New Forms and Strategies of the Working Class

Movement and Resistance in the Era of

Globalization

 Abhinav Sinha

1. Introduction
Indian as well as the International working class movement is facing a grave crisis
today. Now it is not a matter of contention that the power of capital has dominated the power
of labour ever since the fall of the workers’ states in the Soviet Union in 1953 and China in
1976. Nevertheless, capitalism itself has not been able to overcome its own crisis since the
1970s. Right since the economic crisis of 1973, World Capitalism has not witnessed a single
phase of significant boom. But owing to the policies of Globalization, the Information
Technology and Communication Revolution and the ideological, political and cultural
onslaughts on the working class, which was already scattered and somewhat demoralized;
the capitalist system, despite its tattered state, has succeeded in preventing any meaningful
resistance from the working class and also in keeping it from being organized. In this era of
Globalization, the working class movement of India as well as of the world is in crisis today.
Here we would like to clarify a possible confusion at the very outset. When we talk of
the crisis of the labour movement, we certainly do not mean that the ideology, science and
the world outlook of the working class is in crisis. The attacks unleashed by the capitalist
thinkers, ideologues and economists on Marxism-Leninism-Maoism right since the latter half
of the 20th century cannot claim any kind of novelty. Most of these attacks had already been
answered in the time of Marx and Engels themselves and the remaining were dashed by
Lenin. The World Capitalism in its extremely moribund and decaying state has given birth to
some new ideological trends since the decade of 1960s (which, it is worthy to note, was the
period of the conclusion of the last boom of World Capitalism) which have been termed as
Post-Modernism, Post-Colonial Theory, Post-Structuralism etc. The Marxist-Leninist
revolutionaries from around the world as well as other Marxist intellectuals have already torn
apart these theories and proved that there is nothing new in them. It is nothing but an ugliest
possible mixture of the anti-humanitarianism of Nietzsche and Spengler, Anarchism, Kant’s
Agnosticism, Russian Nihilism, the theories of post-industrial society and the anti-human
absurdities of the computer age. Our purpose here is not to go into the critical examination
of these theoretical tendencies. Moreover, it is a topic which calls for a separate dedicated
discussion for itself.
Therefore, there is no question of the Marxist ideology and science being in crisis.
We consider it imperative to clarify this here because owing to their sense of defeatism, poor
study, neo-leftist deviations, political nouveau-riche, axis-less free-thinking and frustration,

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some revolutionary groups and free-thinkers are nowadays bragging about the crisis in
Marxist ideology itself and to borrow from French Marxist thinker Louis Althusser, have
gone on a “philosophical vocation” for dealing with this crisis (Lenin and philosophy and
other essays). Since this crisis-fetishism is particularly in vogue nowadays, we deem it as
essential to clarify that we do not believe that the Marxist ideology is faced with any crisis. Of
course, every science faces some problems for its purpose is to study the ever-changing
world and to search for the laws of its motion. Such problems are the problems of explaining
the new phenomena and thereby developing and enriching the science even further. But this
is quite natural. Only a dead ideology or religion has the privilege of not facing this problem.
Such problems arise only in the realm of science. It would not be an exaggeration to suggest
that precisely these are the very problems which constitute the prime mover of any science.
The crisis that we are talking about is the crisis of the working class movement. The
working class movement today is faced with a crisis as a result of the strategies adopted by
capital for breaking the resistance of labour at the international level in the era of
Globalization and for maintaining the falling rate of profit to the level of survival and our
purpose is to understand this crisis so that it can be overcome.
We can talk mainly about two aspects of this crisis. One aspect is subjective, which
cannot be discussed at length here. This is the crisis constituted by a dogmatic outlook on
the plane of programme among the Marxist-Leninist revolutionaries worldwide and
particularly in the countries which were termed by Lenin as the weak links of World
Capitalism. In our opinion, the programme of the New Democratic Revolution in the camp of
Marxist-Leninist revolutionaries worldwide has become a knot, or an albatross round the
neck. It requires a critical rethinking with utmost seriousness. The tendency of sticking to the
general line given by the Chinese Communist Party led by Mao in 1963, instead of
undertaking an original and independent Marxist study of the socio-economic structure,
production relations and the level of development of productive forces in one’s own country,
has caused tremendous damage to the labour movement.
The labour movement of our country has suffered the loss caused by this dogmatism
in two ways. One section of the revolutionary Communists implementing the programme of
the New Democratic Revolution does not have any coherent understanding regarding
political work in the working class; there are other revolutionary groups who do not think
beyond the resolution of the Peasant Question and they do not even have a reach to the
working class. The activities carried on by yet another kind of groups in the name of working
among the proletariat can at best be called militant economism. Leaving aside some random
and scattered efforts, the working class of India has been left at the mercy of the fascist or
parliamentary leftist and revisionist trade unions. Consequently, tendencies like trade-
unionism, economism and anarcho-syndicalism have entrenched themselves in the working
class. This is not a trivial problem. Lenin has clearly stated that economism and anarchism
always perpetuates the capitalist pecuniary logic among the workers. It means that the
working class remains preoccupied with the battles for wages and allowances. It severely
breaks its organization. If these economic battles are made the ultimate goal, the laws of
capitalist political economy would become effective among the working class. The logic of
competition would work amongst them, which is the most dangerous thing for the working
class. Marx and Lenin have stated that the capitalist class organizes spontaneously by
means of the average rate of profit. Their organization is born out of the logic of competition.
In the capitalist system, one worker is not indispensable for the capitalist because a huge
‘reserve army’ of unemployed workers always remains available in the society. But he
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cannot do anything without the working class as a whole. Therefore, the power of the
workers lies in their being organized as a class and Lenin has written that it needs to be
organized in a conscious manner. Spontaneously, the working class acts on the pecuniary
logic. The ideology of political organization always comes to them from the outside. This task
can only be accomplished by advancing in the direction of party building through a
revolutionary political workers’ newspaper. On the other hand, trade union is a special mass
organization in which there is no multi-class participation; it is a specific mass organization of
the working class. The purpose of a trade union is to unite and organize the working class
around its class interests against the onslaught of capital. This is a platform on which the
working class learns to organize as a class against capitalism. Regarding the importance of
party work within trade union, Lenin has clarified that a Communist organizer carries out a
sustained campaign against the tendencies of occupational narrow-mindedness, economism
and anarcho-syndicalism and strives for raising trans-regional, trans-factory and trans-
occupational class consciousness. It is because of this reason that Lenin has also termed it
as the ‘School of Communism’. The Leninist meaning of the Party work within the trade
union is the refutation of the pecuniary logic (you can read it economism as well) even while
fighting on economic issues; educating and enlightening the working class about its historical
mission through party work within the trade union.
Most of the groups belonging to what is called as Marxist-Leninist camp, owing to
their ‘hangover’ with the New Democratic Revolution, do not take up the task of working
among the working class seriously and even when they try to do so there is lack of clarity
and consistency. Consequently, the huge industrial working class of India is left at the mercy
of revisionism or the Fascist corporatism. And the cases in which the Marxist-Leninist
organizations do go among the working class, they too, in general, end up practising
economism, trade unionism and anarcho-syndicalism. They differ with the revisionist trade
unionism only in the sense that their economism is a bit more militant, a bit more radical and
a bit more ‘red’. But the understanding of political work among the working class is either
absent or extremely undeveloped and weak. And if the game is trade unionism and
economism then the revolutionary Communists can never overtake the parliamentary Left in
this respect.
The second aspect of the problem is the objective one and this is the main concern
of this presentation. This aspect is the problem of understanding the changes in the modus-
operandi of Imperialism, the changes in the composition of capital since the 1970s, which
have collectively been termed as Globalization. In the era of Globalization, together with the
neo-liberal policies, privatization, weakening of regulation, increasingly unhindered
international flow of capital, downfall of Fordism, emergence of a fragmented assembly line
and flexible labour markets, emergence of a more-or-less integrated financial market, the
increasing dominance of finance capital and with the capital becoming more and more
parasitic, unproductive and predatory; some important changes have occurred in the entire
structure, composition, size and nature of the working class all over the world and
particularly in the post-colonial and comparatively less developed capitalist countries of the
so-called ‘Third World’. Without understanding these changes we cannot talk of building a
working class movement in the 21st century. These are the changes that are collectively
termed as informalization, feminization, peripheralization, etc. A gigantic unorganized
working class has come into being at the global level which is working in both organized as
well as unorganized sector. Even the revolutionary Communist groups which are active in
the working class also, in general, carry a variety of pre-conceived notions, prejudices and
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biased attitudes towards this informal/unorganized worker population. They consider it as
being backward, bereft of class-consciousness or lacking it. However, the empirical studies
do not support such notions. Without understanding the whole character, size and nature of
this informal/unorganized working class we cannot even think about building a working class
movement at the level of entire country. There are several reasons for this claim, which we
will discuss in detail later, but as for now, it suffices to say that it constitutes 97 percent of the
total proletarian population of India.

After a brief discussion about the changes that have occured in the modus-operandi
of the World Capitalism in the era of Globalization and a detailed discussion about the size,
nature and character the informal sector, our third aim in this presentation would be to put
forward a proposal on the new forms and strategies of organizing the labour movement and
resistance in the 21st century in view of these changes. We ourselves are in the process pf
working on these forms and strategies and developing an understanding about them; hence
this proposal must surely be considered as working proposal. This proposal is open for
discussion before all the comrades present here.

2. A Brief history of Imperialism in the post-Second World

War period: Globalization of capital, decay of Regulation,
Informalization of labour, unprecedented dominance of
Finance Capital and deepening terminal Imperialist
Economic Crisis

2.1 Imperialism (1870-1945)

Some important changes have occurred in the modus-operandi of the World
Capitalism in the post-Second World War phase. Certainly, we are still living in the epoch of
Imperialism and proletarian revolutions. Lenin had propounded the theory of Imperialism
after an incisive study of the epochal transformations in the structure and modus-operandi of
World Capitalism in the latter half of the 19th century and clearly postulated the strategy and
general tactics of the proletarian revolution in the era of Imperialism. Based on his study of
Imperialism, Lenin elaborated the characteristic features of the World Capitalism in this age.
The main features among them were: the export of capital, the emergence of finance capital
with the merger of banking capital with industrial capital and its subsequent dominance, the
tendency of monopolization and inter-Imperialist rivalry and wars. These characteristics of
Imperialism can be seen even today. Lenin had actually carried forward the analysis of
capitalism done by Marx.
Marx had hinted towards the globalizing tendency inherent in the very motion of
capital in his works like the ‘Manifesto of the Communist Party’, ‘Capital’ and ‘Grundrisse’.
Surely, Marx had not used the term ‘Imperialism’ at that time but we can see some hints of
Lenin’s theory of Imperialism in Marx’s words. Consider the following words of the
‘Manifesto’:
“Exploiting the world market for its profit the bourgeoisie has given a
universal character to production and consumption in every country. To the great
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chagrin of the Reactionists, it has withdrawn the national base from under the feet of
industry on which it stood. All old-established national industries have either been
destroyed or are being destroyed regularly. They are being replaced by new
industries, whose introduction becomes a question of life and death for all civilized
nations; by industries that no longer work upon indigenous raw materials, but raw
materials drawn from the remotest countries; by industries whose products are
consumed, not only at home, but in every corner of the globe. In place of old wants,
satisfied by indigenous production, we find new wants, requiring commodities from
distant lands and climes. The old local and national seclusion and self-sufficiency has
been replaced by all round mutual intercourse, universal inter-dependence. And as in
material production, the same phenomenon has occurred in the field of intellectual
production as well. The Intellectual works of individual nations have become
universal property. National one-sidedness and narrow-mindedness have become
more and more impossible, and a world literature is emerging from the numerous
national and local literatures. (Page 46-47, 'Manifesto of the Communist Party', Progress
Publishers, Moscow)”
Marx clearly specifies the globalizing tendency of capital. In Marx's time, only one
out of three forms or moments of capital, namely, the commodity capital was globalized. The
finance capital was still in the process of coming into being and was within the national
boundaries and the productive capital was also confined within the national boundaries.
Consequently, there was a rivalry among the industrial countries for the capture of the world
market, which was aimed at ensuring the availability of cheap raw material and market for
produced goods. Thus, colonialism was born as a natural expression of the “free trade”
capitalism. Using the terminology of the French Marxist Regulation School, we can say
that at that time, colonialism and industrial capitalism were the 'Dominant Regime of
Accumulation' of World Capitalism and the liberal bourgeois state advocating “free trade”
was the 'Dominant Mode of Regulation'.
World Capitalism had to face its first serious crisis in the decade of 1870s. This
crisis was the abundance of capital accumulation within the national boundaries. In fact, it
was the same crisis of over-production which Marx calls the terminal crisis of capitalism. Due
to the plunder of the world in the era of colonialism, the crisis of over-production and
abundance of capital came into existence in the advanced industrial capitalist countries.
Now, this capital could not be invested productively within national boundaries anymore. Due
to this crisis, the working class had to face terrible unemployment, poverty and inflation and
this in result gave rise to the great movements of the working class in countries ranging from
France, England and other European countries to the USA. The working class launched
politically conscious movements on a large scale. But these movements became training
schools for the newly-emerging proletariat, which had begun to challenge the power of
capital right in its infancy; naturally, these movements could not establish any sustainable
proletarian State. After this onslaught of the working class movements and in order to deal
with the crisis of the rate of profit declining to dangerous levels, the World Capitalism was
forced to make some important changes in its entire modus-operandi. Lenin studied these
very changes and termed the emergence of the financial monopoly capitalism as
Imperialism. Lenin argued that in this phase, capital required to expand beyond the national
boundaries which could have been possible only through the finance capital (i.e. the merger
of banking capital with the industrial capital). With the origin of the finance capital there
emerged giant banks, joint-stock companies and cartels in Europe. The export of commodity
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capital was not a new thing being present as it was for a long time, but this era witnessed the
export of money capital and it grew to such an extent in the coming two-three decades that it
became the general tendency of the era. The entire German industrialization and the
building of war machinery could become possible due to British Banks. The British finance
capital played an instrumental role in the emergence of the economic might of Germany.
Soon it became clear that the finance capital was increasingly playing a decisive role. The
increasing dominance of the finance capital was among one of chief characteristics of the
era of Imperialism, as argued by Lenin. Lenin clarified in 'Imperialism: the Highest Stage of
Capitalism' and also in his other writings on Imperialism and the betrayal of the European
Social-Democracy (as both were related phenomena) and economic romanticism that in the
era of Imperialism, the storm-centre of the revolutions has shifted from the advanced
capitalist countries towards the colonial societies. Formulating the national liberation
struggles and the role of proletariat in them, Lenin propounded the theory of the proletarian
revolution in two stages and saw the national liberation wars as a part of the world
proletarian revolution. Lenin’s prediction proved to be more or less correct. When the centre
of the revolutionary storms was shifting from the advanced European capitalist countries
towards the countries of Asia and Africa, the proletariat accomplished its first successful
revolution at the east-west bridge and established the first proletarian State. After this, the
national liberation wars and movements took place in the colonial countries all over the world
which gave tremendous setbacks to the World Capitalism. Colonialism as a form of modus-
vivendi was bidding adieu to history. World Capitalism was also experiencing changes in its
leadership. After the emergence of the new imperialist forces and right since the First World
War which took place for the capitalist re-division of the world, the British dominance was on
wane. The power of the US capitalism was on the rise. With the beginning of the third
decade of the 20th century, the dominance of finance capital was established throughout the
world, but, industrial capital still constituted a substantial proportion in the overall
composition of the capital, though the control of finance capital over it had been established.
By this time, the share markets had become the centre of earning financial profits through
the trading of shares and speculation. The financial capital of the world had shifted from
London to New York stock exchange. The Great Depression began with the collapse of this
very stock exchange in October 1929. This crisis was also the same old crisis of over-
production and it appeared in the hitherto most dangerous form in the era of the dominance
of finance capital.
Due to this crisis and as a result of the fall of the Social Democracy and the failure
of the European working class to convert it into a revolutionary opportunity, Fascist reaction
took birth in Germany and Italy leading to the rule of the Nazi party in Germany and Fascist
party in Italy. The emergence of Fascism in Europe and the crisis of World Capitalism gave
birth to the Second World War. The Second World War continued from 1939 to 1945 and it
ended with the defeat of the Axis Powers and the victory of Soviet Union over Germany. By
the end of this war two camps had clearly emerged. One was the Socialist camp led by the
Soviet Union and the other was the capitalist camp led by the United States of America.
In order to establish its hegemony over the ruined European countries after the
Second World War the US brought the Marshall Plan in 1947, which was officially known as
the ‘European Recovery Program’. Under this program the USA spent around 13 billion US
Dollars till 1951 in form of aid for the reconstruction programmes and stabilization of the
capitalist States in the European countries. The American finance capital earned huge profit
through this plan. Besides, the US hegemony over the world capitalism was now beyond
6
doubt. After the end of the Second World War a new phase of World Capitalism began which
is remembered by bourgeois historians and economists with immense nostalgia. This was
the period from 1945 till the crisis of 1973, which is also known as the “Golden Era” of
capitalism.

2.2 “Golden Era” (1945–1973)

After the Great Depression and the Second World War the bosses of the World
Capitalism had understood that if the entire economy is left at the mercy of the motion of the
free market and the vagaries of finance capital and speculation, it would prove to be
disastrous. John Maynard Keynes acting as a loyal doctor of capitalism had already told that
if speculative capital is like a bubble in the stream of productive capital, it may be
acceptable; but if the productive capital itself becomes a bubble in the stream of speculative
capital, then the situation could grow out of control. To avoid this, Keynes prescribed the
solution of the interventionist and “Welfare” state and this prescription was implemented
during the period from 1945 to 1973. In this period, capitalism was riding high on
reconstruction projects and there were many opportunities for productive investment. After
the large scale destruction of productive forces in the Second World War, many possibilities
for productive investment had opened up. Besides, the State was running several welfare
schemes on a large scale which was providing social security to the unemployed and youth
population. One of the reasons for implementing these schemes was the presence of a
Socialist camp as well, where unemployment and poverty had been eliminated,
unprecedented improvement had been witnessed in the living standard of the entire
population and freedom from socio-economic insecurity had been achieved.

The World Capitalism appeared to be flourishing on account of the prosperity of the US

capital and the reconstruction after the Second World War. Fordism too came into existence
in the US in the decade of 1940s. This name has originated from the name of Henry Ford
who was the founder of Ford Motor Company. Ford introduced a new form of production in
his company. He stressed on three things in the entire production process so that production
could be achieved at an increasingly bigger scale. The first thing was the maximum
possible standardization of production. The second thing was the highly advanced division
of labour which was executed by the dynamic assembly line. And the third thing was to
minimize the role of skilled labour in the entire process of production. At the same time Ford
also believed in the Under-consumptionist logic that the crisis of the system would increase if
the workers are not given sustainable and considerable wages. These were some of the
fundamental elements of Fordism. Fordism remained the dominant regime of accumulation
of the World Capitalism in the period from 1945 to 1973. It could reduce the cost of
production and maximize the margin of profit. The entire commodity was manufactured in a
single factory and these factories used to be huge in size. Ford implemented this model
successfully in his company and in the decade of 1940s it spread to the different parts of the
capitalist world. In different countries different names also came into existence, e.g. in Japan
it was called as F.S.P (Flexible System of Production) or the Japanese Management
System. The factory assumed such a massive form for the first time in the era of Fordism.
Often, 15 to 20 thousand workers used to work in a single factory. These workers were
generally organized in powerful factory unions. The Dominant Mode of Regulation of this era
was the “Welfare State”. So long as it remained a “Welfare State”, the capitalist class was
7
successful in avoiding big clashes between capital and labour; in other words, it was
possible for the capitalist class to do so at that time. The process of capital accumulation
was functioning more or less satisfactorily and the capitalist world was witnessing one of the
best periods of its prosperity. The capitalist State could afford to give some security to the
working class in the form of Factory Laws at that time. The labour markets in the entire world
were not flexible and were regulated by Labour Laws. One of the reasons behind this was
also the pressure of the organized labour movement. And the capitalist class was not so
desperately compelled as to ignore this pressure and use repression to establish its
absolutist rule. Thus, the 'shram qanoon' (labour laws) had not yet been turned into “sharm
qanoon” (shameful laws) and they were implemented to some extent.

In this era, the role of the Nation-State was enforcing and direct. Most of the countries
were implementing the protectionist policies keeping in mind the interests of their national
capital. The flow of capital, though present at the global level, existed along with national
barriers and was regulated to a large extent. The Dollar-Gold standard was present which
used to ensure stability to this entire apparatus and was its symbol as well. This in itself was
a Keynesian instrument. Under this, the value of US Dollar was pegged with the price of gold
and dollar was the standard or unit for other currencies. Consequently, it was not possible
for any single country to undertake monetary adjustments at its will. There was no economic
crisis on the horizon and hence no national economy felt the need for a floating currency and
the Dollar-Gold standard provided them with a stability which was essential for Keynesian
'Welfare' State.

However, this phase of prosperity came to an end soon. As soon as the next three
decades passed, the capital accumulation had started reaching the stage of saturation. It
was no longer possible to utilize the excess of capital within national boundaries. The crisis
of over-production was once again looming large over capitalism. By the 1970s the rate of
profit had stagnated throughout the capitalist world. The motion of capital had started
suffocating within the national boundaries. Soon, the crisis reached its zenith. We know it as
the Economic Crisis of 1973. The rate of inflation skyrocketed in many advanced capitalist
countries. In the US itself this rate went above 12 percent between 1973 and 1974 and by
1975 it reached to the mark of 25 percent. The unemployment rate in the US reached above
the 10 percent mark and there was a fall of 4 percent in its Gross Domestic Product which
was indicative of a serious recession. The economy of the entire capitalist world was
dependent on the US economy to a large extent and soon the crisis spread to the entire
capitalist world. Meanwhile, the capitalist world had to face another crisis. Due to the Arab-
Israel conflict, the oil producing Arab countries imposed an oil embargo. It led to an oil crisis
in 1973. Due to this reason, old friends of the US, including even Japan, started deserting it.
Finally, the US foreign minister Henry Kissinger forced Israel to withdraw its troops from
Sinai and Golan Heights. Arab countries lifted their Oil embargo. But by then the world
capitalist crisis had deepened further. Along with increasing rate of inflation the rate of
unemployment had also become uncontrollable. The simultaneous occurrence of the
increase in the rate of inflation, decline in investment and increase in the rate of
unemployment, was termed as stagflation by the economists. This was the characteristic
feature of the recession of the 1970s. But the main reason behind all this was the excess of
capital, over-production and the rate of profit going below the minimum level of survival. In
order to deal with this crisis, initially United States of America tried to adopt some monetary

8
measures but it was not possible while the Dollar-Gold standard was in force. Consequently,
the USA detached itself from the Dollar-Gold standard and converted the dollar into a
floating currency so that by changing the exchange rate and through devaluation of its
currency, the crisis could be dealt with. But even this did not work. The situation had already
grown too grave for such monetary measures. Other countries also started adopting the
policy of floating currency but even they had to face failure. Due to the inflexible labour
markets, i.e. due to the relative security of the working class arising out of the labour laws, it
was not possible to increase the rate of exploitation and thereby maintain the rate of profit
above the survival level. So long as the existing dominant regime of accumulation and
dominant mode of regulation remained in force, any such attempt would have had to face a
powerful organized resistance from the working class.

When all attempts failed, the think-tanks of the capitalist world started looking for
structural changes in the entire capitalist system. They started thinking over new strategies
and this process lasted for a few years. One faction was talking about a solution within the
Keynesian framework while the other faction was advocating for the neo-liberal policies, i.e.
privatization on large scale, liberalization, doing away with all the barriers in the flow of
capital, throwing away the labour laws into dustbin and making a flexible labour market,
abolishing the fixed currency exchange rates, promoting foreign direct investment and doing
away with every kind of regulation. Finally the latter faction had its day and with the
beginning of the 1980s, the first experiments of the economic policies of Globalization and
neo-liberalization commenced in the world.

2.3 From the decade of 1980s till present : the Era of

Globalization and the Significant Changes in the Modus-
operandi of Capitalism
Before embarking upon a brief discussion of the process of Globalization, it is
imperative to draw attention to an important aspect. The period between 1945 and 1973
was the last period of boom for world capitalism. After that, although the policies of
Globalization have provided some breathing space to capital for the time being, yet no
period of boom has been witnessed. In fact, the very definition of boom has changed. If we
look at the total Gross Domestic Product of the world from 1970, we find that leaving aside
some exceptional small phases, it has always gone down. In this entire era there has been a
mild recession, intermittently surfacing in form of serious crises. Most of these serious crises
have come in the period between the collapse of share market in 1987 and the Sovereign
Debt Crisis of 2010. And their frequency has been considerable. The Debt Crisis in Mexico
and Latin American countries in the decade of 1980s; the financial crisis of 1987; the
monetary crisis of India in the decade of 1990; the east Asian monetary crisis of 1997; the
crisis after dot-com crash in 2001; the crisis in 2005 after the bursting of the housing bubble;
the American sub-prime debt crisis of 2006-2009 and now the Sovereign Debt Crisis of the
European countries in 2010. It is noteworthy that we have not even mentioned all the crises.
From the decade of 1980s, i.e. after the implementation of the policies of Globalization, the
terminal crisis of the capital has deepened further. It has given some breathing space to the
capital in bits and pieces; sometimes with the Keynesian instruments, at times with the State
intervention and at other times with the stimulus packages. But all these are proving to be

9
futile endeavours and each and every new crisis is proving to be far more serious than the
previous one. Indeed, we can say that while Lenin called Imperialism as the highest stage of
capitalism, we can call Globalization as the last stage of Imperialism. Despite this fact, if
the world capitalist system is still alive today and the Working Class Movement is in
shambles then its reason is inherent in the Lenin’s dictum that “politics must take
precedence over economics. To argue otherwise is to forget the ABC of Marxism”. In the era
of Globalization the World Capitalism has adopted several new strategies to break the
resistance of the working class. Moreover, with the collapse of the Socialist camp and the
retreat of the forces of labour worldwide, an atmosphere of pessimism and hopelessness
has been created. Apart from this, perhaps the most important factor, the dogmatism
prevailing among the revolutionary Communists and the tendency of sticking to the old
formula instead of undertaking a Marxist analysis of the new circumstances is also acting as
a hurdle in the building of a countrywide revolutionary Communist party and advancing the
movement of the working class in any single country. But the level of crisis of the World
Capitalism can never be measured by the yardstick of the health of the working class
movement. The working class movement being in shambles does not mean that the
capitalism is growing and flourishing. There is no need to say a lot about the health of world
capitalist system. One does not need to go long back; a look at its history in the new
millennium reveals that the capitalism is more moribund, hollow and parasitic than ever and
it stays only because there is no organized force today to overthrow it. By understanding the
policies, processes and the history of Globalization, one can also understand the strategies
of the world capital on the basis of which it has succeeded in fragmenting the organization
and resistance of the working class.

The main elements of the policies of globalization were privatization, liberalization,

doing away with all the barriers in front of the international flow of capital, putting an end to
every kind of regulation by curtailing the government expenditure in a big way, making the
labour market flexible by relaxing the labour laws, opening flood gates of foreign direct
investment, setting up floating exchange rates so that the regulation of capital can be ended,
low rates of interest and completely opening the national market. All these policies were
collectively termed by the World Bank and IMF as the Structural Adjustment Program
(S.A.P.) in the decade of 1980s and they offered to provide loans to the crisis-ridden
countries of the "Third World" on the conditions of implementing these policies. Some
countries of Latin America and Mexico became the laboratories for the first experiments of
the policies of the Structural Adjustment Program. But soon the devastating consequences
of these policies came to surface. Abject poverty, unemployment, retrenchments and
lockouts, increasing number of the homeless and the socio-economic insecurity led to
resentment among the people. In the beginning of the decade of 1990s the condition of the
Indian economy also worsened, though India had not adopted the policies of Structural
Adjustment till then. The monetary crisis that shook Indian economy was an expression of
the reaching of the saturation point of capitalist development within the framework of public
sector capitalism. Now it was no more possible for private capitalism to breath under the
system of capital accumulation of the public sector. Though Rajeev Gandhi had already
begun to call the policies of regulation of private capitalism (for example, the licence regime,
etc.) as "impediments in the way of progress", the task of getting rid of these policies was
properly undertaken in 1991 when the Congress Government, under Narsimha Rao's
leadership and under the direction of finance minister and a neoliberal economist Manmohan
10
Singh, a staunch supporter of the policies of World Bank-I.M.F., started to implement the
New Economic Policies. Till then, the disastrous results of the policies of Structural
Adjustment had become clearly apparent in Mexico, Argentina and some other Latin
American countries and the risks of a totally unregulated economy had become sufficiently
evident. Therefore countries like India and China, while on the one hand, implemented the
policies of Structural Adjustment, on the other, chose the path to remove the shackles of
regulation in a long gradual process, rather than in one go. That is one of the reasons, apart
from others, why India and China did not meet the fate of Mexico or other countries of Latin
America.

After witnessing the results of implementing the policies of neo-liberalism in an

uncontrolled fashion, Mexico and other Latin American countries controlled the situation for
some time by adopting the policies of regulation. But with the increasing integration with the
world economy the tremors of the crisis anywhere in the world started to be felt in every
corner. In 1997 the economies of the South-East Asian countries which had been termed as
the ‘Asian Tigers’ started floundering due to monetary crisis. For dealing with this crisis, a
new avenue of investment in the world market was required, which was for some time
provided by the Dot-Com Bubble. It was the era of e-Commerce and e-Business. People
made millions over internet itself which was nowhere to be found in reality. Soon this bubble
also busted and then for some time the situation was tried to be taken under control by
creating a Housing Bubble. But every such surge of the speculation-driven finance capital
was giving birth to even more serious crises. The same happened with the Housing Bubble.
By 2005, even this got busted. The period of 2006 to 2008 was that of the most serious
recession after the recession of 1930s. This recession originated from the financial markets
of the USA where the trash of toxic debt had got accumulated and the US banks and the
finance institutions spread it to the financial markets all over the world in the form of a
special kind of bonds called Collateral Debt Obligation (C.D.O.). The result was a huge
worldwide financial crisis. While the world capitalism was trying to overcome this crisis by
giving stimulus packages, the Sovereign Debt Crisis began in Greece 2010 which has now
engulfed Portugal, Spain and other South European countries.

In this era of Globalization, three important phenomena unfolded which are worthy
of consideration for the working class movement. The first phenomenon was to make a
flexible labour market by doing away with every kind of regulation of the labour markets
through the policies of neo-liberal Globalization. It was meant to snatch away all such legal
rights and legal security from the workers which had been providing them some security
against the onslaught of capital ranging from recruitment to the working conditions and from
minimum wages to the length of the workday. At the same time the existing permanent and
formally employed labour population was retrenched on a large scale. Under the new laws
and regulations, the workers could not even raise their voices effectively against this. The
second phenomenon was the end of Fordism at the global scale. With the sanction of open
freedom for the free flow of capital at the global level it became easier for it to roam around
the world for the exploitation of raw material and cheap labour. At the same time, it was
difficult to properly implement the anti-labour policies so long as the Fordist large scale
production was in force and as long as the labour population was organized at large scale at
the factory level. Due to this reason also it had become imperative to do away with the
modus-operandi of the Fordist production both economically as well as politically. The third

11
big phenomenon was the revolution in the field of information technology and
communication-transportation which took place in this era. It speeded up further the free flow
of capital as compared to earlier periods. This revolution provided unprecedented
momentum to the process of the Globalization of commodities as well as of capital. It
accelerated and simplified the movement of capital across national boundaries. The trans-
national corporations (T.N.Cs), although were present even before the decade of the 1980s,
but their worldwide dominance could be felt especially after the decade of 1980s. Now the
capital could roam around without any barrier anywhere in the world in the search of cheap
labour and cheap raw material. The Information Technology not only made it easy to break
the Fordist production but also made it profitable. Now there was no need to manufacture
the entire commodity in one single factory. If Nike gets the cheap labour and cheap raw
material for shoe-sole in Indonesia, the cheap labour and raw material for the production of
laces in Turkey, the cheap labour and raw material for the leather body in Mexico, and the
cheap labour skilled in assembling all these separate parts in Brazil then it would set up four
factories instead of one. The reason being the transportation and communication have
become so cheap and fast that the minor increase in the cost of production because of this
is far exceeded by the profit earned by exploiting the cheap labour and cheap raw material in
different places. On the top of that, nobody bothers about any kind of labour laws in these
countries and all sorts of headache can be avoided by getting the work done on contract and
sub-contract. An additional and substantially bigger gain is that when the work is done in this
manner, the capitalist is freed from troubles of the union etc. as well.

These three changes have done large scale informalization of the entire productive
economy in the entire world and particularly the relatively backward capitalist countries of the
"Third World" in the last three decades. The informalization of labour means deprive the
workers of a permanent and secured wage employment and put them into the ranks of the
casual workers, daily wagers and contract workers. This working class population is much
more insecure, readier to do work at low wages and more unorganized. It enables the
already crisis-ridden capital to increase its rate of profit a little bit. There are two aspects of
the informalization of the economy. One is the informalization of the workers' population
which we just mentioned. The second is coming into being of a big informal sector. It means
the coming into being of such workshops, factories etc. on a large scale which are either so
small that legally they do not even come under the Factory Act (in India 10 labourers with
electricity connection or 20 labourers without electricity connection) and therefore fall outside
the purview of the state regulation; or such factories which though legally should come under
the purview of the Factory Act, but they run illegally without licence and regulation and are
exploiting the workers ignoring all the laws. Now we will focus on the size, history and nature
of this process of informalization.

3. Informalization: How Much and of What Kind?

3.1 What is informalization?
While discussing about informalization when we say that with the 1970s the Fordist
mass production has declined and the integrated assembly line has been fragmented, it
surely does not mean that the assembly line itself has vanished and now the production is
not carried out on the assembly line. There is a particular reason for giving this clarification.
12
When we said this for the first time, some impatient critiques quoted us in such a way as to
mean this and deduced the inference out of the context; and then erected an effigy and
rained it with their arrows and alleged that we were saying that now the working class has
been deprived of its infallible weapon of halting the production itself! Whereas, what we were
saying is merely this: with the old methods, the use of this infallible weapon is getting
increasingly difficult and we need to devise other ways and strategies for its use! We would
like to clarify this point at the outset so that no such confusion prevails this time around. The
fragmentation of the assembly line does not mean that the assembly line itself has
come to an end. It also does not mean that the production is carried out on a smaller scale.
On the contrary, it means that the production is still carried out on a large scale, rather, one
can say, on an even larger scale than earlier. The large scale production is not measured
by the size of the floor of the factory. The large scale production is measured by the
magnitude of investment and the size of its production. It would amount to political and
economic naivety to say that the production is now carried out on a smaller scale, merely
because of the fact that the dominant form of accumulation has changed from the production
on an integrated assembly line to the one on a fragmented global assembly line. It only
means that the production process does not get completed at the level of a single factory;
instead, it is done in many factories as required by the different conditions of the availability
of cheap labour and raw material for the production of different parts of the commodity,
which are, in many cases, geographically scattered not only in one country but in many
countries in this era of Globalization.
This process of informalization has two components. The first is the coming into
existence of a huge informal sector in the economy. It means the emergence of such
industrial units in huge numbers which do not come under the purview of any law or any kind
of regulation implemented by the government. These include enterprises ranging from work
done at home under subcontracting to handicraft industries, small workshops and small
factories. 98 percent of the labour population working in these enterprises does not have a
permanent employment with a fixed wage and does not get any kind of legal protection.
The second aspect of this process of informalization is the informalization of the work
force of the factories in both organized and unorganized sector. That is, reduction in the size
of the workers' population working in the organized sector on permanent roll and regular
fixed wages, through contracting-subcontracting and retrenchment. This in turn means
continuously increasing the proportion of the workers working under informal contract even
in the organized sector.
Let us see as to how this process is defined by the different government sources and
labour historians and economists.
In 2006, the United Progressive Alliance government formed a ‘National Commission
on the Enterprises in the Unorganized Sector’ under the chairmanship of Arjun
Sengupta. The definition formulated by this Commission can well be considered an accurate
definition. This Commission distinguished between the informal sector and informal working
class and it is necessary to understand this. Let us see as to how this commission defines
these two concepts:
"The informal sector consists of all unincorporated private enterprises owned by
individuals or households engaged in the same and production of goods and services
operated on a proprietary or partnership basis and with less than ten workers."
(Chapter 2, NCEUS, Report on Definitional and Statistical Issues Relating to the Informal
Economy, Government of India, December 2008, New Delhi)
13
 Undoubtedly, around 98 percent population working in such kinds of enterprises work
as informal labourers which does not enjoy any employment security, social security,
protection of labour laws, decent conditions of work, minimum wages, work day of 8 hours,
pension, E.S.I. etc. But this Commission lays particular emphasis on the fact that today
even in the formal/organized sector, more than two-third of the workers' population has been
converted into informal workers, the main reason for which is the process of
contractualization, casualization and emergence of the dominance of daily wager system
which has been continuing since the last three decades. Therefore, the entire informal
working class requires a separate and complete definition. This Commission defines the
informal working class as follows:
"Unorganized/informal workers consist of those working in the informal sector
or households, excluding regular workers with social security benefits provided by
the employers and the workers in the formal sector without any employment and
social security benefits provided by the employers." (ibid.)
It is clear that the informal working class not only consists of the labour population
working in the informal sector, but it also includes the population working in the formal sector
which has become the victim of contractualization, casualization and work on daily wages.
There is a separate definition of the unorganized working population which was given
by the National Labour Commission of 1969 which is as follows: "those who are unable to
organize themselves in order to achieve a common aim." Such population normally
consists of those very workers who belong to the informal working class but still there is a
difference in the two concepts. Famous economist K.P. Kanan has approved the distinction
made by the Arjun Sengupta Commission and has mentioned that today it is important to
stress upon the concept of class rather than that of sector. (page 4-6, Dualism, Informality
and Social Inequality : An Informal Economy Perspective of the Challenge of Inclusive
Development in India, The Indian Journal of Labour Economics, Volume 52, Number 1,
January-March,2009). Now let us briefly discuss the categories of formal/informal and
organized/unorganized. The formal sector means all the industrial and commercial
units coming under the government regulation through factory legislation; the
informal sector means the industrial and commercial units where less than 10
workers work and which have an electricity connection or less than 20 workers work
and there is no electricity connection. The organized workers' population refers to the
one which is in any way organized in form of a union or organization and which could
fight for its economic interests. Unorganized population is the one which is not united
or organized in the form of a union or an organization. If we talk of the informal working
class instead of informal sector then it would have more or less the same meaning as that of
the unorganized working class. But if, we talk about organized working class, instead of
formal sector, then it would not mean the same thing as the formal working class. This is
because a large part of the formal working class is also unorganized.
Although these are government definitions, however, they cannot be written off just by
calling them as governmental because they correctly capture the present realities to a great
extent. Their conclusions are different but not the information and the data. Their conclusion
is Welfarism and the so-called "inclusive development" within the framework of capitalism
and the conclusion that we derive is revolution!
Now, having a glance on the definitions of some non-governmental labour historians
and economists would further clarify the concept of informalization.

14
 Among the scholars who have worked on the informal sector and informal working
class in India, Barbara Harris-White and Nandini Gooptu and Jan Breman are considered
distinguished. Barbara Harris-White and Nandini Gooptu have given the definition of the
informalization as follows:
"'Organized sector labour' means workers on regular wages or salaries, in
registered firms and with access to the state social security system and its framework
of labour law. The rest — 93% of the labour force — works in what is known as the
'unorganized' or 'informal' economy. Unorganized firms are supposed to be small. In
fact they may have substantial work-force, occasionally numbering hundreds, but
where workers are put deliberately on casual contracts." (Page 89, Mapping India's
World of Unorganized Labour, Working Classes, Global Realities, Socialist Register,
2001)
The study of Harris-White and Gooptu tells us that the informalization has incessantly
been pushed ahead through three processes: contractualization or sub-
contractualization, ‘Putting out system’ and casualization. Even the government
statistics confirm the objectivity of this observation. The ‘putting out system’ which has come
into being in today’s time is not the same institution which originated in the medieval period.
Today, the jobs given under the ‘putting out system’ are performed by thousands of families
on piece-rate basis in their respective households, for example, jobs ranging from bidi-
making, bangle-making to the manufacture of spare parts to be used in the automobile and
construction industry. These domestic enterprises are part of the huge circuit of capital.
Lenin has clearly written about them, whom we will quote later in this paper while discussing
about the nature and character of the informal working population.
Jan Breman is the leading historian who has undertaken the study of the informal
sector in India. Breman has written many well-known books and articles on the topic and the
credit for bringing the informal working class to the centre of study among the Indian Marxist
academicians must go to Breman primarily. Breman, while doing a dialectical analysis of this
entire phenomenon and searching for the origins of the informalization, writes that from the
1970s due to the change in the land relations and from the period of ‘Green Revolution’, the
migration of the labourers from rural areas to urban areas increased with unprecedented
rapidity. These migrant labourers, millions in numbers, could not succeed in getting a
permanent and regular job and continued to be accumulated in the ‘surplus’ labour pool of
the cities. The capital always utilizes this entire pool for increasing its profit and after the
implementation of the neo-liberal policies from the decade of 1980s, this was done at the
global level and in India this process unfolded especially from the decade of 1990s. Breman
argues that the terms informal sector and informal workers' population was first mentioned
by a Marxist anthropologist named Keith Hart in 1973 in his study about Ghana. In this
study, Keith Hart argues, while mentioning the scene of the streets of cities of Ghana that
along with the advance of capitalist development, the scene of the streets started changing.
A huge colourful crowd could now be seen which included numerous workers doing petty
jobs –shoe-polishers, street vendors, pedlars, tinkers, etc. (Informal Income Opportunities
and Urban Employment in Ghana, Journal of Modern African Studies, 11, 1: page 61-
89,1973)
Breman argues further that the emergence of such an informal economy was quite
natural in the Indian capitalist development or, for that matter, in the type of development
which took place in all countries which became independent between 1950 and 1980. This
was not a backward, pre-modern, primitive working class. The internal mobility within this
15
entire class was so high that it could be considered a worker in a factory, as well as a street
side vendor, pedlar, rickshaw-puller and a farm labourer! Because often he/she used to do
all these works in a single year! In such a scenario, to call him backward or primordial is a
prejudice. Also, it is not as if he is not skilled. In fact, he is multi-skilled. We will come back to
the opinions which have been put forward by Breman on the nature of this working
population.
Famous labour historian Prabhu Mahapatra writes that the origin of the informal
sector could be seen even in the colonial capitalist system. Mahapatra finds it incorrect to
consider the informal sector as beyond regulation. According to him the informality of both
the class and the sector has been regulated right from the beginning. True, this regulation is
not imposed through clear and direct laws. Capitalism has always required the informal
sector and it regulates it through means other than laws. Mahapatra states that Marx clearly
showed that the capital regulates the labour not only through its state power but through the
private informal means as well. Hence informalization is not something which has arisen out
of some kind of aberration of the capitalist system. It has always remained an integral part of
the modus-operandi of the capital. Informality can be considered as the lack of formal
regulation but not lack of regulation itself. (see Marx, the chapter pertaining to the factory
laws in Capital, Volume-I).(page 29-46, Making of the Coolie: Legal construction of Labour
relations in colonial India and in the Caribbean, Labour in the Public Arena , V.V. Giri
National Labour institute, Noida 2004)
Similarly there are numerous labour historians and economists like Geert De Neve,
Dilip Simeon, Rohini Hensmann, Arjan de Haan etc., who have given definitions of the
informal sector and informal working population. For their writings you can refer to the
bibliographical section in the end.
Later, we will also briefly discuss the ways in which Marx and Lenin viewed the
informal working class (though they never used this term).

3.2 Informal working class: number, size and its region-

wise distribution

Why is it that the informal working class today has become an important and a
central question for the Indian working class movement? The plain and clear answer to this
question is this: it constitutes 93 percent of the total working class population! The situation
becomes even clearer by having a glance at the sectoral and region-wise distribution of the
informal/unorganized working class, apart from its size and number.
The total working class population today is about 45.8 crore. It does not include the
poor and marginal peasant population. It is purely the rural and urban proletariat population.
93 percent of this population consists of the informal/unorganized workers' population
working in the informal sector. Remaining 7 percent population works in the formal sector,
three-fourth of which are the contract, daily wage or casual labourers, and even when they
are permanent, they are not organized in any union in most of the cases. Even of the 3
percent that is organized in unions, the majority has become disenchanted from the
revisionist and fascist trade union bureaucracy. The still remaining does not even consider
themselves as workers. To a large extent this remaining section can be counted as part of
what Lenin called labour aristocracy. It is not without reason that recently the fascist

16
Bhartiya Mazdoor Sangh (BMS) has become the biggest trade union surpassing CITU. It
alludes to the important changes which the structure and nature of this 3 percent labour
population has undergone. Jan Breman writes somewhere: "In the landscape of labour,
industrial workers in the organized sector of the economy form a privileged and
protected enclave. …In addition to their secure employment status, they constitute an
'aristocracy' with a high social profile and a reasonably comfortable lifestyle". (page
407, The study of industrial labour in post-colonial India — The informal sector: A concluding
review, The Worlds of Indian Industrial Labour, Sage Publications, 1999). Anyway, let’s
return to the principal issue. In all, 97 percent workers belong to the
informal/unorganized working class (including both, in the formal as well as the
informal sectors).
Barbara Harris-White and Nandini Gooptu inform us that the 7 percent formal labour
population earns around 34 percent of the total wages while the 93 percent
informal/unorganized labour population only manage to get 66 percent share. Between 1977
and 1994 the growth rate of informal economy was 2.6 percent whereas, that of the formal
sector was around 1 percent. A large part of the labour population of the unorganized sector
works at their homes. A considerably large part this labour population is the one which works
at its home with family labour, as a part of the fragmented assembly line. Following Lenin,
Jan Breman believes that this population should be considered as wage labour. Lenin
termed it as the ‘outside department’ of the industry. Harris-White and Gooptu also agree on
this. The labourers working at home are included in the ‘self-employed’ population in the
government statistics which is illusory and misleading. Moreover, it relieves the State of its
responsibilities. This category has been invented for this very purpose. Lenin has considered
it as an illusory and misleading category. These so called ‘self-employed’ workers constitute
56 percent of the total workers' population. The share of the casual labourers in the total
working class population is 29 percent. (All the above statistics are from this source: Barbara
Harris-White and Nandini Gooptu, Mapping India’s World of Unorganized Labour, Working
classes, Global Realities, Socialist Register, 2001). 60 percent of the Gross National
Product of the country, 68 percent of the Total Income, 60 percent of Total Savings, 31
percent of the Total Agricultural Export and 41 percent of the Total Industrial Export comes
from informal sector (India’s Socially Regulated Economy, Barbara Harris-White, Critical
Quest, New Delhi, 2007).
The statistics of the report of Arjun Sengupta Commission has clarified the picture of
the workers of unorganized/informal sector in the most commendable ways. This report
mentions that if the Indian economy grows with the rate of 7 percent in 2011-12, the total
proletarian population would be 54 crore (which does not include the semi-proletarian poor
peasants which is standing on the verge of ruination and whose population is between 25
and 30 crore). 47 crore of such workers would be in the informal sector and merely 7 crore in
the formal sector. This report states that currently only 17.3 percent of the total industrial
production is being carried out by the formal workers' population, while the informal
workers' population is responsible for 82.7 percent of industrial production. In 1990
among all the manufacturing units, 52 percent were such in which less than 50
labourers used to work. It is noteworthy that the real process of informalization actually
began in 1990. Now one can easily simulate the present condition.
After the Arjun Sengupta Commission, if any other source presents the clearest
picture of informalization, it is the statistics of the National Sample Survey Organization. In
2000-2001, the 55th round of the sample survey was conducted. According to this, at that
17
time the working population (rural and urban) was 40 crore, out of which 34.3 crore was in
the informal sector. 67.7 percent of this informal workers' population was agricultural
labourers and 32.3 percent was constituted by non-agricultural labourers (including
industrial). So the total informal labour population constituted 91 percent of the total labour
population. (National Sample Survey, 55th round, National Sample Survey Organization). 3
years later, the statistics which appeared in the 61 st round reveal a lot about the pace of
informalization. According to this, there were 45.8 crore workers (rural and urban) in the
country. Around 39.5 crore among them were informal labourers. 64 percent of the total
informal labourers were agricultural labourers and 36 percent non-agricultural labourers. The
total proportion of the informal labourers shot up to 93 percent. It needs to be kept in mind
that this data is that of 2004. (National Sample Survey, 61st round, National Sample Survey
Organization). If we assume that in the last 6 years the pace of informalization increased
with the same rate, then today the informal working class population would be around 96
percent of the total working class population and the total working class population would be
around 53 crore. That implies that the informal working class population itself would be
around 47 crore. 20 crore among them would be those who are involved in industrial
production.
These statistics present a clear picture of the size, number and distribution of the
informal/unorganized labour population to a great extent. There are a lot of such statistics
which confirm this basic trend. Here, it is not necessary to present all of them. The above
statistics are sufficient to make it clear that the sheer size of the informal/unorganized
working class population is such, that to ignore it, you have to be a blind person. This
question stands as one of the principal questions on the agenda of the entire working class
movement today as to how this huge population, which has been termed by the famous
Marxist writer Mike Davis as “the fastest growing and the most unprecedented social class
on earth” (Planet of Slums, Verso, 2006), can be organized? What are the challenges of
organizing them? Does today’s informal/unorganized worker possess a backward
consciousness? Does he possess a peasant consciousness? Is he pre-modern? Is he
primitive? Does he lack class consciousness? If somebody believes so, does he/she have
any analysis to support his/her belief? If someone does not believe so, what kind of analysis
does he/she have? This brings us to the third issue related to the informal/unorganized
working class – what is the nature and character of the informal working class population?
We will discuss this important issue in the light of the views of Marx and Lenin and we will
also analyze the historical and statistical-empirical studies of the contemporary Marxist
historians and economists.

3.3 Informal/unorganized Working Class: Nature,

Character and Consciousness

The first characteristic of the informal working class which comes to our attention is
its being geographically scattered in terms of the workplace. So far as the factory floor is
concerned, this population is in the process of being dispersed. We have already explained
the reason for this process of dispersion. At the national level the number of big factories has
declined considerably. If we leave aside the core sector, almost entire industrial activity is
going into the informal sector. (Globalization and Labour, Naveen Chandra, the speech

18
delivered at the Dr. Ramnadham Memorial Meeting organized by PUDR in Delhi). Even
in the big factories which are still existing and in the industrial centres in which some big
factories are being set up (although it is not a common trend), a large proportion of the
working population (leaving aside the technicians and foremen) is employed on the basis of
daily-wages or contract or they work as casual labourers. The most important characteristic
of this population is that it is extremely mobile. Even among the workers who work on
contract, daily wages or work as casual labourer in the bigger factories, the tendency of
sticking to a single factory diminishes to a large extent. Therefore, it becomes a challenging
task to form a powerful trade union in these factories. The reason is the extremely high
internal mobility of the target population. Today, for the workers working in a big factory, it is
most likely that 50 percent among them would be replaced in the next six months. And one
organizes individuals, and not the numbers, in the unions. Thus, may be the number of the
workers working in a factory remains the same or may even increase, but its profile is
changed. Jan Breman, in one of his famous and widely acclaimed work – Footloose Labour:
Working in India’s Informal Economy, 1996, Cambridge University Press – has termed this
volatile labour population as Footloose labour, i.e., as if the worker has got some wheel
attached to himself/herself and who keeps on changing his/her job due to the lack of any
kind of job security or social security. It was because of this reason that Jan Breman also
called them as wage hunters and gatherers (Wage Hunters and Gatherers: Search for Work
in the Urban and Rural Economy of South Gujarat, 1994, Oxford University Press, Delhi)
which is quite an appropriate term for an informal worker. The high workplace mobility of this
labourer makes it extremely difficult to find him/her and mobilize-organize him/her at his/her
workplace. This labourer is normally a multi-skilled labourer who would generally have
worked in the industries ranging from primitive to advanced, done the so called ‘self-
employed’ work, worked at his home with the family labour, also done the works like
rickshaw-pulling, street-side vending or have worked as pedlar. And, often he/she has done
all of these works within a single year and may be has also worked as agricultural labourer
for three months in the countryside.
Jan Breman believes that a large part of the 56 percent so-called ‘self-employed’
population is actually wage labourer and is part of the industrial world itself. In real
terms, the ‘self-employed’ is that population which in the language of economics is known as
the so-called ‘own account’ entrepreneur. The number of such entrepreneurs would not be
even 5 percent of the total informal industrial labour population. According to Breman, the
proletarian consciousness of the working class cannot be grasped in a mechanical way by
fitting into the old formulae. While rebutting another Marxist intellectual Tom Brass in a
debate on the bonded labour among the rural informal workers, he said that being “un-free”
in such a manner cannot be seen as a lack of the capitalist development and proletarian
consciousness. It would be a grave mistake to apply the Marxist concept of the free and the
“un-free” labour so mechanically. On the basis of his study in Gujarat, Breman explains that
the informal labour population in no way lags behind the permanent factory labourers in
terms of class consciousness. And we would take this opportunity to add that from their
conditions of life itself they are more anti-system.
Marxist thinker Henry Bernstein has also supported this argument. Following the
works of Jan Breman and Mike Davis on the informal working class, Bernstein explains that
today’s informal working class is extremely multi-coloured class in which there is tremendous
internal mobility. It is extremely radical class which faces the State-power of the capital right
from streets to the home and the work place. There is no lack of class consciousness in it.
19
And from the decade of the 1980s, the kind of policies which are being adopted by the World
Capitalism due to its crisis, has produced a huge informal working class in the last thirty
years or so, which unlike “surplus” labour population of earlier periods does not suffer from
unskilled, backward, peasant or primitive consciousness; on the contrary, this class is
radical, modern and equipped with proletarian consciousness. This class is compelled to live
in the abject poverty and this very factor is the source of its being radical. Quoting from Mike
Davis, Bernstein contends that this is hitherto the fastest growing part of the proletariat,
which is huge and brimming with possibilities. (Keynote lecture in the Conference on the
topic Lliving on the Margins. Vulnerability, Exclusion and the State in the Informal Economy,
Cape Town, 26-28 March, preparatory draft available on the internet)
Famous labour historian Geert De Neve has done a brilliant study on the textiles
industry of Tamil Nadu which sheds light on a number of dimensions of the informal working
population. Geert De Neve expresses his disagreement with the conclusions of Barbara
Harris-White and Nadini Gooptu that there is a lack of skill among the informal working class.
On the basis of his exhaustive and intensive study of the power loom industry of Tamil Nadu,
De Neve proves the fact with his findings that this informal working class is adequately
skilled and in many ways it possesses even more technical skills than the organized working
class. De Neve also considers it an oversimplified perception that the industrial units in the
informal sector are only of small size. He states that the statistics of the units being smaller
is based on the information given to the government agencies by the small capitalist class
which is false in more than half of the cases. Certainly there is large number of small
industrial units in the informal sector. But on the basis of his studies, he shows us that even
the medium and large scale industrial units are not little in numbers in the informal sector;
needless to say, most of them are operating illegally. De Neve corroborates Jan Breman and
contends that it is a prejudice of the leadership of working class movement towards the
informal working class that it suffers from the lack of class consciousness. A variety of
studies on the informal sector inform us that in the labourers working in the informal sector,
there is considerable class consciousness which is, in many ways, more advanced than that
in the labour population working in the organized sector. (page 1-38, Introduction, The
Everyday Politics of Labour: Working Lives in India’s Informal Economy, Geert De
Neve, Social Science Press, Delhi, 2005).

To have a glance at the writings of Marx and Lenin after these labour historians and
economists, would be instrumental for an understanding of the character of the informal
working class.

Marx, while writing about the ‘creation of the relative surplus population’ in the
Section III of Chapter XXV of Volume I of Capital, puts forward many such observations
before us which are useful for understanding the character of the labour population of
today's informal sector. Marx explains that along with the increasing accumulation of capital,
the capitalist increases the constant capital (i.e., investment on technology and machinery)
due to which there is an unprecedented increase in the productivity of the variable capital
and there is an increase in the rate of production of surplus value. At the same time, the
capitalist retrenches the workers with a view to minimize the expenditure incurred on regular
basis and thus a relative surplus population is created. Marx shows that in accordance with
the different cycles of capital accumulation, the size and nature of this relative surplus
population also keep on changing. But with the continued development of capitalism it
20
becomes a permanent feature of the capitalist society and an essential necessity for the
capital. Total employment society is an anti-thesis of capitalism. It may happen in a small
peculiar phase but it cannot become a general trend of a capitalist society. This relative
surplus population manages to survive in the capitalist society by doing this or that work at
different times with irregular employment and social insecurity and enhances the capacity of
capital to bargain against the employed workers. It acts as the reserve labour army of
capital. Marx has described four main types of this relative surplus population :
floating, latent, stagnant and pauper. The fourth among them is the one which is not a
part of the workforce, e.g., beggars, handicapped, insane etc. But the remaining three are
part of the work force. The most important among them are the first and the third ones.
About the stagnant relative surplus population, Marx states that it is part of the active work
force but it has highly irregular kind of employment. Consider the following quotation of Marx:
"The third category of the relative surplus-population, the stagnant, forms a
part of the active labour army, but with extremely irregular employment. Hence it
furnishes to capital an inexhaustible reservoir of disposable labour-power. Its
conditions of life sink below the average normal level of the working-class; this
makes it at once the broad basis of special branches of capitalist exploitation. It is
characterised by maximum of working-time, and minimum of wages. We have learnt
to know its chief form under the rubric of "domestic industry." … Its extent grows, as
with the extent and energy of accumulation, the creation of a surplus-population
advances. But it forms at the same time a self-reproducing and self-perpetuating
element of the working-class, taking a proportionally greater part in the general
increase of that class than the other elements. (Page 602, Capital, Volume 1, Karl
Marx, Progress Publishers, Moscow, 1974 Reprint)
The second big part of the informal labour population today is the one which has
been termed by Marx as floating relative surplus population. Following quotation of Marx
about it provides another insight about the today’s informal working class:
"In the centres of modern industry — factories, manufactures, iron-works,
mines, etc. — the labourers are sometimes repelled, sometimes attracted again in
greater masses, the number of those employed increasing on the whole, although in a
constantly decreasing proportion to the scale of production. Here the surplus-
population exists in the floating form.
In the automatic factories, as in all the great workshops, where machinery
enters as a factor, or where only the modern division of labour is carried out, large
numbers of boys are employed up to the age of maturity. When this term is once
reached, only a very small number continue to find employment in the same branches
of industry whilst the majority are regularly discharged. This majority forms an
element of the floating surplus-population, growing with the extension of those
branches of industry." (Page 600, ibid.)
Later in the same statement, Marx argues that the tendency of juvenilization and
feminization of the workforce is inherent in capitalism. And we were under the impression
that the theorization of informalization, feminization of the work force and child labour is to be
credited to the 20th century intellectuals! It is clear that Marx in his writing has lucidly
portrayed this trend of capital. Now it is a different thing that in the form of a dominant and
concretely expressed phenomenon, it has emerged in the era of Globalization.
Marx while mentioning about the third type of relative surplus population states that it
is a latent relative surplus population which mainly includes the hidden unemployed, irregular
21
agricultural labourers and the rural poor involved in non-agricultural activities. With the
penetration of capital into the villages, this population continues to migrate to the cities, at
times with slow pace and with rapid pace at other times. (See the entire chapter mentioned
above.)
It is quite evident that Marx was pretty clear and certain about the creation of an
industrial informal working class, like that of today. It was bound to happen with the natural
motion of the capital. It happened earlier too, but in different forms. In the era of
Globalization, this phenomenon has appeared in a new form.
Lenin also foresaw the emergence of a such an informal working class when he was
studying the development of capitalism in Russia. Although the main objective of this study
of Lenin was more to rebut the faulty theories of the Narodniks about the formation of a
domestic market and the crisis of the recovery of the surplus value and less to study the
emergence of the different parts and components of the proletarian population. But despite
that one gets a brilliant insight about the emergence of the informal working class population
in this work.
Lenin, while describing about the different stages of the capitalist development in
industries, argues that the first stage is that of artisanal production in which the commodity
production has not yet fully developed. The characteristics of wage labour in the producer
are still negligible. With the separate development of marketing of the product, the task of
commercial capital is separated which is an important division of labour from the point of
view of the development of industry. With this the artisan continues to get increasingly
dependent on the trader in a gradual process, not only in terms of marketing but also in
terms of the supply of the raw materials. From here begins the second stage, that is called
the “putting out system”. Lenin states that with the passage of time, the relationship between
the trader and artisan turns into the one between a capitalist and a wage labourer. It is from
here that the commodity production begins with Simple Capitalist Co-operation. But still,
every labourer does all kinds of work and the division of labour in the process of production
is in embryonic form. Along with the development of the productive forces this simple
capitalist cooperation is replaced by complex division of labour and it is at this point that the
third stage, i.e. Manufacturing, begins. Along with the stage of manufacturing, the production
expands rapidly and with this the market also expands. With the expansion of the market
manufacturing reaches such a level of development which, Lenin has written, could almost
be considered as the Factory System. In the stage of manufacturing, when the division of
labour continues to develop further to reach the level of such separate small activities which
could then be automated, the machinery enters into the picture. With this the Factory System
comes into being and the industry reaches the stage of machinofacturing from that of
manufacturing. Lenin states that in the age of simple commodity production the main form of
industry surfaces in the form of domestic industry. In the era of manufacturing the main form
of industry is manufactory, which Lenin distinguishes from the factory. And after this the era
of factory ensues in which automation brings the industry up to the stage of assembly line
production.
Some comrades might well find this discussion unwarranted but it was essential for
the whole logic which we intend to elaborate later. Lenin states that these stages should not
be divided chronologically. Even in the most advanced capitalism the periods of
different stages overlap with each other. Not every time this overlap results in form of the
baggage of the past but many a times it occurs as an essential component of the capitalist
development. It is here that the key to understand the development and expansion of the
22
informal working class lies. Lenin states that along with the development of the factory
system and machinofacturing, a large network of ancillary industries comes up in the vicinity
of the factory (today the condition of being in the vicinity is no longer mandatory, Long Live
the communication-transportation revolution!). Just consider the following quotation of Lenin:
"But this splitting of production into the simplest operations, while being a
necessary preparatory step to the introduction of large-scale machine production,
leads at the same time to a growth of small industries. The surrounding population is
enabled to perform such detailed operations in its homes, either on the order of the
manufactory owners, using their materials, or even "independently" buying the
materials, making certain parts of the product and selling them to the manufacturers.
It seems paradoxical that the growth of small (sometimes even "independent")
industries should be an expression of the growth of capitalist manufacture:
nevertheless, it is a fact. The "independence" of such "handicraftsmen" is quite
fictitious. Their work could not be done, and their product would on occasion even
have no use-value, if there were no connection with other detailed operations, with
other parts of the product. … One of the main errors of Narodnik economics is that it
ignores or obscures the fact that the "handicraftsman" performing a single operation
is a constituent part of the Capitalist manufactory." (Page 433-434, The Development
of Capitalism in Russia, Lenin, Progress Publishers, Moscow, 1977 Reprint).
This quotation of Lenin to a large extent articulates the reality of the industrial
development and the formation of the working class in the post-colonial capitalist societies.
Let’s have a look at another quotation:
"In all the industries organized on the lines of manufacture that we have
examined, the vast mass of the workers are not independent, are subordinated to
capital, and receive only wages, owning neither raw material nor finished product. At
bottom, the overwhelming majority of the workers in these "industries" are wage-
workers, although this relationship never achieves in manufacture the completeness
and purity characteristic of the factory. … Under manufacture, side by side with the
mass of dependent workers, there always remains a more or less considerable
number of quasi-independent producers. But all this diversity of forms of dependence
merely covers up the main feature of manufacture, the fact that the split between the
representatives of labour and of capital is already manifested in full force." (Page 439-
440, ibid.)
Later in the same statement, Lenin argues further that in this stage of the
development of capitalism there also exist a class of labourers which still lives in the illusion
of becoming proprietor, but this illusion is soon shattered into pieces. Have a look at yet
another fitting quotation which throws light on the informal aspect of the capitalist
development in the post-colonial society:
"This retention (and even, as we have seen above, development) of small
establishments under manufacture is quite a natural phenomenon. Under hand
production the large establishments have no decisive advantage over the small ones;
division of labour, by creating the simplest detailed operations, facilitates the rise of
small workshops. For this reason, a typical feature of capitalist manufacture is
precisely the small number of relatively large establishments side by side with a
considerable number of small establishments. (Page 443, ibid.)
Lenin opines further that in reality these small workshops act as an ‘outside
department’ of the big manufacturing units. Lenin also states that in this entire phase while
23
the factory system, manufacturing, small industrial units simultaneously exist, an entire class
of contractors and intermediaries comes into existence. And along with this the most brutal
form of exploitation comes into existence through this contractualization. The reason for this
is that work done at the small industrial units and at home is only a part of the capitalist
manufacturing. The following quotation might appear as a prediction of informalization:
"Let us point, first of all, to the multitude of middle-men between the capitalist
and the worker in domestic industry. The big entrepreneur cannot himself distribute
materials to hundreds and thousands of workers, scattered sometimes in different
villages; what is needed is the appearance of middle-men (in some cases even of a
hierarchy of middle-men) to take the materials in bulk and distribute them in small
quantities. We get a regular sweating system, a system of the severest exploitation:
the "subcontractor" (or "workroom owner," or "tradeswoman" in the lace industry,
etc., etc.), who is close to the worker, knows how to take advantage even of specific
cases of his distress and devises such methods of exploitation as would be
inconceivable in a big establishment…" (page 447, ibid.)
In the same statement Lenin goes on to describe the conditions of work in such
industries. If this description is presented before someone without any context, it might
appear as the description of the conditions of the work and life of today’s informal sector
labourers (see page 447-449, ibid.)
Lenin while comparing the Russian case with the capitalist development of the
advanced countries expressed the hope that when the machino-facturing would be
advanced enough in Russia, then one could do away with such industries. But the history of
the latter half of the 20th century has shown that even after the machino-facturing getting
dominant, the capital has further expanded the informal sector in the era of Globalization in
order to increase the rate of profit and for dismantling the resistance of the working class.
And still it has managed to maintain the productivity. There are many reasons for this. The
first reason is that the division of labour today is at a much higher level than that in Lenin’s
period and in such a situation the dividing line between the skilled and unskilled labour has
been blurred. Lenin himself predicted this. If the entire production process can be
fragmented without lowering the level of productivity, it would be beneficial for the capital in
the short term. It has also become feasible because the information technology and
communication-transportation revolution has enhanced the mobility of the capital to such an
extent that the cost for setting up and functioning a fragmented assembly line has become
almost negligible. And its benefits exceed its costs because the capital can easily reach the
places wherever the cheap labour and cheap raw material for the production of different
parts of the product would be available.
At another place Lenin states that in a capitalist society a class of
informal/unorganized workers would always be present. At the same time, a huge labour
population would be present as an "appendage" to the factory which would include loader-
unloaders, construction workers, packers, etc. They would constitute a considerable
proportion of the population of the entire working class. (page 539-541,ibid.) This point
becomes even more clearly apparent with the following statement of Lenin:
"In order to give anything like a full description of the appendage to the factory
one needs complete statistics on the occupations of the population, or monographic
descriptions of the entire economic life of factory centres and their environs. But even
the fragmentary data with which we have had to contend ourselves show the
incorrectness of the opinion widespread here that factory industry is isolated from
24
other forms of industry, that the factory population is isolated from the population not
employed in factories. The development of forms of industry, like that of all social
relationships in general, cannot but proceed very gradually, among a mass of
interlocking, transitional forms and seeming reversions to the past. Thus, the growth
of small industries may express (as we have seen) the progress of capitalist
manufacture; now we see that the factory, too, may sometimes develop small
industries." (Page 541, ibid.)
In order to elaborate the Marxist logic of the roots of the informalization, it was a
Herculean task to select quotations from 'The Development of Capitalism in Russia' as
their quantity was so huge that the limit of this paper does not allow all of them to be
included. We are providing the references of those quotations and the comrades interested
in reading the discussions on the origins of informalization in this work can see those
portions. For the three main stages of industry, their overlapping and different types of
working class coming into existence during these stages and their simultaneous existence,
please see page 546-47; For the tremendous internal mobility, seasonal migration, circular
migration and non-agricultural migration among the informal working class, please see page
55; for advanced class consciousness of the migrant and urban informal worker, see page
582-87. Especially, the last reference is worth considering.
Now we would like to briefly present before you our conclusions about the
informal/unorganized working class population.

Firstly, the emergence of the informal working class is not an aberration of the capitalist
development, but a rule. It has been clearly shown both by Marx and Lenin. Lenin has also
shown that particularly in those countries where the capitalist development took place late
and at a latter point of time, and in particular, through non-revolutionary path, the presence
of such a working class was but natural.

Second point, this working class is not backward, not so even in the days of Marx and
Engels, not even in Lenin’s era and certainly not today. These are the prejudices created by
the trade-unionism which was born in the Fordist era of integrated assembly line and mass
production. There is a need to get rid of the prejudices that the informal/unorganized working
class possesses backward, primitive, peasant, pre-modern or non-industrial consciousness.
If someone carries such an opinion about today’s informal/unorganized working class,
he/she is surely unaware about today’s informal working class.

Third point, today’s informal working class is, in general, more radical than those 7 percent
workers who are working in the formal/organized sector; it is anti-capitalist from its very
nature; it is relatively freer from the economism, anarcho-syndicalism and revisionism spread
by the revisionist trade unions; this working class owing to its mobility is also relatively free
from the tendencies of occupational narrow-mindedness and it does not consider any single
factory owner as its enemy, instead recognizes, and in quite practical terms so, entire class
of the factory owners as its enemy. Its politicization is relatively easy, but there is no denying
the fact that understanding this logic would be a bit difficult for those whose mind has been
ossified within the old trade unionist economistic ways and means.

Fourth point, this class is not only directly confronted with the capitalist class, but everyday
from home to streets and to the work place it is also directly confronted with the Government
25
which acts as the managing committee of the capitalist class. This class does not hold any
kind of legal illusion regarding the police, bureaucracy, judiciary and the leaders of the
bourgeois parties. All these organs of the bourgeois system are exposed on a daily basis in
front of this class in the most brutal ways.

Fifthly, Due to the dispersal of the working class on the factory floor and the basis of work
place, an immediate pessimism and hopelessness has crept into the psyche of this class
and it is finding itself helpless in many ways. The reason for this is that it is not able to think
beyond the old forms of resistance by itself and feels that the very ground of carrying out
meaningful resistance has been snatched away from under its feet. But new forms of the
resistance of the working class have emerged in many workers' struggles, especially in the
Chattisgarh labour movement, the movement of unorganized workers of Delhi in 1988 and
recently in the Almond Workers’ movement in Delhi. About the Chattisgarh labour
movement a Turkish Marxist intellectual Fatma Ülkü Selçuk wrote in the ‘Monthly Review’ in
2005: (‘Dressing the Wound: Organizing Informal Sector Workers’, May 2005, Monthly
Review). This whole article is a brilliant documentation of the new forms of resistance of the
informal working class in different parts of the world.

Sixth point, this informal working class is tremendously mobile. The informal/unorganized
workers generally do many kinds of works for small durations in a single year due to the lack
of job security and thus they become skilled in many trades. You can find a worker who
knows the work of masonry and at times works as a construction worker; but at the same
time he would also have worked in a factory making iron-sheet, in a factory making spare
parts of automobiles, in a factory making pressure cookers or paint of screen printing and in
the export garment industry; in the event of none of these works being available, he would
work as a street-side vendor or pedlar and in the months of April-July he even goes to
Punjab, Western Uttar Pradesh and Haryana to work as an agricultural labourer as well.
What we mean to say is that, this working class is highly mobile in terms of work place. This
fact is confirmed by almost all historians and economists studying the workers of the informal
sector and also by the statistics of Census, National Sample Survey and National Rural
Labour Commission.

Seventh point, the presence of the traditional trade unions is relatively negligible among the
informal working class. In fact, the presence of any type of political force is sparse among
them. And wherever some trade unions are raising some issues of these workers, they are
not very important for them and in most of the cases the traditional trade unions utilize the
numerical strength of these workers for strengthening their own movements and
demonstrations whose main purpose is to fight for the economic demands of mainly
organized workers' population. In such a scenario, there is, in general, a situation of political
vacuum prevailing among this informal workers' population.

Eighth point, due to the lack of effective presence of the class-based politics, we often
encounter casteist or regionalist forms of social organization among the
informal/unorganized working class population. In many cases, we can see that in the
absence of any revolutionary activism, these workers have organized themselves
spontaneously. But the basis of this organization might appear to be caste or region if taken
on the face value or superficially and no doubt these factors do play a role in this
26
organization. But to consider it as the total reality would be a terrible mistake. In reality while
on the face of it they might appear to be organized on the “non-class” basis, these workers
make class as their main basis in all their activities of struggles. Geert De Neve has clearly
underlined this fact in the struggle of the loom workers of Tamil Nadu.

These are some general conclusions on which we have arrived on the basis of our study of
the informal/unorganized working class population. But these conclusions are the ones that
are the most important and most apparent. There is a need of a detailed and intense study
of the regional distribution, occupational distribution and social profile of this population. It
would unearth many facts about this informal/unorganized working class population in whose
light it would be easier for revolutionary organizations to work among them. But this is
outside the scope of this presentation. Many such studies are ongoing even today and we
would have to derive our own conclusions by critically analyzing the conclusions of these
studies. As of now, on the basis of the above-mentioned some important characteristics, we
can embark upon a discussion of the new strategies of organizing the informal/unorganized
working class.

4. Informal/ Unorganized Working Cass: New Forms and

Strategies of Organization and Resistance

On the basis of the general conclusions derived about the informal/unorganized

working class in the last section of the presentation, we can now discuss briefly about the
new forms and strategies of organizing them and the challenges that lie ahead. During this
discussion, we would refer to some debates in which the controversy emerged on the
question of the new forms and strategies (or on the question whether the
informal/unorganized working class should be given so much importance in the first place),
even at the cost of slightly deviating from the context. We have been clarifying our stand in
these debates even earlier and we will use this opportunity to once again clarify our position
on those issues.
The biggest challenge in organizing the informal/unorganized working population is
the identification of the location of such an organization. The old locations for organizing the
working class struggle used to be the factories or the work place in most of the cases. In
today’s time, as we have seen above, capital has scattered the 93 percent portion of the
working class in terms of the work place. We had mentioned about those statistics which
reveal that about 80 percent of all manufacturing units of the country employ less than 50
labourers. Even in the remaining 20 percent manufacturing units which employ more than 50
labourers, most of the workers now work as ad-hoc, casual, daily wagers or contract
workers. Under such a circumstance, the work force profile of the factory is getting
increasingly volatile. Consequently, the task of organizing the workers by making factory-
based trade unions is getting extremely difficult. Even if such unions are somehow
organized, their power is limited in most of the cases. With the labour laws becoming more
and more flexible, their power has declined even further. In most of the factory struggles
taking place in last two decades, the working class has faced defeat in more cases than
earlier. In many cases (like during the Gorakhpur workers' movement), even though the
across-factory strong organization succeeded in bringing the State agencies to their knees,

27
but the issues on which the labour movement began, remained more or less unsolved. In
many cases, the factories whose issues were at the centre of the struggle either got closed
down or the factory-owners closed them for some time and then restarted the production
with an entirely new work force. Many a times such factory-owners shifted the factory from
the old location to a new location with a new work force. But even in this escapist attitude it
is the profit of the capital which prevails; the forces of labour certainly get political victory but
struggle on the demands which have been raised do not move beyond a certain point. And
we are talking about the best possible situation which was witnessed in the Gorakhpur
labour movement. In most of the cases, even this has not proved to be possible and with the
full-fledged help of the administration, the factory-owners adopt repressive and arbitrary
attitude towards the workers and even manage to succeed to a large extent. Prabhu
Mahapatra in his above-mentioned study has stated that in the last two decades there has
been a tremendous decline in the number of petitions filed in the labour courts from the side
of trade unions. Other statistics also corroborate this fact. Hence, it has now become an
apparent reality that along with Globalization and informalization, the graph of factory-based
struggles has generally gone down as compared to the earlier period. In Gurgaon, only
recently the factory-workers carried out a huge movement which shook the entire
administration. But even that was not a movement organized on factory-centred issues,
instead, it was an area-wide upsurge of the factory workers. When we say that the graph
of the factory-based struggle has gone down, it in no way means that the factory workers are
now sitting idle, have become less radical, are not fighting, ‘have become deprived of their
infallible weapon of stalling the production’ etc. We only mean (neither more, nor less) that in
the new times of today the old forms and strategies of the factory-workers are no longer that
much effective. It is a fact independent of our will and to see this one just needs to have a
look at the petitions filed in the last two decades regarding the factory-disputes or the related
matters. The facts themselves narrate their own story.
In such a situation should we become hopeless or pessimistic? We assert certainly
not! Definitely not! Through the correct scientific method and analysis we can convert this
negative into a positive. In today’s changed circumstances we would have to go
towards the bastis (working class neighbourhoods) from the factory gates and again
return towards the factory gates. Before discussing this issue, we would like to indicate
towards an important characteristic of the dynamics of the capitalist development in the era
of Globalization. We have seen as to how the capital has disorganized the labour population
at the level of the factory or work place in view of its economic and political interests. It is a
fact which no one can deny today. Owing to one’s emotional hangover with the factory floor
struggles one can present millions of facts and scores of example in which he/she can state
that at such and such locations a huge factory is being set up even in today’s time. We
would just like to tell them that surely big factories are being set up and being run at many
places even today. But we would like to draw their attention to two facts. Firstly, it is not a
general trend today and it needs to be determined with the data of the national level. The
average size of the manufacturing units has continually decreased. Secondly, even if it
is not so, the size of the factory is immaterial. The determining factor which we are talking
about is not the size of the factory; that is just a corroborative fact through which we support
our main argument. Even if we leave it for a moment, the main issue is informalization of the
labour even within the big factories which is making the possibility of workers' struggle at
work place increasingly lesser. It is a fact today that in the last two decades the capital has

28
continually disorganized the working class at the work place. But at the same time we would
like to allude towards a second phenomenon which holds a lot of possibilities for us.
The modern capitalist development and particularly the one unfolding in the era of
Globalization can never disorganize the working class at its place of residence. The model of
the urban development which is inalienably attached with this model of capitalist
development is bringing about the geographical concentration of the workers’
neighbourhoods on a huge scale, which is unprecedented. There are numerous Marxist/non-
Marxist intellectuals like Mike Davis, Amitabh Kundu etc. who while studying the capitalist
urbanization have drawn our attention towards the hitherto most expansive growth of slums
and huge shanty towns. The characteristic of today’s capitalist development and
urbanization is that, while it is dispersing the workers at the factory level, on the basis of the
neighbourhood it is concentrating them more and more. It is not at all possible for the State
to scatter the working class population on the residential basis in the entire urban landscape.
It would in no way be acceptable to the social props and “sovereign consumer” of capitalism
that a “brown crowd” roams around the streets of its cities and makes their “beautiful living
context” as ugly. Hence, a huge structure of workers’ slum settlements can be seen around
every big industrial, urban and commercial centre today. These centres are surrounded by
such slum settlements and the vast turbulent ocean of workers. The labour population goes
to the work from these areas and returns at the same place. This entire working population is
extremely multi-faceted, multi-occupational, multi-skilled, multi-ethnic, multi-caste and multi-
regional in character.
These working class neighbourhoods are extraordinary source of possibilities
for the working class movement. If the ways and means of organizing these workers in
their neighbourhoods can be devised, it can prove to be a way of breaking out of today’s cul
de sac. Clearly any such organization of the workers would forge a more extensive class
unity. Therefore the need of the hour is to build such neighbourhood-based and occupational
trade unions which will organize workers employed in different trades and also unemployed
workers. Such neighbourhood-based or occupational unions can organize the factory-based
struggles in a new form. Besides, they will be able to struggle on the issues which will
enhance the process of politicization of workers in an unprecedented way and which will be
able to organize the workers as a class against the onslaught of capital in a much more
effective way. Neighbourhood-based and occupational unions are two sides of the same
coin. Workers of some area might organize themselves in a neighbourhood-based union,
while, at the same time, being members of their respective occupational trade unions. Here
neighbourhood-based unions and occupational trade unions are not two different types of
bodies. Whether we see the occupational trade union or the neighbourhood-based union
depends on the location of our sight, and also on the particular strategy and tactics that we
have in our mind at that time. Whereas, on the one hand, the neighbourhood-based union
assumes importance in defending the economic interests of the working class and in
organizing it as a class against the onslaught of capital, on the other, the occupational trade
unions hold the immense possibility in the future to bring to halt an entire sector, which can
destablize the whole capitalist system. Neighbourhood-based trade unions can accomplish
the task of bringing the capitalist class to its knees on its demands in much lesser time-span
by organizing an areawide strike in an industrial area. On the other hand, an occupational
trade union can organize a citywide, statewide, countrywide or even worldwide strike of a
sector and bring it to standstill.

29
 Through such unions struggle on facory-based issues also can be organized
effectively. Let me illustrate this fact through an example. Suppose there is an industrial area
consisting of a large number of small and medium-sized factories. Generally, the workers
employed in such an industrial area live in the vicinity in slums. Now, suppose a factory-
owner fires 5 workers from his factory in an unjustified manner, which employs 80 to 100
workers. The factory union struggles against this act of the factory-owner. If this struggle
remains limited within the boundaries of the factory, most probably,the factory union will
lose; either there will be a compromise in which the owners will be gainers, or not a single
fired worker will be taken back. Now, imagine there is a neighbourhood-based union of
workers in that area. This issue comes in the notice of this union and it demands the
restoration of the fired workers from the factory-owner. When the owner refuses to accept
this demand, the union begins an united and organized struggle of the workers of the entire
industrial area and halts production in the entire area. In such a case, the organized force of
labour will create a crisis for capital. Other factory-owners of the area will pressurise that
factory-owner, in whose factory the dispute has arisen, to negotiate a way out and
compromise with the workers. In the presence of such a neighbourhood-based union, it will
become very difficult for the factory-owner to arrange new workers in sufficient numbers.
Besides, since the basis of membership of such neighbourhood-based union will be residing
in that area and not working in some factory, the unemployed workers of the area also will
be a part of membership of the union. In such a scenario, it will be very difficult for any
factory-owner to resolve the crisis in time. The presence of such a powerful neighbourhood-
based union will make it possible to perform the task of picketing in the whole area in a
militant way, which is not possible for a factory union of small or medium-sized factory,
because they will easily be overpowered by the private hired goons of the factory-owners.
However, any number of goons, howsoever large, will not be sufficient to subdue the force of
a huge neighbourhood-based union. Therefore, most likely, the factory-owners will be
obliged to conform to the demands of the union. We have two examples of such experiments
in front of us.
The first experiment is the famous Seven Days' Strike of 1988 of the unorganized
workers of Delhi. To know about this struggle you can see the commendable research paper
of Indrani Majumdar that is based on the study of this struggle. (Unorganized Workers'
Strike in Delhi, 1988, Labour in the Public Arena: Representation and Marginality,
V.V.Giri National Labour Institute, NOIDA, 2004). In this paper, Indrani Majumdar has
described in detail the whole process of organization of the strike, the new strategies of
picketing and the ways in which the workers ran propaganda campaign. The workers did not
go to factory for picketing, because this strike was organized on the basis of entire area and
it would have been a waste to go to factory-gates for picketing. Therefore the picketing
teams guarded opening points of all streets, alleys and roads of all industrial areas from
where the workers passed. The workers ran this strike successfully till seven days and
succeeded in bringing the government to its knees on most of the contentious issues.
Second example is of the Almond workers' strike of Delhi in which thousands of
workers ran a strike for 16 days in the Karawal Nagar area. This strike ended in a
compromise and wages were not increased to the extent, and all the facilities were not
provided, that the union had been demanding. However, despite a partial victory, a great
experiment of neighbourhood-based union was carried out during this strike. During the
strike, workers of nearly 70 almond workshops led a militant struggle against the almond
workshop owners and 80 percent of the Karawal Nagar Almond industry had been brought
30
to a halt. Due to some unavoidable factors, the strike was somewhat weakened during the
last two days. The major reason for this was the rumour-spreading by the agents of the
almond workshop owners. This strike was first of its kind for the almond workers and they
did not have the experience of dealing with most of the possible situations and the workers
as well as the Union leadership lacked expertise in organizing the myriad kinds of activities
of a neighbourhood-based union efficiently; this led to some avoidable mistakes and lapses.
Despite all this, this strike proved this fact beyond doubt that a neighbourhood-based union
can paralyze an industry in an entire area. During this strike, prices of almond doubled in the
dry fruit market of Delhi and this attracted the attention of national newspapers as well as
national and international websites. The striking workers even took on the Police and all
threats of repression failed to push them into retreat. Especially the women workers fought
with indomitable courage and strength during the strike. You can refer to the report
published in the January, 2010 issue of 'Nai Samajwadi Kranti ka Udghoshak Bigul' to
understand the mixed experiences of the strike.

Apart from these, such experiments are under progress in many countries around the world
and we are not the only one to think in this direction. To know more about experiments of
neighbourhood-based unions and movements in other countries, see the article of Fatima
Ulku Selćuk for Monthly Review (Dressing the Wound: Organizing Informal Sector
Workers, May 2005, Monthly Review).
Indeed, the neighbourhood-based and occupational unions give us the opportunity to
organize factory-based struggles in an even better way; however, at the same time, they
also enable us to organize and politicize the workers on such issues and in such ways, that
a factory-based union cannot provide. The unions organized on the basis of neighbourhood
can struggle for a number of rights that are not necessarily linked to the factory, but they are
very important for the working class and these demands are essentially and mainly, more
political. For example, the question of housing; the right of easily available, accessible and
cheap medical facilities; the right of the children of workers to education; the demand of
various basic amenities in the working class neighbourhoods, such as, drinking water,
electricity, sanitation system, creche for woman workers, etc. These are such demands of
the working class that appear to be more like the civil rights of the workers in essence. Some
comrades have this strange perception that these issues are 'N.G.O. brand' issues or
'reformist' issues! If we turn a tragic condition into a norm, then what we get is a condition of
appalling irony. In other words, if today N.G.Os and voluntary organizations have snatched
away the issues of such rights of the working class and are relieving the state of its burdens
by raising these issues in a typical reformist fashion, and putting forward pretentious
solutions of these problems through the reformist instruments of "co-operative" and self-help
groups, then what we are faced with is a tragedy. These are the demands that should be
raised by the revolutionary trade unions of the working class. There are a number of benefits
of organizing struggle on these issues. In comparison to any economic demand, the working
class population can be politicized in a much more extensive and intensive way through the
struggle on these demands. These demands are quintessentially political in nature and put
the entire capitalist system into the docks. These assert the claim of the working class on the
citizen identity and through this act of assertion, help in exposing the reality of the capitalist
'civil society' in front of the working class. These unmask the whole capitalist state and
society in the eyes of the working class. The process of revolutionary organization and
struggle on such demands will dig the grave of N.G.O. reformism, that is contaminating the
working class politics like poison. These demands will make the working class politically
31
more conscious and powerful in every possible way. Lenin in his famous work 'Two Tactics
of Social Democracy in the Stage of Democratic Revolution' has clearly pointed out that
the proletariat should never give up its claim on the civil identity. Lenin has written that
bourgeois democracy is the space in which the proletariat can practice its politics in the most
extensive and intensive manner. The working class should never give up its claim on
the democratic and civil rights, howsoever less, given by the bourgeois democracy in
the wait of some future 'concrete class struggle.' That is what the bourgeoisie wants.
Legally the worker is a citizen equipped with all civil and democratic rights, but in reality
he/she is a secondary citizen in every practical sense. In such a scenario, if the worker
himself/herself accepts this informal reality as the formal one, then it will prove to be literally
suicidal.
Secondly, the civil rights for which the working class movement will struggle
will have a clearly apparent class consciousness. Needless to say, these will not be
petty bourgeois civil rights issues like the demand for justice for Priyadarshini Mattoo or
Jessica Lal. The civil rights issues raised by us will be related to material, biological, and
cultural reproduction of the workers. This thing also is not something for which we can claim
novelty. If we study the charter of demands of the Chartist Movement, we will find that the
damands that have been mistaken by some comrades as merely "civil rights" form a
considerable part of that charter. Indeed, most of the large and political movements of the
proletariat in the 19th century Europe and America had, as its main force, the working class
which is called unorganized working class today and these movements had raised these so-
called "civil issues" in a quite significant way. But due to the lack of a historical view and in
the confusing haze created by the N.G.O. politics, some comrades have misunderstood the
very demands as being reformist N.G.O. brand civil issues. If this misunderstanding is not
rectified we will pay dearly for it in the future.
Before we move ahead, it is imperative to refute one more misleading perception.
There is this extremely economistic and vulgar perception that by raising these demands we
will shift the location of struggle from the site of production to that of consumption. Comrades
plagued with this bizarre understanding forget this fundamental teaching of Marxism that in
capitalist society labour power itself becomes a commodity and the location of
reproduction of this commodity is the residential areas and colonies of workers. The
working class will struggle for the necessary preconditions of reproduction of its life
by raising these so-called "civil rights issues" like drinking water, housing, health,
education etc. This will not shift the location of struggle from the site of production to
"the site of consumption." If such vulgar economistic perceptions persist, then the working
class will not be left with anything else but issues of wages and allowances.

We would like to conclude this issue by arguing that we will have to organize
neighbourhood-based and occupational trade unions of the working class. This in no way
prohibits the possibility of organizing factory-based trade unions. We must build factory-
based trade unions, wherever possible. However, even in the cases where we succeed in
organizing factory-based trade unions, we will be obliged to build neighbourhood-
based and occupational trade unions. Lest, through factory-based unions only, we will not
be able to organize the working class as a class against the onslaught of capital in an
effective manner. Occupational and neighbourhood-based unions can organize the workers
on the economic and non-economic demands of much more political character, besides,
obviously, the concrete economic and factory-based demands of the working class.
32
 Indeed, the task of devising newer forms of working class struggle and resistance in
the era of Globalization and informalization is quite challenging. To meet this challenge we
will have to get rid of economistic, anarchist and dogmatic views of every breed; we
will have to understand the changes in the modus-operendi of capitalism and also the
changes in the structure and nature of the working class; we will have to decipher the
novel strategies of capital against labour; without performing these tasks, we cannot
innovate novel forms and strategies of working class resistance in a creative manner.
Until we do not commit ourselves to this task, we cannot move towards the direction of
solution of that crisis of the working class movement, that we had mentioned in the very
beginning. Today an extremely important aspect of the task of making a rupture from this
stagnation that is facing the working class movement of our country as well as that of the
entire world, is to evolve and innovate new forms of working class resistance in the era of
Globalization. And we are not the only ones to believe this.

— Abhinav Sinha

33
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