The Economics of Pushpa

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Pushpa: The Rise, a Telugu film directed by Sukumar and starring Allu Arjun, depicts capitalism and social stratification in an interesting way. I will divide this article into several sections that focus on particular economic topics.

Crony Capitalism and Monopolization

The political and socioeconomic conditions in the Seshachalam Hills (located in Andhra Pradesh, India) create an opportunity for Pushpa, a poor wage laborer, to rise through the ranks and take control of the red sandalwood syndicate. This group, which includes Mangalam Seenu and Konda Reddy’s gangs, is essentially a cartel that monopolizes the extraction and distribution of this commodity to the Port of Chennai. The rare wood can be sold for millions in international markets and it can be used to make furniture, decorations or instruments.

The syndicate maintains a close relationship with the local government in order to ensure its success. The corrupt government officials loosen regulations and provide forms of protection in exchange for a share of profits. This gives the syndicate free reign to control the entire market and create barriers for entry, resulting in the restriction of outside competition and the price gouging of customers to maximize their profits. Their dependence on a few corrupt politicians to avoid law enforcement and legal issues is vital for the business to maintain its operations.

Labor Exploitation and Wage Slavery

Pushpa used to work in the mills, but now chases after high-risk, high-reward gigs involving sandalwood cutting and export for Konda Reddy. He embodies the typical worker trying to make a living in a crony capitalist system where material conditions are substandard and wealth inequality is rampant. His estrangement from his father’s side of the family places them in a dire economic situation with no financial support. In addition, loan sharks charge high interest rates, which causes them to rack up debt. Because of their poor financial standing, the fear of unemployment drives workers to accept low-wage or high-risk jobs just to stay financially afloat. In one scene, Pushpa faces two choices for a night shift: a legal job for 100 rupees or an illegal job for 1,000 rupees. Pushpa decides that the illegal job, which involves extracting red sanders, is worth the risk of getting caught or even dying.

The authoritarian hierarchy of a capitalist organization enables the owner class to privately manage the means of production and dictate all aspects of the business with minimal worker input. The syndicate bosses have the freedom to distribute revenue as they see fit since the workers have no legal protections, self-organization or collective bargaining power. The owners could reinvest some of these profits in equipment, godowns (warehouses) and wages. Instead of pursuing further expansion and growth, they keep the money for themselves. Seenu earns around 2 crores for each shipment, but only distributes 25 lakhs to Konda Reddy. The business would be non-existent without the value provided by the labor, which involves the extraction of goods, evasion of police and transport of goods across a portion of the route to Chennai. Even though Seenu’s men handle the remaining checkpoints along the route, they hoard 88% of the revenue.

The concept of the owner class extracting profits from surplus labor value is known as wage theft. Seenu rarely puts in a fraction of the workers’ effort, but can exploit their labor to earn enough money that can afford him luxuries and real estate. Meanwhile, the remaining bosses of the syndicate and other middle men take the majority of the 25 lakhs left. The workers end up with only a small portion of that amount. Pushpa highlights the inherent labor exploitation under a capitalist system when he complains about Seenu’s greed and says “We are all working hard and he is sitting and enjoying all the fruits”.

The workers’ wages stagnate while the majority of the wealth is concentrated in the hands of the few. The capital owners have the means to acquire more capital, while the laborers can only ask for concessions with little success. Before the intermission, one worker gets brutally whipped by Seenu’s men for daring to ask for a higher share. Even if workers are successful in negotiating higher pay, these concessions are transient since the owners control the income distribution and can revert the decision whenever they want.

The Risks and Challenges of Upward Mobility

From the owners’ perspective, they are the job creators and innovators, which is true to a certain degree. They hire the workers and run the show, but the number of jobs they create is driven by consumer demand. If demand falls, they can lay off (or sometimes kill) workers to keep expenses low and maximize their bottom line. If demand rises, owners can create more jobs or force existing employees to produce more output. Since there’s no competition, they can keep wages as low as possible. In terms of risk-taking, the workers take on more risk than the owners. The owners’ biggest risk is either getting arrested by the police or losing all of their money. Even if they do lose their capital, they fall down a couple rungs on the social ladder to join the working class. Meanwhile, the worker’s biggest risk could be getting arrested, getting killed by their bosses, going back to an ordinary labor job that is not enough to sustain their family, or being unemployed and unable to afford basic necessities.

After Pushpa manages to sneak the wood past police checkpoints a couple of times, Konda Reddy offers Pushpa 5 lakhs. Anticipating business growth in the future, Pushpa cuts a deal to become a partner with a stake of 4%. He achieves upward economic mobility by moving from the working class to the owner class, even though he still has to help coordinate extraction and distribution efforts on the ground. He can now acquire significant capital if business improves, although his influence on business strategy and decision-making remains limited. In terms of social status, Pushpa is hindered by the caste system and being born out of wedlock so his business partners still consider him as an inferior “coolie”. Even when workers finally move to a higher social class, they still face further discrimination.

The rest of the workers who helped Pushpa still receive inadequate compensation for the value they provided. The capitalist system creates a bottleneck on the number of workers who can achieve upward mobility since wealth inequality increases with wealth accumulation. The more capital the owners have, the more freedom they have to dictate what their workers can have. Pushpa’s rise is a rare progression in an otherwise stagnant social structure. A few success stories cannot be extrapolated to prove that this system works for everyone.

When Pushpa decides to bypass Seenu and sell the wood directly to a consigner in Chennai, he is able to negotiate a deal for 1.5 crores per ton. The Parliament member representing the local area hands over the syndicate to Pushpa since he knows how to extract high-quality wood, drive up demand in the market and expand their trade to other ports around India. The current owners don’t have the knowledge and skills that the workers have to locate the finest wood. Pushpa also suggests that collectivizing their commissions to pay police and revenue officers only once can save time and cut expenses by almost 25%. His working class background can help him make decisions that improve efficiency and keep long-term goals in mind instead of hyperfocusing on short-term profits.

Final Thoughts

In summary, we have witnessed how much risk, luck and hard work it takes for a worker to achieve upward economic mobility and provide for their family in this region of India. With few public welfare programs and government regulations, the crony capitalist system forces the hands of workers to take on illegal, high-risk jobs to make a decent living. With the syndicate under his control, Pushpa has to deal with Bhanwar Singh Shekawat, a corrupt police officer who seeks to make money from the business as well. Their final confrontation hints at further roadblocks that the syndicate will face while tapping into new foreign markets.

Although there are screenplay errors, incomplete character arcs and an unnecessary romantic subplot, I enjoyed the parts of the film that focus on the smuggling business and conflicts between syndicate members. The sequel, Pushpa: The Rule, will be released in 2023.