returning to where it has always been (Abu-Lughod)

    Another approach is the globalisation approach. It assumes that every five hundred years or so, there has been a shift from one global political centre to the next, i.e., hegemonic empires’ rise, peak, and decline. For the late Andre Gunder Frank, we need to review the last 5000 years, not just the previous 500). At times, individual civilisations succeeded in becoming such hegemonic empires twice. Examples include the Egyptian society, the Chinese Empire of the Han dynasty, the Roman Empire, the Sassanid Empire (Persia), the Muslim Empire until its destruction by the Mongols, and finally European colonisation from about 1500.

    we need a floating balance and mutual recognition of the world’s civilisations

    The crucial question for today is whether globalisation will override this succession of great powers and civilisations or whether there will be a renewed, now genuinely global, struggle for world domination. In my view, we need a floating balance and mutual recognition of the world’s civilisations (Herberg-Rotzhe/Son). The rising civilisations are again faced with whether they will merely repeat the past mistakes and the ethnocentrism of the Europeans under different auspices or contribute to an equal coexistence of the world’s civilisations. And conversely, will the Europeans and the settler colonies they founded also learn to regard other civilisations as equals? Both perspectives will determine the fate of the 21st century if we do not want to experience yet another “bloody century”!

    References:

    Abu-Lughod, Janet: Before European Hegemony: The World System A.D. 1250-1350. Reprint edition. Oxford University Press: Oxford. 1991.

    Amin, Samir: Accumulation on a World Scale: A Critique of the Theory of Underdevelopment. (2 Volumes). Monthly Review Press: New York. 1974.

    Frank, Andre Gunder, The World System: Five Hundred Years or Five Thousand? Routledge: New York. 1996.

    Herberg-Rothe, Andreas and Son, Key-young: Order wars and floating balance. How the rising powers are reshaping our worldview in the twenty-first century. Routledge: New York. 2018.

    Jaspers, Karl: The Origin and Goal of History. Routledge: New York 2021 (original in German 1949).

    Katzenstein, Peter J.” Civilizations in World Politics: Plural and Pluralist Perspectives. Routlöedge: New York 2009.

    Stark, Rodney: How the West Won: The Neglected Story of the Triumph of Modernity. ‎ ISI Books: NewYork. 2015.

    Wallerstein, Immanuel: World-Systems Analysis: An Introduction. Duke University Press: Durham. 2004.

     

    Feature Photo Credit: Photo of ‘Monument of Discoveries’ in Lisbon. Photo by M Matheswaran. The Monument depicts Henry the Navigator followed by 33 pioneers, including Vasco-da-Gama whose exploration voyages were instrumental in establishing the Portuguese colonial empire, and thus begin the age of colonialism and imperialism.

    Image 1-Map: Asian empires and trade routes – the collector.com

    Image 2: Columbus reaching the Americas (actually the Caribbean) in 1492 – Wikimedia Commons

    Image 3: The story of the colonial looting of Africa – Photo of exhibit in African American Museum, Washington D.C. (Photo – M Matheswaran).

    Image 4: Robert Clive meeting Mir Jaffer in Battle of Plassey 1757 – the beginnings of the British Indian Empire – Wikimedia Commons.