In the name of free trade,
the ordinary people of India are losing their livelihoods.

THE POET Rabindranath Tagore, identified democratic pluralism and an ecological culture as the distinctiveness of Indian civilization:

Contemporary Western civilization is built of brick and wood. Ii is rooted in the city. But Indian civilization has been distinctive in locating its source of regeneration, material and intellectual, in the forest, not the city.

India's best ideas have come where people were In communion with trees and rivers and lakes, away from the crowds. The culture of the forest has fuelled the culture of Indian society. The culture that has arisen from the forest has been influenced by the diverse processes of renewal of life which are always at play in the forest, varying from species to species, from season to season, in sight and sound and smell. The unifying principle of life in diversity, of democratic pluralism, thus became the principle of Indian civilization."

It was this distinctiveness on which Mahatma Gandhi built his ideas and actions for freedom and democracy. The logic of resource exploitation integral to the classical model of economic development based on resource-intensive technologies led Gandhi to seek an alternative path of development for India. He wrote:

'God forbid that India should ever take to industrialism after the manner of the West. The economic imperialism of a single tiny island kingdom (England) is today keeping the world in chains. If an entire nation of 300 million took to similar economic exploitation, it would strip the world bare like locusts."

Official India which took over from the British Raj, however, ignored the ecological foundations of Indian culture and knowledge in all its diversity and pluralism. It ignored Gandhi's ecological insights and put aside the energy of the freedom movement. It followed Nehru's vision of imitating Western systems of production and consumption. Over the past fifty years, the dominant paradigm of development has treated nature as a colony, not as a teacher, and it has treated India's ecological and cultural diversity as a block in the way to progress that needed to be removed - not as a foundation on which to build a sustainable and just future. Nothing symbolizes this shift more than temples at the sources of "sacred flyers" being substituted by dams - the "temples of modern India" as Nehru called them.

The three great myths of development which have caused severe ecological and cultural erosion in India and elsewhere are:

I. Nature is uncreative, unproductive and valueless until exploited as raw material" for industry.

2. Cultures and knowledge systems that build on nature's creativity are also uncreative, unproductive and valueless.

3. There is no knowledge, no economy, no culture, no rights prior to establishment of industrial civilization. They gain value only as raw material for industrial civilization.

Creativity is defined as the exclusive preserve of Western science. Productivity is defined as the exclusive preserve of Western industrial technology. Value is defined as the exclusive preserve of modern market economies.

This has led to the destruction of nature and people's economy, and massive uprooting of people to clear the way for development. It has caused the replacement of self-sufficient individuals and communities and made them dependent on a centralized state for their everyday needs produced wastefully through a resource-hungry production system.

Fifty years of maldevelopment have been based on:

1. Marginalization of indigenous science, indigenous medicine and indigenous agriculture, even though two-thirds of India is still supported by these systems.

2. The takeover of the functions of the community by the state, hence the erosion of decentralized democracy.

3. The artificial support to a capital intensive development through debt and subsidies and its control through licences and permits.

Today this so-called Nehuvian model of centralized planning is in dispute. It is being assaulted by the paradigm of globalization and free trade.

HOWEVER, THE globalization of the economy worsens all the negative features of the Nehruvian paradigm such as centralization, ecological destruction and cultural erosion. India has experienced globalization and "free trade' before. The new wave of trade liberalization is, therefore, not so new. We have been there before.

For us "free trade" is not a late twentieth century innovation. It is the re-emergence of a very old instrument of monopoly control. It does not herald the end of history: merely its repetition. It does not create new liberties for the ordinary' Indian; it leads to recolonization.

The GATT treaty might be more complex than the Faruksheer "firman" (order) of 1717 granted to the English East India Company, and, instead of one large corporation, we now have many multinational corporations, but in core content and in impact, free trade in the eighteenth century and free trade in the late twentieth century do not differ very drastically.

The language and concept of free trade was central to the East India Company policy for laying the "foundation of a large, well grounded, sure English dominion in India for all time to come

The East India Company's first factory, in Bengal, was established on 14th May 1653 at Hariharpur. On 2nd February 1634 the English obtained from Shah Jahan an order to bring their ships to Bengal. In 1651 the English East India Company was permitted to trade freely in Bengal in return for a fixed annual tax of Rs.30.000, on the basis of a sealed permit, granted by the Governor of Bengal. However, the English were not Satisfied with freedom to trade in Bengal only They wanted free movement of trade over the entire country. For this, they asked the Mogul emperors for a single document which would remove the impediment's in the way of trade of the Company, and give them legal and moral justification to assert their rights, whenever they came into conflict with local and provincial authorities. The 1717 order was their route to extra territorial power for free trade.

However, freedom for the East India Company implied the end of freedom for local producers and traders.

As Radhakamal Mukherjee writes in his Economic History of India the Indian merchants were placed under a serious handicap as they not only had to pay both customs as well as transit duties and other charges (from which the Europeans obtained exemptions), but also lacked the protection of the Mogul fleet against attacks by European frigates. The free-trade order of 1717 led to the rise in the monopoly of the East India Company in trade in manufactured goods as well as in agricultural commodities.

Textiles were the most important export item from India. In the times of the Mogul government, the weavers manufactured their goods freely. Master weavers often employed their own capital to manufacture and sell freely. With the introduction of monopoly, the entire weaving population as well as the merchants and intermediaries connected with the cloth trade were subjected to oppression. The coercion of the weaving community was intrinsic to the creation of freedom for the East India Company.

The Company appointed a large number of agents who advanced money to the weavers, obtaining from them signed contracts and exercising a monopolistic control over them, so that the 'weavers were not permitted to work for others. The weavers could not obtain a just price for their clothes. The English East India Company fixed prices in all places at least 15%, and in some even 40%, less than the clothes would sell in the public bazaar or market on a free sale.

"Free trade" was at the root of the loss of freedom for India and her people, because free trade is essentially freedom for foreign trading interests. "Free trade" is supposed to create a level playing-field. However, free trade does not create a level playing-field for all economic actors because it puts small local producers and traders at a disadvantage. As freedoms grow for corporations, small producers lose their freedom to engage in economic activity on their own terms and can either become bonded, contract labour to the corporations, or become economically dispensable.

Nor does free trade create sustained markets for Indian manufacturers, as the case of free trade under the English East India Company shows. The increased import of Indian textiles through the East India Company started to affect the production of woollen textiles in England. Weavers in England, therefore, rioted, and an Act of Parliament prohibited the importing of Indian calicoes.

Later, heavier and heavier duties were imposed on Indian textiles in the interests of the Lancashire mills and this contributed to the reduction arid ultimately the death of the Indian trade.

Protectionism is, therefore, an essential part of free trade. The raising of the issue of "social clauses" and "environmental clauses" at the GATT meetings indicates that for the powerful global actors who demand and determine "free trade" strictures, "free trade" and protectionism go hand in hand. Free trade is not anti-protectionist. It is the protectionism of the strong and powerful.

As free trade removes the protection of the weak, and as the protectionism of the powerful grows, de-industrialization and de-intellectualization of India begins. The free- trade regime established by the East India Company reversed the commercial relations between India and England. The balance of trade which had been in favour of India until the close of the eighteenth century began to turn against her. From being the industrial and trade centre of the world, it was quickly transformed into being a supplier of raw material and a market for British goods.

Thus, from the beginning of the nineteenth century, export of cotton, silk and dyestuffs was encouraged, to fuel the industrial revolution in England, while India's textile industry' was dismantled, leading simultaneously to the destruction of livelihoods and of natural resources.

The vital resources needed for human survival are land, water and biodiversity The most fundamental human and democratic rights are the rights to these vital resources. It is on the inalienability of these rights that the freedom of the peasant is based.

However, free trade as freedom for corporations is based on the forced alienation of rights to land, water and biodiversity that common citizens hold as a birthright.

THE WAR AGAINST diversity did not end with colonialism. With the definition of entire nations of people as undeveloped, incomplete and defective, Europeans were reincarnated in the "development" ideology, which predicated salvation on generous assistance and advice from the World Bank, the International Monetary Fund and other financial institutions and multinational corporations.

Development is a beautiful word, which suggests evolution from within. It was, until the middle of the twentieth century; synonymous with self-organization. But the ideology of development has implied the globalization of the priorities, patterns and prejudices of the West. It has come to mean precisely the opposite of what the word originally meant. Instead of being self-generated, development is imposed. Instead of coming from within, it is externally guided. Instead of contributing to the maintenance of diversity it has meant the creation of homogeneity and uniformity.

The homogenization process of development does not fully wipe out differences. Differences persist not in an integrating context of plurality, but in the fragmenting context of homogenization. Positive pluralities give way to negative dualities, each in competition with every other, contesting for the scarce resources that define economic and political power. Diversity is mutated into duality, into the experience of exclusion. The intolerance of diversity becomes a new social disease, leaving communities vulnerable to breakdown amid violence, decay and destruction. The intolerance of diversity sets up one community against another in a context created by a homogenizing state, carrying out a homogenizing project of development. Difference, instead of leading to the richness of diversity, becomes the base for diversion and an ideology of separation.

This is the reason communalism and fundamentalism are on the rise in India. India's diversity and pluralism are getting split into fragmented, identities through the state driven development. Development has created an erosion of cultural norms, values and identities amid an erosion of community rights to vital resources like land, forests, water and biodiversity. These ecological and social costs of development are beginning to be made visible by emerging movements of communities to regain control over their resources and their culture. These movements are working to build a decentralized democracy, a sustainable economy and a just society.

"Free trade" is the ruling metaphor for globalization in our times. But far from protecting the freedom of citizens and countries, free-trade negotiations and treaties have become the primary locations for the use of coercion and force. The cold war era has ended and the era of trade wars has begun.

Free trade is not free, because it operates in the economic interests of the powerful transnational corporations, which control 70% of world trade and for whom international trade is an imperative. Transnational corporate freedom is based on the destruction of citizen freedom everywhere. Globalization implies the dismantling of the powers of democratic institutions of individual countries - local councils, regional governments and parliaments.

WHILE THE NEHRUVIAN era of state directed development is being attacked by the globalizers and trade liberalizers, globalization is magnifying the problems of centralization: unaccountability, corruption, uniformity, inequality, environmental destruction and cultural erosion. Ever since the new economic policies were put in place in l991 in response to the World Bank and IMF directives, decision making has moved out of communities and regions to Delhi and then out of Delhi to Washington and Geneva and to corporate headquarters of transnational corporations (TNCS).

Unaccountability of government and corporations to people has increased. Corruption has exploded. Uniformity has expanded both ecologically and culturally. As agriculture gets corporatized, the landscape of small, biologically diverse farms is giving way to miles of monocultures of sunflowers, vegetables and shrimps for export. The McDonaldization of India has begun. Environmental destruction is taking place faster and over larger areas with globalization.

While globalization is strengthening the negative aspects of the development era, it is dismantling the positive aspects of a state focussing on the basic needs of people, a state committed to equality and justice, a State protecting resources and livelihoods through policy and regulatory mechanisms.

Basic needs have been replaced by import of luxury goods like cars and cosmetics and export of luxury products like flowers and shrimps. Land ceilings have been removed in urban and rural areas, transferring land and real estate to speculators or big corporations.

The livelihoods of small producers are being destroyed by trade liberalization. Two million weavers in Andhra Pradesh lost their livelihoods when free export of cotton was allowed, taking cotton beyond the access of weavers. 200,000 producers of Bikaneri Bhujia (a regional snack speciality) are threatened with the entry of Pepsico in the manufacture and marketing of Bikaneri Bhujia. New power plants have been established by bypassing the requirements of Environmental Impact Assessment. Deregulation does not imply an end to the state - it is a change in the function of the state. The state is now exclusively an instrument of global capital.

Globalization has rendered the relationship between the community, the state and the corporation - or, to use Marc Nerfin's more colourful categories, the relationship between the citizen, the prince and the merchant - totally fluid.

THE APPEAL OF globalization is usually based on the idea that it implies less red tape, less centralization and less bureaucratic control. It is celebrated because it implies the erosion of the power of the State.

Globalization does mean "less government" for regulation of business and commerce. But less government for commerce and corporations can go hand-in-hand with more government in the lives of ordinary people. As globalization allows increasing transfer of resources from the public domain - either under the control of communities or that of the state - discontent increases, leading to law and order problems. In such a situation, even a minimalist state restricted only to policing will become enormously large and all-pervasive, devouring much of the wealth of society and intruding into every aspect of citizens' lives.

For example, under the new infrastructure policies, foreign companies can have 100% equity participation, but the government will acquire the land, displace people and deal with "law-and-order" problems created by displacements.

Most of the ideological projection of globalization has focussed on the new relationship of the prince and the merchant, the state and the corporation, the government and the market. The State has been stepping back more and more from the regulation of commerce and capital. Reflecting this ideology of deregulation, the Indian Finance Minister stated that "Power should move to the boardroom," i.e., from the state to the corporations. However, the shift from the rule of the nation state to that of the corporations does not imply more power to the people. If anything, it implies less power in the hands of people, because transnational corporations are more powerful than governments and also because they are unaccountable to democratic control.

The erosion of the power of the nation-state leads to a concentration of power in the hands of corporations. It does not devolve power to the people. It does not move power downwards into the hands of communities. In fact, it takes power away from the local level and transforms institutions of the state from being protectors of the rights of people to being protectors of the profits of corporations. This creates an inverted State, a state more committed to the protection of foreign investment and less to the protection of the citizens of the country'. The inversion of the state is well exemplified in a recently announced proposal that foreign Security experts would train Indian police to protect the "life and property of foreign investors".

The expansion of corporate control is often made to appear as the expansion of the democratic space for citizens on the basis of "consumer choice". However, choice within a predetermined setup of options of corporate rule is not freedom, because it involves the surrender of the right to determine the context of living and the values that govern society. The apparent widening of individual consumer choice for the élite is based on the shrinking of the rights of communities to control their local resources and a shrinking of social choice through democratic process.

Globalization Is creating more freedom for corporations. But this is not translating into more freedom for citizens.

Deregulation of commerce is not the same as reduced interferences by the state in the lives of citizens. "Self- governance" of corporations has very different social and political implications than self-governance of people. The end of the "licence raj" might imply more freedom for corporations to invest freely. But it also heralds the beginning of a "patent raj" in which governments are forced to play a new role of interfering in the lives of citizens - small producers, the farmers and craftspeople - to protect what big corporations have claimed as their "intellectual property" - seeds and medicinal plants.

It is often argued that globalization will create growth and growth will remove poverty. What is overlooked in this myth is that globalization creates growth by destruction of the environment and of local livelihoods. It therefore creates poverty instead of removing it. The new globalization policies have accelerated and expanded environmental destruction and displaced millions of people from their homes and their sustenance base,

THE MAJOR DEMOCRATIC issue emerging in India is the right to survival of the large number of poor people who derive their livelihood from natural resources - land, water and biodiversity. In each Sector; a major conflict is emerging between corporate control and community control over natural resources,

People's movements are demanding that power should not be concentrated in institutions of the centralized nation states but should be distributed throughout society and should be dispersed through a multiplicity of institutions, with more power at the local level, controlled by local communities and their institutions. However, while the TNC driven globalization agenda requires that power move from the centralized control of nation states to the even more centralized control of global corporations and global institutions like the World Trade Organisation (WTO), the World Bank and the IMF, the people's democratically driven agenda is for greater localization, both political and economic. Political localization implies more decisions being transferred to the local space. Economic localization implies that whatever can be produced locally with local resources should be part of the local economy so that both livelihoods and the environment are protected.

While the international financial and trade organizations coerce and push the government into a blind and indiscriminate experiment with globalization, the Indian people are responding with a new politics of "localization". They are engaging in an enlightened response to put globalization in its ecological and social context. In region after region, where foreign investment is diverting local resources from survival needs of local people to the limitless appetite of global markets, people are putting investment to the test of ecological and social accountability. They are also redefining the principles of governance on the basis of decentralized democracy. The rule of the World Bank and the WTO has implied rule by super state institutions serving the one sided interest of commerce and beyond the democratic control of people. As the state "withdraws from environmental and social regulation in the "free-trade" area", local communities are getting organized to regulate commercial activity by asserting their environmental rights to natural resources - land, water and biodiversitY - and their democratic rights to decide how these resources are used.

They are redefining democracy in terms of people's decisions in their everyday lives. They are redefining the nation in terms of people, not in terms of the centralized state.

This trend towards localization has, in fact, been born along with the trend towards globalization. If globalization is the corporate driven agenda for corporate control, localization is the countervailing citizens' agenda for protecting the environment and people's livelihoods, In the absence of regulation by national governments, citizens are creating a new politics, for introducing ecological limits, The movement for localization has an inbuilt environmental component of the sustainable use of local resources and an economic component to resist the destruction of local economies by the global economy and international trade.

Movements for localization are giving rise to a new people's protectionism, This is different from the old protectionism in the sense that power and authority to make environmental and economic decisions move from centralized states to structures of self-governance at the local level. Citizens and community organizations decide which roles and functions the state should have. In corporate protectionism all institutions of society - the courts, police, government departments - are distorted to protect the interests of transnational corporations, sacrificing the interests of citizens, small producers and small traders.

The largest corporations of the world have found new investment opportunities in India since 1991 under a combination of strong-arm tactics of the Super 301 clause of the US Trade Act, the IMF/World Bank pressures for liberalization and the Uruguay Round GATT; which have combined to shape the government's new economic policies that put the interests and rights of foreign investors above the interests and rights of the citizens of India. But now, in each sector, the biggest multinational corporation has been forced to recognize that it is the clearance from citizens, not just from the government, that is necessary for democratic functioning.

Whether it is Cargill and Grace in Karnataka, Dupont in Goa, or KFC in Delhi and Bangalore, the entry of TNCS, which threaten people's livelihoods, resources and health, is questioned by local communities and grassroots struggles. Local communities are raising a common voice:

"We will decide the pattern of investment and development. We will determine the ownership and use of our natural resources."

As this message resonates in village after village, from one investment site to another, a new environmental philosophy based on democratic decentralization of control over natural resources is emerging. The pressure of the people is forcing the government to remember its role as protector of the public interest and the country's natural and cultural heritage, not merely the interests of foreign investors. The tendency towards localization and deepening of democracy is aimed at taming the excesses of globalization, including the political excesses of deregulation.

The pattern that seems to be emerging is for environmental governance beyond the centralizing state and superstate systems, which work unidirectionally for the corporate interests. Localization is emerging as an antidote to globalization and to unrestrained commercial greed.

THE RE-EMERGENCE OF democratic pluralism is putting justice and sustainability at the core of a new movement for freedom. Democratic pluralism is an alternative to both centralized and unaccountable state structures and centralized and unaccountable corporate structures. Globalization driven by transnational corporations creates a closed society: it is not an opening up. It closes off the options of two-thirds of India - including the poor, the women, the tribals, the fishing communities, the peasants. It closes off India to her lasting strengths -- diversity, pluralism, sustainability, simplicity and spirituality.

Dr. Vandana Shiva is author of Staying Alive and Monoculture of the Mind.