India, it has widely been declared, is open for business. Having successfully abolished the main legal limitations on foreign direct investment (FDI) in such vital industries as food production, Prime Minister Narendra Modi tweeted in June 2016 that the country now had the most liberal investment regime in the world.1 The announcement quickly won him plaudits from the international business press. His record of dismantling the most elementary restrictions on FDI, financial regulations, labor protections, and other remaining vestiges of the nationalist period, has led some to speculate that India will soon overtake China as the main destination for foreign manufactures, as the latter’s economy sways under the impact of prolonged economic crisis and labor unrest.2

The perception that India can serve as an alternative to China for world investment suggests something important. The crucial factor here is labor. India’s labor costs are among the cheapest in the world. This is, to avery significant extent, the country’s comparative advantage in the world economy, and what has attracted a significant amount of attention from multinationals.

India today has seventy-eight billionaires, up from eighteen a decade ago. Its capitalist class is increasingly going international, with businesses of the Tata and Birla dynasties intervening actively in the world economy. The extremely rich live an increasingly lavish lifestyle in the skyscrapers, luxury apartments, and entertainment districts of cities such as Mumbai and Bengaluru. Meanwhile, hundreds of millions of their fellow citizens live well beneath the poverty line, which in India is fifty rupees (about $1) per day. The recent demonetization of large rupee notes carried out by Modi’s government in a supposed attempt to fight corruption has tipped millions of migrant laborers in construction, domestic services, and other low-valued occupations, in which poverty and insecurity are commonplace, over the edge on which they lived.3

Economic development under capitalism is a class struggle.4 The kind that has happened in India and other economies of the former periphery on their way up the ladder has been a lopsided process—a class war waged against millions of poor and oppressed workers, by a fabulously wealthy post-colonial elite and a cadre of state managers eager to remake their countries in the image of the developed world, whatever the cost in labor and lives.

As Snehal Shingavi’s essay in ISR 103 makes clear, the class war of India’s development has been of a very traditional type. During the 1970s and 1980s, the vanguard of the Indian working class and its organizations were smashed: in 1974 on the rails and in 1983 in the mills of Bombay, Calcutta, and Ahmedabad. These political defeats for the working-class movement, as with the PATCO strike of 1981 in the United States and the Great Miners’ Strike of 1984 in the UK, paved the way for decades of neoliberal restructuring, weakening of workplace protections, wages, and security.5

This article builds on Shingavi’s essay by extending his focus on the organized class struggle in India into the informal economy. This is where the overwhelming majority of the Indian working class is to be found—95 percent when last counted, a proportion which stands only to increase under Modi’s aggressive style of neoliberal development.6 While many of these workers remain in agriculture or in low-tech industries dominated by seasonal migrants, a steadily increasing part of the workforce supports the Special Economic Zones, of which there are now hundreds making their bid to foreign investors by being outside of India’s workplace laws.

There is, of course, a weakness in the term “informal economy.” It was used first by Keith Hart, an anthropologist who worked in Ghana in the 1970s. He was trying to describe the kinds of economic activity engaged in by slum-dwellers who could not find steady waged employment.7 But it encompasses some vastly different types of activity, from ownership of small enterprises and supervision of piecework, to petty production, to waged labor of one kind or another. Here, I am looking mostly at informal workers, both those earning a wage and, like many Indians, those paid an advance that mediates a wage relationship through debt.

“Informality” itself is a slippery concept. We can only define it ex negativo: an informal worker, most likely, has no written contract, no set wage, no access to workplace protection law, no right to organize, no guarantee of ongoing employment, no pension, and so on.

In fact, formal labor relations—access, in other words, to all those things that informal workers lack—only came into existence relatively recently in the history of capitalism, and then only for a minority of the world’s working class. In the nineteenth and early twentieth centuries, labor law in much of the world, including India, derived from the English common law’s master-servant relationship, and held to the employer’s absolute prerogative to direct, hire and fire, and sanction and punish workers. It was only after World War II that the modern employment contract—which built in safeguards for labor in terms of minimum wages and maximum hours, overtime pay, cost of living adjustments, occupational safety, job security, organizing and collective bargaining rights—became the standard in most of the developed world, under the pressure of mass workers’ struggles and the rise of social democratic parties to positions of leadership of world powers.8 Formality, in other words, was a recent outcome of sustained class struggle, whereas informality has been the norm for most of the world’s working class throughout the history of capitalism.

Unevenness and combinationunder nationalist development

As in Europe during the period of primitive accumulation, the development of capitalism in India drew millions of peasants from the countryside into a variety of industrial enterprises, including textile factories in the provincial capitals of Bombay, Calcutta, and Madras, mines in Bihar, and tea, coffee, and spice plantations in the northeastern and southwestern corners of the country. Here, however, the similarities end. British rule in India did not attempt to enforce the same kind of capitalist transition that it had in England. There was no enclosure movement on any significant scale that prevented workers from returning to lives of agrarian subsistence.

This was a deliberate policy. Colonial industry came to rely on a workforce of permanently marginalized rural migrants circulating between the cities and their home villages. The advantage for capitalists was that they could resist demands to pay workers a living wage and benefits that would allow them to live and work full-time in the cities. Indeed, at the turn of the twentieth century, only a very small minority of the industrial workforce was permanently settled. Workers’ compensation, healthcare, maternity leave, childcare—all existed either in a purely nominal sense or not at all in the mills and surrounding shantytowns. Capitalists felt no responsibility for their workers, and the colonial state felt no need to step in to take up the slack. Workers could not rely on waged work in industry to reproduce their labor power.

Indian independence in 1947 was a bourgeois revolution, although it was achieved not by smashing the colonial state but by its reform and transformation into an independent one under mass pressure.9 The Congress Party, which led the way to independence and ruled India practically uncontested for five decades afterwards, was the political representative of a capitalist class with its hand much more firmly on power than in most other post-colonies.

To say that Congress articulated the class interests of the Indian bourgeoisie should not be understood in a reductionist or mechanical way. As Jairus Banaji argues, before independence Congress appeared as “a series of paradoxes, a fusion of apparently contradictory elements.” At the top, while Mahatma Gandhi provided overall guidance and strategy, the day-to-day running of the organization was taken on by professionals with leftist credentials, foremost among them Jawaharlal Nehru. At the bottom, a disciplined cadre from the lower middle class guided an organization that began to look less like a class-based political party and more like an agrarian mass movement.10

Until independence, the hegemony of the Indian ruling class in theanti-colonial struggle, combined with the subjective failures of socialists and communists to cohere an independent workers’ party, succeeded in sidelining the interests of the working class. But in 1947, India emerged free of foreign domination into a world that was rapidly becoming divided into the camp of free-market capitalism led by the United States and that of state capitalism led by the Soviet Union. Independence had also accelerated the development of two camps within India itself: the bourgeoisie which had inherited the colonial state and the developing, and increasingly militant, working-class and peasant struggles falling more and more under the leadership of the Communist Party.

India’s first prime minister, Nehru, attempted to triangulate between these two. Nehru had served Gandhi loyally before independence and never attempted to challenge the capitalist interests that underlay the Congress’s right wing. However, he was also intellectually molded by Fabian reformism. For him, the essential task facing independent India was to break down the communal barriers of caste and creed that had led to partition in favor of a unified, secular country.11 “The real thing,” he said, “to my mind is the economic factor. If we lay stress on this and divert public attention to it, we shall find automatically that religious differences recede into the background and a common bond unites different groups.”12

The economic methods with which he sought to accomplish this were those of Stalinist state capitalism. A visit to the Soviet Union in 1927 had given him the conviction that a backwards nation like India could plot its own course out of western domination; a later official visit as its prime minister in 1955 provided more material inspiration in the form of funding to build a state-owned steel industry.

The first mill, opened with Soviet assistance, was the Bhilai Steel Plant in the central state of Chhattisgarh. This emblem of Nehru’s dream, where the migrant working class congregated and produced its first steel in 1959, was an image of the kind of nation that he hoped to mold with the methods of state capitalism, a dream of a “modern, self-reliant, secular India” which he described as “a symbol and portent of the India of the future.”13

The goal of Nehruvian state capitalism to overcome primordial divisions of caste, language, and religion and create a secular, unified India depended on such projects as Bhilai. Steel manufacturing, in contrast to more traditional Indian industry, was at a much higher technical level of production and could only be maintained by recruiting a stable, skilled, and relatively prosperous workforce. Workers at Bhilai could command a wage which allowed them to reproduce their labor power and thus maintain their families in the town.14 During the 1960s, workers from as far away as Kerala and Assam poured into the Chhattisgarhi mill town. Many were immediately hired without contract or agreement and trained at the plant.

At Bhilai and other projects of public-sector industry, a stable, rooted and skilled working class emerged that constituted a mini-India, a melting pot of workers from all over the country. As Nehru dreamed, barriers between caste, religion, and language began to break down. Migrants of Bengali, Brahmin, or Muslim origin, over time found these identities less important than an identity based on their job or union.15 Through state-led development, many Indian workers escaped the trap of the village, circular migration, and brutal exploitation.

But the fact that these workers, even during the height of Nehruvian “socialism” in the 1960s, still only constituted a small fraction of the whole class, testifies to the general failure, on its own terms, of state capitalism in India. The reasons for this may be found in the years immediately before and following independence. Despite sweeping promises of planned development on the Russian model in the 1940s, Indian businesses launched a coordinated assault to ensure that the state would not be able to discipline them in this endeavor.16 The sectors which could be dominated by the state were reduced to a handful of utilities and heavy industries that Indian capitalists were uninterested in, and planning in the rest of the economy merely took the form of government protection, aid, and subsidies.

Instead of emulating state-led industrial development in Russia, or even the economic planning of countries like South Korea, which remained

market-capitalist and part of the US sphere of influence, most of the Indian economy remained trapped at a consistently low level of technical production. To most of the national and regional capitalist class, the advantage of this setup came from the vast amounts of surplus value that they continued to extract from a flexible, casual workforce whose social reproduction they resisted paying for. Throughout the nationalist period they largely succeeded in a struggle against both the state and their own workers to resist improving their methods of production and to prevent the enforcement of labor codes.

In the combination of heavy industry at a high level of technical accomplishment and lighter industry and agriculture where profits were made primarily from an unskilled working class using outdated methods, as emerged in India during the second half of the twentieth century, we have an extreme case of what Trotsky first analyzed in Russia as uneven and combined development. This can be seen even within one plant and one town. At Bhilai, for example, private-sector cottage industries supplying the plant’s inputs and building its extensions cropped up around the plant itself. The workers here, in stark contrast to those working inside the plant proper, were drawn mainly from nearby villages, and being limited to temporary and low-wage contracts, remained a casual, informal migratory population to whom agrarian-communal ways of life remained central and among whom the emergence of class consciousness was blocked.17

As Trotsky notes, in skipping the stages of development undergone by the advanced capitalist countries, a backward, dependent or colonized

nation “not infrequently debases the achievements borrowed from outside in the process of adapting them to its own more primitive culture.”18 In

eighteenth-century Russia, the adoption of Western military organization and industrial production paradoxically led to the strengthening of serfdom. In twentieth-century India, the soldering of Russian state-capitalist heavy industry onto an economic base of industries dominated by merchant capital led many Indians in the unskilled migratory working class to strengthen their labor bondage and its extension from agriculture into industry.

Jan Breman, a Dutch anthropologist who has spent decades working with bonded laborers in the western state of Gujarat, writes of this transformation in action. Up to the 1960s, most agrarian labor was from the halpati (cultivator) caste, bonded to give up the greater part of their crop in exchange for protection and patronage. This arrangement lasted a lifetime and was passed on from parents to children. Only very rarely was it challenged or disrupted, and with severe consequences.19

After independence, precapitalist bondage, with its trappings of explicit servitude and caste paternalism, was transformed from above into a new kind of bondage more appropriate to capitalist social relations: a cash advance tied labor to contractors, binding them until paid off—a near impossibility. The halpati now work mainly as migrant casual labor in agriculture and construction, in many cases under the same landowner class to which previous generations were bonded.

In the nationalist period, a crusade against bonded labor was the corollary of the attempt to establish productive manufacturing on a state-capitalist basis. In 1976, Indira Gandhi’s government passed the Bonded Labor System Abolition Act, which freed bonded laborers, voided their debt to employers and recruiters, and subjected them to fines and prison sentences should they attempt to continue the old arrangements or to dismiss their workers. It has remained a dead letter in the four decades since.20 Even were state governments to challenge the interests of the powerful social groups that profit from bonded labor, the contracts are frequently verbal and resist written codification. Furthermore, given the threat of violence upon which labor bondage is predicated, most workers are neither able nor willing to invoke their legal rights.

In the four decades after independence, despite the nationalist promises of self-sufficiency, secularism, and prosperity for all, India was set on a course of capitalist development which combined forms of state-capitalist heavy industry with merchant-capitalist light industry and agriculture of the colonial period, and in which the social relations characteristic of the latter dominated and influenced the former. This left labor in a situation essentially like its experience under British rule, when most workers were only able to reproduce themselves by alternating periods in the village and the city. The overwhelming majority of the Indian working class remained desperate, impoverished, and in many cases, bound during the period of Nehru’s “socialism.” The attempt to overcome the limits of state capitalism would make things worse.

Neoliberal assault and informalization of labor

As we have seen, the state-capitalist policy of Nehru and his immediate heirs, which aimed to abolish distinctions and oppressions based on caste, religion, language, and gender by creating a truly national and Indian working class, only succeeded in reaching a small minority. Thus, when neoliberal macro-

economic reforms began to be implemented under Congress Party rule in 1984—and extended into labor market reforms in 1991—they further deepened the well of poverty, insecurity, and flexibility that for most Indian workers have always been facts of life.

Concurrent with a creeping reform of labor legislation that emphasized profitability and investment over workers’ livelihood and security, the enclaves of formal employment, including public and private heavy industry as well as state employment where workers were relatively well off, were pulverized through an employer’s offensive, deindustrialization, and the far-reaching use of contract labor. Older generations of workers expelled from the formal sector, and newer ones who would grow up without the aspiration to a relatively comfortable lifestyle, were absorbed into three main areas: petty-commodity production and casual labor commanding below poverty wages, the service sector, and new industrial employment in the zones.

The observer of Indian labor must contend with the contradictory nature of the country’s workplace protection regime, which at least on paper is some of the best labor law in the developing world. The Industrial Disputes Act (IDA, 1947) originally provided that employees in enterprises of more than one hundred workers be protected from layoffs without proper notice or severance, for union recognition in any workplace where seven or more employees asked for representation, and for unions to be consulted in cases of reorganization and introduction of new technology.21 Chapter V-B of the IDA in which these rights are enumerated has been a constant target of pro-business Congress and Bharatiya Janata Party (BJP) governments, but up until now Modi has been unsuccessful in repealing it as even the trade-union wing of his own party, the Bharatiya Mazdoor Sangh, has organized and lobbied against repeal. Similarly, the Contract Labour Act (CLA, 1970) limits the scope of informalization, especially in the state sector, prohibiting contracting in certain services, activities, and enterprises.

There are, however, two central defects of Indian labor law. The first is that it was never as friendly to labor as Nehru and other Indian leaders of the state-capitalist era presented it. The second major problem is that those parts of the IDA, CLA and other statutes which favor workers the most have gone systematically unenforced at both the central and state levels.

Thus, by the time market reforms prescribed by the World Bank and IMF had reached India’s parliament, the drive towards deregulation, lowering wages, and abolishing workplace protections in the interests of capitalist retrenchment was well established. The deregulation of the labor market directly affected only the small minority of the working class which had achieved formal status. Thus, there is a legitimate debate to be had as to what extent neoliberalism was a matter of radical change or simple continuity in a process that was already well underway at the beginning of the 1990s.22 Nevertheless, the political and ideological importance of the assault on the formal sector cannot be overstated. By destroying enclaves in which workers were relatively comfortable, the Indian state and ruling class legitimized poverty and insecurity of the vast majority of Indians as the necessary condition for economic growth.23

The employers’ assault on the formal workforce during the 1970s–80s has already been admirably covered in the pages of this journal.24 Rather than rehearse what has already been said, here it suffices to detail two examples of the assault on formal employment which have also shown consequences in the informal economy. The first of these is in Ahmedabad, Gujarat. During the colonial period, dozens of textile mills sprung up there, giving the city the name “the Manchester of India.” At the end of the 1970s, it was home to sixty corporate mills, providing relatively stable employment to over 150,000 workers, among whom Dalits and Muslims were disproportionately represented.25

Beginning in 1980, capital began to flee the mills. Most frequently owners simply absconded. Workers showed up for their shift one day finding the premises locked and were notified that their employers lacked the funds to pay severance or back wages. This continued until 1997, when not one mill remained and all became dumping grounds, or open sewers.26

The Textile Labour Association, the union representing the mill-workers, failed to protect its members. Its leadership, following a Gandhian commitment to industrial peace and seeking to make compromises at all costs, refused to mobilize the workers whose jobs were under threat. They repeatedly agreed to layoffs and plant closures without any commitments from employers or the state government in return, and even canceled the union memberships of laid-off mill employees.27

Their formal employment at an end, textile workers migrated into the informal economy. The fortunate among them went to work as weavers in power-loom enterprises, working substantially longer while earning less than half of what they made in the mills.28 The closure of the mills, which had provided upward mobility to Dalits (members of India’s lowest caste) and Muslims were hit the hardest. The state government encouraged former mill workers to set up their own micro-enterprises, and some did try to enter petty production as street vendors, rickshaw drivers, or repairmen. However, many were barred because of their inability to raise startup loans, and those who succeeded, once in business, entered destructive cycles of self-exploitation and exploitation of family members in order to scrape out a living.29 Other mill workers were only able to find casual work one or two days a week as builders or security guards; still others, by this time old or ill with byssinosis from inhaling cotton particles for decades, found no work at all.

As the mills were torn down, it became suddenly clear that the workers and the communities they came from in Ahmedabad had lost much more than their jobs. In 2002, the city was rocked by communal rioting during which, as in the rest of Gujarat, grisly pogroms were carried out against the city’s Muslim community. Communal violence had happened in the city before, but the mills and surrounding communities then remained relatively aloof. Now former workers found themselves not as part of a concentrated and well-organized class but a diffuse mass of working poor, petty proprietors, and unemployed. Fighting with each other for scarce resources at the bottom rungs of the urban economy, they turned to caste and religious bonds as their primary source of protection and sole remaining social capital after being made redundant. In the process they became vulnerable to political forces like the RSS-BJP, among them then-Chief Minister Narendra Modi, that were eager to divide them along communal lines. Because of this, Jan Breman argues that there is “a direct causal relationship between the massive expulsion of labor from the formal sector of the city economy and the eruption of communal violence at the end of the twentieth century.”30

In Ahmedabad, we see a return of what was partially repressed during the state-capitalist period. Just as workers under colonial capitalism were unable to survive as workers and so relied on their caste or religious bonds to sustain them, workers thrown out of relatively well-remunerated formal employment turned to these same institutions to survive the buffeting economic winds of the informal sector, often with terrifying results.

Deindustrialization in eastern India has had different effects. After the decline of the jute industry, young workers in Kolkata migrated into the service sector, particularly retail. Having attained in most cases a college degree, these workers found that malls were the only places that were hiring, and where their social and effective labor skills were valued. Management here employs a system of rewards and incentives that inculcates a sense of personal responsibility in a deliberate attempt to divide and weaken solidarity. Thus, “when they do feel outraged, usually because they have themselves been unjustly treated, they simply choose to leave.” 31

By contrast, the staff of private security firms employed to guard office buildings, malls, and cinemas are recruited not from the city itself but in rural areas remote from Kolkata, often from states in the center and northeast of India where the government and business elites believe they can combat Maoist and tribal insurgency by offering youth in these areas a ladder out of agrarian poverty.32 Before going on the job, security guards must go through an intensive period of training to develop the pleasing appearance and servile and deferential comportment that the firms’ clients expect.

The deferential behaviors security guards are trained in often replicate in the city the behaviors of caste-based subservience that are by now obsolete in the rural areas they come from. Hence, security personnel feel they debase and humiliate themselves by serving wealthy clients who have nothing but contempt for them. To cope with the despair and rage that their employees encounter in the course of their work, security firms offer counseling, which interprets and represents workplace frustration as “stress,” and emphasizes “mental coping skills, discourage[s] any interrogation and encourage[s] workers to internalize and psychologize the problems at work and fall back on individualized, privatized emotional solutions.”33

Like the mall retailers, security guards see their rights as workers as unimportant and the prospect of collective mobilization is for them a futile exercise which ultimately damages the workers’ cause by contributing to economic decline.34 These firms contribute to this sentiment by constant socialization in enterprise culture, and by circulating workers to different assignments if they suspect groups or friendships are forming that might lead to agitation down the road.35

Neither security guards nor mall retailers are, per se, informal workers. Both enjoy permanent contracts, although the security guards and some retail workers are employed not by their workplace, but by a private contractor. However, the contract is a purely official difference from the informal economy. Instead of experiencing daily insecurity, they are subjected to more long-term insecurity in terms of low pay, no prospects for advancement, and being subject to dismissal or “encouraged” to quit if management finds their behavior faulty. Because of this most retail workers leave the malls before they turn thirty, and most security guards “age out” of the profession before forty.36

The decline of formal employment in the state and private-sectorindustry has corresponded to an expansion of heavy industry in the informal sector under multinational corporations and their subcontractors in the industrial zones. The first handful of zones, which offered international investors publicly-funded infrastructure and tax exemptions, were set up in India during these decades in large cities and major ports including Chennai and Mumbai.37 But in light of China’s post-liberalization success in attracting multinationals to their own zones, the BJP-led government of Atal Bihari Vajpayee turned to Special Economic Zones (SEZ) as “free-market experiments” outside India’s regulation regime and workplace protection laws. This was formalized under Manmohan Singh’s Congress government in the SEZ Act (2005). Currently there are 188 such zones operational in India, as well as 237 more that have been approved and are at various stages of planning or construction.38

Zones rely upon the informal work which has always existed in the rest of the Indian economy in two ways: first, indirectly on the subsidies of work carried out in addition to the primary industrial employment which make up for the miserably low wages paid, and second, directly from construction and repair gangs which build and maintain the zone.39 Because of this, British anthropologist Jamie Cross writes that SEZs concentrate rather than produce informality as “unexceptional spaces that make legible, legitimate and visible the conditions of informality and precariousness under which most activity already takes place in South Asia.”40

We have seen how the decline of formalized industry has led to the destruction of centers of India’s organized labor movement in cities like Ahmedabad and Kolkata. This process has led to great difficulties in organizing workers, with many turning to the communal institutions and organizations that can help them survive poverty, and others embracing the ethos of self-reliant hard work that has been engendered especially in the service sector to the exclusion of working-class politics and organization. It is to this that we turn in the next section.

Misery and promise: Informal workers’ organization

It may be useful before moving further to summarize exactly what constitutes the informal sector and those who work there. The easiest to distinguish is unconcealed wage labor. This can occur in the formal economy but in conditions that increasingly organize and reproduce informality, such as in Kolkata’s malls and private security firms. Wage labor on a semi-permanent basis also occurs in the informal economy on contracts that are individualized and verbal, in which bosses express their favor and trust by promises of security and primitive benefits including agreed time off, gifts or bonuses, and loans on favorable terms for expenditures such as medical bills or a child’s wedding. Though relatively rare, this kind of arrangement can cover all kinds of work, from night security to accounting.41

Contract labor is where things start to become murky. As we saw, a form of employment relations has emerged in India wherein employers outsource hiring to labor contractors, who recruit gangs of workers and take them to the principal employer. They then work under the supervision of the contractor, who is paid a lump sum for their labor out of which he distributes wages.42 This manner of labor relations prevails in some of the most advanced and productive industries in India (the multinational garment manufacturing cluster in Tiruppur, Tamil Nadu, for instance) along with the two largest industries in India: agriculture and construction.

The latter are where the permanently migratory workers—roughly eighty million men, women, and children—live and do seasonal work while living in temporary slums and bivouacs.43 As we have seen, much of this work includes a degree of bondage mediated through a paid advance and backed up by physical coercion and threats. We can tell, however, that these groups are workers because the advance stands in for the wage—which workers are aware of and will use to their advantage, bargaining for the largest advance while reminding their contractors that they cannot be dismissed or treated too poorly while they still owe money to him.44

Most workers recruited by middlemen, whether they experience bondage or not, fall outside the purview of labor law such as the Contract Labor Act because it is made deliberately unclear who they work for. Workers insist they are hired by the recruiter, and thus work for him, while the recruiters frequently argue that, being hired for definite periods makes the workers independent contractors.45 Though this is blatant manipulation, it does raise the further issue of petty proprietorship and petty commodity production.

Petty proprietorship includes a whole range of occupations with degrees of autonomy from wage-work proper. Usually, it is distinguished by the fact that the petty proprietor owns his or her means of production. Examples are a rickshaw, or the tools used in sewing and tailoring. The rickshaw driver may have taken out a substantial loan with interest that keeps accruing to the point that his profits all go to servicing his debt, while the seamstress may be doing piece-work for a garment cluster supplied by a middleman who checks the work and pays her. In both cases, while they have a degree of independence that the wage worker does not possess, their labor contributes to capital accumulation through rent, interest, and the terms of commodity exchange. These mediated forms of dependence tighten the screws on the petty proprietor, leading to self exploitation by extending the hours of work beyond reasonable endurance and further exploiting the unpaid labor of family members.46

Despite all these barriers, workers’ politics from soft organizing to militant job actions are not the exception but the rule in the informal sector. This is even true at the lowest levels of the informal economy, characterized by neglect, bondage, and daily violence. Conditions approximating modern slavery do not breed a fatalistic helot mentality among the migrant workers who Breman calls “the underclasses of mankind.” As he notes, “there is… an attitude of resistance,” which carries itself into individualized acts of shirking, deception, and sabotage.47

Once in a while, the anger level may rise so high that a joint action is taken…. [R]efusal to work and strikes do happen and are indeed quite common, albeit in a spontaneous rather than planned way, and being small scale in nature, highly localized and apt to fizzle out due to lack of resources. Still, they are sufficient to fuel the social consciousness and to nourish the hope for better times to come.48

Sustained workers’ organization has found occasional success. Weavers in the town of Bhavani, Tamil Nadu are one example. Their Communist-led union mobilized against poverty wages and abominable working conditions during the 1970s–80s, engaging in militant political strikes that occasionally escalated into physical violence. The employers were in the end forced to recognize the union and agree to annual collective bargaining. Key to the workers’ success was that their union, unlike many even in the formal sector, was highly democratic—organized, run, and led by workers themselves. However, the Bhavani weavers also had other important factors on their side: namely, that all of them came from the Vanniyar caste whose community institutions facilitated mobilization, and they did not face competition from Dalit, Muslim, or Christian workers. In the nearby town of Kumarapalayam, where the workforce was divided along caste lines, organizing was unsuccessful and workers were reduced to debt-bondage by their employers.49

Organizing becomes easier higher up on the ladder of the informal sector where there is greater concentration, higher skill levels, and where the workers are closer to the formal sector with its stronger traditions of militancy. But organizing is often more dangerous in many of these places where it is only marginally legal or outright illegal, such as the SEZs.

The most internationally-renowned struggle of informal workers in India is that of the contract workers at Maruti in Haryana. Maruti is the largest car manufacturer in India, formerly a state-owned enterprise which was privatized through a partnership with the Japanese manufacturer Suzuki.

In 1999, workers at Maruti’s Gurgaon plant started rolling strikes after refusing to sign a productivity agreement which would have led to an instant drop in wages. Maruti petitioned the state government of Haryana to declare the job actions illegal, after which workers were locked out. Finally under threat of penalties including dismissal, they returned to work in January 2001.50 But a decade later workers at the Maruti plant in Manesar launched the independent Maruti Suzuki Workers’ Union, and engaged in three major sit-down strikes in mid-2011 demanding that contract workers be made full-time, to slow down the line, and to abolish variable pay-scales. After initially giving in to these demands, recognizing the union, and rehiring victimized workers, Maruti rescinded its terms and launched an offensive in collusion with state authorities. Provoking a fight between workers and hired “bouncers” during a shift change, police beat workers as the bouncers set fire to the premises. Many were arrested, accused of damaging Maruti property and attempted murder. Three years after the dispute ended, over a hundred workers remained in jail.51

Organizing the informal sector is the condition without which there will be no real workers’ movement, nor a left alternative to the death trap of poverty and insecurity for hundreds of millions of Indians. This is the case for many reasons, but two stand out. First of all, informal workers face the highest levels of poverty in India, experiencing absolute poverty at twice the level of petty producers and four times those of workers in the formal sector.52 The lever with which to combat this misery lies in the workplace. Activism to eliminate poverty through the recognition of land rights in slums, or the provision of a minimal level of social security from the state, while worthy if achieved, are too often unmoored from the oppressive conditions of working life which is the source of poverty to begin with, leading to scattershot, fragmented advocacy on single issues limited in time and space, and which are hard to cohere into distinct political campaigns when combined with the inherent limits of NGO-style activism.53

Secondly, the dire state of the labor movement, now mostly confined to a few bastions in the formal sector, is a direct result of the Indian left and trade union movement’s failure thus far to work out a strategy to organize the informal sector. The union that starts by refusing to confront the sea of impoverished contract labor outside, or increasingly inside a work place, will end by having its own bargaining leverage taken away and its members sliding down the ladder of the informal economy.54 But a strategy for organizing the informal sector is unlikely to emerge in the short term from any of the current bureaucratized unions and left parties. To do this, Indian workers need a political project that can bring together the disparate threads of workers’ struggle at all levels of the economy with each other, with women’s struggles, and struggles of Dalits, Adivasis, Muslims, and other oppressed religious minorities. To illustrate, we now turn to Kerala.

Kerala is a small state, by geographical size and population, bordering the Arabian Sea on the western shore of India’s southern tip. In the first part of the twentieth century, Kerala was seen as a social and economic basket case. At the end of the century, however, Kerala became a model for equitable economic development. Many authors have called attention to the high living standards, consumption of food and consumer goods, and life expectancies of its population that, combined with numerous achievements in education, literacy and healthcare along with income equality give the state a Human Development Index rating that far surpasses the rest of India and approximates that of many states in the North.55

What changed? If Kerala is a social democracy, then what has been said about other social-democratic states, for example the Nordic countries, applies. The reason it has been able to provide a decent standard of life for its citizens, in sharp contrast to the rest of India, lies not in the realm of culture or ethnic uniformity, but in its history of class struggle.56 Indeed, what constitutes Kerala’s experience as distinct from the rest of India is its history of militancy by industrial workers and agrarian labor, in organizations that have led and concentrated this militancy, particularly the Communist Party of India (CPI) and Communist Party of India (Marxist) (CPM), as well as state governments led by them which have enacted policies favoring the working class.57

During the 1940s–50s, the Communist Party became effectively hegemonic among the working class and peasantry of Kerala. This was on the strength of their class-based demands for land reform and workers’ rights, as well as their deserved reputation of being the most dedicated and self-

sacrificing activists in the cause of the people, and especially the poorest and lower castes.58 Part of their success was due to efforts that made Marxism digestible among peasants and workers through the propagation of a revolutionary popular culture. Communist poets wrote songs that imitated field chants while telling the story of the October Revolution, dignifying manual labor, and abhorring caste indignities. Communist authors, including some of the Party’s state leaders, wrote and performed plays that used the forms of high-caste, and used Sanskrit in melodrama to express a content of socialist realism, making theater a powerful weapon of social change.59

The struggle for popular education was also high on the Communist agenda. They organized night classes in literacy for peasants, published newspapers and books that were read aloud during factory shifts, and established hundreds of community libraries that exist in Kerala to this day.60 In championing popular culture and education as a means of radical politics, Communists became dedicated promoters of Kerala’s Malayalam language and were the strongest advocates of a unified Kerala state.61 They then won state elections in 1956, marking the first time in history that a Communist party was able to take state power through the ballot box.

The CPI did not last long in power, due to a counterrevolutionary “liberation struggle” led by landlords and the Catholic clergy, which led to Nehru dismissing its ministers and imposing President’s Rule on the state in 1959.62 However, the expectations of land redistribution, rights at work, abolition of caste-based social humiliation and a higher standard of living that they had aroused were not so easily dismissed. Instead, the peasants’ union, linked to the CPM, started mass agitations for the land reform that had been by this point repeatedly postponed. The party led mass processions to put pressure on the state government to enact land reform. After the CPI formed a government in 1967, the union launched a land-grab agitation to put pressure on the government for adoption of land reform and, when a bill was passed, to overcome the plodding of state bureaucrats and landowners’ evasion of the law. Tenants and agricultural laborers fenced off ten cents of government and private land around their huts, planted the CPM’s flag, and defended the land from police.63 The main achievement of the Communist-led peasant movement was the destruction of serfdom. As the social historian K. P. Kannan writes:

It is easy enough to notice the absence of social indignities in Kerala that are experienced by agricultural and other laborers in contemporary rural societies. During fieldwork among agricultural laborers almost all respondents pointed out the removal of social indignities as the single most important achievement of their political mobilization. “We are no longer looked upon as slaves,” “the union worked to put an end to exploitation,” were the expressions used by men and women alike.

Changes in dress, facial hair, speech, and body language by lower-caste workers also “had an economic basis” and the end of severe forms of exploitation including long working hours and numerous forms of petty exaction that characterized Kerala’s caste-landownership nexus.64 Agrarian labor also won collective bargaining through an Industrial Resolution Committee, which gave their union the institutional space to ensure a steady rise in wages based on yearly agitations.

Rural non-agricultural labor in Kerala also made significant gains in the early period of Communist hegemony. One such group was the toddy-tappers. Toddy is a popular light alcoholic drink made from the sap of coconut trees. Producing it involves high amounts of technical skill, and was the traditional occupation of the Ezhava caste. Both of these factors gave workers the ability to quickly dominate the trade once they unionized with the CPI during the 1940s. They were able to dictate the terms of trade to toddy shops and control entry into the profession, which, however, was used to pass down their now well-paying and stable jobs within families and to exclude Dalits and women.65

Another group of workers that has been successful are the beedi-rollers. Beedis are cheap country cigarettes. Unlike tapping toddy, rolling them requires no special skill, hence it is casual work often engaged in by the low castes, women, and children. Nevertheless, beedi workers succeeded in organizing with the CPM’s union federation in the 1970s. When manufacturers fled the state for neighboring Karnataka to avoid demands by the union for higher wages, the CPM-led government provided funding to establish a cooperative, which was made sustainable on the basis of its high-quality product.66 In different ways, the cases of toddy tappers and beedi rollers demonstrate what can be achieved by informal workers when there is a political and organizational will uniting them. That both of these occupations were originally poorly paid or degrading work engaged in by poverty-stricken rural workers should also inspire hope as to the future of India’s informal working class.

However, admiration of the achievements of Communist-led workers in Kerala should not prevent us from pointing out the shortcomings of CPI and CPM-led state governments, nor of the parties themselves. Kerala’s “model” has also left many behind. Starting in the 1980s, scholars and activists began to call attention to the ways in which caste inequality and discrimination persisted in Communist-dominated Kerala. As early as the 1930s, Dalits were a target of Communist propaganda and recruitment; but the Party’s approach to Dalits took on strongly paternalist overtones. Dalits were often portrayed in Party literature as the wretched poor, to be educated and uplifted by self-sacrificing Communist activists, often from high-caste backgrounds.67 They did break caste taboos by eating with Dalit workers and families, but this becomes a symbolic gesture when it is realized that Dalits almost never became leaders of the Party in their own right.68

The shortcomings of Communist-led reform in regards to Dalits have also been experienced by other oppressed groups, notably women, tribal peoples, and Muslims. This is also true of the working class generally, much of which has become apolitical and demoralized in light of the CPI and CPM’s failure to extend their achievements of the 1950s-1970s and their recent turn to implement neoliberalism “with a human face.”69 This speaks to the contradictions of a Communist movement that has become institutionalized and tamed by state power.

Nevertheless, Kerala’s achievements, limited as they are, show what can be accomplished by an organized working class guided by socialist politics. Kerala’s workers possessed important advantages at the outset of the twentieth century, a high development of forms of commercial capitalism, far-reaching proletarianization of rural and agrarian areas, and a recent history of radical anti-caste movements among them. That these factors were brought together with a socialist leadership does not, however, make Kerala exceptional. Workers in other parts of India also radicalized early in the twentieth century, and socialism penetrated areas with a much higher level of industrial development than Kerala. Other processes at work including sustained organization of agricultural labor have also been seen in other parts of the country.70

What happened in Kerala can happen in India more generally: if there is indeed a “Kerala model,” it is not the palm-tree dotted paradise beloved by development economists, but a history of class struggle organized among a working class sustained by socialist ideology. And what should be the response of the revolutionary left to the retreats and betrayals of official Communism is summed up by a Dalit character in a play written by Kerala ex-Naxalite poet Civic Chandran:

That flag is red because of our blood. It belongs to us. But we have lost in the struggle. Lost... We will not let the red flag be snatched away. We will hoist the flag ourselves, by standing in the very front.71

Despite the miserable conditions of exploitation that characterize the lives of informal workers, organization and politics is not absent from this sphere: quite the opposite. From the elemental, spontaneous walkouts of construction workers who have been pushed just a bit too far by their recruiters, to solidarity between contract workers and permanent employees at Maruti Suzuki, class struggle is a fact of life and the area shows a great deal of promise. We have seen how the most effective forms of struggle come with sustained organization where workers have found effective strategies to overcome divisive tactics of employers, frequently—but not in every case—connected to a political party adhering to some form of socialist ideology. The obvious lessons should be drawn by Indian revolutionaries.

The new normal: A precarious existence

Several themes emerge in common from studying the lives and struggles of informal workers in this survey of a century of Indian history.

The first has to do with the character of the informal sector. In a discussion of the capital-labor dynamic in the informal sector, it has been impossible to exclude the formal sector of relatively well protected and remunerated workers, although they are in the minority throughout the history of contemporary India. Indian neoliberalism has succeeded in pushing through a large-scale informalization of the workforce, which meant pulverizing the bastions of organized labor as well as infecting formal waged employment with the precarity and insecurity that has always characterized the informal sector.

The informal sector bleeds into the formal one, and vice versa. They coexist within the same sector of the economy: Nehru’s attempt at state-capitalism saw the creation of a steel industry which exemplified formal labor relations. However, the materials with which it was built and maintained came from the informal sector, where conditions did not appreciably change. They can also coexist within the same business. A major part of neoliberalism in India has been the informalization of the formal sector, both through the introduction of contract labor and forms of “organized informality,” which reproduce the oppressive and exploitative conditions of informality within the lives of waged employees on permanent contracts. Finally, the same workers may move back and forth between these two sectors not just once, as in Ahmedabad, but several or even many times throughout the course of their lives. Anna Lindberg relates how during the slack season, when most state-owned and officially registered cashew factories in Kerala shut down or reduce their hours, many of their Dalit women workers go to work in unregistered operations where they are paid less than half as much simply to make their family’s ends meet.72

Realizing just how much the informal and formal sectors overlap and interpenetrate begs a simple conclusion: the formal and informal sectors cannot be separated in even the vaguest way from each other. The formal/informal binary is a simplistic way of addressing the large degree of fragmentation of the Indian working class according to the type of operation, the legal or social regulation that govern it, the chances and means of entering employment, etc.73 Overcoming this binary to address the various fragments of a single working class better suits the reality of Indian labor, which experiences many different degrees and types of exploitation and oppression according to many factors.

India’s path of capitalist development has to be seen as the outcome of a specific capitalist strategy to ensure profitability. One basic Marxist assumption about capitalism is that capitalists will reinvest their surpluses in productivity-saving technological improvements in order to discipline labor, increase the rate of relative surplus value, and gain an ephemeral advantage in the market by underselling the competition.74 However, in Indian capitalism this has been the exception rather than the rule. Indian capitalists have preferred to increase the rate of absolute surplus value (the length of the working day) through bondage and other disciplinary measures, or to move their profits into safer ventures than manufacturing, such as moneylending while leasing out their factories or farms. For instance, Jan Breman has shown how kiln owners in Gujarat resist introducing technological improvements, for fear that this will encourage labor to make demands and attract the watchful eye of tax-collectors.75

This should be seen as a specifically post-colonial model of capitalism which prioritizes absolute-surplus value over relative-surplus value, and hence does not make the transition from what Marx called the formal subsumption of labor to capital, to real subsumption. As Raju Das notes, where capitalists have introduced labor-saving technology it has been the result of sustained class struggle.76 In England, capitalists responded to successful resistance by workers against long hours through the introduction of machinery such as the steam engine.

Class struggle thus has a central mediating role in the strategy of development that India will take in the future. Child labor, debt-bondage and other brutal forms of exploitation that produce masses of absolute surplus value have worked well for much of the Indian capitalist class thus far. It will take massive sustained struggle from below, on the scale of Kerala from the 1930s–1970s but on the national scale, to convince them to adopt a different development strategy. This is to say nothing of moving beyond capitalism altogether.

What are the prospects for such a militant nationwide struggle emerging? Academics and activists in India looking at the prospects for change are most often deeply pessimistic about the ability of the Indian proletariat to assert itself politically, and especially about the trade union movement, which is often described as small, weak, and disorganized by the practice of union federations being affiliated with major political parties. Barbara Harriss-White and Nandini Gooptu write:

The ‘struggle between classes’ through formal unionization… only involves a section of [formal] workers. It is fragmented… Parties influence unions rather than vice versa. Others have been formed in the corporate and public sectors and by individual charismatic leaders. There is an increasing tendency for unions to be based on regional, communal or caste lines. Labour unions, with some notable exceptions, have historically concentrated on advancing the interests of those they represent in organized industry, on whom the law confers the right to engage in industrial action, and have ignored unorganized workers without this right.77

Most agree that it is the multiplicity of unions in the same shop or industry as a result of political fragmentation that has rendered organized labor largely impotent and quiescent.

However, there are not nearly so many unions or union federations in India as is widely believed. Most workplaces only have one union. While political competition has unnecessarily split the union movement many times, one side effect is that, with a multiplicity of unions and parties as potential competitors, at least occasionally union leaders and politicians must listen to their base for fear that it will vote with its feet. As Emmanuel Teitelbaum has shown, these factors have made Indian unions one of the stronger national labor movements, with levels of militancy that compare favorably with many European countries.78 The general strike of September 2016, likely the largest one in history, in which over 180 million workers participated, seems to bear out the notion that organized labor has at least great potential to politically and economically derail Modi’s Hindu neoliberalism.79 It remains an open question whether this potential will ever be realized in light of labor’s many defeats since the 1970s, but a strategy emerging from the Indian revolutionary left to organize the “informal sector” would be one major contribution.

In many ways, the challenges of facing the Indian working class going forward are the same ones faced by labor across the world, including countries in the developed world such as the United States. Here we also see new industrial employment, not in export zones but in Sun Belt plants that are designed to thwart organization. A permanently marginalized migrant underclass from Mexico and Central America circulates throughout the US providing flexible, low-skilled labor in agriculture and construction. We have a right-wing populist government which aims to restore profitability through large-scale attacks on the living and social wages of the working class. Our unions have been decimated and as of yet lack a real political response. The Indian working class in this sense is a distorting mirror that warps and concentrates some of our own dilemmas. We may soon reach the stage where we have to reverse Marx’s infamous dictum: the country that is less developed industrially shows, to the more developed, nothing other than the image of its own future.80