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Modi and the ghost of Reagan and Thatcher

Can separation of state and business ever exist?

Credit : Indie Journal

"The state and the market are the mother and father of the individual, and the individual can survive only thanks to them." - Yuval Harari, Sapiens

Yuval Noah Harari acquired the status of being a modern contemporary historian of our times by writing the distinctions in the State and Market. Referring to the two as parents, he claims that these institutions are the soul pillars on which our juvenile society of Individuals is relying upon. To categorise the institutions as such, the readers of popular culture are very much convinced of the fact that there has to be distinction among these two. The nurture of such propaganda over the years, the idea of segregation of the two has become so well-known that the global leaders are reciting it without any hesitation, tracing the specific pattern of neoliberalism. 

The recent claims made by India’s Prime Minister Narendra Modi that "Government has no business in businesses," contradicts the very reason why the concept of governments was evolved and established. "When a government engages in business, it leads to losses. The government is bound by rules and the lack of courage to take bold commercial decisions," he said. Modi was invited to a Webinar on ‘privatisation’. Ironically, it was organised by the Department of Investment and Public Asset Management. He even went on to say that "it is the government's duty to support enterprises and businesses. But it is not essential that it should own and run enterprises."

The middle ages were prominent examples of the same as city-states were developed where trade flourished and powerful states were established where the trade route had to be secured. Earlier civilisations and thus the methods of governance were functions of the means of production which worked as an authoritative body for local businesses. From the gospels of Bible concerning lamb or the ban on interest rates or Riba in Quran to the 'Aadnyapatras' or bunch of orders given during the reign of Chattrapati Shivaji Maharaj, the state power and religious authorities have always controlled all sorts of business operations within their region of influence. Even the most cursed and fooled king of subcontinent Muhammad bin Tughlaq and his sultanate were inherently the operations of business where he tried to control the structure of trade and business of India. The emergence of the State itself was for the sake of maintaining business. Not only Marxist perspective, but the liberal world has also affirmed the development of the State as the power in accordance with the rise of trade and business. 

Paul Collier, known for his pioneering works on African democracies and conflicts, is one of the most celebrated professors in the west and third world for his new model of the emergence of State and its interchangeable relation with the business, as professor of Economics and Public Policy at Blavatnik School of Government at University of Oxford. His research and analysis on the evolution of the State have underlined the very fact that the government and business were never separate entities. From Anarchy to a centralised State, economic development needs polities that are centralised and inclusive. No society starts with such a polity and had to trace the path of reaching the developed state through successions where business and trade power insisted on building such state. Starting from anarchy, a centralised state emerged for the security and management of the trade operation and distribution of the produce from the region and the population in the respective area of influence of such business models. Thus in the establishment of such entities as State, the power was given to the leadership to hold an upper hand over the businesses. 

These states, controlling central authority, were means to moderate business and trade operations of the region. Centralised states turned to the inclusive states as there were demands from the powerful leaders and business associates as the feudal landlords for the share of power and scope for the possible interventions in state power. It not only shaped the structure of the power, but it influenced the economic development and its alignment between power and identities. Few of the identities were mismanaged, and led to the separations of such states where the businesses were not given a chance to share the power. Civil wars and destruction of powerful states were the battlegrounds of dominating businesses to control the governments and obtain favourable conditions. 

The notion of Modi's vow to distinguish business from governance comes from the larger legacy of his 'allies' in the history of neoliberalism. The politics of the new right is tracing the path of the ideology of the Western European countries and US during 70s. The possibility of the separation was traced long back but never realised until the decolonisation. The models developed by the International Monetary Funds (IMF) and World Bank for the third world. The disengagement of the governmental form of state from business was a proposition for the rise of capitalism, started during the reigns of Regan and Thatcher. 

The rise of Thatcher on the political sphere of the United Kingdom when the empire had lost the tools of operations and exploitations from its conventional colonies and desperate to find means for exploiting the rising Asian lion-like economies, the set of the policies proposed by the Wall Street and Chicago institutions, softly referred as Thatcherism have traded the role of governance for the free market and establishing its value in the new value chain of liberalism. Whatever inefficiencies of the state-controlled economy, uncontrolled inflation, and rising prices of groceries were seen as responsibilities of the government. To get away from these accountabilities, selling them off in the name of Privatisation was the finest way. 

The results of these reforms and liberalisation were catastrophic for the working classes. It had risen the poverty and cases of hunger and deprivation were seen in England. Seen as a mother-figure among the proponents of the free markets, she was despised by those who had identified themselves with the working class. When she died at the age of 87 years and Global North was crying for the lost gem, Kenneth Loach, a filmmaker and proponent of the workers evaluated her correctly, stating "how should we honour her? Let’s privatise her funeral. Put it out to competitive tender and accept the cheapest bid. It’s what she would have wanted."



Her friend across the Atlantic, Reagan had started his own economic model, pushed forward by the IMF and capitalist lobbies of the US. His economic model was the first to openly propose a reduction of government spending with the federal income tax - creating tax havens for the global conglomerates. The government regulation on trade and business was lifted whilst the grip on the money supply was tightened. It was nothing but the 70s version of the demonetisation where currency was curbed in order to reduce inflation. Modi has already implemented many ideas of his predecessors in his policies, ranging from the establishment of NITI Aayog instead of the planning commission. The current assertion of his statement is the rhetoric of Reaganomics and soft talk of Chicago boys (with Masters in entire business management).

The current volatility and power conflict between business and entities of State is far simpler to distinguish than the crisis of conflicts between state and the church. The separation of church and state became the philosophic and jurisprudential concept for defining the political distance from the circle of influence of religion, the inseparable part of the human consciousness of Europe with present EMEA during prolonged waves of crusades which lasted for centuries. Despite this, the separation of the two became possible as the idea of State was able to opt and control the emerging economic sphere of business than the Church. The functionality of governance from the State power on lines of Charlemagne (Charles the Great) was more validating than that of the model suggested and managed by the Pope. Thus, the entire human history (except the prehistoric times where the non-ape identity in opposition to evolutionary theory existed) has shown that the separation of such State and Business never existed.