Thursday, 8 November 2012

Paradox of Socialism and Liberalism in India-An insight

Though India had great liberal and political philosophers like Chanakya who made a political lexicon “Arathasastra” which is a gem, a master piece, a brilliant exposition of economics by a thinker unmatched in intellectual capability for many centuries and clarity of thought, but at last we are left with socialist policies in the same land which is continually running and ruining the nation. It’s not that Indians does not know or experienced liberalism and capitalism, our ancient society had once greatly promoted and practiced these ideologies, the fading has happened during pre and post independence period and one such ruin was also by British colonial legacy. Pls read on a book by Sanjeev Sabhlok Ji of FTI “Discovery of freedom”  in which he detailed how our Hindu capitalism was and maintained economic rigidity.A detailed in sight on socialist and liberal ideologies in Indian political landscape.

1757–1947: The effect of British liberal ideas:

The strengthening of British influence in Bengal with the battle of Plassey in 1757 coincided with significant developments of thought in England (John Locke in the 1680s, Adam Smith with his monumental book in 1776, and Edmund Burke) and in the USA (Thomas Jefferson, John Adams and Alexander Hamilton, among others). The English language came to India in 1603 in Akbar's time but there was then no pressing economic reason for Indian people to learn English. It was only after the consolidation of Bengal by Robert Clive and the extension of the East India Company into the Indian political landscape, that the demand for learning English began to grow. By 1835, Indians were paying serious money to be taught English, as it gave them job openings in the Company. As Thomas Babington Macaulay noted in his famous Minute: “the natives” had become “desirous to be taught English” and were no longer “desirous to be taught Sanscrit or Arabic”. 

Macaulay actual quote, from his 1835 paper follows,

 'It is impossible for us, with our limited means, to attempt to educate the body of
 the people. We must at present do our best to form a class who may be interpreters 
between us and the millions whom we govern; a class of persons, Indian in blood and 
color, but English in taste, in opinions, in morals, and in intellect"...

Further, those who wished to, seemed to picked up English very well: "it is unusual to find, even in the literary circles of the Continent, any foreigner who can express himself in English with so much facility and correctness as we find in many Hindoos."

Those who learnt English quickly became aware of its literature, including the rapid evolution of Western political thought. This greater awareness of the advances in freedom laid the seeds for the demand for self-rule.

While people like Raja Ram Mohan Roy (1772–1833) were beginning to articulate elements of these political arguments, no one was in a position to explore and articulate new insights. However they did catch up with key liberal ideas and began implementing some of these advances thought through their new demands for greater freedom in India. While the West was firmly embedding its new political institutions, or contesting the growing forces of socialism (which had overpowered parts of the feudal and aristocratic West), the Indian intelligentsia was grappling with the challenge of the first major task ahead of it, namely independence.
As well as Raja Ram Mohan Roy, other contributors to political thought on freedom in 19th century India included Dadabhai Naoroji (1825–1917), Mahadeo Govind Ranade (1842–1901), Gopal Krishna Gokhale (1866–1915) and Pherozeshah Mehta (1845–1915). Theory led to an independence movement in India. Gandhi demonstrated through a humane, non-violent, and dignified protest, that all humans were equal and should be treated equally, including their being given the opportunity to govern themselves. This was a major advance in the theory and practice of freedom and can be argued to have had a major effect in ending the age of imperialism and the age of racial discrimination.

Nehru, who was very well-educated and fully aware of the history of liberalism, seems to have had surprisingly little faith in an individual’s ability to think and take responsibility for himself or herself. Nehru did not emphasise the importance of each individual undertaking self reflection and choosing among ethical alternatives. Possibly, in his view, making these ethical choices was too difficult for the common man. He definitely believed that these choices were best directed through state level dictates laid down by governing elites through planning. In any event, he veered toward collectivist and socialist thinking where decision making power is concentrated in the state. Decentralization, where power and freedom vests with people at the lowest levels, was anathema to Nehru. He stated in his Autobiography : “socialism is ... for me not merely an economic doctrine which I favor  it is a vital creed which I hold with all my head and heart.” Indian industrialists (with their Bombay Plan) also sided with Nehru on a socialist pattern based on the Russian 5-year plan model.
Despite the environment in which socialist thought was flourishing, India was fortunate to enjoy at least a few liberties even before independence. The advances made in political institutions in England as a result of liberalism were imported and embedded into India over the decades by British rulers. Things like the right of assembly and protest under reasonable circumstances, the right to property, and freedom of expression ─ with a relatively free press, became a part and parcel of Indian political landscape before independence.

Post independence liberalism:

The 1949 Indian Constitution gave to Indians some of the liberal rights that the British and Americans had come to expect by then. In addition, India extended franchise to everyone: all adults had the right to vote in the Indian Republic. That was earlier than even most developed countries had provided to their citizens at that time.
But on most political issues, India adopted Nehru’s socialist model, that included a significant dilution in property rights, among others. The government entered businesses as its primary activity, to help it achieve the ‘commanding heights of the economy.’ Government factories sprung up quickly and began churning out shirts, watches,T.V, fridges, scooters, bicycles, milk, bread, and cheese.

While Rajaji and Masani, and economists like B.R. Shenoy advocate the greater freedom, they were unable to over-ride the Indian fascination with socialism.Chakravarthi Rajagopalachari, the second Governor-General of India, and a Bharat Ratna, was a close colleague of Nehru during the independence movement. But soon after independence he quickly began to see the risks to India of letting Nehru’s fervour with socialism go unchallenged. Despite having fought for independence by Nehru’s side, and without regard for his own advanced age (Rajaji was 80 by then), Rajaji decided to act to block Nehru’s onslaught on freedom. He formed the Freedom (Swatantra) Party, to oppose Nehru's policies.For the next 14 years till his death in 1972 he waged a battle with Nehru’s Congress to advance freedom. But as Nehru was extremely popular at that time, and also had the resources of the government at his command, Rajaji’s was inevitably a losing battle. He wrote about his Party in 1960:

“The Swatantra Party stands for the protection of the individual citizen against the increasing trespasses of the State. It is an answer to the challenge of the so-called Socialism of the Indian Congress party. It is founded on the conviction that social justice and welfare can be attained through the fostering of individual interest and individual enterprise in all fields better than through State ownership and Government control. It is based on the truth that bureaucratic management leads to loss of incentive and waste of resources. When the State trespasses beyond what is legitimately within its province, it just hands over the management from those who are interested in frugal and efficient management to bureaucracy which is untrained and uninterested except in its own survival".

"The Swatantra Party is founded on the claim that individual citizens should be free to hold their property and carry on their professions freely and through binding mutual agreements among themselves and that the State should assist and encourage in every possible way the individual in this freedom, but not seek to replace him."

Rajaji’s opposition arguably helped India minimize the excesses of socialism. His party held 44 seats in Parliament in the Fourth Lok Sabha (1967–71). Swatantra was also part of the opposition to the Nath Pai Bill that advocated primacy for the Directive Principles of State Policy over Fundamental Rights. There were many other occasions when Swatantra acted as the voice of reason in a very unreasonable time. Making use of the free press and democracy, Swatantra pressed on for freedom, regardless of the difficulties it faced, but ran out of steam in 1973.

Since then, many new thinkers such as S.Raju, Sharad Joshi, Barun Mitra, Parth Shah, Gurcharan Das, Sauvik Chakraverti,Sanjeev Sabhlok-founder of FTI and many others have emerged on the Indian liberal scene, contributing to the debate on freedom in India, and advancing classical liberalism.

Liberalism in Indian Politics:

The Indian National Congress, the flag-ship of Indian Independence Movement, was founded by liberal nationalist, like Gopal Krishna Gokhale. Almost the entire leadership of the Congress till mid-1920s was liberal in its stance. Sometime in the 1920s, the Congress leadership was taken over by socialists like Jawaharlal Nehru and Subhash Chandra Bose, forcing liberals to move into a separate platform. Gandhi however retained liberal leanings and never supported socialism. He was opposed to government taking over ownership of property. He wanted to bring responsible business (trusteeship) and local self-government.
After Independence, Swatantra Party was founded as India's Liberal Party in 1959. It was founded by Rajaji, but merged with B.K.D. led by Charan Singh. It has been India's only genuinely liberal political group so far, with a large number of seats in Parliament. This effort ended in 1973.

In January 2004 Indian liberals attempted to revive the spirit of the Swatantra Party by forming the Swantantra Bharat Party (SBP). SBP now has one seat in Parliament, namely of its President, Sharad Joshi.A minor but distinctly liberal effort, the Liberal Party of India (LPI), based on economic and political liberalism, was floated in 12 April 2005 independent to the Swatantra Bharat Party. The need for a separate party arose over a significant difference of opinion regarding the level of transparency needed in a liberal party. However, LPI wound up within a few months given only a few active members.

The Lok Satta Party launched in 2006 claims to be rooted in liberalism, but its strategy and policies are much awaited.The Jago Party launched in 2008 is a political party based on principles of liberalism and it openly supports free market economy for India.On the same grounds and a step head of all Freedom team of India(FTI)- founded in 2009 which recognizes that liberal policies and effective leadership is the utmost prime strategy for transforming India and its offering a platform for creating best leaders India needs with alignment in policies.Hence the growing spirit of liberal polices can be strengthen only when the like minded people join hands,unless the common envy cant be evaded.In the meanwhile, Indians are able to take advantage of economic liberalism now on offer from a number of 'mainstream' parties, which, however, are not grounded in philosophical liberalism.

Liberalism in Indian Economy:

After Independence, India adopted the Socialist model of development. This led to creation of Licence Raj, the elaborate licences, regulations and the accompanying red tape that were required to set up business in India.The economic liberalisation of 1991, initiated by Indian government mostly in industrial sector in response to a balance-of-payments crisis, did away with the Licence Raj and ended many public monopolies, allowing automatic approval of foreign direct investment in many sectors.However, liberalization has benefited certain sector, but still many major setbacks are in agricultural, education, manufacturing, tourism and other unorganized sectors where millions of street entrepreneurs dwell. In fact, post-liberalization, the productivity growth in agriculture has fallen behind the growth in population because of too much government intervention and poor policies in agricultural sector, which is nudging innovation.

My sincere request to the readers are to first understand the problem what our nation faces and it cant be solved without having good polices,inspite of that we are always opting and trying to replace the driver of a defective car.Here the defective car is lack of policies and system,but the driver so called BJP/Congress etc cannot drive good enough to take nation’s economy prosperous.India's current policies are not incentive compatible, and systematically generate moral hazard (cheating, criminality, losing societal values) in every aspect of public life.

Awake Indians!!!Pls do visit and offer your support.

Jai Hind!!!Jai Bharat!!!


  1. Well written and comprehensive essay. Ten years ago I'd have agreed with it simply because I didn't know any better.
    The points I'd take issue with are
    1) Chanakya was not a good economist but a 'Legalist' like Shang Yang. The policies he recommends would tend to kill of the golden goose of Trade based on comparative advantage because laissez faire policies tend to weaken the Prince and concentrate mercantile power in peripheral regions or regimes with lowest State regulation.
    As against the Brahmin Chanakya's 'Statist' Legalism, we know there was a middle-caste 'Business Studies' type Niti tradition which even Lord Buddha quotes from and which Ved Vyasa draws attention to in the Vyadha Gita.
    2)The rise of British power had to do with their better 'Tiebout' model of providing a legal basis for laissez faire. Indian capital gravitated to the Brits who were able to negotiate or extort lower or zero taxes for their Commerce from Indian Kings. It is noteworthy that orthodox Hindu merchants found the exactions of the Peshwa too much to bear and that they tended to switch loyalties to the British Presidencies.
    3)Hindu entrepreneurs and compradors operating under British aegis faced problems arising from difficulties of joint-family relationships, irrational prejudices arising from caste or creed, as well as speculation mania. This made them unreliable partners and they were squeezed out of financing British Imperial expansion as well as the Railways etc. Furthermore wealthy compradors soon took up aristocratic ways of life and lost their entrepreneurial drive. They were late in recognizing the importance of scientific education and overseas travel. Parsis took the lead there.
    4)Apart from Ismailis and Bohras, Muslims suffered because their Waqf laws (Trust & Inheritance law) was more strict than that of the Hindus. Timur Kuran, the Turkish economist, thinks this explains why Muslims lagged behind.
    However, he does not appreciate that Hindus, too, had all sorts of problems due to the stupid and irrational religious ideas prevalent at that time.
    Take Raja Ramohan Roy- he grasped Benthamism very well as did Dwarkanath. The latter was a successful businessman who, like most of the English traders, came a cropper by reason of excessive speculation. Still, there was no call for his son to go and turn into a Maharishi or for Rabindranath to turn into some sort of Brown Jesus Christ in long robes waxing poetic about the Bengali landscape. Ranade understood the importance of Econ, but Gokhale- though a master of the facts and figures, wasn't interested in Economic theory and was stupid enough to bring the crazy nut-job Gandhi into Indian politics. He did say 'look, this fellow didn't accomplish anything great in South Africa so don't trust him with any negotiations'. Still, even the Servants of India Soc.- which had voted to keep him out because he was too stupid- later surrendered to Gandhi. Ambedkar decried this surrender but he went crazy himself and decided that Buddhism was the answer. This was not an original idea of his but lifted from the Tamil Ayothi Dasan. My point is that Economic thinking in India- as opposed to compiling statistics and then basing some foolish and self-serving advocacy on the basis of those supposed 'facts and figures'- never existed at the level of intellectual discourse. Some people made money shrewdly enough but then they'd use that money for some wholly foolish end- giving money to Gandhi or to some cows or (Shyamji Krishna Verma who went crazy for the crack pot Herbert Spencer) to various idiotic 'Revolutionary' groups which the Brits had thoroughly infiltrated.

    1. Dear Friend(Windwheel),
      Thanks for your comments and i appreciate your detailed study.I firmly acknowledge about chankya's ideas as well as he is a far most prominent thinker who lived in ancient India. And the current india's problem is socialism and its adopted polices which hinders the growth and also free trade and capitalism are profound concepts which we practices earlier.I would recommend you to read the work sanjeev sabhlok an economist who has researched in detail the works of chanakya and also he is a greater promoter of Liberity.

      Once again thanks for the comments.Stay connected.

  2. 5) It was Motilal not Jawaharlal who was more impressed with Soviet Russia. Nehru wasn't particularly Socialist. But he saw the Modi-Lee agreement and didn't like it. It was a corrupt deal. Churchill spoke out about it. Nehru didn't have that sort of power. Still, Nehru refused the crook Dalmia's money (incidentally that Salt March tamasha was paid for by Dalmia) and kept his hands clean. He wasn't against 'Capitalism' but the crooked Capitalists of India who used the Congress Party to grab monopoly profits for themselves. Yet Nehru had no power. His own sister was on the take from the Tatas. Birla said 'the only one who didn't take money from me was Nehru.' But this did not mean Nehru could have prevented the licence permit Raj- which was 'Agency Captured' from the start. What he and Indira could do was to cut the Capitalists down to size if they wagged their tail too much.
    The real damage was done by clever people with PhDs not the educationally backward Nehru clan. Nehru himself was the prisoner of his civil servants and secretariat. Some were left wing nutjobs, some opportunists simply. But 'rent seeking' theory explains almost everything. Sometimes 'Socialism' also gets a look in but only for the most absurd and foolish excesses.
    6)Rajaji was a sharp enough fellow and sometimes appeared to be talking sense- but, in reality, he was a complete nut-job with stupid 'Brahminical' beliefs which would have been beaten out of him had he ever had a proper Guru or Acharya. Rajaji was only put in as C.M because Prakasam had gone completely crazy and was proposing to destroy the textile mills while simultaneously arresting Communists. Incidentally, Rajendra Prasad was one of the brightest men of his generation but he too went totally crazy. People of that ilk, or beautiful Maharanees, weren't serious about laissez faire because their first priority was to restore some utterly stupid caste system which they considered both 'natural' and 'divine. In other words, they didn't genuinely offer a Liberal alternative to the 'Socialist' Nehrus but would have imposed a dirigiste Clericalism of the De Valera type under which Ireland languished till it joined the E.C.
    Charan Singh (who fancied himself an Economist) offered nothing new. On the contrary, his vision, like that of the various Samajvadi parties, was delusive simply.
    I appreciate that you may have written this with some specific audience in mind and that your own views may be quite different.

  3. Dear Friend(Windwheel),
    Thanks for your comments and i appreciate your detailed study.I firmly acknowledge about chankya's ideas as well as he is a far most prominent thinker who lived in ancient India. And the current india's problem is socialism and its adopted polices which hinders the growth and also free trade and capitalism are profound concepts which we practices earlier.I would recommend you to read the work sanjeev sabhlok an economist who has researched in detail the works of chanakya and also he is a greater promoter of Liberity.

    Once again thanks for the comments.Stay connected.