What does it mean to revive planning?

We cannot generate a more critical concept of planning until we take seriously the conflict of interests and ideologies that will inevitably shape any possible recovery for Sri Lanka today

Despite claims of a ‘free market’, the leverage that these actors have over much of the global supply chain means that large swathes of the market are in fact held under a kind of private dictatorship. Accordingly, the question is not whether to plan. Instead, we must ask whether we prefer a form of planning that works in a democratic way with an explicit understanding of the public good, versus one that does not

It is fitting that the epigraph to Godfrey Gunatilleke’s now classic piece, “The Lessons of National Planning,” in the edited collection ‘Economic Policy in Sri Lanka’, opens with the following line attributed to former US President Harry Truman: “There is nothing new in the world except the history you do not know.” Pointing to the unknown unsettles categorical assertions that planning has failed. Of course, for a small country like Sri Lanka struggling to achieve key developmental goals, the legacy of planning remains contested. 

In recent times, for example, the JVP has begun to revisit the need for a national plan to cope with the effects of the current crisis. This intervention, among others, has provoked debate about whether planning itself is necessary to revive the economy. The bigger conceptual problems that planning raises, and which Gunatilleke pointed to in his chapter, however, have yet to be resolved. In this context, portraying planning as the opposite of the market constitutes a tremendous regression in our thinking. It ignores the history that we did, in fact, once know.

Instead, we must identify earlier work as a point of departure for further clarifying the paradoxes of planning, as opposed to dismissing the concept outright. The problem is that today, ideology, as much as planning, is portrayed solely in a negative way. But as Gunatilleke argues, planning’s limitation was not that it contained too much ideology, but too little.1 Sri Lanka’s planners from independence to the late 1970s failed to articulate a clear understanding of the relationship between state and society. A more explicit ideological framework could have accommodated a clearer set of objectives for both the public and private sectors.

Gunatilleke personally sympathises with social democracy. But the underlying idea is that ideology is a necessary component of critical inquiry. It requires us to be explicit about how we articulate different value systems. Adopting this perspective implies a choice between competing visions of society.

Two versions of planning

Meanwhile, attempting to dismiss planning by alluding to the efficiency of the market in the abstract does not do away with the concrete problems that planning is meant to address. Authors such as Leigh Phillips and Michal Rozworski, for example, have revisited the socialist calculation debate that occurred in interwar Europe between proto neoliberals such as Friedrich Hayek and socialists such as Oskar Lange. In ‘The People’s Republic of Walmart: How the World’s Biggest Corporations are Laying the Foundation for Socialism’, Phillips and Rozworski argue that long after the controversy abated, planning without price signals very much occurs within large-scale enterprises. 

Despite claims of a ‘free market’, the leverage that these actors have over much of the global supply chain means that large swathes of the market are in fact held under a kind of private dictatorship. Accordingly, the question is not whether to plan. Instead, we must ask whether we prefer a form of planning that works in a democratic way with an explicit understanding of the public good, versus one that does not.

In the context of Sri Lanka, the problem is further accentuated by the fact that the developmental needs of the country are frequently dismissed or otherwise downplayed by powerful International Financial Institutions (IFIs). They prioritise ruling class objectives, such as sustaining global finance capitalism. Accordingly, the ‘structural benchmarks’, or targets, that the International Monetary Fund (IMF) promotes are often at odds with goals such as improving the majority living standards of the population. 

This has been evidenced in a recent, powerful way by the fact that over 500,000 households were disconnected from the electricity grid in 2023 alone, thanks to tariff hikes imposed under the recommendation to pursue ‘cost recovery energy pricing’. The IFIs’ statistics often reflect an extremely limited definition of macroeconomic stabilisation. They ignore the fact that most of the population is being left behind in the supposed recovery.

Interdependence and instability

In the face of powerful global pressures, we must return to past debates that instead highlight the complex challenges in balancing different developmental approaches within the concrete institutional framework of planning. As Gunatilleke pointed out, a long-term view of planning must be reconciled with short-term macroeconomic fluctuations, which may disrupt Sri Lanka’s ability to achieve its targets. Global economic instability requires us to think carefully about the need to strengthen self-sufficiency in key sectors, to try and shield Sri Lanka from dangerous headwinds.

Gamani Corea made a similar point about global turmoil in a lecture to the Asian Development Bank in 1991, reprinted as “World and Asian Development Perspectives in the 90s” in the ‘Lanka Guardian’ (Part 1, Vol. 14, No. 2 and Part 2, Vol. 14, No. 3). As he put it, “The international community must realise that in the world of today it is unlikely that trouble and turbulence will stay confined to national boundaries” (Part 1, p.16). 

Corea further argued that in terms of Sri Lanka’s own domestic choices, “Production for exports and import substitution can appear to be policy alternatives. But the common experience [sic], I believe, is that they are also mutually supportive. A dynamic development process in a dynamic world must reflect and take advantage of all kinds of positive linkages and benefit from the growth of all kinds of markets—those to be found abroad in both developed and developing countries as well as those provided from within” (Part 2, p.17).

Against this intellectual background, the present does not necessarily represent progress. The previous generation of Sri Lanka’s development thinkers were far ahead of today’s neoliberal establishment. Echoing the interwar sociologist Karl Polanyi, they recognised that simplistic rhetoric about the virtue of ‘interdependency’ in the global market often disguises the extreme concentration of power and wealth. Typically, the process engenders chaotic forms of adjustment, such as war and conflict, which we are once again seeing today. Such a tendency leads to global unravelling in the absence of countervailing mechanisms, including redistributive state intervention and a just way of managing systemic trade imbalances between surplus and deficit countries.

Incorporating struggles into planning

Yet Corea, along with Gunatilleke, also retained key assumptions about the malleability, or flexibility, of powerful IFIs such as the IMF and World Bank. These expectations have not withstood the test of time. Corea appealed to “common sense and pragmatism” against market fundamentalist “philosophy” (Part 2, p.16). He argued that the costs of adjustment should not be imposed on poor countries such as Sri Lanka. He continued to believe that a new global financial and trade architecture could be formulated within existing institutions, even after the US-led defeat of the proposal for a New International Economic Order in the 1970s. Similarly, Gunatilleke remained sanguine about the possibility of combining different development approaches, including the IMF and World Bank’s. He thought that they could be reconciled within a modernised framework that continued to take the concept of planning seriously (p.93).

But what even these discerning thinkers missed is the fact that powerful global institutions reflect a distinct configuration of geopolitical and financial interests. They eventually hardened in their opposition to the very notion of planning, or even industrial policy, for poor countries. Moreover, previous generations of development thinkers have struggled to grasp the fact that in the domestic context planning remains embedded not only in social mobilisation, but social and class struggles. The latter imply the need for an analysis of the balance of forces. 

Postcolonial scholar Partha Chatterjee recognised a similar problem in India. It had a far more robust planning mechanism than Sri Lanka, but it still faced significant challenges. According to Chatterjee, the limitations were not because the state intervened in the economy per se, but rather the degree to which its strategy reflected a unique paradox.

As Chatterjee put it: “Seen in terms of the political logic of passive revolution, what the strategy called for precisely was promoting industrialisation without taking the risk of agrarian political mobilisation. This was an essential aspect of the hegemonic construct of the postcolonial state: combining accumulation with legitimation while avoiding the ‘unnecessary rigors’ of social conflict” (‘The Nation and Its Fragments: Colonial and Postcolonial Histories’, p.213). Land redistribution, for example, proved far more difficult than initially anticipated, especially given the ideological closure of nationalism. It prevented a deeper critique of the ways in which the colonial legacy continued to insinuate itself into the supposedly neutral state bureaucracy. Towards this end, we cannot generate a more critical concept of planning until we take seriously the conflict of interests and ideologies that will inevitably shape any possible recovery for Sri Lanka today.

The current controversy over the need for planning reveals this question in sharp outline. The answer, however, should not be a retreat into the supposedly disinterested realm of ‘evidence-based policymaking’. Rather, we must take a risk in critiquing the social structures encompassing caste, class, gender, ethnicity, and region that have produced tremendous inequality. Especially now during the current crisis, they threaten to erode even the basic living standards of many people in Sri Lanka. Whether such a self-aware perspective can be expressed in the figure of a new intellectual capable of grappling with the enduring paradoxes of state power as a crucial means for transforming social relations remains to be seen. 

That includes taking serious struggles inside and outside of institutions. They may end up inducing major changes in the state apparatus. In pivotal historical moments, they may further entail epistemic shifts within the broader society. Across the social sciences, this problem is often framed in the more innocuous way of how to build state capacity. But the point remains that we can no longer simply defer to economics as the primary, if not sole, discipline for addressing the crises that have occurred since the 1970s. The neoclassical framework especially has continually failed to provide adequate answers.

Planning in the context of crisis

In general, channelling the resulting popular disappointment and frustration requires articulating an alternative developmental vision to the prevailing tendency that is premised on continuing dispossession to try and revive accumulation. Returning to Sri Lanka’s pre-crisis Gross Domestic Product will take years. Accordingly, we should be clear that even the old neoliberal slogan of growth for growth’s sake—meaning, discounting other development objectives for a single-minded focus on efficiency—is off the table. Instead, the question is who will bear the long-term costs of recovery, and towards what end. Calling for blood, sweat, and tears only works in a situation where the people trust the leadership to fulfil a collective mission with broad legitimacy. Paying off external bondholders to subject the country once again to the vagaries of the global market is not one of them.

We must further recognise that the mainstream policy apparatus in Sri Lanka is at the very least unaccustomed to, if not inclined to sabotage, an alternative vision in the absence of concerted ideological effort and popular struggle to bend the state to the will of working people. Accordingly, returning to earlier debates about planning is not simply a technocratic matter for experts. Rather, a critical approach means considering the ways in which planning necessarily involves prioritising some value systems over others. This balancing act reflects competing priorities among social and class strata. Still, we can frame these issues in terms of working people’s broad demand for development.

This is a perspective that even the JVP has yet to take up with adequate force by emphasising its redistributive dimension. If we return to planning with a clear understanding of the struggles that shape the relationship between state and society, however, we are better positioned to overcome the ideological barrier imposed by neoliberalism. The latter tries to categorically rule out planning. Nevertheless, redistributive state intervention remains crucial in conjunction with other strategies including social mobilisation and the building up of alternative institutions through which to accumulate wealth, such as cooperatives. Only a holistic approach can achieve a real economic recovery for most people. As a critical aspect of this project, the question of planning, last seriously explored by previous generations of development thinkers in Sri Lanka, has yet to be superseded.

Footnote:

1 In an FT column earlier this year, “Sri Lanka and the Crisis of the 2020s: Rethinking the Development Model,” I initially argued that Gunatilleke among other development planners put forward an “apolitical, technocratic approach.” But upon closer reading of his work, I note the difference here now in terms of Gunatilleke’s own acceptance that ideology should, in fact, play a key role in providing the conceptual framework for planning (“Lessons of National Planning,” p.91).