The True Dangers of Trump’s Economic Plans
His Radical Agenda Would Wreak Havoc on American Businesses, Workers, and Consumers
CITIZENS of industrialized countries find difficulty in realizing the extent to which India has remained agricultural. Out of India's 330 millions of inhabitants 300 millions are rural, and no less than 240 millions are directly supported by cultivation or the keeping of livestock. Their innumerable villages are scattered over immense areas, with few metalled roads and a scanty allotment of post offices and schools. The provision of these conveniences in every village would involve a scale of taxation heavier than India at her present stage can endure. The peasant is consequently a man of simple ideas, which, despite the changes slowly brought about by vernacular newspapers and the spread of primary education, are not far distant from those of his grandfather or indeed from those of a thousand years ago. He is undoubtedly on the move, and in certain areas of the northwest which contain many ex-soldiers of the European war the demand for the education of boys, and still more remarkably of girls, indicates a new outlook and new values. In several districts of Bombay, too, where an intensive political campaign has recently been carried on, the villager has begun to question the justice of the taxation system (with regard to land rather than salt, the latter duty being a selected object of attack and no real grievance) and to adopt methods of passive resistance. Similarly in Oudh, the region lying in the center of the great northern plain, the payment of rent to landlords is being refused. But elsewhere, with rare local exceptions, the peasant remains quiescent and is occupied with other than political thoughts.
Three matters principally occupy his mind: the state of his crops, the attitude of his money lender, and some current religious ceremony in his own or a neighbor's household, usually a marriage or a circumcision. What lies beyond this range is in the power of God, or perhaps of that remote Sarkar (government) which is embodied in the local police officer or irrigation engineer. Save when a mystic saint, a Gandhi whose name is repeated with veneration from mouth to mouth, directs him (he believes) to commit some act of defiance, he leaves guidance of the world's destiny to higher powers.
The Indian peasant ordinarily owns from 3 to 20 acres. In some provinces the tenant class is larger, but only in the south of India is the landless man, often a pariah or outcaste, a major problem. The tenant's holding also will be of the same size, and his status is not necessarily below that of the peasant-owner; but owners predominate, and, except in tracts favored with canal irrigation, draw a bare subsistence from a tired soil. The outstanding feature of an Indian village is poverty -- due to conservatism and ignorance, to weak stamina and indebtedness, but due above all to the pressure of population, to that relentless flow of births which makes each improvement in agricultural production the occasion for a still more minute subdivision of the land. The average holding throughout India is 6 acres, split up into 20 or even 50 fragments in every direction around the village site. Cultivation is done with a wooden plough as in the days of Abraham, the surface of the soil being torn open a few inches deep by the plough's narrow iron tip. The yield of wheat averages (as in America) 13 bushels to the acre, of cotton about 100 pounds (in America it is 175 pounds); and the Indian peasant is living on 6 acres, not on 250. An industrious man, he works early and late during the sowing and harvest seasons, though his occupation leaves him idle for 100 days or longer in the year; but his methods are unprogressive, and the arguments and practical demonstrations of agricultural experts make little impression on him. Out of 300 million acres cropped, the last published records show that only 10 million were sown with improved varieties of seed, and except among a few tribes with whom the care of cattle is traditional, puny cows wander over the bare common with a retinue of wanton scrub bulls. Malaria, cattle disease, infant mortality and plague are decreed by fate, and it is useless if not impious to struggle against them.
Since he pursues such an economy, it is not surprising that the peasant is in debt. Indebtedness is widespread and in most cases hereditary. Judged by European or American standards the sum is not large, but it differs from the debt of western farmers in being unproductive. Failure of the harvest, death of cattle, litigation, a reckless marriage, or the education of children may be the first cause, but all of these sooner or later contribute their share. Debts incurred for clearance or equipment of land are extremely rare. The money lender is a Hindu of the commercial or priestly castes, the peasant himself being a Hindu, Mohammedan, pariah, or of one of a hundred diverse beliefs. Rates of interest are high, ranging from 12 percent on a land mortgage to 100 percent or more on an advance of seed. In themselves these rates are not altogether unfair, the peasant being unpunctual or crafty in evading payment. What is wrong is the entire economic system of uncontrolled borrowing and unintelligent agriculture, and it is easier to condemn than to amend the system.
Let us examine the balance sheet of an imaginary cultivator. Ram Chand possesses 6 acres, of which two were mortgaged by his father (on the occasion of Ram Chand's wedding) for 150 rupees.[i] Four acres, including these two, are irrigated from a well in which he holds a one-third share: the remainder depend on rain, which is uncertain. Two overworked oxen are maintained for the well and the plough, and one buffalo cow gives milk and a little ghee (clarified butter) for the family. His income may be $100, in the form of wheat ($50 from 2½ acres), cane ($20 from ½ acre), cotton ($8 from ½ acre), corn ($10 from 1 acre), and pulses and millets ($12). With a wife and two children, Ram Chand will consume in the year the whole of his wheat and half of his corn, millet and pulse. He will sell his cane, cotton, and the balance of the cheaper grains, thus obtaining $39 in cash. Land tax at $1 per acre takes $6,[ii] and $33 remain for clothing, amusements, education, house repairs, and the food, such as salt and spices, which is not produced on his own land. Clearly he is insolvent, and even the sale of dairy produce which is urgently needed at home will barely make good the deficit. But he is also in debt. For various reasons described above he owes $80 to a money lender, with interest at $20 per annum and almost certainly more. Only a bumper crop can help him to reduce this amount, and in the meantime he must sell his surplus produce to his grain-dealing creditor, or buy from him whatever he requires. In neither case is he free to question the price or quality.
The picture is gloomy, and it is not overdrawn. The average Indian cultivator is insolvent (there are of course exceptional persons and areas), and survives only by underfeeding himself and his family and by borrowing. The two processes are carried on alternately. The tenant, who pays from a quarter to a half of his produce to his landlord as rent, has naturally an even smaller net income; on the other hand he pays no land tax, the landlord frequently supplies the plough cattle or assists to provide them, and the usurer is less lavish in advances to a non-owner on occasions of ceremonial extravagance. Where the landlord is reasonable, the tenant may be happier than the peasant-owner. But landlords are of many types.
Let us turn from Ram Chand, on the whole a prosperous example, to the consideration of the average peasant. What burdens does he bear and by whom are they imposed? The land tax, which was originally a rent taken by the Crown from all occupiers, dates from long before British times and disappears in the mist of tradition. Hindu and Mohammedan rulers exacted it in kind, the more moderate demanding from one-sixth to one-third of the total crop. It is now a cash payment, fixed for thirty years at a time, except in Bengal where it was fixed at a permanent figure 150 years ago; the average rate in all India is now fifty cents on the cultivated acre. Omitting the more valuable crops such as jute, opium, tobacco and cane, the average produce per acre was $20 before the depression, and the land tax therefore represented a fortieth part of the gross produce.[iii] Another eight cents per acre may be added as the due of the county authority for local roads, schools, hospitals, etc.
No other tax falls directly on the peasant. Indirectly he must pay the salt tax, another inheritance from his ancient rulers. A family of five, together with the cattle, consumes fifty pounds of salt per annum, at a total retail cost of fifty cents; half of this represents the tax, an excise duty levied by the government at the source of production. There is no tax on native tobacco, and the excise on alcoholic liquors is paid only by those who drink them. The import duties on foreign cloth, matches, and household utensils are from 10 to 15 percent ad valorem, and in each case a cheaper equivalent of domestic manufacture is available. The burden of taxation, including land tax, falls at two dollars per head, or ten dollars on a family of five, and distressing though such a deduction must be on an income of $100, it is not in itself unconscionable or obviously unfair.
The share of the landlord is less uniform in amount and in the manner of its exaction than that of the government. The tenant pays no land tax, but his rent, in cash or kind, may vary from an amount exactly equal to that of the land tax (the landlord being content to have idle land kept in good condition) to $10 or $15 per acre in canal-irrigated districts. The tenant is courted in the sparsely populated tracts, and may be grossly oppressed where no alternative tenancy is visible without migration to an unfamiliar climate amid an alien caste or tribe. Oppression takes the form of unauthorized succession dues, marriage contributions and an infinity of "cesses" dependent on the whim of a landlord or his resident agent. The evil is greatest in Bengal, where the fixed land rent has led to the heaping of many superimposed feudal burdens on the head of the unfortunate peasant; it is grave also in Oudh, where mild Jacqueries periodically break out, and on the southeastern coast in Malabar, where Mohammedan tenants a few years ago committed gross atrocities on the Hindu landlords and their co-religionists. Repeated legislation to define or forbid the feudal dues has been unsuccessful in removing the cause of complaint, and there can be no question that agrarian feeling in the provinces mentioned has become steadily more intense during the last thirty years. The solution of this problem will be one of the most puzzling tasks before a self-governing India.
While taxation, however unwelcome, excites no bitterness in the mind of the villager, and while the resentment against pressure by the landlord, though strong, is limited to a few areas, the usurer is becoming daily more unpopular everywhere. He is for the most part the creature of British rule. Under the Mogul emperors, and still more in the period of confusion which followed their downfall, the increase of population was slight, cultivable land was abundant, and the instability and erratic procedure of government rendered the recovery of debts uncertain. There was therefore comparatively little lending and little debt. The establishment of regular law courts, the cessation of war and famine, and the growing spirit of confidence under the British régime made usury a safe occupation. In thousands of villages today the oldest peasants will point to the brick house of the money lender towering above their plain earth or palm-leaf cottages, and will say: "Our fathers remembered the day when his grandfather was the menial keeper of their harvest-reckonings, who removed his shoes as they passed." He is now the wealthiest man in the village, often the most powerful. The trouble is not that the usurer lends at high rates of interest, compounding the interest every six months, or that he occasionally fakes an entry. The root of the trouble is that he lends without discrimination for good and bad purposes alike, provided the security is adequate, and the reckless peasant lacks the self-restraint to abstain from extravagance or to insist on repaying when his pockets are full. The same story is told in Malaya, where the Chinese shopkeeper suavely entangles the spendthrift Malay, as well as in Palestine and the whole of Asia. Unfortunately indebtedness is not the end of the story. The indebted farmer, knowing that he cannot clear his account, and that his creditor will not eject him, makes no attempt to improve his agricultural production, his personal health, or the customs of his family.[iv] Any addition to his income will merely pay a little more of the interest without touching the swollen principal. He therefore continues in the old rut and remains depressed and insolvent.
It is frequently stated that the Indian peasant is now awake, that he is turning angrily against the government which has been oppressing him, and that Mr. Gandhi's clarion call has roused him to fight for "India a nation." A more careful analysis of the economic position in the villages indicates that though the peasant is undoubtedly becoming vocal and demanding a change, the essence of his claim is economic, and so far as he blames the government, his complaint is not of extortionate taxation but of negligence. The landlord and the usurer are eating up his substance, and the government, he feels, is doing nothing or not enough to defend him. Unlike the Indian liberals, who continually urge the government to undertake constructive or even violent legislation on the villager's behalf, Mr. Gandhi and his followers have for political reasons turned the villager against certain taxes or restrictions -- the land tax, the salt excise, the prohibition of grazing in reserved forests. Tactically this policy is prudent; it utilizes the peasant without antagonizing the wealthier classes. Politically it may secure the Nationalists' object, but economically it confers no benefit whatever on the peasant. The complete abolition of the land tax and the salt duty would save an average peasant family from $5 to $10 per annum, but it would paralyze the government of the country through loss of revenue. Self-governing India would be entirely unable to abandon such large sources of income. Meanwhile the peasants would remain in bondage as before, the owner to the usurer, the tenant to the landlord; the real disease of their life would be untouched.
There is abundant evidence to support this view. "Gandhi Rule" was proclaimed by various aboriginal hill tribes, who forthwith proceeded to graze their cattle in the forests, and in one case actually attacked the police with bows and arrows. They expressed no hostility to government as such, but clamored for the right of free grazing. Dacoities have become numerous in the Punjab, the Central Provinces and in Berar, the objects of attack being landlords and the money-lenders. Tenants, however, are seldom courageous enough to attack their landlords, and their method in the United Provinces (Agra and Oudh) and elsewhere has been to refuse the payment of rent. "Any form of taxation," a Swaraj speaker had taught them, "is a relic of the ancient and forgotten régime." But to them taxation meant rent, and they thrashed the emissaries of the landlords. Refusal of land tax is a different and more serious matter, but this movement has only assumed importance in a few west coast districts adjoining Mr. Gandhi's home. In any case the economic plight of the peasant must be remedied by studying it as an economic problem; attempts to deal with it along political lines will land the duped villagers in a deeper morass than before.
No scheme for the reform of the landlord can be produced in a few moments. A growing section of liberal opinion is in favor of his expropriation, with or without compensation. Action, however, must be taken by the provincial governments, within whose jurisdiction the matter lies, and when the political and nationalist struggle is ended the agrarian question will soon come to the front. The points to be borne in mind are, first, that few landlords (there are honorable exceptions) are performing any worthy function by financing their tenants, and second, that the flotation of loans required for the compensation of expropriated landlords would immensely exceed the credit of self-governing India. On the other hand there seems to be no likelihood of a British Government in India seriously tackling the landlord question.
Indebtedness is not, except in minor respects, a matter for legislation. The fellah in Egypt and Palestine, the Malay in Malaya, the Sinhalese and Tamil in Ceylon, are in debt through their own weakness of character, the perversity of their old customs, and the lack of a reasonable system of controlled credit. Indian debt is due to exactly the same causes, and the remedy lies in building up the peasant's character, altering his customs, and supplying the required credit system. Steps have been taken in every orderly country of Asia (except Turkey) to provide co-operative credit in town and village, when and where the people are fit to use it, and great benefits have already been conferred on the peasantry. Debts have been repaid, better farming taught, and the most obvious roads of extravagance have been blocked or made less easy. But character is the foundation stone of the building, and character is not formed in a day. The Indian peasant dares not ignore public opinion and squander less than the usual sum on his son's wedding. Priests and beggars are fed, bands engaged, fireworks released, and an orgy of noise and futility endures for a week or more. Public suspicion likewise attends the first man who adopts a new variety of seed or a new agricultural implement. Even those who guard against malaria with quinine or against smallpox by vaccination were long regarded as somewhat odd, though this prejudice is slowly diminishing. Religious superstition also plays its part. Every cow, good or bad, is equally holy in Hindu eyes; consequently worthless cows abound, and good milk is scarce. All pigs are loathsome to the Mohammedan and are little favored by the higher Hindu castes. As a result of these superstitions surplus milk products and many other foods are wasted. Education has meant to the villager a means of sending a younger son into government service as a clerk, not a means of understanding natural science and agricultural processes. Health, especially in women and children, was an accident of fortune and infant mortality might even be "churchyard luck." What the peasant does not grasp is that these things mean money, and that he can no longer afford to retain obsolete ideas and practices in the modern world.
But he is beginning to realize this fact. He is realizing it slowly, and with many backslidings, but progress is being made. He is now organized, in many thousands of villages, in little coöperative or mutual groups for the control of rural credit, improvement of agriculture, better breeding of cattle, and even the reform of his social customs in respect of expenditure and sanitation. The government assists the new development with all its power, but if the peasant is driven, he will not permanently maintain the higher level of practice. Only what he does himself will be permanently done. He must learn how to learn. A real interest in government lies far ahead. The village is still the world to many peasants, and though the ancient council of elders, so often pictured as the parliament of a Golden Age, was probably as uneven in its justice as any other primitive institution, it really meant government to the people of ancient India, and its reconstitution in a modern form would do more to create Home Rule in the peasant's eyes than the most grandiose of national assemblies. Village councils or "panchayats" have been brought into existence in the majority of Indian provinces, and function with varying success. They dispose of petty civil and criminal cases, and have the power to levy a local tax for sanitation, lighting, or road maintenance. Taxation, however, is unpopular and is seldom imposed. Even the county or town authorities (district boards and municipal councils) which for fifty years have been endeavoring to teach the principles of local government, undertake fewer duties and raise lower taxes than advanced countries. A comparison by a rural economist of Kanatalapalhi village in Madras with Torre San Patrizio in Italy showed that the total of local rates in the former amounted to $80 and in the latter to $3,000. Similarly, Major Jack found the rates of a Bengal village to be 8 cents per head while those of a Japanese village were $3 per head. Local government in India, then, is modest in its enterprises. Schools, hospitals and metalled roads are fewer in proportion to the population than in Europe or America, because the peasant does not yet recognize the advantage of taxing himself to obtain them. His reluctance is due to his ignorance and poverty, neither of which can be removed except by means of these same instruments with which he will not equip himself. There is thus a vicious circle, which cannot well be broken at one point, but only contracted by patient pressure from all the forces of enlightenment.
Nationalism is always shortsighted, having narrowed its gaze to a single goal of ambition. In Egypt, China and India alike the enthusiast shouts for freedom, too often postponing the battle against internal evils until the foreign question has been settled. The danger is that when the national leaders are victorious, and their country is in their hands, they may find it impossible to apply to their own backward people the democratic or parliamentary principles which they themselves genuinely admire. They are thus compelled to establish an oligarchy which it is difficult for mortal men afterwards to relinquish. India will be confronted with that obstacle. The peasant feels a strong interest in village affairs and a mild concern at the proceedings of the county body, but pays very little attention to provincial and national councils except when his own taxation or the rival claims of religions come under discussion. The former at least is a good basis for political thought, but insufficient for national purposes. A country must be governed, even when it is self-governing, and at the present moment the villager tends to look on government as an automatic business in the hands of remote persons with whom he need not interfere except on the two occasions described. The budget of a Nationalist financier, deprived of the land tax, the salt duty, and the liquor excise, will be a brilliant study in high tariffs, since no practicable reduction of the army or of the pay of officials can make up the deficit. And since the importation and consumption of luxuries is not enough to yield a large customs revenue (in addition to the 30 percent duty already paid), the high tariff must be laid on articles of general consumption and will be paid by the villager! When the villager realizes this, he will understand his part in government.
Two further measures would help the peasant to become a politically-minded citizen. He is ordinarily illiterate, and may be misled in political matters by a vernacular newspaper (recited in the village meeting house) or by a partisan orator. Propaganda reaches him by accident, and both sides are rarely presented to the same man. A national radio system, sending out the views and opinions of all parties under the control of an impartial board, and connected with a communally owned receiver in the meeting house, would give him genuine education, and there should be no difficulty in raising village subscriptions to pay for the installation.[v] The peasant knows that he is ignorant, but he does not feel assured that schoolteaching will give him the knowledge that he wants. Oral instruction by radio in the evening is likely to appeal to him. Radio advertisement, incidentally, will of course be strictly taboo. The villager requires no higher standard of life at present; the result of a rise would be further debt, not higher production.
The second measure is of a constitutional nature. India is hampered not only by a great variety of religions and races but also by a multiplicity of tongues. The legislative council of every province includes men who speak not only different dialects but substantially different languages. The result is that though a representative who knows only his own vernacular language is entitled to have every speech, question and resolution translated for his benefit, he is unwilling to delay the work of the council to this extent; and since the majority of the urban members know and speak English, a rural man of equal intelligence but less formal education finds himself helpless. He surrenders his seat at the next election to an urban man with a technical rural qualification.[vi] Now urban men do not really represent the Indian village. They lack familiarity with agricultural details, their mental approach to a new problem is quicker, more versatile, less balanced. The village should be represented in the legislature by rural men, and these will be men who know little English. The provincial legislature, then, must speak the vernacular, and this is only practicable if the vernacular is the same for all members. Provinces should be reshaped along linguistic lines, so that the rural leader may suffer no embarrassment from his lack of English. The normal tongue in use will be that which he uses at home.[vii] The rural man will then speak freely, his numbers will enable him to dominate the legislative bodies, he will educate himself in politics and broaden his outlook, and in provincial government at least the Indian village and the villager will come to their own.
[i]The rupee is worth 36 cents.
[ii]A somewhat prosperous man has been selected, growing richer crops than the average peasant. His land tax is consequently also above the average (50 cents per acre). The yields are based on actual instances. The prices are those of 1927, before the worst of the depression.
[iii]The Government may legally take half the net produce, i.e., the surplus amount after meeting all costs of cultivation and the maintenance of the cultivator and his family. If a cash rent is paid, half of this will normally be demanded from the landowner. The share actually taken is always much less.
[iv]The Asiatic creditor may be willing to acquire the land, but seldom desires to cultivate. He is of a softer breed. He ordinarily leaves his debtor in possession, as tenant or nominal owner, and rackrents him steadily.
[v]The Indian Broadcasting Corporation, after failure as a private company, has recently been placed under a public utility board but has not yet embarked on rural propaganda as outlined above.
[vi]For similar reasons the villager was scarcely represented at the Round Table Conference. There were a few big land owners, several lawyers of rural origin, and a crowd of patriotic townsmen. The Congress party, if present, would have been no better.
[vii]It is assumed that in a self-governing India the British officials who remain will conform to the same rule of procedure.