The decay of the capitalist class and the rise of the wealthy elite in Sri Lanka

(September 27, 2010, Colombo - Lanka Polity, Ajith Perakum Jayasinghe) Sri Lanka' ruling party MP Rajitha Senarathna, a liberal democrat converted into dictatorial worshipper said to The Sunday Observer newspaper that the capitalist class has lost faith in the United National Party (UNP). "They are also working very closely with President Mahinda Rajapaksa and the Government." he said adding "UNP is having a class crisis."

He also says he does not believe in that a vibrant Opposition is essential for democracy.

It is understandable that the capitalist class is closely working with the Rajapalsa regime since their main focus is business for profit and the situation that prevails in the country at present is one even the smallest business needs the blessings of politicians to survive. Capitalist class has adjusted to any harsh condition, even under socialism to survive.

Capitalist class does not essentially mean the wealthiest class of a country. Capitalists are capital accumulators, investors and entrepreneurs. They are independent of the state but both state and capitalists are inter-dependent. Their class interest is a rule that maintains peace for a level they can run businesses normally and a democracy that pays way for enterprise competition healthy to them. No less, no more.

They further need a cheap labor force that is contented or adequately suppressed not to rebel to the level they challenge the system.

For them, the middle class is not a crucial force. It is an intermediate social strata than a class, perhaps a wealthy elite of bureaucrat, small and medium scale businessmen and  pre-capitalist class remnants. However, the middle class was active in the bourgeois cultural space.

UNP, especially under the brilliant leaders like D.S. Senanayaka, Dudley Senanayaka and J.R. Jayawardhana maintained the balance of handling the interests of both crucial classes, the capitalists and the proletariat. Symbolizing this phenomenon, the leaders appeared equally at ease both in the parties of the social elite as well as among the masses in May Day rallies. There was a time UNP challenged the leftists and the trade unionists by holding massive May Days in which real workers enjoyed the shade of the green flag. UNP was well-founded among the peasant class as well. an important social strata in Sri Lanka especially due to their numerical massiveness.

Thus, UNP became the party of the capitalists. Are they the same further?

It is unarguable that the UNP still appears for the interests of the capitalist class unequivocally and boldly. But it has lost the grip of the rein of the peasant and  proletarian classes that have given in to Mahinda Rajapaksa regime. UNP lost its roots. If one argues it is a problem of the present leadership, a counter argument also exists that there is and perhaps was no alternate.

We propose that this is a class crisis, that parallels with the leadership crisis of the working class. The result seems an inevitable situation evolved from the right inception of the social system in the post-colonial era.

Rajitha Senarathna says only the capitalist class "working very closely with President Mahinda Rajapaksa and the Government" and he does not point out that the capitalist class has faith in Mahinda Rajapaksa regime. It is understandable. The regime appears more for the interests of a wealthy middle class than the capitalists.

What is this wealthy class? They belong to a social elite that depends on state for the new found prosperity. Namely, the businessmen and the bureaucrat made of the politicians and the public or service sector officials that have made state their primary source of profit through salaries, perks and benefits, commissions, contracts and unscrupulous means. What they usurp is the local and foreign debt obtained by the government, the tax collections and the loss-making business ventures of state.

They are a rich class but not a hardworking people like capitalists. They cannot prosper without the government. Their unethical, abhorrent earnings are also re-invested in state loans such as treasury bills, unless they are not taken away from the local economy for laundering.

This kind of greedy usurping strata existed everyday in the margins of the capitalist and middle classes. The paradigm shift in recent times is this class outwitted the capitalists and came to front as the most powerful class in Sri Lanka. The ideological and leadership crisis of the working class that paved way for the spread of chauvinist political ideologies among the lower classes was a blessing for this class to prosper.

Mahinda Rajapaksa led regime belongs to this class and it appears for their interests. One fact to prove this argument is as follows. The Sunday Times newspaper on 26-09-2010 reported that President's brother Basil Rajapaksa was given a new responsibility of foreign direct investment development. The same government that is in a dire need a rapid increase of foreign direct investment to peddle through a possible debt crisis in near future is also chasing away the major reputable foreign investors from the country. State took over Appolo Hospital even giving a name change, took back the Emirates management of the Sri Lankan airline and now discussing to buy back the shares owned by Shell Gas while incessantly clashing with Prima.

Capitalist economists identify the situation as mismanagement of economic affairs. We propose you are completely wrong. It is the really brilliant management of the wealthy class, not your bourgeoisie. Hell with FDI! State is a hen laying golden eggs for this wealthy class. That is why they are strengthening it both politically and economically. Keep no more hopes under this regime to get the private sector made the engine of the growth. Forget the fact that state enterprises make losses. People will pay for it. Women will continue to go to Middle  East.

Tourists will arrive in Sri Lanka. IMF will bail the economy. The task of the Central Bank is to maintain good ratings so that the government can obtain loans perhaps until a day until the government will be declared bankrupt. The rulers will try to postpone the day as far back as they can. That is politics or better say governance.


Bookmark, remember and visit us again: www.lankapolity.com

Is China behind CEPA protests in Sri Lanka?

(June 07, 2010, Colombo - Lanka Polity) Sri Lankan President Mahinda Rajapaksa is to visit India since tomorrow and the bilateral talks are expected to focus Comprehensive Economic Partnership agreement (CEPA) that was supposed to be signed two years ago but stalled.

Two weeks back, several hundreds of protesters took to the streets against CEPA claiming it would hugely benefit the neighboring country by forcing the domestic industry into appalling risks. A high profile lobbying is underway against the trade pact which is yet to be made public.

Many highly educated, including doctors and engineers who were part of the recent protest along with businessmen expressed their fears that the island could be dominated by cheaper and skilled Indian services at the expense of the domestic industry.

However, Jose Roy writing to www.toboc.com says "this argument is unfounded as India’s educated unemployed were largely jobless because their reluctance to work for less or in remote places. Moreover, Sri Lanka being a country less than half the currency value of India would not have to panic about the products or services from India going cheap rather can ensure superior quality which could help the country build its economy on a firmer footing."

The Indo-Sri Lanka Free Trade Agreement (ISFTA) signed in 1998 and which is effective since March 1, 2000 has been able to boost trade between both nations significantly with near equal opportunity for the Sri Lankans. The ISFTA that is confined to the trading of only goods pushed country’s exports by manifold from $55.7mn in 2000 to $516.4mn in 2007. Interestingly, the part of the business community lobbying against the CEPA hail the ISFTA.

On the contrary, in 2002, the traded volume between China and Sri Lanka totalled about $350mn, of which China's exports accounted for $340mn providing room for Sri Lankan exports at about a meagre $10mn. Although Sino-Lankan trade witnessed tremendous growth over the years with bilateral trade crossing $2bn in 2009, imports from China remained predominately greater than the efflux. However, an anti-Chinese lobby is almost invisible possible because China is not involved in internal politics of Sri Lanka.

The conservatism of a part of Sri Lankan business community regarding CEPA is highly controversial. But the worst is Sri Lanka's leftist People's Liberation Front (JVP) and some other elements disgruntled due to the rise of Mahinda Rajapaksa through Sinhala nationalism in which they had kept all their eggs might try to rouse anti-Indian sentiments among the masses investing in CEPA protests.

These elements may use the opportunity for raising funds and mustering broad-based support for an anti-Indian campaign that may ultimately lead to a racist movement against any attempt to bring a solution for the ethnic problem through negotiations.

Frustration led them in previous occasions as well to similar disastrous racist tactics to grab power that caused havoc to entire nation. The JVP uprising between 1987-89 and the toppling of the democratically elected United National Party government through a premature election called manipulating draconian powers of the executive presidency they themselves despised in 2004 are examples. The damages incurred to the Sri Lankan polity in these vicious circles are immeasurable.

The business community members that protest the CEPA must be considerate of this kind of adverse effects of their protests that might ultimately lead to disastrous effects on the nation.

We, as leftists, do not believe in the conservatism in the name of safeguarding national states economies. It is the task of the capitalists to move in the path of market liberalization. Socialists must fight against the capitalist system for the rights of the down trodden masses. However, we believe that the forward march of the human socio-economic systems must not stop at nation state. Therefore, safeguarding national economies and state apparatuses should not be in the agendas of the leftists. Socialism, though not clearly defined, is an advanced social system, one beyond the fullest potentials of the capitalist system, that has nothing to share with the backward nation states.

CEPA is not leftists' subject. However, leftists must evaluate the situation vis-a-vis their aim of socialism. Socialism will be a reality only in a context labor has achieved the freedom of mobility that capitalism has already achieved.

Sarah Palin Capitalism and future of mankind

Naomi Klein

The following was adapted from a speech on May 2, 2009 at The Progressive’s 100th anniversary conference and originally printed in The Progressive magazine, August 2009 issue. 

We are in a progressive moment, a moment when the ground is shifting beneath our feet, and anything is possible. What we considered unimaginable about what could be said and hoped for a year ago is now possible. At a time like this, it is absolutely critical that we be as clear as we possibly can be about what it is that we want because we might just get it. So the stakes are high.

Bailout works

I usually talk about the bailout in speeches these days. We all need to understand it because it is a robbery in progress, the greatest heist in monetary history. But today I’d like to take a different approach: What if the bailout actually works, what if the financial sector is saved and the economy returns to the course it was on before the crisis struck? Is that what we want? And what would that world look like? The answer is that it would look like Sarah Palin. Hear me out, this is not a joke. I don’t think we have given sufficient consideration to the meaning of the Palin moment. Think about it: Sarah Palin stepped onto the world stage as Vice Presidential candidate on August 29 at a McCain campaign rally, to much fanfare. Exactly two weeks later, on September 14, Lehman Brothers collapsed, triggering the global financial meltdown.

So in a way, Palin was the last clear expression of capitalism-as-usual before everything went South. That’s quite helpful because she showed us-in that plainspoken, down-homey way of hers-the trajectory the US economy was on before its current meltdown. By offering us this glimpse of a future, one narrowly avoided, Palin provides us with an opportunity to ask a core question: Do we want to go there? Do we want to save that pre-crisis system, get it back to where it was last September? Or do we want to use this crisis, and the electoral mandate for serious change delivered by the last election, to radically transform that system? We need to get clear on our answer now because we haven’t had the potent combination of a serious crisis and a clear progressive democratic mandate for change since the 1930s. We use this opportunity, or we lose it.


So what was Sarah Palin telling us about capitalism-as-usual before she was so rudely interrupted by the meltdown? Let’s first recall that before she came along, the U.S. public, at long last, was starting to come to grips with the urgency of the climate crisis, with the fact that our economic activity is at war with the planet, that radical change is needed immediately. We were actually having that conversation: Polar bears were on the cover of Newsweek magazine. And then in walked Sarah Palin. The core of her message was this: Those environmentalists, those liberals, those do-gooders are all wrong. You don’t have to change anything. You don’t have to rethink anything. Keep driving your gas-guzzling car, keep going to Wal-Mart and shop all you want. The reason for that is a magical place called Alaska. Just come up here and take all you want.

“Americans,” she said at the Republican National Convention, “we need to produce more of our own oil and gas. Take it from a gal who knows the North Slope of Alaska, we have got lots of both.”

And the crowd at the convention responded by chanting and chanting: “Drill, baby, drill.” Watching that scene on television, with that weird creepy mixture of sex and oil and jingoism, I remember thinking: “Wow, the RNC has turned into a rally in favour of screwing Planet Earth.” Literally.

But what Palin was saying is what is built into the very DNA of capitalism: the idea that the world has no limits. She was saying that there is no such thing as consequences, or real-world deficits. Because there will always be another frontier, another Alaska, another bubble. Just move on and discover it. Tomorrow will never come.

Financial crisis

This is the most comforting and dangerous lie that there is: the lie that perpetual, unending growth is possible on our finite planet. And we have to remember that this message was incredibly popular in those first two weeks, before Lehman collapsed. Despite Bush’s record, Palin and McCain were pulling ahead. And if it weren’t for the financial crisis, and for the fact that Obama started connecting with working class voters by putting deregulation and trickle-down economics on trial, they might have actually won.

The President tells us he wants to look forward, not backwards. But in order to confront the lie of perpetual growth and limitless abundance that is at the center of both the ecological and financial crises, we have to look backwards. And we have to look way backwards, not just to the past eight years of Bush and Cheney, but to the very founding of this country, to the whole idea of the settler State.

Modern capitalism was born with the so-called discovery of the Americas. It was the pillage of the incredible natural resources of the Americas that generated the excess capital that made the Industrial Revolution possible. Early explorers spoke of this land as a New Jerusalem, a land of such bottomless abundance, there for the taking, so vast that the pillage would never have to end. This mythology is in our Biblical stories-of floods and fresh starts, of raptures and rescues and it is at the center of the American Dream of constant reinvention. What this myth tells us is that we don’t have to live with our pasts, with the consequences of our actions. We can always escape, start over.

These stories were always dangerous, of course, to the people who were already living on the ‘discovered’ lands, to the people who worked them through forced labour. But now the planet itself is telling us that we cannot afford these stories of endless new beginnings anymore. That is why it is so significant that at the very moment when some kind of human survival instinct kicked in, and we seemed finally to be coming to grips with the Earth’s natural limits, along came Palin, the new and shiny incarnation of the colonial frontierswoman, saying: Come on up to Alaska. There is always more. Don’t think, just take.

Economic system

This is not about Sarah Palin. It’s about the meaning of that myth of constant ‘discovery,’ and what it tells us about the economic system that they’re spending trillions of dollars to save. What it tells us is that capitalism, left to its own devices, will push us past the point from which the climate can recover. And capitalism will avoid a serious accounting-whether of its financial debts or its ecological debts-at all costs. Because there’s always more. A new quick fix. A new frontier.

Gloomy economy forecast. Courtesy: Google.lk

That message was selling, as it always does. It was only when the stock market crashed that people said, “Maybe Sarah Palin isn’t a great idea this time around. Let’s go with the smart guy to ride out the crisis.” I almost feel like we have been given a last chance, some kind of a reprieve. I try not to be apocalyptic, but the global warming science I read is scary. This economic crisis, as awful as it is, pulled us back from that ecological precipice that we were about to drive over with Sarah Palin and gave us a tiny bit of time and space to change course. And I think it’s significant that when the crisis hit, there was almost a sense of relief, as if people knew they were living beyond their means and had gotten caught. We suddenly had permission to do things together other than shop, and that spoke to something deep.

But we are not free from the myth. The willful blindness to consequences that Sarah Palin represents so well is embedded in the way Washington is responding to the financial crisis. There is just an absolute refusal to look at how bad it is. Washington would prefer to throw trillions of dollars into a black hole rather than find out how deep the hole actually is. That’s how willful the desire is not to know.

And we see lots of other signs of the old logic returning. Wall Street salaries are almost back to 2007 levels. There’s a certain kind of electricity in the claims that the stock market is rebounding. “Can we stop feeling guilty yet?” you can practically hear the cable commentators asking. “Is the bubble back yet?” And they may well be right. This crisis isn’t going to kill capitalism or even change it substantively.

Without huge popular pressure for structural reform, the crisis will prove to have been nothing more than a very wrenching adjustment. The result will be even greater inequality than before the crisis. Because the millions of people losing their jobs and their homes aren’t all going to be getting them back, not by a long shot. And manufacturing capacity is very difficult to rebuild once it’s auctioned off.

Financial markets

It’s appropriate that we call this a ‘bailout.’ Financial markets are being bailed out to keep the ship of finance capitalism from sinking, but what is being scooped out is not water. It’s people. It’s people who are being thrown overboard in the name of ‘stabilization.’ The result will be a vessel that is leaner and meaner. Much meaner. Because great inequality-the super rich living side by side with the economically desperate-requires a hardening of the hearts. We need to believe ourselves superior to those who are excluded in order to get through the day. So this is the system that is being saved: the same old one, only meaner.

And the question that we face is: Should our job be to bail out this ship, the biggest pirate ship that ever was, or to sink it and replace it with a sturdier vessel, one with space for everyone? One that doesn’t require these ritual purges, during which we throw our friends and our neighbours overboard to save the people in first class. One that understands that the Earth doesn’t have the capacity for all of us to live better and better.
But it does have the capacity, as Bolivian President Evo Morales said recently at the U.N., “for all of us to live well.” Because make no mistake: Capitalism will be back. And the same message will return, though there may be someone new selling that message: You don’t need to change. Keep consuming all you want. There’s plenty more. Drill, baby, drill. Maybe there will be some technological fix that will make all our problems disappear.

And that is why we need to be absolutely clear right now.

Capitalism can survive this crisis. But the world can’t survive another capitalist comeback.

The writer is an award-winning journalist and syndicated columnist and the author of the international and New York Times bestseller The Shock Doctrine.