Terms of Trade | Move over socialism, the joke’s on liberalism now

BT Ranadive and Elamkulam Manakkal Sankaran Namboodiripad share a light moment. Bhalchandra Trimbak Ranadive (BTR) came up with the famous (or infamous) line of “Yeh aazadi jhoothi hai, desh ki janata bhookhi hai” (CPI

When the Communist Party of India (CPI) met in its second party congress in 1948, its 44-year-old secretary Bhalchandra Trimbak Ranadive (BTR) came up with the famous (or infamous) line of “Yeh aazadi jhoothi hai, desh ki janata bhookhi hai” (The freedom isn’t true freedom given the widespread penury). The CPI, driven by its belief that the poor of the country would take up arms against the propertied classes, especially in villages, launched armed struggles in many parts of the country. Of course, there was no revolution and what followed was only repression. By 1950, the CPI had realised that it had made a terrible mistake and decided to abandon both the armed revolution line and its proponent BTR and contest the upcoming elections. Wisdom dawned after a meeting of a party delegation with Comrade Stalin in the Soviet Union, according to some reports. To be sure, BTR was re-inducted in the party later (some say again on the Soviet Union’s instructions) and he went on to become one of the founding members of what would become the Communist Party of India (Marxist).

Eminent Marxist intellectual Prabhat Patnaik, who also taught this author at Jawaharlal Nehru University, once told us that he actually asked BTR why he came up with that formulation in 1948 and why the party could not help bring about the revolution. We thought that a revolutionary wave was beginning across the world, whereas it had ended by the time India became independent, BTR told him.

The economic model after Independence

BTR’s post-facto realisation of the global revolution having run its course before it could reach India would haunt others besides the communists in India. While India’s first government under Jawaharlal Nehru was no fan of radical class struggle, it did draw inspiration from the economic model of socialist countries such as the Soviet Union. In drawing on the command economy model — where the government determines prices, production and distribution, rather than private enterprise — the hope was that independent India would become an economic powerhouse with a domestic industrial base.

Not only did India not become an economic powerhouse (though it acquired some industrial base under the model), even the role models India looked up to collapsed under the weight of the economic contradictions of this model. Capitalism, on the other hand, despite doomsday projections by many Marxists, has continued to thrive.

The Communist Left’s failure to make political advances in most parts of India and the command economy model’s failure to make economic advances for India are among the most commonly used, and more importantly, largely correct criticisms of the fact that independent India’s optimism vis-à-vis the socialist model was misplaced. While counterfactuals are always problematic, there is a school of thought that a free-market model in the economy coupled with a liberal outlook in politics would have been the best way forward for a newly independent India and the country is still paying the cost for not adopting this course.

The evidence in support of this argument is the rapid economic advance the country has made after the economic reforms of 1991. For proponents of this view, there is bipartisan consensus on the virtues of economic reforms or free markets that has led to uninterrupted progress for the country. However, doubts have emerged on the continuity of this trajectory.

The latest editorial of The Economist, arguably the most zealous and consistent voice in favour of free markets and global capital, has joined the chorus. “The question is whether the religious agenda (of the BJP) and rapid economic development are compatible. The answer is yes, but only up to a point… Yet, if Mr Modi in his third term were to lurch further towards Hindutva and autocratic rule, the economic calculus would change,” it says while acknowledging that Modi, in his earlier stint as the chief minister of Gujarat, had “tried to rebrand himself from a Hindu zealot into a pragmatic manager of his successful home state of Gujarat”.

While global capital and their spokespersons are expressing their doubts rather cautiously, their liberal fellow travellers in the realm of politics and society are far more disappointed with the state of things. To be sure, the disappointment is not without reason.

A dilution of boundaries

The optics of the inauguration of the Ram Temple in Ayodhya and the political rhetoric around it clearly shows that India is steadily diluting the boundaries between majority religion and statecraft. While one can debate on the semantics of whether or not we are a civilisational State rather than a constitutional republic and whether the two are perfectly compatible, there is more than enough evidence to show that the proverbial “secular” in the sense of the ideal of separation of church [read religion] and state is experiencing a big squeeze in India.

It is the political executive that is actively driving this change. In fact, one can take this argument further and say that the political leadership is also signalling that institutional roadblocks to this project might not be accepted uncritically.

Prime Minister Narendra Modi’s speech in Ayodhya, gives one such hint. “I express my gratitude to the Indian judiciary, which upheld the dignity of justice. The temple of Lord Ram has also been built in a just and lawful manner,” he said.

On its own this might seem like a benign statement. But when read in context with the BJP’s stated position in the 1989 Palampur resolution, a different reading is possible. “The BJP holds that the nature of this controversy is such that it just cannot be sorted out by a court of law. A court of law can settle issues of title, trespass, possession etc. But it cannot adjudicate as to whether Babar did actually invade Ayodhya, destroy a temple and build a mosque in its place. Even where a court does pronounce on such facts, it cannot suggest remedies to undo the vandalism of history,” the resolution says. Of course, the so-called vandalism or history was corrected by another act of vandalism on December 6, 1992.

When read together, these two statements clearly show that had the judiciary decided otherwise in the Ayodhya case, the onus of losing its dignity would have been on the courts rather than the extra parliamentary opposition which would have followed.

Why indulge in the politics of ‘othering’?

To be sure, it would be dishonest to argue that the Ayodhya issue is the only one where judicial processes or the implementation of court orders might have been influenced or worse reversed by extra legal and often political considerations. Rajiv Gandhi’s government’s decision to overturn the Supreme Court’s order in the Shah Bano case is one such example.

Let us come to the question which this discussion has been building towards and which continues to haunt a lot of so-called liberals in India and abroad. Why can’t the BJP focus on economic reforms and why does it have to keep going back to Hindutva or the politics of othering minorities?

The answer is quite intuitive even though it might shock a few people. It is Hindutva rather than free markets which constitutes the core of the BJP’s support-base.

In fact, the expansion in BJP’s political footprint and overall support in the post-Modi era is the result of layering of welfare over Hindutva rather than a more pro-reform government.

Those who doubt this claim would do well to recognise that the Modi government has retracted or sat over reforms such as farm laws, land-acquisition laws or labour codes, but it has never taken a step back on a core-Hindutva issue and is continuously expanding the ambit of welfare programmes. While the narrative of India becoming a developed country or global superpower under the Modi government is definitely a part of the BJP’s overall rhetoric, one cannot overemphasise the point that even game-changing reforms are unlikely to lead to any significant addition to the BJP’s support base today. In fact, pushing hard on some of these reforms can very well antagonise a large chunk of BJP’s voters.

To be sure, the relationship is not one-sided. Because, the BJP has a core support-base which is motivated by extra-economic factors (read Hindutva) it is easier for it to push for reforms than parties which do not enjoy a core-base motivated by extra economic factors.

Holding on to the liberal dream

What does this entail for liberals who, not so long ago, saw in the BJP a political instrument which would lead India on its path to liberal capitalism and exorcise the ghosts of socialism in India’s policy corridors which had survived the purge of 1991?

There is a larger political -economy lesson to be learnt here. Current day capitalism, which is a very different beast from what it was in the post-war period is unable to marry capital accumulation with egalitarian growth. This is a result of various factors such as the dominance of finance, weakening of fiscal policy, weakening of labour itself and most importantly technological progress.

The situation becomes complicated when capitalism meets democracy. If neoliberal capitalism has failed to improve the living standards of a majority of people, why should they vote for parties which are committed to preserving this model of the economy?

The easiest solution would have been to replace the liberals with a political force that changed the economic model to a more egalitarian one. However, this is easier said than done, partly a result of the political left’s own mistakes and confusion and partly because of the complex beast that modern day capitalism is: Extremely resilient to older forms of class-struggle or even standalone government interventions.

It is in a crisis like this that political parties such as Modi’s BJP in India have excelled in channelising democratic energies without necessarily antagonising capital. If capital is willing to ignore digressions from what their liberal fellow-travellers see as essential values in governance and statecraft, such regimes can guarantee a policy framework which is committed to reforms and more importantly, prevent any left-leaning or even social democratic resistance to them. What matters most is, this can be achieved without suspending democracy.

The hope and heartbreak of liberals in India is symptomatic of their misplaced trust not in the BJP or Modi, but the model of capitalism which dominates the world and India. The BJP or its leader do not suffer from any such illusions and they have been doing what is needed to preserve their political capital by mixing Hindutva with welfare.

In lieu of a conclusion one could say that it is perhaps time that the liberals took over from the socialists in being the new policy idiots in new India. The former had their moment of triumph around the time Francis Fukuyama declared ‘the end of history’ and India junked Nehru’s command economy model for free markets. Modi’s ‘the wheel of time is turning” statement in Ayodhya has put an end to the Fukuyama moment which signified the triumph of the liberal order.

Every Friday, HT’s data and political economy editor, Roshan Kishore, combines his commitment to data and passion for qualitative analysis in a column for HT Premium, Terms of Trade. With a focus on one big number and one big issue, he will go behind the headlines to ask a question and address political economy issues and social puzzles facing contemporary India.

The views expressed are personal

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