Political Commentary: Maoist Insurgency in Nepal

Note: I wrote this commentary in September 2002, when the Maoist insurgency in Nepal was running rampant violence and was at it's peak. Six years since then, having won the largest number of seats in the Constituent Assembly election, the Maoists are at the cusp of power. Will they finally renounce violence and enter the worldstage of civilized political forces? The time will tell.
Maoist Insurgency and Political Bosses:
Extreme Culture of Violence and Corruption
By Ajay Pradhan | September 27, 2002

Two distinct groups dominate Nepal's current political scene. Both claim to be champions of the poor people. Let me be blunt - there is little evidence that supports their claim. In fact, both are working to the detriment of the country. One group, in the name of people's movement, is doing it's best to shove it's radical political philosophy down people's throat. Everyone knows the members of this group as Maobadi. They used to be smart (now they are only brutally violent). They correctly identified the pervasive forces of poverty -- factors that can directly and only be attributed to the other group. I am compelled to call that other group Khaobadi. You might want to call them political leaders belonging to mainstream establishment, yet fragmented, political blocks.

Maobadis and Khaobadis are not working together; they are working in parallel streams but to the same result -- destruction of public faith in political process. This erosion of public faith is because of the escalating violent culture of Maoists and the entrenched culture of corruption perpetuated by political bosses, their bosses, and their bosses' bosses. They have both hidden agenda replete with ulterior motives. Public welfare is not one of them. Predictably, they rhetorically and almost monotonously try to have you believe otherwise.

Maobadis pronounce they are people's party -- working to improve the welfare of the proletariat. They want to build a different kind of a nation state. Their purported mission is the demolition of economic stratification because, as they claim, too few people hold too much wealth and power. They want to shift that power to the people and redistribute wealth from rich to the poor. What else is this argument but, as we all, of course, know, the Maoists' political mantra recited too often? Is it a wrong assertion? I have to admit not, even though I wish it were.

I would like to venture away from the predictable and familiar vein of argument. I cannot but admit that many of the issues they have raised are legitimate. Despite each and every five-year plan's emphasis on the agriculture sector, have the peasants not been left behind in economic progress and remained in subsistence condition? Has BCN (Bahun-Chhetri-Newar) nexus not dominated Nepal's politics, bureaucracy, army/police, and commerce? Has Civil Code (Muluki Ain) not blatantly supported patriarchal inheritance? Has capital and social expenditure, for the most part, not neglected rural regions? Has bureaucracy not largely remained for the elite, of the elite, and by the elite? Have foreign aid moneys not been unabashedly misused to line the pockets of the elite bureaucrats and corrupt politicians? Have minister after every other minister not been corrupt? (Maybe there are exceptions - and if there are exceptions, that's what they are -- exceptions!) And, last but not the least, let's face it, has monarchy not been, for the lack of a more elegant word, a sucker -- a leech? What is the long-lasting sociopolitical exigency that demands perpetuation of the throne whose heirs have only embarrassed Nepal abroad and insulted and murdered its subjects under the influence of alcohol? Frankly, the institution has become costly, useless, uninspiring, unmotivating, and, arguably, redundant.

So, the Maoists have indeed raised legitimate issues. But, that is very plain and simple for everyone to see. Their benevolence stops there. The million dollar question is, Why have they raised those issues? Because they want to solve poor people's problems? I much doubt it. In fact, I think they are just taking up these issues to throw dirt in people's eyes. They say they want to effect a shift of power from the elite to the poor. But, in reality, they are just using the poor people and issues close to their heart, so that they have something to legitimize their real intent. And, their real intent is not shifting power from elite to the poor, but, in the name of the proletariat, they want to usurp power themselves.

Maoists were smart, as I pointed out in the outset. But, their unbridled hunger for power has pushed them to the extreme and converted their revolutionary zeal into violent terrorism. Correctly demanding universal education for all children, yet terrorizing teachers, even beheading some, is antagonistic. Using their rural charisma or force or whatever to mobilize poor peasants to fight against elite domination, yet not embracing democratic means of using those peasants to canvass support for their legitimate causes, is another antagonism. I mean, come on, if they can convince so many poor peasants to fight for them, even sacrifice their lives, I'm sure they could bring about tumultuous political change without having to resort to abhorrent violence.

Gullible, vulnerable poor people from rural areas with little to lose either do not recognize Maoists' real intent or do not want to even try. They have become a mere vehicle for Maoists, yet they either do not know it or do not even care. They have been so neglected by the politicians, the Khaobadis, that they have become disillusioned. And, as long as they remain disillusioned, government's use of force (read Shahi Nepali Sena) to eradicate Maoist insurgency will not be successful. As long as the feeling of social injustice and unfairness is pervasive, Maoists will continue to exploit the feeling to perpetuate their movement through cycle of violence. Will the Maoists be successful in getting what they want? With what they are doing, I doubt it. Their violent movement is like a brushfire -- it will stop burning eventually. Not because firefighters were successful, but because there was no more forest left to burn. By the time Maoist insurgency goes the way the Naxalites of North Bengal did, Nepal will have seen more misery. Maobadis will have caused the misery, but the actual culprits, as the history will tell us, will be the Khaobadis, the political bosses that see it as their birthright to do as they please.

09/27/02

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Environment and Development: Political Economy and International Aid

Political Economy of Environmental Problems in Developing Countries:
Implications for International Development Assistance Efforts

Ajay S. Pradhan

It's Policy, Stupid

When we consider the hundreds of millions of dollars spent on "foreign aid" and Third World "development" over the last several decades in conjunction with the claims that the world's poor are becoming poorer and increasing in number, it would seem that a rigorous stock-taking and evaluation is in order. Such assessment and self-criticism is undoubtedly occurring in many bilateral and international development aid agencies. However, this will never go far enough without penetrating studies of the development process itself through the analysis of the political economy of recipient countries.

The international aid operations have spawned vast bureaucracies. Aimed at reducing the gap between the "have" and "have not" countries and improving the lot of the world's poor and underprivileged, those operations have, in many instances, implanted or enlarged local privilege and affluence, separated large numbers of poor people from access to natural resources and, directly or indirectly, damaged the local environments. Much of this dismal process has been typified by actual or unintentional arrogance based upon the assumption that modern science and technology and western educated elites have the answers to all the problems in the Third World. In Nepal, for example, the great number of virtually competing foreign aid projects has placed the central government in the cleft stick of inability to control its own policy development.

There exists a tendency on the part of bilateral and international development aid agencies to see the temporary provisions of technical experts, dissemination of knowledge, and the training of Third World technicians as sufficient responses to serious environmental degradation in the developing countries. The importance of disseminating knowledge and assisting the Third World countries to overcome lack of skilled labor is great. However, ignorance and poor technical training are not the only things at fault. Political and economic constraints may be important impediments to preservation of environmental quality even though there are enough skilled workers.

Environmental problems in many Third World countries are often the manifestations of bad political and economic policies. Development aid agencies must not ignore this fact in administering funds to help developing countries deal with the problems. This essay critically examines the political economy of environmental problems in developing countries, and its implications for international development aid efforts.

Development Aid at What Price?

Evolutionary changes are underway in the focus of international development assistance organizations. Because of these changes and the efforts of international conservation movement, bilateral and multilateral development aid programs in the environmental and natural resources sector have expanded greatly in recent years. An increasing number of environmental management pilot projects have been implemented and some have even shown signs of success in helping people design local watershed management techniques, village woodlots, and soil conservation systems.

However, in many developing countries where people depend on forests, pastures, and agricultural lands for their livelihood and welfare, significant deterioration in the productivity of these environmental resources continues. The question of how these countries are going to stabilize and then appropriately manage their resource base is made complicated by numerous political and economic factors that are often overlooked.

Despite their expressed concern for highlighting the serious environmental problems that are rampant in developing countries, development assistance organizations and international conservation organizations have sometimes failed to examine the underlying political and economic dynamics of resource and environmental abuse in the Third World. Environmental abuse and mismanagement are often a result of complex political and economic circumstances and incentives prevailing in individual countries. The results may be similar in similar ecosystems all over the world—deforestation, soil erosion, desertification, etc—but the causes of such environmental degradation may vary widely from place to place, region to region, and country to country. This variation has significant implications for the natural resource management and environmental protection efforts of international development assistance agencies and developing country governments.

The generalization of environmental problems by development aid agencies can lead to an oversimplification of solutions proposed at the local level. No environmental policy, plans, programs or guidelines can be successful if they overlook the basic fact that environmental abuse is rampant in the developing world because of much larger and more complex failings of individual political and economic systems. In such a context, resource abuse at the local level or national strategies for depleting forest and fishery resources may well represent the most expedient responses by countries and individuals to situations which would otherwise require fundamental political and economic reforms. Or, power and authority may be exercised to shift the costs of environmental externalities from one group in society to another.

Resource Abuse - Poverty or Greed?

In many cases, the poor, especially the rural poor, suffer great costs, while those with political power may actually gain from a strategy of environmental exploitation. At the same time, there is a tendency to overemphasize the extent to which the poverty-population conundrum is the predominant reason for environmental abuse in the poorest countries. While the link between poverty, population and serious degradation of renewable natural resources in many countries is certainly important, such a viewpoint understates the complex factors that make environmental abuse the most logical short-term strategy for people to pursue. Overpopulation and absolute poverty are not necessarily the primary causes.

For some poor people, the farming of steep and eroded hillsides and collecting fuelwood may well be the only alternative to starving or freezing. But, examined as cumulative regional phenomena, deforestation in Nepal, and desertification in the Sahel are much more than the result of poverty-stricken people trying to eke out a living. Invariably, deeply rooted political and administrative structures and economic incentives induce the poor and not so poor to cut trees or abuse the earth's soil. Corrupt officials, overly centralized bureaucracies, inequitable land tenure patterns, or pressures for short-term successes and projects may make reckless use of the land quite rational and often lucrative.

Moreover, the image of millions of poor people abusing the land, day in day out, year after year, thereby diminishing a wide area to a barren, eroded zone or dustbowl, in a continuous sequence is probably only a partially accurate portrayal of much environmental abuse that takes place in the third world. People the world over react to a continuous series of short-term circumstances that significantly affect at any given time the degree to which they abuse or care for their local environment -- whether general economic outlook, prices, political pressures, etc. Because of these changing external factors, degeneration of renewable resources often takes place in short, intensive periods rather than at one constant rate.

Often after a surge of degradation -- caused by one-shot deforestation, migratory agriculturalists or pastoralist, or a confluence of poor economic return -- the natural or human abuse is slowed and the lands attain a new, if diminished, threshold for their carrying capacity. While nature does not itself change rapidly, it is often diminished at a rapid and erratic pace with, perhaps, periods of relative stability in between. This fact may call for different approaches to the problem of encouraging better land management and conservation practices among the millions who live off the land in developing countries.

In addition, environmental degradation in developing nations is often portrayed as a "tragedy of the commons" -- no single individual has an interest in taking positive steps and collective action does not take place, so in the long term everyone suffers as lands are degraded. This is the way how international community has viewed the desertification problem in the countries in several African nations. But this image of the tragedy of the commons fails to illustrate that some benefit more than others from the short-term abuse of the land and that they might not benefit at all if collective actions were taken to implement sustainable land management practices.

Therefore, from a social sciences perspective, there is still a need to delineate more clearly: a) the diverse causes of resource and environmental degradation in the third world countries; b) why human pursuits lead to degradation of some ecosystems and enhancement of others; and c) how a strategy of environmental exploitation, whether implicit or explicit, may be quite integral for various nations, groups, or individuals pursuing disparate goals under a wide variety of political and economic circumstances.

Therefore, it is important to examine these concerns, and see how manipulation of political power by certain groups, lack of personal and territorial security, numerous economic incentives and disincentives, and the development planning and administration process itself often motivate environmental abuse even when the adverse consequences are obvious. This, of course, raises the question of whether development planners and development assistance agencies should try to treat the symptom or the cause.

Political Influence

Natural resources are finite and scarce everywhere; there is not enough for everyone to enjoy unlimited benefits from these resources. Consequently, governments have to allocate access to scarce resources through various means. The government could either do this by setting out priorities for the use of resources or by ensuring the protection of the "property rights" of institutions and individuals who have already secured access not available to everyone.

Besides their finiteness and scarcities, natural resources can be limited in their ability to contribute to the economic welfare of different groups when access to those resources is restricted. But differential access to basic natural resources in one place also can contribute to environmental degradation in other places. Within specified geographical areas, access to land for agriculture and other land uses is rarely equally distributed among the inhabitants. Groups and individuals with privileged positions within the state, or whose group access is protected by the government through the assignment of appropriate property rights, usually possess the most fertile lands, the best forests, and the rights to scarce water.

In many instances, the monopolization of lucrative resources by few rich people leaves many poor people dependent on land, which is marginal and ill-endowed with natural resources. The carrying capacity of such marginal lands is easily exceeded when large numbers of people have no other means of securing a living except to work the land around them. Therefore, environmental degradation in many areas is an outcome of lopsided distribution of land, water, and other natural resources.

The mountainous and hilly areas of Nepal are an example of marginal areas subject to intensive and often destructive use by poor people who do not have access to limited lands in flatter, more fertile terrain of the plains, the southern food-growing belt. A large percentage of the area under cultivation in mountainous and hilly areas is susceptible to soil erosion. People who of necessity toil in the marginal areas generally cannot lay claim to other resources to help improve their lands -- they are remote from key urban centers, they participate only marginally in politics, they are amongst the poorest and least educated, and they have relatively low social status. As a result, large development projects or financing available from governments and external aid programs also tend to be focused in other areas.

Territorial Insecurity

Lack of well-defined property rights over lands often gives rise to a sense of insecurity. Security from usurpation is a fundamental requisite for long-term land stewardship. Unless people feel that the proceeds of investments to protect and improve future land productivity will accrue to them, they will not make an effort to protect the land. This security is lacking in many parts or the developing world.

For example, in the late 1960s in Nepal, the government's decision to nationalize all forests in the country led to a rapid conversion of forestlands to farmlands, as forestland owners were "rational" enough to protect their lands from being usurped by the State by converting forestlands to agricultural lands. The result was a rapid and large-scale deforestation throughout the country. Until the late 1970s, the government assumed that placing forests under the control of the Forest Department would ensure proper use. The result was just the opposite. More recently, the policy has gradually shifted and the current approach is to devolve control of forests to local community, re-institutionalizing the common-property resource management system in the forestry sector.

For poor people living in subsistence level, security is, however, not simply the freedom from expropriation of property. Poor people who work the land will not or cannot make investments to maintain long-term productivity if this entails too much sacrifice from present consumption.

Another potential cause of environmental degradation is the constant insecurity of land tenure that many poor people throughout the world must endure. In both rural and urban areas, people are reluctant to take steps to protect or improve the land around them if they do not have some reasonable assurance that they will be permitted to continue occupying that land.

Degradation of the local environment may also be encouraged when governments exercise political power to force people to move from one place to another. When governments try to dictate where people settle, one consequence can be a failure by those so coerced to care for their adopted environment.

Role of Governments

In many instances, governments are directly responsible for environmental deterioration. Often governments simply do not have capability and the will to check the undesirable trends. In many cases, governments simply lack financial resources and commitment to provide for adequate protection of natural resources from abuse. Faced with immediate economic constraints, governments are often easily attracted by short-term solutions to environmental problems. Such short-term solutions may very well be popular among the often-ignorant rural people. For the governments, permitting unlawful abuse of natural resources may be far easier than providing alternatives for people in need or implementing political and economic reforms that might reduce the pressures that lead to abuse.

Sometimes long-term environmental rehabilitation programs do not succeed because governments do not afford adequate protection or seek people's participation. In Nepal, reforestation programs have been plagued by administrative problems and the inability of the government to police reforested areas, as well as the lack of people's participation. This problem of cutting down trees will persist as long as people have no alternate sources of fuel to cook food and heat their homes in winter.

In some cases, local groups strongly protest or simply ignore government efforts to institute conservation policies because this would amount to a forced reduction of present levels of income. And in many other cases corrupt government officials and political leaders abuse their authority and exploit resources for personal gains. Those who are responsible for implementing regulations are themselves engaged in unlawful activities. Such actions by powerful and rich individuals often encourage general people to squander the resources further.

The Way Forward

The failure to manage natural resources and to contain the most serious forms of environmental degradation is quite often symptoms of broader problems. Any attempt to design strategies to reduce environmental abuse in developing countries must begin with an understanding of how intricately the various forms of resource and environmental mismanagement are interwoven into the fabric of individual political-economic systems. This fact must be accommodated by international development aid agencies in their effort to help the developing nations around the world in managing their environmental resources.

The development aid agencies must take into consideration all key aspects of political economy relating to natural resources of a country if they really want to be helpful in the sound management of natural resources. They should try to help people in developing countries to overcome resource and environmental problems in a way that is not foreign to the local people.

The stakes in devising better approaches are quite large. In many developing countries today, no single achievement would be more important for the welfare of the masses of poor people than the stabilization and enhancement of environmental and natural resources to ensure sustainable and improved production from the land. If development aid agencies consider the implications of the political economy of environmental resources in the third world countries, they will be successful in providing help, and not merely aid.

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Environment and Sustainability: International Aid

Unintended Environmental and Social Impacts of Development Projects:
A Case for Policy Reform in Multilateral Development Financing
Ajay Pradhan

The multilateral development banks—such as the World Bank, the International Monetary Fund, Asian Development Bank, African Development Bank, and Inter-American Development Bank—together are the largest source of development financing in the world. As the largest source of loans for funding development programs and projects, they exercise a big influence in setting policy agenda in developing countries in Asia, Africa, Latin America, and Eastern and Central Europe, affecting the lives of hundreds of millions of people.

The main purpose of development loans given by these agencies is to encourage economic development and alleviate poverty. In many cases, such development assistance programs have yielded tremendous positive results. However, there is ample evidence that many ill-conceived development programs and projects that these financing agencies have funded have been responsible for widespread social disruptions and environmental damage in many countries.

The majority of multilateral bank loans have supported projects in various sectors such as natural resources, agriculture, rural development, power and irrigation schemes, and road building. The projects and policies of the banks have an impact on the ecological stability and environmental future of the developing world.

Observers have documented the environmental damage that bank-funded projects have caused in developing countries. Environmental problems caused by development bank activities are particularly severe because many of the projects are large and capital-intensive. This implies that local people in the project area do not get benefits from the projects.

The gravest environmental impact of bank projects may be the accelerated deforestation of the tropics. The projects have caused deforestation in two ways. First, the banks have financed projects that directly entail deforestation, such as forest colonization schemes. Second, the banks have helped promote and implement general agricultural policies that are capital-intensive rather than labor-intensive.

These capital-intensive programs have displaced great numbers of rural farmers and the poor from lands suitable for agriculture onto agriculturally marginal areas such as tropical moist forests. Capital-intensive schemes are not essentially bad, but they can have disastrous ramifications if they do not have adequate provisions for off-farm employment opportunities for displaced farmers.

The banks often design projects as a "safety valve" for the local conditions. A huge World Bank-funded Amazonian colonization scheme in Brazil removed rural poor from subtropical areas with rich soils and transplanted them to the Amazon, where deforestation is the inevitable consequence of environmentally unsustainable agriculture. The banks have funded large-scale cattle ranching projects in Central and South America, despite their obvious damage to the rain forests.

The development banks are financing projects designed to address what are essentially donor-defined problems rather than those that are real. In many cases, the traditional forest and agricultural management practices of indigenous peoples are far more appropriate to the local conditions than are those supported by the banks. Regrettably, the banks have done little to investigate, preserve, and utilize the knowledge of these native peoples. Instead, ill-conceived agricultural projects have accelerated the destruction of sound traditional agricultural methods.

The development banks are engaged in seemingly questionable projects. They are financing production and utilization of such pesticides in developing countries that are already banned or restricted in developed countries. Such pesticides include DDT and BHC. A classic example of environmental and economic collapse resulting from heavy use of pesticides promoted by aid agencies is now occurring in the Sudan's main cotton producing area, the Gezira. Some scientists maintain that the banks' pesticide financing practices also contribute to the accumulation of dangerous levels of pesticide residues in developing countries. Long-term public health consequences of tobacco are obvious. However, the banks have funded big tobacco projects in Africa and Latin America.

In India, the World Bank created thousands of development refugees—people displaced from their land by development activities. A bank-funded resettlement project in Singrauli, India, has forcibly relocated 300,000 poor rural people several times without proper compensation in 25 years. Displaced from their land, the source of their livelihood, the rural poor became landless poor.

In Nepal, Kulekhani Hydroelectricity Project displaced 1,200 villagers belonging to 235 households from their land submerged by the reservoir. Instead of land-for-land scheme, more than 80 percent of households accepted cash for land, which did not come through for two years. When the government completed the payment, the land value had gone up sharply in surrounding areas, making it almost impossible for the farmers to buy land and resettle in the surrounding areas.

With no proper government support for rehabilitation, the new landless villagers from Kulekhani quickly spent the money in subsistence or squandered their cash in ill-conceived small business ventures in Hetauda, south of Kathmandu, and became development refugees. An inadequate and delayed compensation package devoid of rehabilitation component was not successful with rural people whose only livelihood experience was in farming. Impoverishment was an unintended outcome.

On top of this, the progressive deforestation in the upper catchments of the Kulekhani watershed, which is 212 km2 with a 1980 population of about 36,000, has increased the risk of mass wasting and accelerated erosion in the watershed and excessive siltation of the Kulekhani Reservoir. Siltation and increasing sediment load has reduced the reservoir’s electricity generating capacity significantly. Deforestation has increased the risk of flash flood damage to the dam in the event of excessive rain in the catchments.

Built in early 1970s at the cost of $180 million to generate 90MW electricity, the Kulekhani dam and the reservoir has an economic life of 100 years, but with the continuing siltation and increasing sediment load, the reservoir’s lifespan can be much shorter. Apparently, the project planners had ignored the socio-economic factors that would emerge in the future to drive deforestation and watershed degradation. In the watershed above the dam, the reservoir severed many households from access to markets and watermills and enforced a long detour. Below the dam, the water retention in the reservoir dried up downstream channels, causing a loss of irrigation water and closing down many watermills.

Another example of a failed infrastructure project from Nepal is the East-Rapti Irrigation Project in Chitwan District. A huge investment by the Asian Development Bank in project development and feasibility study phase became wasteful when the project failed. A much-delayed environmental impact assessment predicted that diversion of water from the Narayani River would lead to serious environmental consequences to the ecosystem of the Royal Chitwan National Park, the precious tall-grass habitat of endangered Bengal tiger, one-horned rhinoceros, and many other wild animals. The most significant component of the project—a 400 meter-long diversion weir—was scrapped from the project, but by that time a significant amount of money had already been spent. The money could have been saved had the EIA study been done in time.

To be fair, I must point out that the World Bank did adopt a comprehensive policy on managing involuntary resettlement in bank-financed projects in 1980. The policy, as stated in the bank’s 1980 operational manual, “Social Issues Associated with Involuntary Resettlement in Bank-Financed Projects”, was a response, in part, to the criticism of social impact of poorly planned resettlement schemes.

There are examples of withdrawal by the World Bank from mega-projects following intense public pressure, lobbying against projects, and negative media attention. In India, the bank withdrew from financing the construction of Sardar Sarovar Dam of the massive Narmada Project that, its critics claimed, would displace millions of people in the Narmada Valley.

In Nepal, the World Bank is facing intense national and international NGO lobbying against the Arun III Hydroelectricity Project, a huge 204MW project in the Arun Valley in eastern Nepal. The NGOs have leveled a non-trivial charge—in developing the project, the bank violated its own policy guidelines and operational procedures on economic analysis as well as environmental and social impact assessments. They claim that the project would be economically unfeasible, environmentally damaging, and socially disruptive to indigenous Arun Valley people.

There is the concern that Arun III, at one billion dollar, is too costly. Indeed, the cost is one and a half times greater than Nepal’s entire annual budget. Furthermore, the bank ludicrously stipulated that to pay off the project loan the government would have to raise the electricity tariff by 100 percent nationally. Added to this is the charge by local hydro experts that the bank has been ignoring smaller, more viable alternatives to Arun III.

With the pressure increasing, the World Bank has now finally decided to send an independent inspection panel to Nepal to investigate the charges. Given the serious charges, the bank will find it difficult to push the costly project through if the inspection panel finds that the bank did indeed violate its own policy and procedural guidelines.

There are other examples of the World Bank’s involvement in costly schemes. In its own 1987 report “Twelfth Annual Review of Project Performance Results”, the World Bank conceded that the cost of new jobs created under bank loan schemes is occasionally as high as $500,000 per job. Such a capital-intensive scheme is nothing but a burden for cash-strapped countries with labor surpluses.

Under its Structural Adjustment Program, the World Bank has expanded its role beyond development financing into questionable interference with macroeconomic, social, and fiscal policies. By itself, SAP is not a bad concept. The bank, and its sister organization, the International Monetary Fund, initiated SAP in 1980 to sanction loans only if the governments would make macroeconomic adjustments. The main idea of such adjustment is to reduce economic inefficiencies. However, in the name of policy reform, macroeconomic adjustment, and busting inefficiency, the bank engages in unnecessary social reengineering, imposing unrealistic conditions on governments.

Although Arun III is not a structural adjustment loan, the bank’s demand that the Nepal government raise the electricity tariff by 100 percent is an unfair meddling in a government’s right to set priorities for its people. Instead of demanding unrealistic and deep cuts in public health, education, and social programs, the bank can target special interest subsidies and pet projects of corrupt politicians.

SAP typically requires countries to remove import and export restrictions, balance their budgets, lift price controls, eliminate state subsidies—policies that even the governments in developed countries are reluctant to try in their own countries for political reasons and fear of public backlash. While some of the requirements do make economic sense, others will undoubtedly cause hardships to the neediest people in the society.

Moreover, SAP generally requires the countries to adjust their currency’s exchange rate, which is, devalue their currencies against the U.S. dollar, in order to boost exports. Devaluation manifests itself through changes in input and output prices. The export sector becomes more competitive, but imports become more costly. Such macroeconomic imbalance can increase inflation, causing economic hardships to consumers of poor countries borrowing structural adjustment loans. Therefore, critics have labeled the World Bank and IMF-imposed currency devaluation requirement that favors consumers in the rich countries as their attempt to exercise, through the World Bank and IMF, economic imperialism over poor countries.

After a decade of SAP, it has now become apparent that many of the policy reform initiatives of the World Bank and IMF have not produced the anticipated changes in economic performance or policy behavior. The poor results have led many observers to question the feasibility of forced policy reform that has given rise to resentment, skepticism and sarcasm. The process of policy reform has turned out to be more complex and difficult than initially expected.

The World Bank has well-intentioned environmental guideline manuals that are publicly available. However, in case of water resource projects involving huge infrastructure development, they have not satisfactorily followed their own environmental guidelines. In the recent past, the United States Congressional hearings on development banks, particularly the World Bank, revealed many examples of projects where the banks did not adequately consider grave environmental impacts during planning phase.

More recently, the development banks have given growing attention to incorporating environmental considerations into their development aid programs. However, the disparity between official bank pronouncements on environmental policy and the environmental effects of specific projects raises questions about not only the sincerity of the bank's commitment to the environment, but also their ability to learn from errors, to disseminate new information to their staffs, and to incorporate innovations into project planning.

Review of the environmental aspects of bank activities also calls into question the ecological soundness and sustainability of the development model promoted by the banks. The World Bank designs and appraises projects largely according to modified neoclassical economic model. Cost-benefit analysis and discounted rates of return that the World Bank uses in evaluating prospective projects may be a classic instance of micro-rationality leading to macro-irrationality.

There was a leak to the press in 1991 of an internal memorandum written by the World Bank's chief economist Lawrence Summers proposing that United States and other developed countries donate dirty factories to developing countries. Many charged that while Dr. Summers may very well be a well-meaning technocrat and a competent economist, the leaked memo echoed their prevailing imperious and disdainful attitude towards aid-recipient countries. In a damage-control attempt, the bank later explained that the memorandum was written merely to generate an internal policy debate. However, the incident had already given rise to resentments in the developing world.

In some cases, the bank staffs have dramatized the borrowing government's opposition to ecological concerns in ways that are consistent with their own value preferences. As long as the banks get to give financial loan on their own narrowly defined neoclassical economic terms, why would they bother about potential negative social ramifications in the recipient countries? Makes us wonder if there is any difference between multilateral development banks and multinational corporations out to make money.

This is not an anti-development or anti-social change argument. Neither is this an argument against intervention by a democratic state in social transformation. Unlike some street-level protests or intense lobbying against development projects, my purpose here is not to make a case against multilateral financing in Third World development. The World Bank and other multilateral financing agencies ought not to consider criticisms, such as this, of their operational approach of translating policy into actions as unfair.

Rather, the policy analysts of multilateral development banks and their partners in developing countries ought to recognize that development activities will undoubtedly affect society in a complex set of ways. An understanding of such complex effects, or externalities, is largely lacking from policy planning and analysis. Those that policy analysts understand are mostly limited to formal sectors of economy, are often peripherally addressed, and not adequately internalized.

In order to prevent future unintended consequences of development, a good starting point for the World Bank and other regional development banks is to take a critical look at their own loan policy and explore room for policy reform. For example, the World Bank ought to evaluate critically their structural adjustment conditions and their comprehensive and far-reaching social and environmental consequences.

Just as the World Bank is eager to impose structural adjustment conditions requiring borrowing countries to make policy reforms and socially painful macroeconomic adjustments, so too should they be willing to put their own loan policy under critical lens. There are clear writings on the wall—loan policy needs major reform. They ought to recognize and internalize externalities in their operations and project implementation, regardless of how far into the future such damaging externalities might emerge. They should leave no major harmful spatial and temporal effects of development activity, whether to the society or to the environment, unaddressed and unmitigated.

The multilateral development banks must explore and answer difficult but important questions before any project implementation. Is the project going to cause disruption to communities? Is the project going to cause damage to the environment? Is the structural adjustment loan going to cause economic hardships to people? Does a particular policy objective make it a likely cause of social disruption or environmental damage? Because any development activity, just as any human choice, involves making a tradeoff, what policy instrument and strategy will reduce the severity of such tradeoff?

Development is as much about opportunities as it is about challenges. A skewed focus on opportunity only will invite unanticipated consequences. Development, after all, is a function of society’s capacity to organize human energies and productive resources to respond to both opportunities and challenges. Therefore, it is imperative to predict the potential benefits of a proposed project against its potential unintended outcomes that might affect people and the environment.

The World Bank, or any other multilateral regional development bank, is not a commercial money-lending bank. Therefore, the performance indicators of projects must go beyond simple economics. Project planning, management and evaluation processes must adequately consider social, cultural, demographic, political and environmental consequences as well. Only then will the people reap the benefits of development. In the absence of policies that truly care about the poor people, the multilateral banks will invite more resentment, more skepticism, and more sarcasm.

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Book Club: Marxism in Theory and Practice

Note: The following is the summary of the deliberations (plus some reflection of my own understanding) of Marxism discussed at a Book Club meeting I hosted four years ago today. Instead of discussing a book, The Book Club meeting on that day focused on the topic of Marxism.

By Ajay Pradhan | Saturday, April 19, 2003

What is Marxism?

That's a very simple question. Unfortunately, the answer is vastly complex. In the Book Club meeting of Saturday, April 19, 2003, that is the question we decided to discuss.

Marxism is a topic that is rather difficult to discuss dispassionately. For that reason, I had urged the participants to come prepared to bring more light to the topic than heat. But, I will admit it now that I secretly wished that, in order for some spice to be added to the discussion, somebody would passionately pound the coffee table with a clenched fist, just to make a point. Wait a second, there was no coffee table in my living room.

Marxism is a much discussed but little understood theory. The famous Communist Manifesto, which Karl Marx and Freidrich Engels wrote in 1848 for the Communist League, has been widely read, extensively studied, passionately discussed, diligently researched, and critically analyzed by many within and outside academia; yet, it still does not fail to perplex us. The terminologies that litter Marxist literature, as pedantic and esoteric as they are, spin our mind. Try, for example, "dialectical materialism". Hang on a second, say that again, dia... what materialism? Without a context, the term may simply mean discourse about the material world, for dialectical implies discourse or about language and materialism the material world. And, try some more... "scientific realism", "historical determinism", "Hegelian idealism", "dictatorship of the proletariat", "thesis, antithesis, and synthesis", "bourgeois society".

A student of philosophy could walk us through this mass of bewildering terminologies. But, since I knew of no philosophy student at the meeting, I thought a political scientist would have to do. So, I kicked off the meeting by asking Ramjee Parajulee, a George Washington University political science graduate who teaches at Simon Fraser University, if he would give us a synopsis of Marxism 101 and give us the essentials of Marxist literature.

"Marxism is based on class struggle", Ramjee Parajulee started off with the fundamentals, then added, "and dictatorship of the proletariat". In Marxist utopia, the proletariat, or the working class, who owns no means of production other than one's own labor, takes over control of society's means of production, thus effectively seizing power from bourgeoisie, the capitalist middle class. The objective is to remove class-based economic disparity that exists in a capitalist society. Marxism, he said, is the foundation of Leninism and Maoism.

Marxism: Foundation of Leninism and Maoism

Leninism, as Ramjee Parajulee said, is indeed founded on Marxism. But, what is the difference between them, if any? To understand this, we first have to understand Lenin's revolutionary zeal, something that markedly set him apart from Marxist philosophy. Leading the Bolshevik faction of the Russian Social-Democratic Labor Party and seizing power in 1917, an historical event better known as the Bolshevik Revolution, Lenin accorded paramount role to a tightly disciplined vanguard of professional, revolutionary activists to lead masses to what he called revolutionary consciousness and action. Lenin put emphasis on the tactic of proletariat revolution in general and the eventual dictatorship of the proletariat over bourgeoisie in particular. Lenin lived in the era of developed imperialism, which he called the height of capitalism, and proletariat revolution. In fact, Leninism emerged from proletariat revolution.

Lenin was a revolutionary in his action whereas Marx was a revolutionary in his thought. Marx was a political thinker whereas Lenin was a political revolutionary. Leninism is, therefore, essentially the application of Marxism. No doubt, Lenin was a Marxist and Marxism was the basis of his world outlook, but his world outlook and foundations of Leninism aren't identical in scope. In short, Leninism emerged and developed under the conditions of imperialism, when capitalism was being increasingly questioned and criticized by followers of Marx for its contradictions, and when proletariat movement was taking shape—by which time Marx had long come and gone.

What about Maoism? Mao, like Lenin, was a follower of Marxism. But, Maoist followers accuse Lenin's Soviet communism as State capitalism, in which the State runs the economy as a capitalist economy—for profit rather than for human need, which eventually leads to the rise of bourgeoisie. In order to establish a truly classless society, Mao mobilized the workers, peasants and students into a guerilla rebellion against the nationalists within the Chinese Communist Party. In the process he armed them for a violent movement, giving his movement a much more militant color than Lenin's revolution.

Predictably, Mao's blustering followers say that accusations that Mao preached violence and many people were massacred by his cadre, are baseless. Maoists view the Chinese Cultural Revolution as the farthest historical advance toward communism. Maoist movement effectively came to a screeching halt in 1976 when Mao died and four of his successors, better known as the Gang of Four, were arrested, setting off the reemergence of French-educated reformist Deng Xiaoping and, under Deng's leadership, the economic modernization of China.

Dialectical Materialism

At the Book Club meeting, I didn't feel we expounded enough on the concept of dialectical materialism even though that seems to be a central characteristic of Marxism which Ramjee Parajulee did mention as such. A brief philosophical discussion, or just an attempt at it, at this point would not hurt anyone. Marxism is a theory rooted in Hegelian idealism and its notion of the dialectic. In philosophical literature, an idealist is someone who gives priority to the human mind, whereas a materialist is someone who believes that materialistic description, not mental phenomena, is far more important. Idealists doubt the existence of a material world and materialists think mental phenomena are a function of or are reducible to physical phenomena. We're getting a bit philosophical here, aren't we? Well, bear with me for just a few more seconds.

Well, back to our discussion. Materialism and idealism, thus, are diametrically opposed to each other. Materialism mostly influenced Soviet Union and China and German philosopher Hegel's idealism became influential in the Western world. Not that there were no materialists in the west; only they preferred to call themselves scientific realists. How can, then, Marx, who was a big materialist, expound a philosophy that has roots in Hegelian idealism? Well, it turns out that Hegel postulated a world attaining self-realization through a process of dialectical progression, in which, through a process of interaction and deliberation, one stage evolves into another. Marx also believed in the process of dialectic but he firmly located it at the material level—hence, dialectical materialism.

In layman's term, what does it all boil down to? I'm not absolutely certain if I'm correct, but my take on this is that idealists think human mind makes use of the material world and material world is only what human mind makes of it. On the other hand, materialists believe that human mind is essentially limited by the material world. This is why, I think, communism gives emphasis to brawn power, the labor class, than brain power, the entrepreneurs.

Class Struggle: Thesis, Antithesis, Synthesis

When Marx applied the concept of dialectical materialism to history in the Communist Manifesto, it yielded a picture of class struggle being waged over time. Naresh Koirala and Ramjee Parajulee both expounded further on this concept of Marxism with eloquence. They pointed out that as the class struggle progresses, each form of society ("thesis") generates its own contradictions ("antithesis"), until a new synthesis is achieved, setting off the dialectical process on yet another cycle.

This "thesis-antithesis-synthesis" perspective allows us to understand Marxist explanation of historical evolution of society and prediction of an emergent society more clearly. According to this perspective, medieval society is superseded by bourgeois society which in turn is superseded by a new classless society. This classless society, Marx predicted, would be the dictatorship of the proletariat where the working class will be the only dominant force.

Ramjee Parajulee illustrated the "thesis-antithesis-synthesis" progression with a metaphor that his school teacher in Nepal used to explain the evolution of society as explained by Marx. A corn seed (thesis) germinates (antithesis) and grows to produce corncob (synthesis) from which is released corn seeds (thesis) that repeat the cycle of progression. I don't know if his teacher was successful enough in clearly explaining the concept of dialectical progression with this metaphor. But, clearly, the metaphor stuck in the young schoolboy's mind, who has himself now become a teacher. I silently noted with relief that the schoolboy's mind only got implanted with a metaphor, not a Marxist ideological crank to turn it.

The Communist Manifesto: Communism vs. Capitalism

Naresh Koirala then briefly summarized the Communist Manifesto. The manifesto, written by Marx and Engels in 1848, was a seminal work promoting communism's political agenda and to this day remains an important document. The document dwells more on why capitalism is bad rather than on why communism is good. It seeks to build a justification for communist ideals based on what they thought were contradictions of capitalism, rather than on why communism would be a better alternative. For example, as Naresh Koirala elaborated, the manifesto proclaimed private property as being the source of injustice and to remove such injustice from society struggle by landless labor was needed to deal a decisive blow to the landowners, or the bourgeoisie, and to abolish private property, as if such action would magically create a just and progressive society.

After Naresh Koirala talked about the Communist Manifesto, the book club meeting took a turn for open discussion. Lomash Regmi said neither communism nor capitalism as we see them today are 100 percent pure, meaning that they both have features borrowed from each other. Very true, because look at certain public policies that have been legislated in the United States, the bastion of capitalism. The affirmative action policy, for example, has principle of social justice normally championed by Marxists.

Another interesting point Lomash raised that illustrated communism's concern about capitalism's historical unjust domination of workers in a capitalist society was the long working hours that stretched to more than 12-16 hours a day. In the United States, the industrial labor movement for limiting the long work hours to a maximum of eight hours spanned over 70 long years before finally becoming successful. The movement began in the 1860s, became intensive in the 1880s, and then finally became successful in 1933 when Franklin Delano Roosevelt enacted an Act to limit work hours to eight hours a day. It was a significant achievement for the working class in a capitalist country.

Suresh Bhatta then brought in another interesting feature of communism that is actually in progress now in the non-communist European Union of western European countries. The ultimate utopia of communism is the abolition of class-based society, emergence of communion-based cooperative society and the ultimate establishment of state-less society, for, communists believe, state is typically always oppressive. Indeed, European Union now seems to be moving away from being multi-state Europe to the concept of single super state. Then, a relevant question that one might ask communists is, "Will the European Union with one single super state be more oppressive or less than each individual states combined?"

Ideological War: Is Classless Society Possible?

Is classless society, as prescribed and predicted by a prescient Marx, ever possible to successfully emerge and endure? No, declared Amod Dhakal and Lomash Regmi, because each individual human being has inherently different ability than the other. They implied that to try to create a class-less society would be going against the nature and would never succeed.

But, countered Naresh Koirala, bringing some objectivity to the discussion, what about the uneven playing field that underprivileged had to historically endure? Clearly, he brought up a Marxist contention that history determines the capacity of individuals—a concept Marx called historical determinism. He contended that such historical uneven playing field, or discrimination, if you will, is responsible, to an important extent, for what sometimes appears as different abilities that different individuals have. Canada's social safety net, he contended, is really a Marxist contribution. Giving another example, he said that affirmative action in the U.S. was brought in to level the historically uneven playing field so that the historically underprivileged have a chance to succeed in society.

Seemingly unconvinced, Lomash Regmi then put forth a forceful argument: How much longer shall we, as a society, keep on carrying such historical baggage? Clearly, while he acknowledged the existence of historical discrimination, he wasn't too keen on continuing civil justice programs like affirmative action that ignores individual merit in favor of class-based socioeconomic imperative. Both sides of the argument are equally strong and equally valid, I thought to myself, and these are issues that have no simple solutions.

Ritendra Tamang, a relatively new participant in the Book Club meeting, brought in a new thread of discussion, wondering if capitalism alone was sufficient to protect democracy. The question is interesting, especially because capitalists think democracy is only possible in non-communist states. We know very well that it is not entirely so; look at a non-communist Pakistan, we've got a dictator there. And, Suresh Bhatta reminded us, even in places where communists rule, there is democracy. The populous Indian state of West Bengal, he said, has been mostly ruled by communists and still has democratic government.

Socialism: A Middle Ground Between Capitalism and Communism?

Suresh Bhatta added another dimension to the discussion that was until then conspicuously missing—socialism is a mild form of Marxism. Interestingly, many western democracies love to hate Marxism, but they have many programs and policies that are, well, mild form of Marxism, if that is what socialism is. Canada is a capitalist country, but we have social safety net that we can agree is socialist in nature. In the U.S., right-wing zealots like televangelist Pat Robertson, Rev. Jerry Falwell, TV commentator Patrick Buchanan, and syndicated radio talk show host Rush Limbaugh love to call Democrats a bunch of communists.

Is the difference between socialism and Marxism a question of extent or of form? I think both. Socialism, in my view, provides a cushion and attempts to prevent people from falling through the crack whereas Marxism stifles competitive spirit and motivation for excellence. That's the difference in extent. What about the difference in form? In socialism, there is no one party rule as in a communist state. Therefore, the difference in form is really a question of whether or not there is democracy. It is the difference that we see in Nepal between Nepali Congress, a social-democratic party, and Nepal Communist Party (Maoist), a party that, despite their on-again off-again contradictory public statements regarding their official stand on multi-party form of government, dreams of establishing a one-party communist rule by abolishing multi-party system.

Does capitalism guarantee democracy? What did the participants think in general? We still don't know enough about capitalism, said Manisha Dhakal, pointing out some of the contradictions and weaknesses in it. Capitalist society, Lomash Regmi said, is not interested in democracy, only in money. That's a big accusation. But, it is true that every once in a while, there does seem to be violation of human rights, an important parameter of democracy, in capitalist societies as well. The post 9/11 America has, in the name of homeland security, has not guaranteed freedom of speech to every American. Questioning attack on Iraq is often branded as unpatriotic, added Bhaba Regmi and Sunira Tripathy. Criticizing unilateralist doctrine of George W. Bush often leads to dismissal from jobs. Iswari Koirala said even the free press in America has been biased on the Iraq issue. Bush going into Iraq may very well be for Iraqi oil rather than to reestablish democracy or to prevent a mythical threat against America.

Why Has Communism Failed?

Returning from the topic of capitalism to Marxism, Ramjee Parajulee said Marxism failed in many countries and wondered why. I offered two explanations: lack of democracy and misgovernment. When a regime crushes democracy to implement its dogmatic views it can cling to power only with a brutal military force, not with public support. That's a major reason why communism has collapsed in many countries.

The other reason, misgovernment, has to do with simple logic of management inefficiency inherent in a communist monolith, a concept that can be explained with a robust field of political research—theory of institution. To illustrate this example, I borrowed Garrett Hardin's "Tragedy of the Commons", a metaphor he used to explain why it is difficult, costly and inefficient to manage commons, whether it is a common pasture, a common farm, a common water, a common sky, or a common mill.

Hardin offered a common pasture as an example that is used by cattle herders. Because the pasture is common, each herder can benefit by grazing their cattle. Well, that's good. But, who would protect the grazing land? No one, because it costs time, effort and perhaps money to manage anything and why would any one single herder incur that cost if the benefit is not exclusively his but is to be shared by others? Therefore, like any rational human being, each herder is motivated to only derive benefit not incur any cost—a tragic situation that leads to the ultimate degradation of the common pasture, hence, "Tragedy of the Commons". If, however, the right to use the pasture is exclusive, or a fee charged for its use, then inefficiency can be removed to some extent.

It is true that Hardin didn't account for the human capacity to enter into mutually beneficial relationship among one another that would make it possible for the commons to be managed successfully. There are plenty of examples of successful management of commons, mostly at the local community levels. Indeed, human beings can devise rules to make the management of commons successful, but such rules work well only if a set of conditions are met—just two of which are that the group size is small and homogenous enough for each member of the group to easily interact with one another with minimum of cost.

These are important conditions that are not possible to be met in a communist nation-state that runs every asset as common, not private property. Just like Hardin's cattle herders, nobody has motivation to go the extra mile in communism, because there is no personal gain. That is why Soviet Union and Mao's China had inefficient mills and an inefficient economy. This is the second reason why communism collapsed. This explanation is at the level of government. Is there a more pervasive, more intrinsic reason that has to do with Marxist theory in and of itself? Well, I think, there is and to understand that reason we have to first understand if Marxist theory is a philosophical one or a socio-political one.

Marxist Theory: Philosophical or Socio-Political?

So, is Marxism a philosophical theory? Or, is it a socio-political theory? Is there a difference and, anyway, what's the difference, you might ask. Well, the difference is not only there but it is an important one. A philosophical theory interprets the world whereas a socio-political theory prescribes socio-political agenda. The theory that Marx bequeathed to his followers is essentially a philosophical theory, but with a definite socio-political agenda. The agenda is to change the world, rather than merely to interpret it.

Marx was correct in many respects. He made incisive and critical analysis of the weaknesses of capitalism and its basis, the theory of free market, in explaining the causes of social and economic inequity that exists in a capitalistic society. His philosophical interpretation had merit. But, when applied as a socio-political theory, with an agenda to change the world, to remove socio-economic inequity from society, Marxism failed and failed mightily. It created gigantic economic inefficiency, a debilitating phenomenon that all neoclassical economists love to loathe.

In the two roles that Marx played in world history—critiquing capitalism and advocating socialism—there is a big irony. He wrote a lot in criticizing capitalism and, actually, very little advocating socialism. But, and here is the irony, his followers embraced communism with such fervor that Marxism has become synonymous with a failed political doctrine. Moreover, Marxist followers see production for profit as opposed to production for need and extraction of surplus value as evil features of capitalism; these are features that have propelled capitalist world to the height of economic progress.

When I broached this explanation, it was with a not-too-hidden intention to discredit Marxism and its offspring, communism. "Marxism as a philosophical theory correctly analyzes some weaknesses of free-market capitalism, but as a socio-political basis of government, Marxism has failed utterly," I said without any prevarication. I was blunt because I wanted to provoke. As if already there hasn't been enough said or written out there about Marxism to discredit it, in order to back up my argument, I asked the participants to look at the examples of Soviet Union, People's Republic of China, North Korea, Cuba, and Vietnam.

Soviet Union, the birthplace of communism, that Lenin built into a communist monolith crumbled under its own weight after decades of economic stagnation over a dozen years ago. China, where Mao Zedong added to communism militant dimension, has, for the most part, now abandoned communism in its real sense, in defiance of what Marx and his follower Mao advocated. The communist North in the Korean Peninsula lags so far behind its democratic neighbor in the South, that all that North Korea's "Dear Leader" Kim Jong-il can boast about as having any relevance to international relations is their nuclear program, maybe his platform shoes and his puffed-up hairstyle, but not much else. In the communist Cuba, thousands of freedom-hungry Cubans risk their lives every summer and try to cross the 90-mile breadth of straights of Florida on rickety boats to the shores of Florida, with the hope of finding freedom and a better life, leaving Fidel Castro behind to swagger about the only thing he can—the hand-rolled Cuban cigars. Vietnam, where the communists crushed the mighty America and forced it down to its knees in the protracted Vietnam War, is now busy building market economy.

The communism has only given rise to statecraft of propaganda and sycophancy; not that communists have monopoly over this nauseating political culture, though—partyless Panchayat system in Nepal used it like a religion. And history has castigated the most prominent proponents of Marxism one after another: Lenin, Stalin, Mao. Those that are still left are there only because of dictatorship, not because people really want them. Communism, to use a cliché, has been relegated to the dustbin of history.

Marxism: Useful Critique, Less Useful Substitute

I stopped and looked around, hoping that somebody would jump in and defend Marxism, if only to act as the devil's advocate. When I began to think nobody would take my bait, Naresh Koirala did offer his erudite voice, not so much, in my judgment, in defense of Marxist philosophy but to raise the tone of our discourse from a staid unanimous concurrence to the level of vigorous discussion. But, he didn't contradict that communism has failed; essentially, he said that Marx did offer valid critical analysis of capitalism's reliance on efficiency at the cost of equity and social justice.

Ramjee Parajulee said Marxism has evolved and is no longer a dogma that it once was. Suresh Bhatta said Marxism is indeed a highly charged theory and mentioned a relatively recent article on Marxism in the Economist magazine that said Marxism may have failed as a system of government but it still remains a valid critique of capitalism. Lomash Regmi implored us to read the Communist Manifesto; he said, it tries to adjust the vices of capitalism.

Naresh Koirala added that Marxism seems to be an attractive ideology, but he said he didn't know if one could adapt it to one's own personal life. He said that dehumanizing aspect of capitalistic society frustrates him, but he said he didn't think if applying Marxism to solve that problem would be the answer. He concluded that he tends to think democratic socialism, that promotes social equity and at the same time preserves democracy, that is somewhere in between Marxism and complete capitalism would be better. I thought he hit the nail right on its head—Marxism looks good in theory, but not in practice. I thought it was a nice note on which to end our meeting until next month.

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