The Shaky Foundations of India’s Cheap Labor Economy


As the Commonwealth Games open in Delhi, India, the controversy over sub-standard accommodation and facilities for the participating nations continues to rage.

Several weeks ago, visiting country delegates voiced concern over the shambolic state of the newly built facilities. Now, as the games open, the event promises to turn into an embarrassing fiasco for the Indian government, with glaring publicity on what is still being widely reported as filthy and shoddy conditions. Media reports say that cleaners and labourers are “working through the night” in order to salvage conditions at the so-called Games Village, where more than 7,000 athletes from over 70 countries are scheduled to stay for the 12-day sporting tournament.

Racists may sneer over the debacle, claiming that the problems of sanitation and crumby construction are part and parcel of the Indian subcontinent.

But in truth what the Commonwealth Games fiasco demonstrates is the shaky foundations and unsustainable nature of the Indian economy. As with China, India is hailed as the new global economic colossus. Defying the slowdown in the world economy, India like China has been growing at 8 per cent or more. With a population of one billion each (nearly a third of the planet’s total), these Asian giants are said to be the new centre of gravity for the world economy.

However, just like the spurious ‘Commonwealth’ name of the games – a hangover from the British empire – the accolades attributed to India’s (and China’s) economy are more illusion than fact.

The central fact is that India’s economy, as with China’s, is premised on the super exploitation of cheap labour. Yes, on the short-term this raw-tooth capitalism will manifest in salivating profits for developers and investors and seemingly bristling economic indicators, such as Gross Domestic Product. But in the long run, for the vast majority of workers on a pittance wage, their poverty can only become more intensified and widespread. With millions of unemployed desperate for subsistence, workers can be, and are, dispensed like cannon fodder.

This is not a painful, slow path to social progress as some may suggest for India or China, but rather it is a giant relentless race to the bottom in which the poverty of the masses is used as a battering ram to wreck whatever better wages and conditions workers in other parts of the world may have.

If we accept that human labour is ultimately the source of all value, then it is to be expected that construction, and economies generally, that are built on the backs of people living in slave-like conditions will ultimately reflect those conditions, proving eventually to be unsustainable and futile.

Take the neighbouring Gulf countries, for example, where millions of expatriate workers from the Indian subcontinent have traditionally migrated. The entire construction industry in the Gulf is based on cheap labour from South Asia. Workers typically earn less than $6 a day and out of that paltry amount they send remittances to their families back in India, Pakistan and Bangladesh.

The emirate of Dubai is the classic paradox. When its buildings are newly opened they are routinely hailed as icons of glamour. But architects and engineers on many projects across the Gulf verify that such outward appearance is but a cosmetic effect, conjured with shiny cladding. Closer inspection of Gulf construction sites reveals the ugly nature of the building quality and the miserable conditions of the labourers. Facades are invariably roughly finished with uneven concrete and the shuttering for laying floors and pillars is made from old pieces of recycled timber tacked together with hammer and nail. Health and safety standards are derisory.

Typically when these buildings come into operation there are then a host of ongoing maintenance problems, from poor plumbing and electrical work, to inadequate utilities such as faulty elevators.

This is the false economy of an economy based on unrelenting cheap labour. Things may appear to get done and no doubt some players get rich in the process. But, in the end, the abiding upshot of such an economy is an accumulation of poverty for the masses and an array of products that are worth less than what they are marketed for because ultimately they are made by human hands that are ground down in abject poverty.

So when we hear about the shoddy and filthy buildings at the Commonwealth (sic) Games, don’t expect this to be a one-off mishap due to some peculiarity of Indian cowboy builders. It is rather more a specific example of what we can generally expect from a world economy that is rapidly descending into capitalist super exploitation.

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