NEHRU AS A PRO-SOVIET COMMUNIST CRONY

He was fascinated by the revolution

It is well known that Jawaharlal Nehru, India's first Prime Minister wore a political red hat. S Gopal, in his biography of Nehru, has described how Nehru was pressurised by the Soviet communist leader Leonid Brezhnev to withdraw his resignation, following the failed adventure with China in 1962. Nehru had gone to the Himalayas, seeking peace, when Brezhnev intervened.

But Nehru's tryst with the Bolsheviks dates back to 1927 when he visited Moscow for the first time.

Announcing the arrival of Nehru, on November 5, 1927, Pravda, the communist Daily of the Soviet Union, said: "Pandit Motilal Nehru, one of the outstanding leaders of the Indian National Movement is expected here, today or tomorrow. He will come to Moscow with his son Jawaharlal Nehru, leader of the left wing of the National Congress." (1)

Pravda, the central organ of the Bolshevik Party, in the same issue, reported how invitations to Indian democrats had been sent and the reaction of the British colonial authorities to them. In a special article devoted to India, Pravda said that the invitations had been dispatched in good time to Indian political organisations like the Workers’ and Peasants’ Parties of Bengal, Bombay, Madras and Rajputana. These invitations had been intercepted by the British Government. (2)

Nehru at Brussels, 1927

Invitations were also sent to prominent politicians and public leaders and leaders of the national liberation movement. The delivery of telegrams with these individual invitations had been allowed by the British censor. Published in the Indian press, they caused a “sensation”. But as soon as some of the invitees expressed their desire to avail themselves of the invitations, Pravda said, the British Government refused them exit visas.

And yet, in spite of the prohibitory orders of the British colonialists, a few more Indians, besides Jawaharlal and Motilal, managed to reach Moscow. There were three members of the Anti-Imperialist League, and the well-known Indian revolutionary, S J Saklatwala, who had arrived in the Soviet Union a few days earlier than Nehru and who, according to Nehru, was at the Moscow station to meet him. Virendranath Chattopadhyaya, the revolutionary brother of Sarojini Naidu, was there from Germany.

Shapurji Dorabji Saklatvala (1874 – 1936) was a communist and British politician of Indian Parsi heritage. He was the first person of Indian heritage to become a British Member of Parliament (MP) for the UK Labour Party and was also among the few members of the Communist Party of Great Britain (CPGB) to serve as an MP.

On arrival in Moscow, the Nehrus were greeted by officials of the reception committee and Saklatwala, whom Jawaharlal had met in Brussels, during the Congress of Oppressed Nationalities or the International Congress against Colonial Oppression and Imperialism.

In March 1926, Nehru sailed from Bombay with his wife Kamala and daughter Indira to Geneva, where Kamala was admitted for treatment, at a TB sanatorium in Montana. From his vantage point in Switzerland, Nehru "began to see the limitations of a purely political approach" to India's problems; a brand-new constitution alone could not carry India far without those social and economic changes which had been arrested by the natural conservatism of a foreign bureaucracy and its anxiety not to antagonize vested interests. Stimulated by his left-oriented son, Motilal began to show a keener appreciation of the economic factor in Indian politics. (3)

Motilal wrote to Nehru on January 27, 1927: "The present controversy on the current currency question has revealed the fact that many hundreds of crores (of rupees) have been taken out of the country by the simple process of manipulating the exchange and adjusting the tariff to suit the British manufacturer and merchant." (4)

In Brussels

Nehru attended the Soviet-sponsored Congress of Oppressed Nationalities in Brussels on February 10, 1927. At his suggestion, the Gauhati Congress in December 1926 decided to participate in the Brussels Conference and nominated him as a delegate. Jawaharlal wrote to S Srinivasa Iyengar, the Congress President, to ask whether he might define the political goal of the Congress as independence. Motilal wrote back: "We ask for Swaraj and you can interpret it to mean independence, as indeed it is." (5)

The Indian National Congress was determining its position towards international problems against the background of a grim struggle being waged by the anti-imperialist forces headed by the Soviet Union against the forces of reaction. (6) The Hunter Commission, which officially investigated the events which led to the Jallianwala Bagh massacre in 1919, had even picturised the Satyagraha movement headed by Gandhi as a “Conspiracy originated or supported from outside”. This absurd assertion served only as a pretext for pointing at the “Bolshevik intrigues”. From the documents of the sixth volume of the Hunter Commission, one can see an obvious fear of penetration into India of Bolshevik ideas. This fear determined much of the policy of the colonialists.

The organization was founded with the support of the Comintern. Since 1924, the Comintern advocated support of colonial and semi-colonial countries and tried, with difficulties, to find convergences with the left-wing of the Labour and Socialist International and with bourgeois anti-colonial nationalist parties from the colonized world. Another stimulus to create cross-political cooperation was the revolutionary surge in China since 1923 in which the nationalist Kuomintang was in a united front with the Chinese Communist Party (CCP).

Toying the Soviet line, Nehru attacked Britain at the Brussels Conference and described the early history of British rule in India as "an epoch of predatory war-a period in which freebooters prowled about and committed plunders and robberies in an unbridled manner." He used communist jargon and accused British imperialism of encouraging India's communal divisions, uprooting her educational system and undermining her economy." (7)

He was hopeful that the liberation of his homeland would lead to the liberation of Asia and Africa. There was nothing Gandhian in the resolution on India, drafted and moved by him, which resonated with the communist dependence on the proletariat: "This Congress accords its warm support to the Indian National Movement for the complete freedom of India, and is of the opinion that the liberation of India from foreign domination is an essential step in the full emancipation of the peoples of the world. This Congress trusts that peoples and workers of other countries will fully cooperate in this task; this Congress further trusts that the Indian National Movement will base its programme on the full emancipation of the peasants and workers of India, without which there can be no real freedom". (8)

It has all the nuances of a communist communique.

During and after the Conference, Nehru took a keen interest in mobilizing public opinion against the despatch of British troops to China. In a joint resolution of the British, Indian (read Nehru) and Chinese delegates, the Congress of Oppressed Nationalities demanded the immediate withdrawal of all foreign troops from Chinese territory and waters and urged ''the need of direct action, including strikes and imposition of the embargo to prevent the movement of munitions and troops either in India or China and from India to China." (9)

The Brussels Conference was funded by the Mexican Government, which resented US intervention in Latin America, and by the Kuomintang, the Chinese Nationalist Party, which resented British intervention in China. The Soviet Government was quick to see the propaganda value of the conference, and Marxist phrases were bandied about freely in communiques. (10)

George Lansbury, the British Labour leader presided over the conference and was also elected President of the League Against Imperialism, the permanent organization to which the conference gave birth. Jawaharlal was elected to the nine-member executive committee of the League, which included Madam Sun Yat-Sen.

The inclusion of the word 'league' in the organization's name was a direct attack on the League of Nations, which perpetuated colonialism through the mandate system.

Gandhi not impressed

In his reports to India, Nehru recommended that the Indian National Congress should maintain links with the League Against Imperialism. Gandhi was not impressed. Gandhi wrote to Motilal on May 14, 1927: "I read the public printed report of the (Brussels Conference) from beginning to end and I have now read the confidential report. Both are worthy of Jawaharlal. I appreciate the view he presents about foreign propaganda. But somehow or other, I still feel that our way lies differently. I feel that we will not get the support of Europe beyond a certain point, because after all most of the European states are partners in our exploitation. And if my proposition is correct, we shall not retain European sympathy during the final heat of the struggle." (11)

Gandhi, in a note to Nehru, warned against reliance upon external support. Nehru was in touch with the Indian revolutionaries based in Germany. On April 23, 1927, Nehru wrote back to Gandhi: "I do not think it is desirable, nor indeed is it possible for India to plough a lonely furrow now or in the future. It is solely with a view to self-education and self-improvement that I desire external contacts. I am afraid we are terribly narrow in our outlook and the sooner we get rid of this narrowness, the better. " (12)

Gandhi's thinking, to Nehru, was very narrow. Before long, the League Against Imperialism branded Gandhi as a 'reactionary'. (13) When in November 1929, Gandhi and the Congress welcomed Lord Irwin's declaration on Dominion status for India, the League Against Imperialism hurled abuse in stereo-typed Marxist phrases at Gandhi and the Congress: "Chronic reformism", the betrayal of the cause of workers and peasants." (14) This came just before the launch of the civil disobedience movement. Nehru had no other option than to leave the League in April 1930. 

In India, some revolution-minded Indian patriots gained inspiration from Gorky’s fiction and publicist works. 

From the early days of the October Revolution, Nehru closely followed the socialist transformations in Soviet Russia, studied her experience, and strove to use it in the interests of the freedom movement in India. Nehru studied the works of Marx and Lenin which, by his own admission, substantially influenced his views on the ways and laws of global social development. In doing so, as Nehru pointed out in one of his articles, he was deeply impressed in those years by Lenin’s work, Imperialism, the Highest Stage of Capitalism, and the book written by the American journalist, John Reed, Ten Days That Shook the World. (15)

Later, Nehru wrote about that period: “We began a new phase in our struggle for freedom in India at about the same time as the October Revolution led by the great Lenin. We admired Lenin whose example influenced us greatly.”

In Moscow

So, Nehru was elated when he, together with his father Motilal Nehru, was invited by the USSR Society for Cultural Relations with Foreign Countries to attend the celebrations of the Tenth Anniversary of the October Revolution. On November 7, 1927, Jawaharlal Nehru together with his father, wife and sister set his foot on Soviet soil for the first time.

In September 1927, Motilal was on a vacation in Europe and in October, he was in Berlin. At Jawaharlal's suggestion, it was decided to attend the tenth-anniversary celebrations of the Russian Revolution. They travelled 28 hours from Berlin on an uncomfortable train to reach the small town of Niegerloje, on the Polish-Russian border. 

The Nehrus arrived a day too late to witness the parade in Red Square but spent four hectic days in Moscow. 

The Soviet press gave much coverage to the visit of the Nehrus. On the eve of their arrival, Pravda published their biographies. The newspaper described them as the most prominent leaders of the Indian national liberation movement. Pravda also gave an account of the activities of Nehru in his capacity as an official representative of the Indian National Congress at the first conference of the Anti-imperialist League, held in Brussels. During the stay of the Nehrus in Moscow, the Soviet media reported the meetings they had and the speeches they made.

Nehru was received in the Kremlin by Mikhail Kalinin, Chairman of the Central Executive Committee of the USSR. Nehru visited several factories and plants, attended Moscow court proceedings, went to the Museum of the October Revolution, and the Bolshoi Theatre, and saw V. Pudovkin’s film, “The End of Saint-Petersburg”.

On November 8, Nehru took part in a festive meeting devoted to the Tenth Anniversary of the October Revolution, held in the Trade Union House. Professor Vladimir Balabushevich, a famous Indologist reminisced later: “Nehru was a little late for the meeting. Nevertheless, when Nehru and his father, Motilal, made their appearance in the hall and were introduced to the audience by the Chairman of the meeting, all those present in the hall rose and gave them a warm welcoming ovation. Already at that time, Nehru was regarded as an outstanding fighter against imperialism and colonialism.”  (16)

Besides calling on Mikhail Kalinin, Nehru met A. Lunacharsky, the First Commissar of Education, V. Kuibyshev, Chairman of the Supreme National Economic Council, the Health Minister Semashko, the French writer Henri Barbusse and the German internationalist Clara Zetkin, Sun Yat-sen’s widow Soong Ching-ling, and the Mexican writer Diego Rivera.

Nehru described later all these meetings and impressions on returning to India in his detailed articles on the Soviet Union, which came out shortly after. Most of the articles appeared in the Hindu, and only one in Gandhi's Young India. The articles were published later as a book, Soviet Russia: Some Random Sketches and Impressions (1929). 

In the foreword of the book Nehru admits that he is publishing it as a book with "considerable hesitation." "I realise," he writes, "more perhaps than the average reader, their deficiencies and how disjointed and sketch they are." He confesses that some of them were written on trains.

Nehru was impressed by what he saw and felt like a juvenile communist that India could learn much from the Soviets in shaking off the feudal past. He noted that in Moscow the contrast between luxury and poverty was less glaring than in the big towns of India and Western Europe (17) and that high officials in Moscow didn't live lavishly; that the State Opera House was patronized not only by the upper class but also by the commoners; that literacy was increasing fast; that the legal and economic status of women had risen; that conditions in prisons had improved.

He was astonished to see M. Kalinin, President of Soviet Russia, wearing peasant clothes and receiving a salary that was nearly the same as that paid to his subordinates.

While showering praise on the "transformation" in the Soviet Union, he laments the situation in India, thus: "We are a conservative people, not over-fond of change, always trying to forget our present misery and degradation in vague fancies of our glorious past and an immortal civilisation. But the past is dead and gone and our immortal civilisation does not help us greatly in solving the problems of today." (18)

Nehru in Moscow, 1955

So what is the way out? Nehru hints at a revolution: "If we desire to find a solution for these problems, we shall have to venture forth along new avenues of thought and search for new methods. The world changes and the truths of yesterday and the day before may be singularly inapplicable today." (19)

Nehru then proposes for India, the Russian model: "Russia thus interests us because it may help us to find some solution for the great problems which face the world today. It interests us especially because, conditions there have not been, and are even not now very dissimilar to conditions in India. Both are vast agricultural countries with only the beginnings of industrialisation, and both have to face poverty and illiteracy. If Russia finds a satisfactory solution for these, our work in India is made easier." (20)

He also extols the October Revolution as "one of the great events of world history, the greatest since the French revolution, and its story is more absorbing from the human and dramatic point of view than any tale or phantasy.” (21) It is now known that the actual change was in February, in the absence of Lenin, and the October revolution was just a 24-hour coup which unsettled Kerensky, after the return of Lenin. To cap the absurdities, Nehru has devoted an entire chapter to describe Lenin's "virtues". He quotes Romain Rolland at the end to extol Lenin as "the greatest man of action in our century, and at the same time most selfless." (22)

Nehru failed to foresee the tragedy the revolution had in store. He just linked communism with opposition to colonial rule and economic inequality. In his autobiography too,  he praised communism: "Whatever its faults, it is not hypocritical and not imperialistic." He thought the constructive side of the Soviet model was amazing-the so-called massive assault on poverty, disease illiteracy, bigotry and the push towards industrialization. It was Stalin on the throne and Nehru failed to see the skeletons on the cupboard of the dictator, Lenin. 

So, J Coatman wrote in his book, Years of Destiny (23): "Pandit Jawaharlal Nehru has now one secret ambition, which is to rival Lenin or Stalin in the history of Communism." But as we all know, Gandhi was a roadblock to Nehru, on the way to the destructive and violent journey to a communist revolution. 

Gandhi wrote to Nehru on January 4, 1928: "You are going too fast. You should have taken time to think and become acclimatized." Nehru tried to explain, but that made matters worse. Gandhi wrote back: "The differences between us are so vast and radical that there seems to be no meeting ground between us." (24)

Gandhi claimed to be a socialist. "I have claimed that I was a socialist long before those I know in India had avowed their creed," he said."But my socialism," he wrote, "was natural to me and not adopted from any books. No man could be actively non-violent and not rise against social injustice wherever it occurred. Unfortunately, Western socialists have, so far as I know, believed in the necessity of violence for enforcing socialistic doctrines. I have always held that social justice, even unto the least and the lowliest, is impossible of attainment by force." (25)

After becoming the PM, Nehru went ahead with the Soviet model of five-year plans and got stuck discouraging the private sector. He took a leftist, V K Krishna Menon as his defence minister, failed miserably against China, and left the arena as a political disaster.

(This article was published in Indusscrolls: https://indusscrolls.com/nehru-as-a-soviet-communist-crony )

____________________________

1. B R Nanda, The Nehrus, Oxford, 1984, pp 258
2. Leonid Mironov, Nehru's First Visit to the Soviet Union, Mainstream, Vol XLVI No 47, 15 November 1975
3. B R Nanda, The Nehrus, Oxford, 1984, pp 256
4. Ibid, 253
5. Ibid, 255
6. A I Yunel, The Russian Revolution and India, 2020, Routledge
7. B R Nanda, The Nehrus, Oxford, 1984, pp 255
8. Ibid
9. Ibid
10. Ibid, p 256
11. ibid
12. Ibid 256-257
13. Ibid
14. Ibid
15. Nehru, Jawaharlal, Soviet Russia: Some Random Sketches and Impressions, 1929, Chetana, Bombay
16. Leonid Mironov, Nehru's First Visit to the Soviet Union, Mainstream, Vol XLVI No 47, 15 November 1975

17. Ibid, pp 13-14
18. Ibid
19. ibid
20. Ibid
21. Ibid, pp 36
22. Ibid, p 39-48
23. Cotman J, Years of Destiny, pp 95. John Coatman (1889–1963) was the director of public information for the Indian Police Service and the British government in India. He was made a Companion of the Order of the Indian Empire in 1929 and was a member of the secretariat during the first Round Table Conference (November 1930 – January 1931). His writing promoted the benefits of the British Empire.

24. B.R Nanda, The Nehrus, Oxford, 1984, pp 293

25. Gandhi, Harijan, April 20, 1940

© Ramachandran 

പുസ്തകം: ഹിന്ദുത്വം ഉറപ്പിച്ച കുമാരനാശാൻ

കുമാരനാശാൻ്റെ  ഭാരതീയ മുഖം 

എൻ്റെ പുതിയ പുസ്തകം, ഹിന്ദുത്വം ഉറപ്പിച്ച കുമാരനാശാൻ, ഡൽഹി ഇൻഡസ് സ്‌ക്രോൾസ് പ്രസിൻ്റെ ആദ്യ മലയാള പുസ്തകവുമാണ്. കുമാരനാശാൻ്റെ വലിയ കാവ്യങ്ങൾക്ക് മുൻപുള്ള രചനകളുടെ പശ്ചാത്തലത്തിൽ, അദ്ദേഹം ഭാരതീയ തത്വചിന്തയ്ക്ക് നൽകിയ സംഭാവനകളുടെ പഠനമാണ്, ഈ പുസ്തകം.

വില 150 രൂപ. 

വേദാന്തം നന്നായറിഞ്ഞ ആശാൻ, ശങ്കരാചാര്യരെ വിശേഷിപ്പിച്ചത്, ലോകഗുരുവായി തന്നെയാണ്. ആശാൻ ആദ്യമായി പരിഭാഷ ചെയ്തത്, ശങ്കരാചാര്യരുടെ ‘സൗന്ദര്യ ലഹരി’ ആയിരുന്നു. ജാതിവിവേചനത്തിനെതിരെ പോരാടാനുള്ള ഊർജം കുമാരനാശാന് കിട്ടിയതു തന്നെ, ശങ്കരനിൽ നിന്നാകണം. അദ്വൈതം പോലെ രമണീയമായ ഒരു സിദ്ധാന്തം ലോകത്ത് വേറെയില്ലെന്ന് ആശാൻ സമർത്ഥിച്ചു.

1907 ല്‍ ‘വീണപൂവ്’ എഴുതുന്നതുവരെ അദ്ദേഹം സ്‌തോത്ര കൃതികളാണ് രചിച്ചിരുന്നത്. അവയാകട്ടെ, അദ്വൈതസത്ത നിറഞ്ഞു നിൽക്കുന്നവയുമാണ്. പിൽക്കാലത്ത് ആശാനിൽ കണ്ട ബുദ്ധമത ധാരയും ഭാരതീയം തന്നെ. 

ഈഴവർ ബുദ്ധമതത്തിൽ ചേരണമെന്ന വാദങ്ങൾക്ക് മറുപടി ആയാണ് ആശാൻ, ‘മതപരിവർത്തന രസവാദം’ എഴുതിയത്. ഈഴവർ ഹിന്ദുമതത്തിൽ ഉറച്ചു നിൽക്കണം എന്ന വിശ്വാസത്തിൽ ആശാൻ എത്തിയത്, അഗാധമായ ആർഷജ്ഞാനം നിമിത്തമാണ്. അതിനാൽ, ഭാരതീയതയ്ക്ക് മേൽ കത്തിവയ്ക്കുന്ന ഏത് മതവിശ്വാസത്തിനും അദ്ദേഹം എതിരായിരുന്നു. അദ്വൈതം ആത്മാവിലുള്ള ആശാൻ , ഹിംസയിൽ ഊന്നിയ പ്രത്യയശാസ്ത്രങ്ങളെ വർജ്ജിച്ചു. അതിനാൽ, ഹിന്ദുവംശഹത്യ വരുത്തിവച്ച മാപ്പിളലഹളയെ ധീരമായി അദ്ദേഹം കാവ്യരൂപേണ ചെറുത്തു. മാർക്സിസം തിന്മയുടെ തത്വശാസ്ത്രമായതിനാൽ, സമകാലികരായ കാൾ മാർക്സ്, ലെനിൻ എന്നിവരെപ്പറ്റി ഒരക്ഷരം പോലും ആശാൻ എഴുതിയില്ല. 

ഹിന്ദുമതത്തെ ഉറപ്പിച്ചു നിർത്തി കുമാരനാശാൻ നടത്തിയ കാവ്യ, സാമൂഹിക പോരാട്ടങ്ങളെപ്പറ്റി വ്യത്യസ്തമായ ഒരു പഠനം.

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NEW BOOK: R S S FAVOURS WOMEN ENTRY AT SABARIMALA

Controversial book in English

R Hari, the RSS ideologue, had written a controversial book, Mattuvin Chattangale, in Malayalam, pleading for the Sabarimala temple entry of Women. It had been the RSS' official position, till the Supreme Court verdict, allowing access of women at Sabarimala. After the ruling, the RSS publishing house, Kurukshetra Prakashan, stopped book sales. Now, the book has been translated by me into English and published by India Book House, Indological Trust, India Books,vellariyil garden, MM Ali Road, Palayam, Calicut - 2. Rs 150. Phone 9447394322

Off with the Outgrown Customs. R Hari on Sabarimala entry of women. Translated by Ramachandran.

CHINA CUTS ITS US TREASURY HOLDINGS

Instead, it invests in Gold

China has been cutting down its holdings of U S Treasury securities gradually. But where are the China funds going from the US?

China, the second largest non- U S holder of U S Treasuries after Japan, reduced its holdings to the lowest in February 2023. China's holdings fell to $848.8B in February from $859.4B in January. The figure stood at $1.03 trillion at the same time last year. It was the seventh straight month of decline.

In January, the holding stood at $7.4 Trillion; it was $7.7 Trillion in February 2022, according to US Treasury data released in April 2023.

China ratcheted up its US Treasury bond purchases starting in 2000. Its buying spree peaked in 2014, dropping below the magic US$1 trillion mark in April 2022.

China has already trimmed its holdings by 34.1% over the past 10 years, including a 16.6% cut in 2022.

The reasons

China has three reasons for the move:

• It needs to diversify its foreign reserves, amid “external risks.” The risk is the trade war between the two countries.

• Beijing is wary of the US dollar’s dominance, as it is facing financial sanctions from Washington. 

• US Treasury yields declined following the US Federal Reserve’s progressive interest rate increases last year. The hikes resulted in a fall in the price of US treasury bonds.

De-dollarizing moves

China is trying to internationalize its currency, the yuan. For instance, the proportion of yuan in Brazil’s international reserves has reached 5.7%, while the Euro is 4.7%. Yuan is now Brazil’s second-largest reserve currency.

Yuan found a place in Brazil’s foreign-exchange reserves four years ago, as its US dollar assets fell to 80.24% at the end of 2022 from 89.93% in 2018.

Russia, which has been kicked out of the US dollar system and SWIFT after the Ukraine invasion, has already increased its holdings of the yuan in foreign-exchange reserves and sovereign funds, with more than two-thirds of bilateral trade settled in yuan or rouble.

Hiding in tax havens

Along with the decline in US Treasuries, China’s Treasury holdings in the tax havens, the Cayman Islands jumped by $38.5B and Bermuda by $7B.

China may be hiding some dollar assets in there, to sidestep Western sanctions

Investing in gold

Beijing is replacing some of its US Treasury holdings with gold. China increased its gold reserves for the sixth consecutive month in April to 1893 tons, growing by about 102 tons, in the face of heightened political risks.

The largest single purchase of gold in February was by the People’s Bank of China, which added 25 tons. It added around 18 tons in March alone.

© Ramachandran 

LESSONS FOR CHINA AND INDIA FROM META CRISIS

Stale Vision Led to Crisis

The parent company of Facebook, Meta, cutting 11,000 jobs, or 13 per cent of its workforce, did not come as a surprise to the global techie world watchers, since it was waiting to happen. Though the tech giant has termed the retrenchment as an attempt to become “leaner and more efficient,” it is a well-known fact that American tech companies are in the throes of an unprecedented crisis. The “American dream” is falling into a dark abyss.

The Meta crisis is the beginning of a turbulent era in Silicon Valley, which so far stood as a gigantic bastion of economic power. The United States has always boasted that this bastion is recession-proof, but now the Fort has been breached; according to Crunchbase, 50,000 U.S. techies have been laid off this year alone. Elon Musk gave marching orders to half of Twitter’s workforce; Peloton, a maker of internet-connected exercise bikes, has more than halved its workforce, Robinhood, a popular stock-trading app, also has cut its labour force by 30 per cent, and fin-tech platform Stripe has announced layoffs. Google and Amazon have decided to lay off 10,000 employees, each.

The crisis of Meta

In the case of Meta, apart from inflation, rising interest rates, and recession, aggressive COVID-era expansion is partly to blame. Meta increased its workforce by nearly 60 percent during 2020- 2021. Facebook grew its staff by 28 per cent, to 87,314, in the 12 months ending in September.

My article in China-India Dialogue

"At the start of COVID, the world rapidly moved online, and the surge of e-commerce led to outsized revenue growth," Mark Zuckerberg, founder of Meta and FB, wrote, announcing the layoffs. "Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I decided to significantly increase our investments. Unfortunately, this did not play out the way I expected. I got this wrong,” he lamented.

He got it wrong, because, he was not pursuing realistic dreams. The social-media platforms of Meta, such as Facebook, Instagram and WhatsApp, have a traditional business model that relies on advertising. It was hit hard by the recession. Several digital advertisers pulled back in the face of inflation and the instability caused by the Russia-Ukraine conflict, and customers scaled back spending. As the tech companies tightened their belts, the labour force became the first casualty.

In October, Meta posted its second-quarter revenue decline and its profit was cut in half from the prior year. Valued at more than $1 trillion in 2021, Meta's market value has since plunged to around $250 billion. It ceased to be the behemoth, once it was. Meta's stock lost more than 71 per cent of its value this year, and it became the worst performer in the S&P 500.

The gamble of the metaverse

Once a niche concept contained in the cyberpunk novel, Snow Crash (1992), the metaverse became a buzzword when Facebook rebranded itself as Meta on October 28, 2021.

The metaverse is a virtual world that exists parallel to the physical world. In the metaverse, our digital and physical lives are overlapping, in the domains of work, socialization, productivity, shopping, and entertainment. It is enabled by advanced technologies, such as VR, AR, and MR. It is the next-generation internet for businesses, investors, and developers.

The entry point for the metaverse is, Extended reality (XR), which is a combination of augmented, virtual and mixed-reality environments that are accessible and interactive in real time. It is the pioneer of inventive applications in fields such as gaming, entertainment, enterprise solutions and simulations, as well as in military and defence.

Also, blockchain technology will play a major role in building the metaverse. While the proponents o this aspirational technology are western, the global metaverse discourse is influenced by economic giants such as China and South Korea. An array of positive factors suggests that India has a prime role to play.

The Zuckerberg company, Meta's crisis came as it is taking a gamble on building the metaverse. The hiring boom at Meta has focused on building immersive digital realms accessed through virtual reality. Zuckerberg has maintained that it will be the next great computing platform after mobile phones. He expects metaverse to replace some in-person communication. Since it is a gamble based on a stale vision, the crisis was inevitable.

There seems to be little hope for Meta’s technology which Zuckerberg claims is his company’s and our future. But,  none of us or the world at large has so far viewed him as the Messiah. Also, the multipolar world has ceased to view the U.S. as the saviour, anymore. 

Renowned technologists, who study designing use behaviour in virtual worlds, had always felt that Zuckerberg’s vision is stale and the future of Meta is on the rocks. So, the stale vision is to be blamed for the current crisis, rather than the global recession. 

There are 3D multiperson chat environments that were popularized by online games, Second Life, and now Horizon Worlds. Microsoft’s V-Chat, Comic Chat and V-worlds and the tools for creating and customizing digital avatars were the initial forays into Zuckerberg’s dream world. But it was evident to Microsoft in the 1990s itself that trying to harness the potential of the metaverse amid dramatic shifts in our digital lives, was not worth the extravaganza.

The dreams seem endless, and it is like kids create and then abandon, as in Minecraft. The magical architecture of virtual worlds is possibly a critical ingredient in the user experience and hence Meta is keen on creating 3D environments for people to hang out. But techies at Microsoft had found that these “stage sets” did not play a particularly critical role in shaping user behaviour. Instead of roaming in the virtual space, one has to work one’s way into the social structure to figure out how are things happening. People don’t encounter any sense of real life while wandering around for hours in virtual life. The virtual gathering space then becomes boring and ultimately they become empty and abandoned. This is termed a “cold state problem” by former Microsoft technology expert, Robert Fabricant.

Meta's metaverse division posted a loss of $ 9.4 billion in the first nine months of 2022, but Zuckerberg pumped in $ 36 billion between January 2019 and September 2022 to prop it up in the hopes that, at some point, people will be fools to show up at the party. When the party was about to begin, the world was pushed into penury, and no one turned up!

A decade ago, when Facebook was at a critical inflexion point as a desktop web platform with a very limited HTML 5 browser-based mobile offering, the leadership failed to recognize the smartphone revolution. They didn’t shift their focus to a mobile-first product offering in time. By pursuing the metaverse, Zuckerberg is imagining that Meta is defining the next paradigm. But in doing so, Meta has forgotten the fundamental lesson of mobile computing: Only the computing experience that is with people all the time wins. Computing that accompanies people in the world will always win over computing that takes them out of the world. 

Hence, nobody is really playing Horizon Worlds, Meta's free-to-play virtual reality metaverse that lets users create and visit “worlds” with friends or strangers. WSJ reports that of all the user-created worlds in the game, only about nine per cent are visited by more than 50 players. The rest are never visited by anyone, except Zuckerberg. The end result is empty, barren digital lands.

So, Zuckerberg’s metaverse vision is just a nostalgia trip to escape a world of complex, multilateral reality and hence his metaverse has progressed very little, scripting an American tragedy. The creative imagination of a brilliant student can any time overtake Meta’s flimsy vision and invent a compelling digital world. And it is beginning to happen.

China and metaverse

China’s Fintech Development Plan for 2022-2025 mentions metaverse while discussing reshaping financial services with intelligence, as a key task. The plan proposes that “relying on the features of 5G with high bandwidth and low delay, visual technologies such as virtual reality (VR), augmented reality (AR), and mixed reality (MR) will be deeply integrated with banking scenes to promote physical branches to upgrade to multi-horizontal, immersive, and interactive smart branches.”

In a paper on metaverse in October 2021, the China Institute of Contemporary International Relations (CICIR), linked to the Ministry of State Security, warned of the need for lawmakers to deal with virtual crimes. Similarly, in November 2021, the government of Zhejiang province organized a “metaverse industry development symposium.”

On November 1, China's Ministry of Industry and Information Technology unveiled a five-year plan for 2022 to 2026, for the development of the VR industry, aiming to achieve a target exceeding 350 billion yuan ($48.1 billion) in 2026.

This action plan is China’s first national-level policy that supports metaverse development. The document bats for creating fundamental technologies that support immersive AR, VR, and mixed-reality experiences. The policy calls for innovation in fields like full-body motion capture, gesture, eye, expression tracking, and technologies for rendering graphics.  

In China, so far over 16,000 metaverse-related trademark applications have been filed. Six of China’s tech giants – including Baidu Inc, Alibaba Group Holding Ltd, and Tencent Holdings Ltd (collectively known as BAT) – made it to the top 10 firms globally, that filed the most VR/AR patent applications in the past two years. In 2019, most of these developments happened in the fields of retail shopping, education, gaming, marketing, information display, and industrial manufacturing.

China’s VR industry accounted for about 44 per cent or US$8 billion of the global market, by the end of 2020. Big Chinese firms lack the expertise to develop VR devices, and they are investing in startups. China has over 900 million smartphone users, making VR accessible through smartphones, a priority.  AR generates less revenue than VR, and AR revenues reached RMB 21.3 billion (US$3.09 billion) in 2021. Virtual reality and virtual idols are booming, comprising an industry that is worth RMB 51 billion (US$8 billion) and RMB 3.5 billion (US$548 million) respectively.

Deloitte-China estimates that the metaverse market in China will hit 40 trillion yuan ($5.79 trillion) by 2030, equivalent to 20 per cent of China's GDP, and the electronic products and wearable devices in the metaverse will be worth $100 billion. 

According to a report by Morgan Stanley, leading Chinese tech firms have already begun to invest in a metaverse market that may be worth up to US$8 trillion in the future. J P Morgan, in a September report, suggested that the metaverse could triple China’s online-gaming market to $131 billion from $44 billion. The Bank estimates a $4 trillion total addressable market (TAM) for the metaverse in China from “converting offline consumption across physical goods and services.”

The metaverse development will have a notable impact on the entire technology, media and telecom (TMT) ecosystem. Tencent, NetEase, Bilibili, Sea, Krafton and Bandai Namco stocks could benefit from the metaverse.

Software and service vendors, such as Sight Plus, Hisense, and Mayitegong, have entered the AR market. Baidu launched a metaverse app on Chinese history, in December 2021, called “Land of Hope.” Tencent, the creator of WeChat, launched on the QQ platform, a new feature called Super QQ Show, which introduced a 3D interactive space where users can interact and play games together. 

A new app called Jelly, launched this year and developed and owned by Beijing Yidian Entertainment Technology, allows users to create online avatars of themselves and engage with up to 50 pals. It surpassed WeChat to become the most downloaded app in China’s iOS store. Byte Dance, the parent firm of TikTok, has designed two metaverse apps: Party Island for the Chinese market, and Pixsoul for the Southeast Asian one.

Metaverse was a key theme of the 5th World Artificial Intelligence Conference (WAIC2022), in Shanghai in September. Chinese internet platforms offered a "metaverse-like" viewing experience enabled by 5G and virtual reality (VR), during the Qatar World Cup soccer carnival.

Metaverse in India

China’s neighbour India is in the vanguard to build the metaverse. With the Government trying to foster a digital economy worth up to $1 trillion, the market of video streaming and gaming is seeing fresh heights. Reports project that the Indian gaming market will more than triple to $7 billion by 2026. 

 

India released its National Blockchain Strategy in December 2021. The pilot of the blockchain-backed Digital Rupee will be issued by the Reserve Bank of India, in December. The spectrum auctions to the rollout of 5G mobile services, would accelerate demand for cloud applications – including those for gaming and the metaverse. 

 

The operational challenge of building the metaverse remains, and if India is to take a leading role, investments in the private sector need to accelerate. The 18 months to August 2021 saw over $1bn of capital infused into the local video games ecosystem – more than the preceding five years combined.

 

Deloitte has predicted that the metaverse industry in India could have an economic impact worth between $79 billion and $148 billion by 2035. 

The report notes that India is among the pacesetters in the industry and that India was one of the first jurisdictions to include the metaverse in its policy considerations on cyberbullying and sexual abuse. With the country inching toward unveiling the Digital India Act, it is expected that a proper framework will be established to prevent the crimes of inciting violence and spreading misinformation on the metaverse.

India has stated that it will provide an enabling environment for Web 3 firms to experiment with new offerings for consumers in the industry. Union Minister of State for Skill Development and Entrepreneurship Rajeev Chandrasekhar announced that nothing prevents firms from exploring metaverse or non-fungible tokens (NFTs).

However, the country has signalled to use its G20 presidency to push for global digital asset regulations. The government has been relying on distributed ledger technologies (DLT) in recent months, using them for its central bank digital currency (CBDC) and streamlining local land registries’ operations.

The future of the metaverse can likewise be a big contributing factor to the development of the virtual economy. 

The ethical questions on meta-governance

India is debating the regulation of the technologies that will underpin the metaverse. The budget levies a 30% tax on income from transfers of Virtual Digital Assets (VDAs). Owning and trading non-fungible tokens (NFTs) is a pathway towards a new digital economy and this will impact the development of the metaverse. 

Beyond crypto, the metaverse raises ethical questions on privacy and security. Online risks may worsen the metaverse, through pervasive, intrusive and unwanted contacts. Pioneering efforts to find governance mechanisms for virtual worlds have to be in place and should be supported with digital literacy, safety, security and privacy which guarantee meaningful participation for participants in online communities while navigating through harmful content and behaviours.

Within the tech ecosystem, several standards have been proposed for the metaverse, but the incentives for adopting them are governed by the self-interests of a few western companies in taking control. It will not be possible for a single metaverse to exist if laws for monetising and moderating the metaverse are made and enforced differently around the world. Until recently, the western policy agenda has dominated companies, products, and rules.

The European Commission has suggested that plans to create an all-encompassing virtual reality environment would pose new challenges for antitrust regulators in the EU and has demanded further scrutiny of the development of the economic models of the metaverse. 

South Korea recently created a ‘metaverse alliance’ to facilitate the development of virtual and augmented reality platforms. In China, a metaverse industry group, the Metaverse Industry Committee, formed under the state-supervised China Mobile Communications Association in December 2021, has the stated objectives of strengthening innovation and integration among metaverse builders, organizing the training of professionals, and promoting new thinking.

India always has espoused the doctrine, of Vasudhaiva Kutumbakam, a Sanskrit phrase found in ancient texts such as Maha Upanishad, which means “The world is one family”. This expression is a constant refrain in Prime Minister Narendra Modi’s speeches. During his speech at the Davos Agenda 2022, he indicated that a collective and synchronized, global approach is needed towards addressing challenges with cryptocurrencies. 

This policy of oneness should be applicable, in the case of the metaverse, too. All the Indian scriptures expound on the victory of good over evil, and in a war between reality and virtual reality, in a conflict between reality and metaverse, reality has to be victorious and spread its wings even in the mythical and mysterious horizons.

© Ramachandran