Reasons for Anglo-American domination of Global News

The twentieth century has witnessed the most paradigm shifts in the field of media and communication. The Anglo-American dominance of global news is much talked about owing to its duopolistic sustenance. Up till 1918, the Americans and the British were equal in terms of world news, after which the Americans were leading with the British following close behind [Tunstall 2008: 57]. The rationale for this Anglo-American domination of the world news comes from a multiple sources. The news market was on the rise throughout this century due to massive spread of Globalisation- leading to ‘privatisation’ (or ‘deregulation’ in US terms) further leading to the creation of giant media companies (Reuters, Associated Press, Agence France Presse) and later, conglomerates like News Corporation and Time Warner in the 1980s. The emergence of English as the global media language added to the already long list of strengthening factors of this duopoly. The same list included concentrated ownership of capital, first mover advantage in the global news market, relatively free press due to democratic leadership in both the countries, relative financial ‘transparency’, proximity to banking and financial industries, cross-employment in media firms, vertical integration of American companies, packaging information and entertainment together, ‘commodification’ of news, and many more causal variables.
The expansionary nature of capitalism has branched out into Globalisation, liberalisation and privatisation. The widespread acceptance of ‘global corporate ideology’ [Herman and McChesney, 1997] has led to the ‘commodification’ of news. Inarguably latest technology both hardware and software) and the input financial capital rest and can be utilised relatively freely mainly in these two countries.
As a first-mover advantage in the news market and as the originator of modern journalism, the Anglo-American hegemony enjoyed a wide-scale readership and viewership. Foreign news for television is extremely dear to collect so it was easier for these countries to incur this cost than other less economically developed countries, an idea supported by Jeremy Tunstall (2008). This development also produced some of the best professionals, journalists and technicians in this field. The reason for this was also partly because both America and Britain were democracies without military, communist or Nazi influence on their governments [Tunstall and Machin, 1999]. This contributed to a relatively free press in both the countries. It was ‘assumed’ that the news which would be printed/ broadcasted by these firms would be after a careful scrutiny of issues and substantial amount of democratic debates- the concept of non-partisan news [Tunstall and Machin, 1999]. The notion of public service is still perceived to be relevant when it comes to mega-corps like the British Broadcasting Corporation (BBC). There were other global players in this field namely Japan, France and other European nations but none of those enjoyed a mass audience comparable to the number of Anglo-American news consumers. The political influence across this duopoly is still rampant but the allegiance is less compared to other democratic or non-democratic countries like China, India, Pakistan, Italy, Germany, et al [Tunstall and Machin, 1999].
The geo-politics of news has for long been centered around London as it is centrally located and is the biggest media hub [Jarrah 2008]. The genesis of elite journalism including political coverage and financial news information was in Britain. Even now, the most powerful news component in terms of revenue generation is the financial information. The News Corporation (U.S.) owns the most widely read The Wall Street Journal followed by The Financial Times and The Economist (both from Britain).
The proximity of Anglo-American news media to banking and financial industries (media-finance intimacy) strengthened their dominance because the loans and financial input capital was made easily available and they were able to offset any foreign competition and deter new entrants. In other words, they still remained a duopoly and this nature of market discouraged the formation of any other genuine/ serious global news media players. Sustaining this argument is the figure of annual sales revenue for News Corporation in 2002- a staggering US$ 29,014 million [Sparks, 2007: 172].
The concept of ‘free flow of information’ has marked a new epoch. This has led to a larger role of World Trade Organisation (WTO) in the propagation and endorsement of Anglo-American domination of global news [Sparks, 2007: 184]. One can argue that if the dependency theory is put to work in this regard, we can see that the ‘peripheral’ countries still consider the Anglo-American news media model as a path they themselves need to follow and try to associate themselves with the larger aforementioned conglomerates in order to survive in the global market. Following is an excerpt to support this simple argument.
“Central to dependency theory was the view that transnational corporations (TNCs), most based in the north, exercise control, with the support of their respective governments, over the developing countries by setting the terms for global trade – dominating markets, resources, production, and labour. Development for these countries was shaped in a way to strengthen the dominance of the developed nations and to maintain the ‘peripheral’ nations in a position of dependence- in other words, to make conditions suitable for ‘dependent development’.”
- (Thussu 2003: 61)
The dependency theory also raises an interesting observation which is central to the theme of Anglo-American supremacy of world news- emergence of English as the lingua franca [Seidlhofer, 2005] and [Thussu, 2003: 181]. Be it television broadcasting or newspapers, for more than half of the international audience this is the language of world news. The United Nations (UN) also uses English language for its administrative purposes. English (origin: Britain) is ‘allegedly’ the character of neo-colonialism, a model which is noticeably associated with Britain and United States and clearly they have an advantage in this regard in terms of readability by the audiences worldwide.
English language allows for further combination of packaging ‘news’ with ‘entertainment’- the concept of ‘infotainment’ [Thussu, 1998] which is propagated all over the world on Anglo-American insistence. These giant media conglomerates are vertically integrated (mainly American media organizations) [Thussu, 1998: 64], facilitating these mergers so that the audience base is increased and to force mass-scale dumping of ‘embroidered’ or ‘fabricated’ news by “stressing the positives and concealing the negatives” and at the same time as ‘flag carriers’ of objective and commercial choices of the news audience [Tunstall, 2008: 59]. The commercial advertisement industry sprouted, as a largely non-partisan activity to generate revenue [Tunstall and Machin, 1999: 74]. Observably, there persisted some amount of political agenda and sometimes it was just to disseminate Anglo-American culture among the news readers of the world as a sign of power declaration and the celebration of their economic prosperity. These advertising agencies also claimed to have played an instrumental role in maintaining an emphasis on “‘financial transparency’ across the media” [Tunstall and Machin, 1999: 75]- one of the reasons why these Anglo-American companies were perceived to be more ‘credible’ in the global news arena.
Another fresh argument is offered by Tunstall and Machin (1999) that “there is a tendency to employ each others’ citizens among the American and British news players. For example, London-based Reuters employs numerous Americans. Britain also seemed to be the only foreign country from which American media would accept foreign news.” Given such a setting, one can safely say that this duopoly is very strong and it is difficult for other news media firms of a different nationality to be accepted as a ‘reliable’ source of global news.
Conclusion
Having enumerated the probable causal variables of the Anglo-American domination of the world news, we can evidently say that this duopoly is leading to a global news homogenisation. There is uniformity in the pattern of news worldwide due to the replication of a ‘successful’ model exhibited by the West. The positive aspects being that they have induced competition and have contributed to evolution of national media across nations. They have been trendsetters in terms of obtaining and presenting information. Due to this highly professional attitude, in the contemporary world, news is not as selective and ‘biased’ as it used to be. They have strong networks across the world and their journalists are well-paid and well-skilled.
On the other hand, the profit-making tendency of these capitalist mega-corps has paved way for a “news retail explosion” [Paterson, Christopher in Sreberny- Mohammadi et al, 1997: 152]. The ‘fabrication’ of news in the crucial events, for example, information concerning war or pre-war times and many more, is carried by the international news players to set the ‘global news agenda’ [Thussu 2003: 163]. This is sometimes an engineered process made possible by the manipulation of the kind of visuals or pictures shown, the news stories told through their media to fit a political or commercial schema. For example- “coverage of the civil war in the former Yugoslavia” [Paterson, Christopher in Sreberny- Mohammadi et al, 1997: 149] or the recent ‘liberation’ of Libya from its ‘ruthless’ dictator Muammar Gaddafi.
The Third World nations are still dependent on these global news sources of the West to gain vital information and a “vertical flow does characterise the structure of international communication” [Meyer, 1988] showing traces of imperialism and neo-colonialism.
The Anglo-American hegemony is also apparent in the news culture of ‘sensationalism’ or the use of ‘tabloids’, glorifying violence and similar elements in order to grab the attention of a wider audience, replacing the traditional form of news which aimed at providing political, financial, sports and other important events throughout the world. New and innovative ways to alter or ‘break’ this duopoly would be beneficial in order to preserve the diversity, sanctity and credibility of international news media.

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References on request

Understanding globalisation of Western media organisations through Cultural Imperialism

1. Introduction

Globalization in its current form has sparked off a series of complex phenomena around the world, both at an international level and within nations. Its capitalistic foundation and expansionary element give it the power to modify the shape of every entity that comes in its path. As Robert McChesney puts it, “in the past, to understand any nation’s media situation, one first had to understand the local and national media and then determine where the global market. Today one must first grasp the nature and logic of the global commercial system and then determine how local and national media deviate from the overall system.” (McChesney, The Media System Goes Global, 2010). Of course there are many discourses on whether culture can be viewed as a ‘tool of capitalism’, a presumption opposed by some theorists (Tomlinson, 1991, pp. 134-140) which I will discuss later in the essay. Keeping this background in mind, I introduce the essay with the effects of globalisation on the western media organisations followed by their commercialisation to the ‘domination’ debate, the concepts of cultural and media imperialism and finally, the relevance of the former in understanding the western media conglomerates.

2. Globalisation of western media organisations

By the term ‘globalisation’ here, I refer to its contemporary prevalent form. The media organisations at the time of their inception were largely domestic but as capitalism unfurled, these entities began to take the form of huge Transnational Corporations (TNCs) which have vertically integrated now to become conglomerates. Such Transnational media corporations, mostly Anglo-American, provide wholesome media package products instead of being a simple news media firm, or a television production house, film production company et al. The ‘dominant media flows’ are very strong against the ‘contra-flows (both transnational and geo-cultural)’ (Thussu, 2010). The globalisation process then manifested itself in another form- glocalisation. After vertical integration, this was one of the most successful strategies of these conglomerates- to ‘think globally and act locally’ (Keane, 2003, p. 87). These organisations (like Disney, Time Warner, Viacom, NewsCorp, Associated Press, Thomson Reuters, and others) originated and were concentrated mainly in the West because of the economic and political prosperity those countries enjoyed. An interesting quote which best elaborates my argument is- “As US-led Western media conglomerates have regionalised and localised their content to extend their reach beyond the elites in the world and to create the ‘global popular’, many Southern media organisations have benefitted from synergies emerging from this glocalisation process” (Thussu, 2010, p. 137).

2.1 Growth and Commercialisation

Growth of these media giants can be attributed to multiple sources- privatisation and deregulation in the West, the emergence of English as the global media language, concentrated ownership of capital, first mover advantage in the global media market, relatively ‘free media’ due to democratic leadership in most of the western countries, proximity to banking and financial industries, cross-employment in media firms, vertical integration of American companies, packaging information and entertainment together, and most importantly, commersialisation of media products. The widespread acceptance of ‘global corporate ideology’ (Herman & McChesney, 1997) has led to ‘commodification’ and gigantic growth in their scale of production.

2.2 Commercialisation to Domination
As I have argued above ‘the rise of a global commercial media system is closely linked to the rise of a significantly more integrated “neo-liberal” global capitalist system’ (McChesney, The Media System Goes Global, 2010). The fact that world institutions like World Bank, International Monetary Fund (IMF), and World Trade Organisation (WTO) encourage and catalyse this supremacy (McChesney, The Media System Goes Global, 2010) explains the exponential growth. The distribution systems of these organisations are the major reason which makes these oligopolies impermeable, as McChesney puts it, ‘what distinguishes the emerging global media system is not transnational control over exported media content, however, so much as increasing TNC control over media distribution and content within nations’ (2010). The authority of these corporations in maintaining control over intra-national media content in other countries leads to another realm- the discourse of imperialism.
3. Domination or Imperialism?

The oxford dictionary has a very strong definition of imperialism as ‘a policy of extending a country’s power and influence through colonisation, use of military force or other means’. Antonio Gramsci and his ideas of hegemony provided a clear explanation of the current global media situation. He suggests that ‘power is best understood as a relation’ (Simon, 1982, p. 23). It may be put forth that ‘imperialism’ “grasps a specific form of domination, that associated with ‘empire’” (Tomlinson, 1991, p. 19). At the heart of the discussion involving cultural imperialism today, lies a relationship between globalisation, media and culture.

4. Concept of Cultural Imperialism and Media Imperialism
‘Cultural imperialism’ as a term emerged in the 1960s (Tomlinson, 1991) and it begun to be studied by theorists in 1970s. It has neo-liberal foundations but cultural production is a complex process and the industries associated with it have more social impact than financial profit.
“.....cultural objects are everywhere; as information, as communications, as branded products, as financial services, as media products, as transport and leisure services, cultural entities are no longer the exception: they are the rule. Culture is so ubiquitous that it, as it were, seeps out of the super stricture and comes to infiltrate, and then take over, the infrastructure itself. It comes to dominate both the economy and experience in everyday life. Culture no longer works- in regard to resistance or domination- primarily as a superstructure. It no longer works primarily as hegemonic ideology, as symbols, as representations. In our emergent age of global culture industry, where culture starts to dominate both the economy and the everyday, culture, which was previously a question of representation, becomes thingified.”

(Lash & Lury, 2007, p. 4)

An overview of the global cultural environment reflects hegemony of a few cultural industries, explaining the overlap of culture and imperialism. This domain is what is viewed as cultural imperialism. Herbert Schiller defines it as ‘the sum of the processes by which a society is brought into the modern world system and how its dominating stratum is attracted, pressured, forced and sometimes even bribed into shaping social institutions to correspond to, or even promote, the values and structures of the dominating centre of the system’ (Schiller, Communication and Cultural Domination, 1976, p. 9) . Johan Galtung establishes that there is a ‘harmony of interests’ between Western powers and the dependent economies of the South. (Meyer, 1988)

When Galtung explains his model of cultural imperialism, he defines it as being a function of ‘Media Imperialism’. The dependence arising due to the rise of global media system results in what is known as the media imperialism- a highly debated concept. This mediation, as Tomlinson argues, between the ‘culture (Pool, 1977)as representation and culture as lived experience’ is what is most prone to imperialistic influence. Cultural imperialism also manifests itself in various other forms such as in food, education system, language and other things apart from the media. Thus, it is a much broader discourse entailing other theories with it such as dependency theory, hegemony-and-ideology and dominant-and-contra flows. Media imperialism is “a particular way of discussing cultural imperialism; it is not simply a name for the study of the media in developing countries or of the international market in communications, it involves all the complex political issues- and indeed, the political commitments- entailed in the notion of cultural domination” (Tomlinson, 1991, p. 22)
A different theory termed product-life cycle theory argued that expansion of media can be looked at as a normal course of a business cycle rather than a systematic domination. This theory was developed by Pool and Read (1977). It stated that, the media industry follows the production curve. There is a continued expansion in its production until the saturation of its market, after which its influence (contrary to imperialistic tendencies) begins to decline. The product-life cycle and dependency theory were both critiqued by Lee (1980), which would be discussed in the following debate.

5. Relevance of Cultural Imperialism- A debate
Globalisation of the western media organisations has intensified the debate of cultural imperialism. The main threat which is perceived from cultural imperialism is that a few cultures will dominate other cultures and the traditional cultures would diminish. There are two conflicting views to analyse the relevance of cultural imperialism in studying rising media convergence.
5.1. Yes, it is relevant.
Marxian understanding of cultural imperialism clearly confirms its relevance in studying western media organisations. Its main concern and focus is the relationships between the strong and weak nations and how the former exert power over the latter. They think of ‘cultural imperialism’ as a result of “transposing the intra-societal class conflict to the international communication system” (Lee, 1980, p. 35). The neo-Marxists conclude quite explicitly that “the international streams of communication are a manifestation of the ruling interests of the societies from which they originate and not a unanimous output of the nations involved” (Lee, 1980, p. 36). According to neo-Marxists, since there are only a few media conglomerates, the dominant ideologies and cultures of the nationals owning it would impose their country’s cultures over their audience, which is multi-cultural. Herbert Schiller in his 1976 work critiqued the theorists who by neo-liberal explanations, justified the expansion of media conglomerates and refuted the claim that it has any significant cultural impact. He argued that “though the economic imperative initiates the cultural envelopment, the impact extends far beyond the profit-seeking objectives of some huge media monopolies and cultural conglomerates....the cultural penetration that has occurred in recent decades embraces all the socialising institutions” (Schiller, Communication and Cultural Domination, 1976, p. 8). Although his work dates back to the 1970s, it still holds relevance and to sum this argument up, here is an excerpt from his interview in 1996:
“The monopolies are stronger than ever and the concentration continues. It now embraces a wide area, it is not just 'media', all forms of communication are brought together in these unified corporate conglomerates. You have Time-Warner, which has assets of about 20 billion dollar and is operating radio stations, recording studios, film studios, television programming and increasingly also retail stores, where they sell the apparels that they produce in their movies. Disney is of course an enormous conglomerate. Then there is Viacom, which owns MTV and does a great job in selling pop culture and making these kids less and less capable of doing any thinking. But it also includes computer companies, telephone companies. The television networks are all owned by super conglomerates. CBS is owned by Westinghouse, NBC by General Electric. ABC was just bought by Disney and Fox is owned by Murdoch. To think that these are crumbling, is like being in a fantasy land. We have to be careful in using the word 'globalization' in this context. It may to seem that everybody is participating in it and you will have to, and if you don't you will fall behind and lose, we have to be competitive, that thing. Globalization is a direction of super corporations. They are using the globe to market their products and penetrate every part of the world”
(Schiller, Information Inequality, 1996)
Hollywood is at the top of film industry when it comes to worldwide hegemony. According to Boyd-Barrett (1977: 131), it was the ‘economic of scale’ factor which gave advantage to Hollywood to establish hegemony all over the world which can only be handled by the super media giants with huge accumulation of capital and technology. He emphasises on the ‘consumerist lifestyle’ promoted through its films.
Non-Marxists have a ‘pluralist’ view of cultural imperialism and they separate cultural imperialism from ‘media-imperialism’, dealing specifically with the media effects in culture. Oliver Boyd-Barrett, prefers to deal with media imperialism specifically while understanding the western media organisations and their globalised form as it allows a more “rigorous examination”. He (Boyd-Barrett, 1977, p. 117) defines ‘media imperialism’ as: ‘The process whereby the ownership, structure, distribution or content of the media in any one country are singly or together subject to substantial external pressures from the media interests of any other country or countries without proportionate reciprocation of influence by the country so affected’. For the sake of simplification in this essay, I shall only restrict myself to the term ‘cultural imperialism’.
Both these views broadly explain the theoretically cited reasons which advocate the relevance of ‘cultural imperialism’ in understanding globalisation of Western media firms.
5.2. No, it is not relevant.
The first view negating the relevance of cultural imperialism is given by Straubhaar (2010) who uses arguments such as- active audiences and class (this part emphasized on “active role of the audience in selecting media inputs” (Blumler & Katz, 1974, p. 87), audience’s choice, interpretations and resistance towards mass-fed media products such as advertising), commercialisation and transnationalisation (which contradicted the view that expansion of the media multinationals was done with imperialist ambitions and instead asserted that it was a capitalistic requirement), asymmetrical interdependence (this approach underlines the importance of national media against the influence of global media and the argument of contra-flow and undermines the dependency theory) and product-life cycle theory (this contradicted the cultural imperialism by predicting that the influence of the western media organisations would fade as they lose their market share after market saturation). Thus, there is a shift ‘from total dependency to asymmetrical interdependence’ (Straubhaar, 2010).
Annabelle Sreberny-Mohammadi provides a very simple connection between imperialism and culture as she compares imperialism to a ‘double-edged sword’, impacting, “albeit unequally, both on the colonised and the coloniser and it must be seen as the major global diffuser of modernity, its ‘cross-cultural carrier’” (Golding & Harris, 1997, p. 66)- a comparison which in itself suggests that it is not only the dominating country at the influencing end.
Globalisation theorists have a fairly different view, used for contradicting cultural imperialism in the case of western media organisations. They believe that the notion of the ‘nation’ is fading away rapidly and is paving way for a ‘global’ territory. Globalisation in essence means that “we cannot conceive the whole in terms of one of its parts, say the First or Third worlds (as in imperialism), or as a composite system of logically prior nation states” (Beyer cited in (Ritzer, 1998, p. 82)). Ritzer (1998) quotes Appadurai (1990) while recognising “deterritorialisation as one of the central forces in the modern world”. He also states that “the global culture is not normatively binding, but simply a general mode of discourse about the world as a whole and its variety”. Many cultural theorists like John Fiske focused on active audience and their role in ‘resisting’ the ‘undesired effects’ of culture.
CONCLUSION
There is thesis and anti-thesis of the relevance of cultural imperialism in this essay but the fact which hold true is that the capitalism has managed to establish itself globally only through media giants and evidence above suggests that it has profound cultural effects too. I conclude that globalisation of western media organisations cannot be studied in isolation without viewing it through the filter of ‘cultural imperialism’. As for the counter arguments negating its significance, I would quote Herbert Irving Schiller, “I am not saying that everybody is a cultural dope. But I do have to recognize where the cultural power is” (Schiller, Information Inequality, 1996).

(words- 2545)

REFERENCES

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Castells' "Network Society" and its assessment

INTRODUCTION
The technology today and its exponential growth are transforming our society every second. We are living amidst two very different epochs. What makes this period unforeseen in history is the speed at which it is changing. Never before have we witnessed a gap between the cultures of two generations being as large as the current one. The internet has become “the fabric of our lives” and the character of our period stems from the interaction between multiple models, not of less developed societies aiming to emulate the most developed ones (castells(1942), 2001, p. 1). The number of Internet users on the planet grew from under 40 million in 1995 to about 1.5 billion in 2009 (castells, the rise of the network society, 2000, p. 24)

Manuel Castells, a professor of Sociology, and Director of the Internet Interdisciplinary Institute at the Open University of Catalonia (UOC), in Barcelona has been studying closely these changes and his theories have opened a new arenas for debates- debates centered about the future of the societies we are a part of. His seminal work is on the theory of ‘network society’ in which he talks about a society not restricted by time and distance- about moving away from the Gutenberg galaxy towards an Internet galaxy. Some of his key publications include a trilogy- ‘The Rise of the Network Society’, ‘The Power of Identity’ and ‘End of Millennium’ (1996) and his latest book- ‘Communication Power’ (2009). In this essay, I shall describe how Castells defines the ‘network society’ and the advantages and disadvantages of the concept for understanding the current societies.

CASTELLS AND THE NETWORK SOCIETY

The foremost question is- what is a network? Castells had explained it as “a set of inter-connected nodes. A node is the point at which a curve intersects itself. Networks are very old forms of human practice, but they have taken on a new life in our time by becoming informational networks, powered by the internet”. (castells, the rise of the network society, 2000, p. 501). He states that the internet and wireless communication “is the technological basis for the organisational form of the Information Age: the network” (castells(1942), 2001, p. 1). We are living in a second world which is virtual- after the advent of internet. “Networks are becoming the preferred way of organising in virtually all domains of social life” (Stalder, 2006). The society is influenced by any changes in the technology and with the internet revolution it has taken an immaterial shape.
“The trends observed in the last decade seem to support the relevance of this analysis of the transformation of time, however abstract it appears to be. The process of globalization has accelerated the tempo of production, management, and distribution of goods and services throughout the planet, measuring productivity and competition by shrinking time to the lowest possible level”
(castells, the rise of the network society, 2000, p. 50)
There are networks at every level in the society- professional, institutional, personal and so on; there are ‘network states’, ‘networked individualism’ and even ‘network of networks’ on the internet. In traditional societies, there was a vertical social structure- hierarchies but the network society has a horizontal communication system. These lead us to the concept of network society which refers to a society in which time and distance is immaterial. According to Castells, “three independent processes came together, ushering in a new social structure predominantly based on networks: the needs of the economy for management flexibility and for the globalisation of capital, production, and trade; the demands of society in which the values of individual freedom and open communication became paramount; and the extraordinary advances in computing and telecommunications made possible by the micro-electronics revolution…..thus internet became the lever for the transition to a new form of society- the network society- and with it to a new economy” (castells(1942), 2001, p. 2). This theory was empirically conceptualised and took a holistic view of the social study, i.e., to understand one aspect of the society, on needs to understand the whole of it. The key dimensions of Castells’s concept of network society are- network, nodes, space of flows, power and counter power among others. By ‘space of flows’ Castells understood that these are:
“the material arrangements that allow for simultaneity of social practices without territorial contiguity. It is not a purely electronic space. It is not what Batty has called a cyber space, although cyberspace is a component of the space of flows. It is made up first of all of a technological infrastructure of information systems, telecommunications, and transportation lines. The space of flows is also made of networks of interactions and the goals of each network configurate a different space of flows”
(castells, Grassrooting the space of flows, 2005). The relationships of “power and social priorities, derived from a technology’s situation are thus, in a sense, designed into instruments” (Barney(1966), 2004, p. 54)
The network society is a virtual extension of one’s self in “all its dimensions, and with all its modalities” (castells(1942), 2001, p. 118). Although it is closely linked by the theory of ‘virtual communities’ but they are fairly distinguishable; the scope of this essay doesn’t allow me to explore and make comparisons between the two.
ADVANTAGES OF THE CONCEPT OF NETWORK SOCIETY FOR UNDERSTANDING CURRENT SOCIETIES

Castells’s conception of the networks has a wide scope and is indeed, very flexible. The concept of network society uses networks as the only connecting thread which is adaptable and can be applied to a large range of social structures and organisations. The networks in today’s society “are proliferating in all domains of the economy and society, outcompeting and outperforming vertically organized corporations and centralized bureaucracies” (castells(1942), 2001, p. 1). Before the arrival of internet, networks had to face hurdles in “coordinating functions, in focusing resources on specific goals, and in accomplishing a given task, beyond a certain size and complexity of the network but in today’s society, the description of ‘network society’ fits considerably because due to internet and technology, there is an unprecedented combination of flexibility and task performance, of coordinated decision-making and decentralised execution, of individualised expression and global, horizontal communication, which provide a superior organisational form for human action” (castells(1942), 2001, p. 2). The boundaries between mass media communication and other types of communication are blurring which is inducing the technological scientists to produce more and more user-friendly devices for better inter-personal and mass ‘self-communication’ (castells, communication power, 2009) i.e. a form of communication which has emerged with “the development of the so-called Web 2.0 and Web 3.0, or the cluster of technologies, devices, and applications that support the proliferation of social spaces on the Internet thanks to increased broadband capacity, open source software, and enhanced computer graphics and interface, including avatar interaction in three-dimensional virtual spaces” (castells, the power of identity, 2010, p. 25).
The element of space of flows in the concept of network societies as perceived by Castells is “becoming increasingly the space in which most important activities operate in our societies. There is interaction; there is connection” (castells, Grassrooting the space of flows, 2005). The information sharing system characterising the network societies can enhance our knowledge about everything we need to know and thus helps us to reach a conclusive rationale through which the problem solving becomes faster and easier for the human mind.
In his theory of informational/ network society, he makes another important point that “our societies continue to perform socially and politically by shifting the process of formation of the public mind from political institutions to the realm of communication, largely organized around the mass media” (castells, communication, power and counter-power in the network society, 2007). To a large extent, political legitimacy has been replaced by communication framing of the public mind in the network society, as one can see from the arguments he gives. Castells extols the role of NGOs to elaborate his concept of a network state in a network society. According to him these NGOs would be considered as ‘neo-governmental organizations’ rather than non-governmental organizations. These would, as he envisions, guide the network society on behalf of the humans.
In understanding the current society, it becomes relevant to study this theory on informational networks because of the rising role of ‘power-players’ using internet as “a tool of surveillance as in the U.S., using manual control of email messages when robots cannot do the job, as in the latest developments in China, treating Internet users as pirates and cheaters, as in much of the legislation of the European Union, buying social networking web sites to tame their communities, owning the network infrastructure to differentiate access rights, and endless other means of policing and framing the newest form of communication space” (castells, communication, power and counter-power in the network society, 2007)

DISADVANTAGES OF THE CONCEPT OF NETWORK SOCIETY FOR UNDERSTANDING CURRENT SOCIETIES

Felix Stalder points out correctly that “Castells tends to offer very broad and general definitions that shift much of the explanatory work to their empirical application” (Stalder, 2006, p. 170). Many critics of Castells’s work have pointed out to the fact that even if his model of network society is foolproof, what does one gain out of it? Ironically, he studies ‘network’ society in isolation. Perkmann (a critic of Castells) terms the theory as an “empty signifier” because of its vague nature and broadness. This critique is “understandable because Castells is not only extremely frugal with his definition of networks, but also does not use, or even refer to, any of the standard categories developed by network analysts over the last two decades” (Stalder, 2006). It might be because his thesis is based on empirical evidence and is relatively new; not much work has been done on it. There are a few other challenges of the network society as described by Castells himself, in his book The Internet Galaxy (castells(1942), 2001).
The first one is ‘freedom’ itself owing to expansion of media monopolies free communication and information flows become restricted and/or manipulated. The next challenge is that instead of the north south divide (determined by space of places) there are other kinds of isolated nodes unevenly dotting the world network maps; these are the people switched off from the network societies. Another major limitation is the storage and ‘knowledge generation and absorption capacity’ of human beings. By this, Castells means that “there is no more fundamental restructuring of education (castells(1942), 2001, pp. 275-279). The education system is transforming into a virtual network consisting of those distributing knowledge and those receiving it. An unforeseen challenge to the concept of network society arises in the form of developmental concern. In network societies, a substitute has still not been provided for physical forms of labour employment and institutions for social security.
“The mechanisms of social protection on which social peace, working partnerships, and personal security were based need to be redefined in the new socio-economic context”
(castells(1942), 2001, p. 278).
This new economy after the advent of network society is in need of market regulations and institutions for stabilizing monetary and fiscal crisis. Castells, along with the above drawbacks also recognizes environmental degradations as a concern beyond the scope of the concept of network society.
A persistent criticism of contemporary mode of communication in the network society is critiqued to have lost the personalised communication. The ‘reality’ element from the real world is diminishing i.e., “new technologies are also fostering the development of social spaces of virtual reality that combine sociability and experimentation with role-playing games” (castells, communication, power and counter-power in the network society, 2007, p. 28). Internet is leading to isolation of individuals from the real world; “faceless individuals practice random sociability” (castells(1942), 2001, p. 116).
Castells’s book (castells, communication power, 2009), states specific aspects of the network theory and the review of the book brings out a point- “….Castells’
s account
 is 
undercut 
by 
a 
rather 
old‐fashioned 
analysis 
of 
the 
media and 
a 
confusing 
framework 
of 
how 
audiences 
make
 sense
 of 
media 
messages. 
It 
is 
also
Limited 
by 
Castells’ 
focus 
on 
communication 
power 
as 
the 
‘shaping 
of 
the 
public 
mind’.
This
 weakens
 his 
analysis 
of 
the 
most
 important
 form
 of
 power 
in
 the 
network
 society:
The 
power 
to 
construct 
socio-technical 
networks” (Kavada, 2011)
One of the sharpest criticisms to the theory of network society has been- the non existence of the “actors and institutions able and willing to take on these challenges”. (castells(1942), 2001, p. 280). To explain this point further, real world still has geographical divides which leads to different consequences for different people in the network society- a claim which refutes the essence of the theory of network society.
CONCLUSION

There have been other theorists apart from Manuel Castells who have worked on the concept of network society like Darin David Barney, Felix Stalder. They are all contemporary theorists. The theory of network society is more relevant today as compared to any other era in history.
But in nineteenth century, a German sociologist named George Simmel conceptualised ‘a web of relations which was, in essence, analogous to today’s definition of network society. He talked about Dyad and Tryad (A dyad is a two person group; a triad is a three person group), asserting that as the number of people in a web of relation increases the ‘individuality’ of each person involved decreases but at the same time, due to increase in the number of entities involved, it became more and more difficult to exert control over one individual, hence the ‘freedom’ was retained. This debate of ‘freedom’ vs ‘individuality’ is relevant even today, with Castells’s network society at play. Simmel, in his work finally suggested that in an effort to become a member of a larger group (network), one must become a part of a ‘family’ (smaller network) first to retain both their individuality and freedom.
Also, in understanding the current informational societies we must not ignore the one-third population of the world which operates outside the domain of the network society and according to the internet-world, still lives in the ‘dark-ages’. Such a society needs to be studied in order to conform with the totalistic view of the theory of network society as viewed by Castells. But the changes in our society due to the effect of internet are very visible to us in everyday lives and can be better understood by this theory; wit few minor drawbacks which will become clearer in the due course of time, this theory can be used a powerful tool for the future generations to understand this era of communication revolution.
I would thus conclude that Manuel Castells’s work helps us to understand how the “Internet came into being, and how it is affecting every area of human life--from work, politics, planning and development, media, and privacy, to our social interaction and life in the home. We are at ground zero of the new network society” (12ja)

(references overleaf)

REFERENCES
1. (n.d.). Retrieved january 9, 2012, from http://books.google.co.in/books?id=1t_tAAAAMAAJ&q=castells+internet+galaxy&dq=castells+internet+galaxy&hl=en&sa=X&ei=YC0LT8fVJabL0QGxsv3RAg&ved=0CDAQ6AEwAA
2. Barney(1966), D. D. (2004). The network society. cambridge: polity.
3. Bennett, W. (2003). New Media Power: The internet and Global Activism. In n. couldry, & j. curran, contesting media power: alternative media in a networked world. oxford: rowman & littlefield.
4. castells(1942), m. (2001). the internet galaxy: reflections on the internet, business and society. oxford: oxford university press.
5. castells, m. (2009). communication power. oxford: oxford university press.
6. castells, m. (2007). communication, power and counter-power in the network society. international journal of communication , 238-266.
7. castells, m. (2005). Grassrooting the space of flows. In M. Abbas, & j. n. erni, internationalizing cultural studies: an anthology (pp. 627-636). oxford: blackwell.
8. castells, m. (2010). the new public sphere: global civil society, communication networks, and global governance. In D. K. Thussu, International Communication: A reader (pp. 36-119). london: routledge.
9. castells, m. (2010). the power of identity. sussex: wiley-blackwell.
10. castells, m. (2000). the rise of the network society. sussex: blakwell publishing ltd.
11. castells, m., & ince, m. (2003). conversations with manuel castells. Wiley-Blackwell.
12. castells, m., cardoso, g., & nitze, p. h. (2006). the network society: from knowledge to policy. washington DC: centra for transatlantic relations, paul h. nitze school of advanced international studies, Johns Hopkins University.
13. Kavada, A. (2011). Book Review of Communication Power. Westminster Papers in communication and culture , 197-200.
14. Stalder, F. (2006). manuel castells: the theory of network society. cambridge: polity.

"Culture as a whole way of life" - Are we convinced by Raymond Williams?

In ancient India, the society was divided into four basic classes- the ‘Brahmins’ (scholars), the ‘Kshatriyas’ (the warriors), the ‘Vaishyas’ (traders, manufacturers and merchants) and the ‘Shudras’ (so-called lower class doing menial jobs). Although they were divided in terms of their professions (hereditary) for the sake of convenient classification but it was much more than just occupational; it became an economic base of division leading to social categorization weavingthe political and ‘cultural’ fabric. Had Marx been alive at the time, this would have been an interesting case study for him as this kind of a superstructure did not echo an economic base in the initial setup and thus the cultural genesis in this case must have been something else.
Defining culture has always been a herculean task for the scholars but nonetheless of vital importance because of the exploitative use of the word ‘culture’. Narrowing my area of focus to Britain in the early twentieth century, there was no scholarly analysis on the culture (Pete Anderson made his presence felt too, but none of them were concrete enough in terms of ideas). One of the earliest cultural thinkers was Raymond Williams (1921-88). He was a Welsh academic, critic and novelist. He came from a ‘British working-class background’; his father was a railway signal worker, a trade unionist and a socialist. This might be one of the reasons for Williams’ association with Marxism. The materialist conception of history (Marx) was a great influence on Williams and he went on to study at Cambridge University. He, in his widely read academic works like Culture and Society (1958), The Long Revolution (1961), Problems in Materialism and Culture (1980) and many more, asserted the idea that ‘Culture is Ordinary’ and ‘culture is a whole way of life’ (Williams, R., 1958). Coming from a working class background, he had seen the discriminations made between the ‘high’ and the ‘low’ cultures. He was concerned with the question of culture in the class-based society of England. He attacked the ‘high’ culture saying that it is not comprehensive and is not a reflection of the society as a whole, the way a culture ought to be. Through culture, people and groups identify and define themselves, conform to society's shared values, and contribute to society.
For his idea of ‘cultural democracy’ he broadly used Marxian analysis to illustrate the genesis of culture in a society. To him ‘it is (was) capitalism….which is (was) confusing us’ (Williams, R., 1961, 327). Marx used the concepts of historical and dialectical materialism to provide a clear picture of the world we live in. Williams took this theory further and “…..traced the evolution of culture through its various historical conditions towards a complete form” (Sardar and Van Loon, 1997). He emphasised that in order to understand the holistic nature of culture, the proposition to determine the base and the superstructure became vital. Crucially, he revalued the ‘base’ separately from its traditional economic notion of being restricted to just the ‘relations of production’ to real social and economic relations which make the base dynamic. Williams reviewed all the elements of Marxian analysis such as ‘productive forces’, ‘social consciousness’, ‘class struggle’, added to them the contemporaneous recognition and reproduced it to fit in a superstructural framework for the study of culture. As he says, “…if we fail to see a superstructural element, we fail to recognise reality at all.” (Williams, R., 1980)
He argues that one of the unfortunate consequences of Marxian analysis is that it is so hard to comprehend that people often choose a much easier way such as the ‘totality complex’ theory which takes into account all the human activities such as social intention law, institutions, which affect the culture but without assigning any specific weights to any aspect. He endorsed the views of Antonio Gramsci, the great political philosopher and thinker, on ‘hegemony’ and its complexity. Williams found “this notion of hegemony as deeply saturating the consciousness of a society” to be fundamental (Williams, R., 1980)as it had an obvious advantage over the concept of totality, recognising the class domination over culture and society.
“The theoretical model which I have been trying to work with is this. I would say first that in any society, in any particular period there is a central system of practices, meanings and values, which we can properly call dominant and effective. This implies no presumption about its value. All I am saying is that it is central.”
-(Williams, R., Problems in materialism and Culture, 1980, 38)
The above statement highlights the theme of selective tradition formulated by Williams, according to which, there are certain parts of any culture which are passed off as being traditional or residual and the ‘selectivity’ is that central point from which certain ideas or social practices are excluded. He describes the culture to be ever changing and hence the dominant (central) culture also has to be amended from time to time. His ideas echo a Marxian theme of dialectical materialism when he talks about the old ideologies being discarded for alternative ones (oppositional culture).
Williams imagined a democratised culture in which every individual’s beliefs could shape their mindset and together would shape the culture of the ‘masses’. He argued that ‘there is no such thing as masses, only ways of seeing people as masses’ (Raymond Williams); this was his basis of supporting the statement that culture is extremely dynamic.
Williams had responded to a lot of criticism for his earlier works in his latest book- Problems in Materialism and Culture. His earlier critics noted that his idea of a democratised culture was utopian and that he never explained in any of his works on how he aims to amalgamate the contemporary situation and his own idealised notions. What they did not however understand was that Williams never put forth the theme of a ‘uniform culture’ but a ‘democratic’ one. By this he meant that the culture should not be restricted to the ruling or dominant class and should ‘recognise’ or ‘acknowledge’ the culture and the lifestyles of the proletarian class. The study of culture could no longer be reduced to an aesthetic or moral question but involved a ‘whole way of life’, a complex, lived-in ‘structure of feelings’. (Chambers, I., 1986, on Raymond Williams).
What I particularly noticed in his writing is that he acknowledged that unfortunately just like when in capitalism, a non-profit making entity is overlooked till the time it starts making losses, even certain human practices outside or against the conscious dominant form of culture exist only till the time the interests of the ruling class are served or rather, not opposed. If the stakes are too high, new ‘traditions’ will emerge out of the ‘central point’ which will minimize the effects of the emerging struggling culture.Williams immersed himself so much in Marxian analysis that it was the only framework he could set things in. He could not build his own crucible which could encompass and withstand all the heated culture-debates. So, although his reasoning was quite scientific and his last work mostly satisfied his critics, the lack of originality remains prominent. In this essay, on the basis of Gramscian view, I noted the role of state in forming the social and economic relations in a society. The state, according to this view, is the ‘site of a permanent struggle to conform…. the whole complex of social relations, including those of civil society, to the imperatives of development in a social formation.’ (Hall, S., 1986).
Conclusion
To summarise my essay, I would highlight its key objectives which were- first, to give evidence of how Raymond Williams supported his views on culture as ‘a whole way of life’ and second, to rate his reasoning. On focusing on the former, we see a prominent presence of Marxian analysis, which he used to support his view. I have given examples of how he supported his arguments with the concept of materialism and class-struggle. He explained the earlier seeming follies in his later works and thus made his theory clearer. When I considered the second part, it was not an innocent exercise to critically examine his reasoning because the culture-studies is a complex subject which is not dependent on ‘definite’ elements, but I constantly searched for his views on the role of state in the society. Being restricted to Marxist thought, he could not analyse the state’s role in isolation and thus, lost a very crucial study theme. This drawback also led to exclusion of the ‘emerging capitalist culture-industry’ from the subject in question. The contemporary popular culture is fed to the media audience by the ‘providers’ in the industry who control the content and project a tempting illusion of media-democratisation.It makes people believe that they can actually be a part of controlling the content meted out to them. It would be interesting to discern how Raymond Williams would perceive Lady Gaga or issues of Social Networking Sites like Facebook! Or perhaps this is what he had idealised- a world free of prejudices between ‘high’ and ‘low’ cultures. My only question is- how would he explain the emergence of capitalistic media content providers? Will he totally condemn their presence, keeping in mind his Marxian mental background? We would know, only if he were to be alive today. The research, meanwhile, continues.

References
1. Bennett, T., Colin, M., et al., (1986) Popular Culture and Social Relations, Philadelphia: Open University Press

2. Chambers, I. (1986) Popular Culture- the metropolitan experience, London: Methuen
3. Sardar, Z., Borin, V.L., (1997) Cultural Studies for Beginners, Cambridge: Icon Books

4. Williams, R. (1980) Problems in Materialism and Culture,Chapter 2,London: Redwood Burn Ltd.

5. Marx, K. (1859) A Contribution to the Critique of Political Economy

Neoliberal policy of privatisation in India- supporting development?

1. INTRODUCTION

The gigantic economic growth of India over the last two decades has been much talked about and analysed. It has been surprising for many because its image reflecting orientalism, orthodoxy and thus, resistant to any kind of change. Much has been written about the dynamics of this rise of India and its placement and recognition on the world map. After the advent of the New Economic Policy (1991), the overall “rate of economic ‘growth’ (of the Gross Domestic Product) of the country as a whole has somewhat speeded up in the 1990s in comparison with the 1980s” (Dreze & Sen, 2002, p. 317). The GDP growth rate of India rose from 3.7% (1950-60) to 6.0% (1990-2000) to 8.2% (2011-12), which is substantially high (source: government of India’s Economic Outlook report, p.20). The economic policy of liberalisation, privatisation and globalisation has altered the Indian economic and social landscape.
“Privatization of public enterprises has generated much debate; developing economies, which had previously opted for planning as a strategy and system for national socio-economic development. Under the Five Year Plans, the Indian state took upon herself the responsibility to undertake investments in basic and strategic economic activities and to control and direct private sector through a network of regulatory institutions. After pursuance of planned development for nearly half a century, a stage was reached when questions were raised about the relevance and the need to continue the planned development strategy. There is an ideological position that asserts to ‘end all direct and indirect state interventions in the economy’. The state should, according to this viewpoint, roll back and occupy the minimum possible space. The market forces instead of the arbitrary decisions undertaken by bureaucrats and politicians should decide all economic decisions. The contrary viewpoint is that since the Indian economy is ridden with extreme disparities in incomes, wealth and consumption, macroeconomic decisions cannot be left to the operation of the free market system. Third World economies suffer from so many socio-economic limitations that it is obligatory on part of the state to operate from the ‘commanding heights’ and aim at the highest level of socio-economic good for the largest numbers.”
(Goyal, 2009, p. 1)
In this essay, India would be considered as a case of developing country, given its categorisation as a country with medium level of human development and its HDI ranking as 134 out of 193 countries. The HDI is computed to be 0.547

[source 1="(United" 2="Nations" 3="Development" 4="Programme," 5="2011)" language="website:"][/source]

. The discussion would be introduced with India as a developing country followed by an explanation of the concept and context of ‘development’ in this essay. Keeping this background in mind, we shall move to the new economic policy of India and its features, narrowing it down to privatisation. After looking at the advent and spread of privatisation in India, there will be a critical analysis of its effect on development, followed by a conclusion and future prospects of privatisation as a probable causal factor of development in India.

1.1. INDIA AS A DEVELOPING COUNTRY

India was traditionally an agrarian economy with agricultural sector being the prime employer too. during the British Raj (British-rule) from 1858 to1947, it started developing a few industries of prime importance such as iron and steel industry, railways, postal services and a few manufacturing units. This epoch marked the beginning of industrialisation in India. Owing to colonial restrictions, none of the sectors of the economy could optimally grow, until 1991. Despite all the glossy representations of India’s economic prosperity, social progress leaves much to be desired. The ‘development’ levels according to any of the development indices (accepted internationally) are abysmally low in the country.
“Despite a booming economy and a $9 Billion jobs programme, India ranks poorly on the poverty indicators- 41.6% of the country’s population lives below US $1.25 per day.” (Report, 2005, p. 28). It ranks 45th on the Global Hunger Index among 29 leading countries with hunger crisis and the country has one third of the world’s poor. It lags behind China, Pakistan and Sri Lanka, its neighbours. (international food policy research institute, 2011)
So, in this regard, evidently India can be classified as a developing country as opposed to a developed one.
1.2 CONCEPT AND CONTEXT OF ‘DEVELOPMENT’
Development is defined by Mahbub ul Haq (1934-1998), the father of Human Development Report of the United Nations, as follows:
"The basic purpose of development is to enlarge people's choices. In principle, these choices can be infinite and can change over time. People often value achievements that do not show up at all, or not immediately, in income or growth figures: greater access to knowledge, better nutrition and health services, more secure livelihoods, security against crime and physical violence, satisfying leisure hours, political and cultural freedoms and sense of participation in community activities. The objective of development is to create an enabling environment for people to enjoy long, healthy and creative lives."
This definition is not ultimate and the idea of development in itself is highly contested because of its nature. It is a term which encompasses almost all aspects of life and is the overlapping concern of every field of study. Similar approach is given by Amartya Sen for understanding development (Dreze & Sen, 2002). It should be understood that there is a distinction between ‘growth’ and ‘development’. It would be misleading and dangerous to equate the two concepts. A country which is economically prosperous “may fare poorly on some of the commonsense indicators of development, such as literacy, access to drinking water, low rates of infant mortality, life expectancy” (Ray, 1998, p. 25), poverty, employment, inequality and so on. So, contrary to the ‘GDP as a measuring rod’ (Dasgupta, 2007, p. 30) for development, a more holistic view of the concept must be understood.
Since it is beyond the scope of this essay to consider the impact of privatisation on the development as a whole, I am considering the main development indicator to be HDI (Human Development Index), which is the universally accepted measure of Human Development. There are of course other measures like the Inequality index, Happy Planet index, Gender inequality index, Global Hunger Index and so on but they all cover specific parts and not a totalistic view. Human Development Index was devised by Mahbub ul Haq in 1990. The UNDP adopted this measure to measure development levels across nations. It is a mathematical value and the organisation defines it as follows:
“The education component of the HDI is measured by gross enrolment ratio and expected years of schooling. The life expectancy at birth is the second component of the HDI. For the wealth component, GDP per capita is considered. The scores for the three HDI dimension indices are then aggregated into a composite index using geometric mean.”
Source website: (United Nations Development Programme, 2011)
The value of HDI for any country lies between the value of 0 and 1. For India, the value is 0.547 and its rank is 134 according to the latest Human Development Report. On a careful absolute and comparative analysis, it has not changed much since last two decades.
So, in the essay, although HDI would be an indication of the level of development in India, we would also be looking at development in general- instances of poverty and underdevelopment.

2. INDIAN ECONOMY AND THE ADVENT OF THE NEW ECONOMIC POLICY 1991
India was traditional an agrarian economy i.e. - based on agriculture. During the British Raj (colony rule), there was a shift towards industrialisation, at least in the basic heavy industries like iron & steel industry, textiles industry, railways and so on. According to Leon Trotsky’s “law of uneven development, the wealth and power of the great powers is maintained only by the exploitation and impoverishment of the colonies. In their search for sources of cheap labour and raw materials, the imperialist powers distort and stunt the development of culture in the colonies. These colonies do not simply “lag behind”, but rather their development is the “other side of the coin” of the advanced conditions enjoyed in the great powers. The law of combined development flows directly from that of uneven development: while blocking their normal development, the imperialist powers introduce into the dominated countries the most advanced techniques and relations of production, side by side with the most primitive” (Hymer, 1972, p. 38). This was exactly what happened in the Indian context. But even after independence, entrepreneurship in India was a challenging task as the licensing was in the government and it was extremely difficult to accumulate capital and other resources (which again was government owned), which was needed to enter into the market as a manufacturer. The services sector was not as what it is today. The IT sector only boomed in the 1990s, after coming of the New Economic Policy in India (1991) consisting of major neo-liberal reforms.
A senior research analyst at the Institute of International Trade, India summarized the reforms- ‘The 1991 Balance of Payment (BOP) crisis was the “tipping point” in India’s economic history. India was forced to procure $1.8 billion loan from the International Monetary Fund (IMF). The bailout wounded India’s pride and thwarted the country’s policies of “self-sufficiency”. India’s policy failures were now glaring across the Indian policymakers and the world. In response to the crisis, the government immediately introduced stabilization measures to reduce the fiscal deficit. Fiscal tightening and devaluation of the rupee by 25% adequately reduced the current account deficit. Though the foreign exchange reserve recovered quickly and ended effectively the temporary clout of the IMF and the World Bank, reforms continued in a stop-go fashion. The government has since initiated a reversal of the historic policies of regulation and government intervention. The economic liberation reform, initiated by Dr. Manmohan Singh in 1991, is considered to be one of the milestones of Indian economic reform as it changed the market and financial scenario of the country. Foreign Direct Investment was encouraged, public monopolies were stopped, and service and tertiary sectors were developed. It was not until 1991 that the government signaled a systematic shift to a more open economy with greater reliance upon market forces, a larger role for the private sector including foreign investment, and a restructuring of the role of the government. In the 10 year period from 1992-93to 2001-02, the average growth rate of the country was around 6%, which puts India amongst the fastest growing developing economies of the 1990’.
Source: (Diwan, 2011, p. 5)
Broadly the new reforms consisted of the LPG policy- Liberalisation, Privatisation and Globalisation.
Dr. Ajay Verma provides a rationale for privatisation in India:
“One basic rationale for privatisation in the concept that private ownership leads to better use of resources and their more efficient allocation. Throughout the world, the preference for market economy received a boost after it was realized that the State could no longer meet the growing demands of the economy and the State share holding inevitably had to come down. The ‘State in business’ argument thus lost out and so did the presumption that direct and comprehensive control over the economic life of citizen from the Central government can deliver results better than those of a more liberal system that directly responds according to the market driven forces. Another reason for adoption for privatization policy around the globe gas been the inability of the Governments to raise high taxes, pursue deficit / inflationary financing and the development of money markets and private entrepreneurship. Further, technology and W.T.O. commitments have made the world a global village and unless industries, including PSEs do not quickly restructure, they would not be able to survive. Public enterprises, because of the nature of their ownership, can restructure slowly and hence the logic of privatisation gets stronger. Besides, techniques are now available to control public monopolies by regulation/competition and investment of public money to ensure protection of consumer interests is no longer a convincing argument”
(Verma, 2009, p. 2)
Professor S.K. Goyal, (Institute for Studies in Industrial Development, New Delhi) explains privatisation: “Privatization, in its broader sense, stands for policies to reduce the role of the state, assign larger role for the private sector pursuing the logic of the market in all economic decisions. Viewed in this perspective departure from the policy of reservations of certain economic activities for exclusive development by the public sector (de-reservation) implies a reduction in the relative position of the state sector and larger role for the private sector. The entry of new private sector enterprises could introduce competition where public sector enjoyed monopoly. The existing public enterprises (PSEs) would be forced to go commercial and respond to the market discipline. The de-reservation process has sometimes been described as ‘Parallelization’ in the privatization framework. Privatization is also witnessed when governments take a decision to reduce their obligations to regulate and direct the behaviour of private actors in the economy. Pursuance of deregulation policies is aimed to make the restrictive regulatory system less important. In India, deregulation would imply loosening such statutes like the Industries (Development & Regulation) Act, 1951 (IDRA), Monopolies & Restrictive Trade Practices Act, 1969, (MRTPA), Foreign Exchange regulation Act, 1973 (FERA), Capital Issues Control and technical scrutiny by the Directorate General of Technical Development (DGTD)”.
Privatisation, however, is most often associated with transfer of public sector enterprises and services to private ownership, management and control. The privatization process for public enterprises can involve steps ranging from dilution of state-held equity, to adoption of practices like franchising, award of lease and management contracts, sub-contracting of select activities and tasks, down-sizing of workforce, and changes in the process of decision-making even without change in ownership, so that business decisions are guided by market and commercial principles of profit maximisation than vague societal concerns.”
Privatization in India has been carried out in several stages; such as, deregulation, de-reservation, privatisation and disinvestment.
3. THE POLITICAL ECONOMY OFTHE NEO-LIBERAL POLICY OF PRIVATISATION
Privatisation in simple terms means- to partially or wholly sell government equity to a private party. There are broader theories on privatisation and one of them is as follows:
“By privatisation we mean a combination of two changes undertaken by a reformer. The first is turnover of control from spending politicians to managers, often referred to as corporatisation. The second change that is usually part of most privatisations is the reduction of the cash flow ownership by the Treasury and the increase of cash flow ownership of managers and outside shareholders. The Treasury can sell its shares for cash, or it can give them away through vouchers or some other allocation scheme” (Boycko, Shleifer, & Vishny, 1996, p. 21). It is very evident that privatisation is a hard-core neo-liberal policy of capitalism. Philosophers like Heilbroner have looked at capitalism as a regime, as a “social order whose organising principle is the ceaseless accumulation of capital cannot be understood without some appreciation of the historic changes that bring about its appearance” (Heilbroner, 1987). He further explains the expansion of capitalistic regime- “….transfer or the organisation and control of production from the imperial and aristocratic strata of pre-capitalist states into the hands of mercantile elements” and goes on to illustrate how the neo-liberal policies are becoming threatening for the position of state ‘under the garb of free market economics’ (Heilbroner, 1987, p. 41).
Neo-liberal policies are often accused of diminishing the self-sufficiency of a country, especially in relevance to developing countries. As Vakulabharanam (2009) noted that “the neo-liberal regime ensured that the supported non-capitalist institutions such as families, state, and community structures in otherwise largely capitalist social formations were all wrenched open and destroyed….any stable phase of capitalist accumulation witnesses a stable but unequal relationship between the capitalist and non-capitalist institutions in a social formation”.
4. DID PRIVATISATION REALLY SUPPORT DEVELOPMENT IN INDIA?

Before the LPG reforms, there were 17 major industries which did not allow for the private players to enter including- Arms and ammunition and allied items of defence equipments, defence aircraft and warships, Atomic energy, Iron and steel, Heavy castings and forgings of iron and Steel, Heavy plant and machinery required for iron and steel production, for mining, for machine tool manufacture, Heavy electrical plant including large hydraulic and steam turbines, Coal and lignite and others. After the reforms, only 8 could make it to the same list. All the sectors which were privatised are doing extremely well, especially the telecom sector which now ranks 3rd in the world in terms of network size.
The government website of the telecom sector reflects on its growth and developmental achievements:
“Efforts are being continuously made to develop affordable technology for masses. Emphasis is being given to technologies having potential to improve rural connectivity. Also to beef up R&D infrastructure in the telecom sector and bridge the digital divide, cellular operators, top academic institutes and the Government of India together set up the Telecom Centres of Excellence (COEs). Their development measures are as follows-
Secure Information Infrastructure that is vital for country’s security, Capacity Building through Knowledge for a sustained ‘growth’, Support Planned Predictive Growth for stability, Reduce Rural Urban Digital Divide to reach out to masses, Utilize available talent pool and create environment for innovation and Management of National Information Infrastructure (NII) during Disaster, An expanding Indian economy with increased focus on the services sector, Population mix moving favorably towards a younger age profile, Urbanization with increasing incomes..”
(indian telecom sector)
Now, if we consider the components of HDI and transpose the effect of privatisation on it, we see that in the terms of education and health, privatisation has pushed its way through and a unforeseen surge of private health and educational institutions has emerged.
There have been higher education colleges in huge numbers which have provided the people with skilled knowledge and have prepared them for industries. But the statistics show that rural to urban privatised schools “ratio is 2/25 i.e., for every 2 private educational institutions in villages, there are 25 urban ones”

[source 1="Sixth" 2="All" 3="India" 4="Education" 5="Surveys" 6="(NCERT," 7="1998)" language=":"][/source]

. Thus, the privatisation in this sector is still nascent and has penetrated only higher education sector as the profit-making can occur only in the case of technical colleges. They did not venture much into primary education which is left for the government to look after and even in the cases where private schools do exist, they are mostly backed by the government

[source 1="(Govt" 2="backs" 3="private" 4="schools," 5="2007)" language=":"][/source]

.
There is a similar case in the health sector.
“The private health sector in India is the most dominant sector in terms of financing and utilization of health services. There has been a tremendous amount of growth in physical size, investments, expenditures and utilization. The share of the private health sector is around 4 % of the Gross Domestic Product as compared to the government spending which is around 1 %. The share of the private health sector at today's prices works out to between $ 4,571 million and $ 5,714 million per year”
(Nandraj, 1997, p. 2)
But even today, before the privatisation of insurance sector, hospitals were a far reach for the masses in India. Privatisation of Insurance sector has raised the standard of living of people by providing them with security and stability and it has done very well.
There are numerous other examples of privatisation leading to economic growth and growth trickling down to the citizens but as I had discussed in the essay before- growth does not always lead to development. As I had mentioned before, there has been no recognizable change in the HDI values of India since these neo-liberal reforms. It appears as a heavily polished and manicured concept which brings about growth, evidently, but does not transform it into development.
Privatisation has reduced social security which came about with Public Sector Units. The nine major PSUs, called the navratnas, are doing better than their private counterparts. One should not forget that the ultimate aim of capitalist private units is to maximize profit. Their aim is not to bring about development by providing employment and reducing poverty. Whatever development has taken place because of these reforms has been short-lived and a need for state intervention is being felt again. Is private and corporate the main sector for development as many lobbyists of neo-liberalism have pointed out? R. Nagaraj analyses the much hyped services sector growth of the 1990s and his research led to “skepticism which somehow muddies the picture of the recent growth significantly enough to cast doubt on the optimistic scenarios portrayed” (Nagaraj, FDI in India in the 1990s, p. 61).
5. CONCLUSION AND FUTURE PROSPECTS

There have been more severe criticisms against Public Sector Units of lacking market discipline, lack of competitive production, corruption and many more. Privatisation has changed the economy for good, which is easy to establish if see the India now and compare it with previous decades. But this growth should not be expected to trickle down to the poor, more than 41% of the Indian population. Paul A. Baran, a Marxist, stresses on the fact that “..only a large-scale enterprise would be in a position to finance the outlays called for by modern technology…only big business could afford to maintain the research facilities that are indispensable for the advance of technology” and although this growth of large private firms, of monopoly and in some cases, oligopoly, owing to neo-liberal reforms was “a progressive phenomenon furthering the advance of productivity and science, the very same phenomenon tends to turn economically, socially, culturally, and politically into a retrograde force hindering and perverting further development” (Baran, 1957, p. 95). I conclude by saying that privatisation should not be reversed because it has boosted the economy and brought about changes which have provided the PSUs with an example of professionalism and competitiveness but it should not be expected to play the role of mediator-for-welfare. That would against the principles of its neo-liberal foundations.
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