Mainstream Weekly

Home > 2021 > Pandemic and the State: a Political Economy perspective | Banhi Baran (...)

Mainstream, VOL LIX No 34, New Delhi, August 7, 2021

Pandemic and the State: a Political Economy perspective | Banhi Baran Ghosh

Saturday 7 August 2021

by Banhi Baran Ghosh*


 Pandemic engendered by Covid-19 rekindles the normative view of the Indian State. For more than two decades the State which has been embracing the ideology of neo-liberalism, suddenly has turned into advocating its transformative role in the guise of Dirgiste State. In this article an attempt has been made to recuperate the role of Indian State in this pandemic from a political economy perspective.

For more than one year we have been experiencing the rampage of this pandemic and now the drive for vaccination turning into a fiasco. Apprehension and uncertainty have seized our natural way of living. We find ourselves braving the storm like camels in the desert, and occasionally, looking forward whether ‘he’ would come as saviour. Some of us feel comfortable to portray ‘God’ as ‘he’; some try to juxtapose the ‘State’. But State is an abstract concept, we cannot embrace it, we understand government, more truly, we feel easy to take refuge in the charisma of the political leaders. When all these turn out to be delusive we make ourselves subservient to the judiciary, sometimes, we are compelled to take refuge in ‘media’ with an impression that either of these would highlight the truth that would stir the authority to take cognizance of our plight.

 Confronted with different images, namely, government, media, judiciary, religion, education, political structure, we fail to form a collage. The situation becomes ominous when the conflicts occur between these images, when these are maneuvered by the political system and we get frenzied. We roam about for shelter and here looms large the scope of political economy.

For the last three hundred years the political economy has been engaged in exploring the interface between the political and economic activities of the State. At one point of time the subject was confined to taking into consideration of the ways of meeting demand and as a sequel to this, it concentrated on the nature of production and pattern of distribution. While once it was treated as the study of the management of household, with the passage of time its scope started confining to the management of the economic activities of the State. What about the political aspect?

The meeting of demand cannot be rendered possible by any single individual, it involves mutual exchange and that also takes place within a political boundary where the task of mitigating demand is no longer confined to the household, it is bestowed upon the central authority, i.e. the government-a crucial component of the State. There was a time when it was the responsibility of the political economy to advise the political leaders regarding the means and ways by which the objectives of satisfying demand of the citizens were met.

Later on, the scope of the subject was expanded to configure the ordering of the political and economic powers in the society and to judge how that ordering influenced the policies for development.

Capitalism was born through the historical evolution of society. Its journey has been unrestricted though it had occasionally to tread along bumpy track. Availability, unavailability, satisfaction, dissatisfaction, luxury, deprivation- these had been its close ally. Crises are very much familiar with this system. Even the system is riddled with ‘disproportionality in different lines of production’, under consumption, falling tendency of rate of profit, pervasive inequality, mammoth public, private and corporate debt, a large section of the working population pushed to the brink of extreme marginalization and therefore, propping up the system has been advocated. Historically this propping up has been exercised through the advents of Liberalism, Dirgiste State and Neo-liberalism.

Liberalism is a kind of Utopian philosophy the building block of which are the right to private property, self-regulated market system and policy of free trade. These ensure the individual freedom and salvation. The world before the Second World War witnessed its uncontested supremacy.

Another commentary on economic development relates to the positive intervention of the state or dirgisme. This concept emerged in order to control the failure of the market. The concept was imbibed in France after the Second World War having an urge for industrialisation and to survive from foreign competition. Later on this was imitated by the countries of the East Asian countries. This positive role of the state includes the centralised planning, State controlled investment, control of price and wages and regulation of the labour market.

Neo-liberalism was a brainchild of Thatcher, Reagan and Pinochet and was evolved through the implementation of their policies. The tenet of this approach is that the activities of the market should be conducted with efficiency so that the movement of indigenous and foreign private capital is not impeded. In his approach the developmental role of the State is subverted, rather, the State is insisted on pursuing the clandestine efforts of accumulation. In other words, this version of neo-liberalism scaffolds that regime of accumulation where the export and deficit financing private expenditure appear to be motivating factors for economic growth instead of allowing the State to rely upon the domestic market and deficit spending.

In India during the two decades after the independence the overriding mood was in favour of Dirgiste State which indulged in nurturing license raj and bureaucratic culture. Since the mid 1960s it was felt that the implementation of the measures of regulation has not been in the right direction which undermined very crucial goals and objectives and from that very moment the philosophy of control regime lost its relevance. Since 1980s the country forged ahead for liberalization.

Since 1990s primarily to overcome the balance of payments crisis the full-scale liberalization was considered the only goal and revamped with increasing dominance of the government over the State neoliberalisation ushered in. As neo-liberalisation held sway it seemed that education, welfare, interest of the workers, security of the citizens- nothing ever should have any bearing on the State. For the sake of development multitude of people rendered homeless, outcry for nationalism was favoured for hiding the brutal face of state terrorism and suddenly the country has been besieged by the pandemic.

The Economist announced in its 14 May, 2020 issue “Trade will suffer as countries abandon the idea that firms and goods are treated equally regardless of where they come from. Governments and central banks are asking taxpayers to underwrite national firms through their stimulus packages, creating a huge and ongoing incentive to favour them. And the push to bring supply chains back home in the name of resilience is accelerating. On May 12th Narendra Modi, India’s prime minister, told the nation that a new era of economic self-reliance has begun. Japan’s covid-19 stimulus includes subsidies for firms that repatriate factories; European Union officials talk of “strategic autonomy” and are creating a fund to buy stakes in firms. America is urging Intel to build plants at home. Digital trade is thriving but its scale is still modest”.

Not only in respect of this country but across the globe it is not difficult to understand that this has been a turning point of history. On the one hand it is incumbent upon the State to help the citizens brave the deadly virus and to maintain stability in the society given the uncertain future. This required implementation of stringent rule of law along with strengthening the surveillance of the State by virtue of establishing the role of ‘government by discussion’. However, even in this situation, the intimidating role of the government obscured the “State’.

The obliteration of the Planning Commission without any discussion, decision taken overnight for demonetization, implementation of GST, announcement of lockdown last year without leaving room for the federal states to prepare and the disposition of the government to impose decision from ‘above’ even in this national disaster prove that autonomy of the government has been successively mounting. The days are not far off that ‘State’ would be considered synonymous with the ‘Government’.

At this juncture let us have an analytical view of the situation before embarking on the Dirgiste State.

The nature of the State in Singapore, Taiwan and South Korea is not uniform and given their structural position these countries have prepared themselves since the SARS crisis. The situation in China, India and U.S.A has been altogether different.

China, despite its failure to combat the SARS epidemic developed ‘a well-designed early-warning system’ (Bardhan, 2020) so that if a contagion developed anywhere in the economy it could be known to the central authority. However due to some reasons the government had to fumble since the information containing ‘early-warning system’ could not be diffused in the proper direction for which China had to waste a lot of time.(ibid.). But, after that, it managed the disaster quickly.

In India in spite expenditure on health being increased than before, it is not significant yet. In 2017-18 the expenditure on this sector as proportion of GDP was 1.28%. In a joint survey conducted by the Centre for Disease, Dynamics, Economics and Policy (CDDEP) and Princeton University it was observed that up till 15 April, 2020 the number of beds in hospitals was 19 lakh, ICU 95 thousand and ventilators 48000. Most of the hospital beds and ventilators are concentrated in seven states- U.P(14.8%), Karnataka (13.8%), Maharashtra (12.2%), Tamil Nadu (8.1%0, West Bengal (5.9%). Telengana (5.2%) and Kerala (5.2%).

 One of the reasons for combating the pandemic in some countries is the apathy of the government regarding health services. In Italy, during 2009-2017 the downsizing in health sector amounted to 46500, the number of hospital beds has been reduced by 70000. In 1975, the number of hospital beds per thousand was 10.6 % in Italy which came down to 2.6%, in Britain, it was 10.7% in 1960 which has been reduced to 2.8% in 2013. This has been the situation in almost all countries of Western Europe. Naturally, the more there had been a surge of affected people the more it had been difficult to cope up with the situation. In the United States the problem was severe due to unavailability of health insurance. Moreover added to this was nexus between the government and the pharmaceutical companies (Alizadeh, 2020).

At this juncture it would not be futile to quote at length from David Harvey (March, 03, 2020)

“Public authorities and health care systems were almost everywhere caught short-handed. Forty years of neoliberalism across North and South America and Europe had left the public totally exposed and ill-prepared to face a public health crisis of this sort, even though previous scares of SARS and Ebola provided abundant warnings as well as cogent lessons as to what would be needed to be done. In many parts of the supposed “civilized” world, local governments and regional/state authorities, which invariably form the front line of defense in public health and safety emergencies of this kind, had been starved of funding thanks to a policy of austerity designed to fund tax cuts and subsidies to the corporations and the rich”


The great success of the neo-liberalism is that this it has been successful to ingrain its seed in the economic, political, social and cultural fields as a result of which the institutions and organizations endowed with pursuing the objectives of development have been able to make the working class subservient to capital in order to serve their own purpose. The great success of these organizations lies in their success to transform a great proportion of the proletariat into the reserve army of labour.

In 2015 the total income of 62 persons in the world was equivalent to the income of 3.6 billion people. During 2010 to 2015 the income of the rich 62 persons has increased by 44% and the income of the 55% of the lower bottom of the world population has decreased by 38%. A handful of the population of the southern hemisphere has been deprived of the right to agriculture. The working population has been thronging the informal sector since the scope of employment has been shrinking in the formal ones. Where there is scope for employment in the formal sector there has been predominant the demand for the skilled workers. In order to sustain the capitalism the demand for neo-liberals has been strong enough to introduce flexibility in the labour market which entails that the struggle for the workers’ right would not take place under the umbrella of the organization whereas the working-hour must be increased for boosting up productivity.

However, the voices of protest could not be suppressed. In Brazil, since the mid-1980s, 3,50,000 families regained the right to land. In India for the last thirty years the female agricultural labourers in Bihar have been struggling for just wages, redistribution of land and abolition of discrimination on the basis of castes. In Argentina, 15000 workers entrenched in the beginning of the new millennium, have been able to earn the right to manage the factories, who, later on, have succeeded in running more than 200 factories in the country (Selwyn, 2019, p.52). Of late, the farmers’ struggle in India is a glaring instance of the challenge against the neo-liberal onslaught.

We are confronted with a serious question of whether this pandemic would usher in a new phase of this transition in which the have-nots would have recourse to survival, a hope for revival of the poverty-ridden people would be rejuvenated and the moribund civilization would be vivified.

We are reminded of the fact when Marx explicated in the inaugural address of the First International the enactment of the laws of working hours of the labourers for ten hours as political economy of middle class ‘succumbed’ to the political economy of labour.
At this hour, when a virus has invoked the misfortune for the human civilization that devastated the entire society, it is legitimate for the political economy to unravel the nature of transition of the State from Neo-liberal to Dirgiste culture. A State clamouring for its ensuing triumph over the pandemic by displaying certain gimmicks without resuscitating its health infrastructure while pushing doctors, nurses and health workers to the brink of extinction needs to be exposed by the political economy and that would usher in a critical dimension of the nature of the State hovering around neo-liberal and Dirgisme regimes.

*(Author: Banhi Baran Ghosh is Associate Professor of Economics, Sreegopal Banerjee College, Bagati, Magra, Hooghly - 712148 email-banhighosh[at] )


1. Alizadeh, Hamid (2020): Coronavirus pandemic opens a new stage in world history. accessed at 9 p.m., July 18, 2021.
2. Bardhan, Pranab (2020): Lockdown trade-offs in a young country call for wide public deliberation. The Indian Express, July15, 2020.
3. Harvey, David (2020): Anti-Capitalist Politics in the Time of COVID-19. Jacobin, March3, 2020.
4. Selwyn, Benjamin (2019): Twenty-First-Century Capitalist Development: Upon the Backs of, and Against, Global Labour in K. R. Shyam Sundar (Ed.) Perspectives on Neoliberalism, Labour and Globalization in India. Palgrave Macmillan (pp.37-60)

Notice: Mainstream Weekly appears online only.