On the NPP-SJB debate: the real question at stake

Wednesday, 1 May 2024 00:24 –      – {{hitsCtrl.values.hits}}


As Sri Lanka gets closer to the elections that are supposed to be held at the end of this year, a fierce contest seems to have occurred between the two main opposition parties, the Samaji Jana Balawegaya (SJB) and Jathika Jana Balawegaya (NPP). Representatives of the SJB Economic Policy Committee, such as Eran Wickramaratne and Harsha de Silva, seem to have launched a strong attack on the NPP questioning the latter on economic policy matters.

One of the significant themes recurring in this attack is frequent references made to terms such as Socialism and Marxism. Addressing a press conference last week, MP Harsha de Silva stated that if the NPP Economic Council is not willing to come for a debate, the SJB economic committee trio would like to have the debate at the Galle Face Green, with cutouts of Marx, Engels, and Lenin in the opposing side.

The bottom line of the SJB’s discourse is to portray the NPP as an archaic party, still confined to the Soviet era. Thus, it is suggested that such a party is not competent to lead a government under the circumstances of the modern world economy. The entire attack is premised on a dichotomy that juxtaposes ‘archaic socialism’ to the so-called outward-looking, modern economic thought. The present article aims to assess this anti-left-wing rhetoric of the SJB economic committee and to share some thoughts about the relevance of the idea of socialism in the 21st century.

Creating a strawman

First of all, it has to be said that portraying the NPP as an archaic socialist party that delved into the notion of central planning appears to be an exaggerated claim. The NPP since its formation in 2018 has proclaimed its economic policies in two instances — one, at the 2019 Presidential Election manifesto, and second, as a set of proposals presented as a response to the economic crisis when the crisis started hitting Sri Lanka in 2021. None of these publications even slightly imply that the NPP stands for a socialist model of the soviet variant. Furthermore, no such inference can be drawn from the speeches and press conferences NPP leaders and spokesmen are having constantly.

The NPP’s economic vision can be summarised in the following manner:

First, Sri Lanka needs a production-based economy to achieve sustainable development. The notion of a production-based economy suggests a shift from the present economic formation, in which unproductive sectors like finance have become overdetermined. They are advocating a shift towards an economy that leans towards real production.

Second, this process requires the involvement of both the state and private sectors. The private sector including the small and medium enterprises would continue to play the principal role in economic activities. But the responsibility of directing private capital and investment towards productive economic activity, and thus leading the economy towards developmental goals lies with the state. Therefore, this transformation requires the state to have a substantive role, which goes beyond a mere regulatory role.

Third, the benefits of economic development should be fairly distributed, making sure that no one is left behind. In this context, a stronger, and healthier welfare state is proposed characterised by policies such as universal free education and free healthcare, and substantive social-protection schemes that would ensure the reduction of social disparities.

This economic vision appears to have been drawn from multiple intellectual sources, rather than reflecting a singular model. The idea of a production-based economy, and the prominent role of the state resembles the conception of the developmentalist state that East Asian countries adopted during their industrialisation process. Contrary to neo-liberal prescriptions, newly industrialised East Asian countries like South Korea, Taiwan, and Malaysia retained a stronger role to the state in their development trajectory. China and Vietnam are other examples, where the role of the state, including State Owned Enterprises (SOEs) has been vital in controlling the unruly expansion of capital and directing the private economy toward national development objectives. On the other hand, the focus on social justice and the welfare state reflects the influence of socialist and social democratic thought.

The present author wishes to identify NPP’s economic vision as a form of developmentalism with left-wing characteristics. This left-leaning developmentalism stands apart from the neo-liberal model that advocates a minimal state, and also state socialism in the twentieth century, which focused on the state ownership of productive resources and strict implementation of a planned economy. Without engaging with this particular vision the NPP advocates, it is disappointing to see the SJB economic spokesmen have chosen to attack a caricature.

The post-2009 developments

The negative connotation of the SJB’s use of the term socialism raises another important question, concerning the contemporary relevance of the idea of socialism. As we know, the idea of socialism emerged in the 19th century in Western Europe as a response to the discontent triggered by the emerging capitalist industrial society. In the aftermath of the 1917 Russian Revolution, the idea of socialism was commonly identified with the policies of the Soviet Union.

However, even in the 20th century context, it is misleading to treat the Soviet Union and the idea of socialism as identical because other forms of socialist politics were observable. For instance, social democracy in the West, which resorted to social reforms as a way of minimising the worst detrimental effects of capitalism, is a political tradition that emerged from the idea of socialism. The well-celebrated Scandinavian model practiced in countries like Sweden or Norway characterised by a comprehensive welfare state was invented, established, and nurtured by left-wing-oriented workers parties of those countries.

Indeed, the popularity of the socialist idea was badly affected due to the collapse of the Soviet Union in the 1990s, which was accompanied by the rightward shift of social democratic parties in the West. However, in the aftermath of the 2009 global financial crisis, we also see the emergence of a renewed discussion about the excesses of untamed capitalism. In his famous work, ‘Capital in the 21st Century’ (2013) French Economist Thomas Piketty showed how social inequality in the neo-liberal age has become even worse than the levels of inequality that prevailed in the 19th century. There has been a significant discussion in the West concerning how the ‘one percent’, the ‘financial oligarchy’ has concentrated power, and captured the state undermining the democratic aspirations of the people. From this consideration, interest in using socialist policies to balance the excesses of unfettered capitalism has flown.

The mocking attitude SJB economic theorists share about the term socialism indicates that they are largely alien to these contemporary developments. When MP Eran Wickramaratne states that after the 1980s, the idea of SOEs has gone obsolete, what he demonstrates is his ignorance about contemporary discussions taking place in advanced capitalist countries regarding the adverse impact of privatisation. For instance, in a country like Britain, the failure of Railway privatisation has become a common concern, and the need to renationalise has become quite popular in recent times. Though ideas like providing student loans for higher education are presented in the Sri Lankan context as ‘fresh’ ideas, in countries like the United States, the detrimental effect of student debt on the lives of young generations has created significant controversy.

The truth is that those who defend an orthodox neo-liberal approach to economics are the ones who are stuck in the 1980s. Though SJB claims that their policy is social-market economy, rarely anything ‘social’ can be seen in the statements of their economic committee members.

Contemporary manifestations of socialism

There are three tendencies in the contemporary international arena that demonstrate socialist traits. The first tendency is the ‘socialist market’ model practiced in China, Vietnam, and Laos. Although neo-liberal commentators proclaim the Chinese economic success as a triumph of the free market over socialism, the Chinese story is far more complex. In their book ‘Socialist Economic Development in the 21st Century’ (2022), Alberto Gabriel and Elias Jabbour show how the socio-economic formation in countries like China and Vietnam differs from the Soviet-style state socialism, and also the neo-liberal free market.

Though these countries have opened up and integrated with global capitalism to develop their productive capacity, and to obtain technological development, and to that extent have adopted market reforms, the state which is under the command of the Communist Party plays a significant role in these economies. In China, most of the largest companies are state-owned, and SOEs contribute to around 30 to 35 percent of the GDP. This stands in sharp contrast to the ‘government should not do business’ orthodoxy.

China seems to have creatively fused socialist policies with market reforms appropriate to its level of development. In recent years, we have seen a drive in China to address social inequalities and environmental problems that have widened during its reform and opening-up process. The Chinese Communist Party has declared building China as a ‘great modern socialist country in all aspects’ as its second centenary goal.

Pink tide 2.0

The second tendency is represented by the Latin American ‘pink tide’. The tagline pink tide was used to refer to the wave that emerged in the late 1990s and early 2000s in many South American countries like Venezuela, Bolivia, Brazil, Nicaragua, and Argentina where left-wing or left-leaning governments came into power through popular vote. The pink tide was the political response to increasing social discontent in the region that occurred due to neo-liberal policies implemented since the 1980s. The pink tide faced a right-wing backlash after the 2010s, but in recent years, a resurgence is observable. Thus, there is a talk about a new wave of the pink tide — ‘pink tide 2.0’.

Left-wing candidate Manuel Lopez Obrador winning the Mexican presidential elections in 2018, and the victory of the ‘Movement for Socialism’ in Bolivia in 2020 were the opening signs of this return. At the moment, countries like Peru, Honduras, Chile, and Colombia are governed by left-wing or left-leaning social democratic parties. The remarkable victory of Lula De Silva in Brazil in the 2022 presidential elections where he defeated the far-right ex-president Jair Bolsonaro marked a milestone in this resurgence.

Unlike China and Vietnam, left-wing governments in the Latin American region function within a different historical, and political environment characterised by multi-party democracy and competition among parties. Most of the pink-tide governments are critical of the hegemony exercised by a handful of Western nations on the Global South and view emerging multipolarity in international affairs in a positive light. Gabriel Boric, the young left-wing politician who was elected president in Chile in 2021, publicly claimed in his inauguration speech that he intends to end neo-liberalism in the very place where it was born. (Boric was referring to the aftermath of the 1973 Chilean military coup, where neo-liberal policies were implemented as an experiment in a country of the Global South for the first time).

All these examples from South America show that left-leaning governments coming into power is not an ‘extraordinary’ phenomenon as the SJB tries to portray, but a common fact in day-to-day political life.

The third tendency that reflects the socialist idea is Western socialism. As mentioned before, in the aftermath of the 2009 global economic crisis, a renewed interest in socialist ideas resurged in Western countries. Consequently, we see the emergence of various ‘radical left’ political movements outside the traditional social-democratic parties that have succumbed to neo-liberal ideas. However, though there was initial enthusiasm, it seems that Western socialism is lagging behind the advent of xenophobic, right-wing populist movements capitalising on anti-immigrant sentiments.

Terms of the debate

The discussion so far shows that contrary to SJB’s depiction, the idea of socialism remains a living force in the contemporary international political scene. This might not be the socialism of the 20th century, embodied in Soviet socialism. Soviet socialism, which can be termed a form of ‘state socialism’ is one form the idea of socialism can take. Socialism in the 21st century does not necessarily have to be a repetition of the Soviet model. The contemporary examples that we discussed above demonstrate that political movements in different countries have been capable of developing pragmatic and practical models inspired by socialist principles according to the historical, social, and political conditions of their countries. Why do we have to think that this open possibility is not available only for the NPP in Sri Lanka?

Therefore, it is a misrepresentation to suggest that the only preference is between the neo-liberal model the economic committee of the SJB endorses and the soviet socialism of the 20th century. There can be different alternative models differing from these two. All the economies in the 20th century that attained development through industrialisation demonstrate that development requires an active state, intervening in the economy. The state’s relegating to the role of a mere regulator does not correspond to the developmental demands of an underdeveloped economy. Developmental experiences of countries like South Korea or Taiwan that industrialised through a capitalist path, and countries like China and Vietnam that were under the rule of Communist Parties both testify to the fact that the development of underdeveloped countries demands a more active role from the state that goes beyond regulation.

Hence, the real disagreement in question is not between neoliberalism and Soviet-style socialism. Framing the question in this way is a tactic to avoid the real question. The actual debate should be about the role of the State in the economy; whether Sri Lanka requires a minimal state that attributes faith on the so-called self-correcting market mechanisms or a more interventionist state that can direct the economy, including the private sector towards development. To put it in a more theoretical language — what we need to see is a debate between the neo-liberalism of the SJB economic committee and the left-developmentalist stance of the NPP.

(The writer is an academic attached to the Department of Legal Studies, The Open University of Sri Lanka. He can be reached at raminduezln@gmail.com.)