16 January, 2022

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For An Open Economy & A Presidential System: The Social Democratic Case

By Dayan Jayatilleka

Dr. Dayan Jayatilleka

Though the JVP is opposed to the Open Economy as well as capitalism as such (’32 වැනි ඉල් මහ විරු සමරුව’ | Tilvin Silva | 13.11.2021 – YouTube), all consistent democrats should, by contrast, be able to agree that broadly speaking, the Open Economy of JR Jayewardene is better than the “closed economy” of Sirimavo Bandaranaike-NM Perera and later, Gotabaya Rajapaksa. The Open Economy introduced a measure of economic democracy, in place of the economic serfdom that preceded it.

The real question is, which kind of Open Economy is sustainable and therefore desirable? JR Jayewardene’s grandson Pradip quit the UNP of Ranil Wickremesinghe on the grounds that the latter’s version of the open economy was nothing like his grandfather’s, which had a robust role for the state. The example Pradip provided was the Mahaweli project.

Many of today’s democratic oppositionists know little about the 1977 JR model –which in practice was different from the BR Shenoy model of 1966. I recall Ranil Wickremesinghe telling me that he had asked JRJ why he didn’t go in for a “big bang” after the victory of 1977 and liberalize everything including food prices. JR had replied that he had tried that once as Finance Minister in the Dudley Senanayake administration of 1952 and it had triggered the August 1953 Hartal (uprising). He had learned his lesson, he said.

If in the next government, liberal economists attempt Shenoy-Hausmann experiments, they surely will learn the same lessons—but at what cost and whose?

The 1977 Open Economy model was itself seriously flawed, as Prime Minister Premadasa kept warning. When its inequities cumulated and exploded in the second insurrection, Premadasa had to pick up the pieces, but what he did was to implant his long-standing policies of ‘growth with equity’ on the foundation of the Open Economy, changing its orientation.

Premadasa’s Open Economy was the only model since the 1950s which did not cause either low growth/stagnation/unemployment or socioeconomic polarization generating a social backlash. It ended because Premadasa was assassinated and the UNP abandoned his policies.

That UNP never led the country again and finally wound up extinct. Those who survived (i.e., today’s SJB) did so only because of Premadasa’s son who evoked his father’s brand and the memory of his policies, thus rising above the electoral cataclysm.

Premadasa’s distinctive programs from the ‘poottu paalam’ and pre-fab urban housing of 1965-1970 to the planned 15,000 projects of 1993 cannot be replicated today, but it is the Premadasa variant of the Open Economy i.e., the Premadasa Open Economy model, that must be the start-line for any macro-policy which wishes to avoid the sociopolitical instability and conflicts of the past and present.

Ronnie de Mel, the architect-builder of the 1977 Open Economy said on the record on his birthday this year that Sajith Premadasa and his policies were “the only hope for the country” and urged an Open Economy infused with “socialist values”.

Joe Biden belongs to the wing of the US Democrats that understood the sources of the surge by autocratic rightwing ultranationalism which had broken into the white working-class base of the Democrats. He understood that economic distress, poor public services and growing inequality fueled by the model of neoliberal globalism and elitist cultural cosmopolitanism alienated entire social swathes and areas, leaving them open to the Tea Party-to-Trump tendency.

Biden’s blue-collar roots (and Catholic social doctrine) made him a vigorous and explicit proponent of a Rooseveltian New Deal as manifested in his two massive spending bills. The Biden perspective was preceded and supported by a body of critical opinion produced by five outstanding US economists who served or were sympathetic to Democratic administrations from Bill Clinton onwards: Joe Stiglitz, Jeff Sachs, Paul Krugman, Robert Reich, James Galbraith.

The only political leader in Sri Lanka to even approximate that progressive perspective is Sajith Premadasa, who quoted Roosevelt and called for a New Deal in his hour-long parliamentary speech during the Budget debate.

The rest of the democratic Opposition and policy intelligentsia are still stuck with the economic thinking of US Republicans, UK Conservatives, European Christian democrats and worse, the Latin American Right (e.g., Ricardo Hausmann) against whose policies much of the continent rose in rebellion in the streets or elected left populist administrations.

Gotabaya Rajapaksa was the product of certain policies or rather the Sinhala swing against certain policies of the administration of the day (2015-2019).. That these were much more the policies of the UNP rather than SLFP, is evidenced by Sirisena’s election to parliament at the head of 14 MPs, and Ranil’s solitary, unelected presence. The failure to identify, renounce and avoid such policies will only re-open the space for the next Gotabaya albeit by another name or more dangerously, another institutional agency.

Simply put, a repetition of such policies cannot but result in the repetition of the outcome. Except for Sajith Premadasa, whose father inherited a country “burning at both ends” due to the policies of the UNP’s elite Establishment and had to break decisively with them in order for the democratic system and the market economy to survive, the lesson does not seem to have been learned by the political class.

‘Parliamentary Cretinism’

The absurd assumption that autocracy is coterminous with the presidency and democracy with the parliamentary system, brings to mind Lenin’s phrase “parliamentary cretinism”.

The universal relevance of the American contribution not only enables the USA to stand at the helm of the world’s democratic camp but made America the pioneer of the Presidency which 4 of the 5 permanent members of the UN Security Council have adopted as an apex structure, irrespective of their divergent ideologies and economic systems.

The unreason which manifestly characterizes the policies of President Gotabaya Rajapaksa is hardly proof of the dangers of the presidential system. It took the anti-Poll Tax riots to force Maggie Thatcher’s resignation into her third term as PM, while Donald Trump lost the presidency at the end of one term.

America opted for the presidential system precisely after it had made a revolution-cum-war of independence against Mad King George. Steeped as its leading elite was in Lockean liberalism it could very well have opted for the supposed virtues of the parliamentary system. Instead, it chose an ‘elected monarch’, countervailed and hemmed in by the Lockean separation of powers.

In Latin America, Simon Bolivar known as The Liberator because he defeated the armies of the Spanish crown, opted not for the parliamentarism that everyone knew existed in England, but followed North America in choosing the presidential system.

Why? A 21st century explanation comes from one of the most influential leftists of today, Antonio Negri who spent 24 years in prison and exile for his membership of a far-left Italian movement. In the massive volume ‘Empire’ (Harvard) of which he was the principal author (he wrote in Rome’s Rebibia prison), and in the follow-up ‘Empire and Beyond’ compiled upon release, Negri, formerly Professor of State Theory at the University of Padua and lecturer in Political Science at the University of Paris, celebrates US Constitutionalism or what he calls ‘the US constitutional project’.

He revisits the established fact of the influence of Greek historian and political analyst of the Roman period, Polybius, on Montesquieu, Locke and most consequentially the American Founding Fathers.

Aristotle made the breakthrough classification of democracy, oligarchy and monarchy, and identified the tendency of each to degenerate into its opposite and the cycle to begin again. Polybius found the solution to be a ‘mixed system’ which accommodated all three forms but used them to check and balance each other.

The American constitutionalists consciously studied him and built a hybrid system with the elected presidency, judiciary, and bicameral legislature.

Sri Lankans have such an advanced system albeit distorted by two swings to opposite extremes: the over-centralization of the 18th and 20th amendments and the dysfunctional deadlock of the 17th and 19th amendments. The US system has powerful Congressional oversight but the UNP liberals gave the role of oversight to unelected civil society (NGO personalities).

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Latest comments

  • 1
    0

    Dr. DJ: Please get updated with what the PEOPLE NEED before you speak of all types of “Archiac Dogmatic Theories” that have been put to test for “Decades”. Please, if you do care to “Update” a link:

    https://www.youtube.com/watch?v=CxDufWai_Ac

    Please listen to Lalkantha of JVP/NPP at SLVLOG on the above link. You could learn what the “PEOPLE NEED” and what Political Parties NEED to do to meet that “”NEED”.

  • 1
    0

    We forget that the root of the current political and economic crises is in the ‘open’ economic policy of JRJ enforced with the help of his executive power.

    • 0
      1

      SJ
      If you asked me who are the individuals who contributed most to the pathetic state we are in today I would say
      JR Jayawardene
      Rohana Wijeweera and
      Velupillei Prabakaran
      in that order , the share of JRJ being thousand times bigger than that of other two combined.

      Soma

      • 1
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        So the Rajapakses are blameless: no responsibility whatsoever, eh? :))

        What caste are you Soma? …….. You don’t have to answer ……. but just out of curiosity to find out what particular insecurity afflicts you ……. for you to dabble/wallow in such one-sided-reality ………..


        It always has to do with your childhood ……….

  • 1
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    No we don’t need an executive president.

    Parliamentary democracy was less violent and less corrupt.

    We also do not need provincial councils. Totally worthless.

  • 0
    0

    Mr R Premadasa while he was the Prime Minister under JR and later as Executive President was actually engaged in distribution of wealth not in creation of wealth.

    Sri Lanka is in the present plight because of the welfare polices followed by successive governments in the name of socialism.

    If Sajith is going to follow similar destructive polices, then Sri Lanka is doomed with no prospect of redemption.

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