India - Economic liberalism, Socialistic Populism and Democracy

Indian conventional thinking is about veneration of founding fathers, Democracy, constitution, universal suffrage, liberal economic reforms, socialistic ideas and Caste census. Indian activists and intellectuals live in their microcosm bubble of these & related ideas. Much of social and intellectual thinking in India is shaped by false achievements and fabrication of history and lack of epistemological knowledge of the world - the macrocosm. 

The Democracy in India is largely a failed project of which i have discussed in detail and will only give a brief summary here. The founding fathers lacked foresight, philosophy and courage to shape a suitable and stable political system for India. The current constitution itself is dysfunctional and a failed project as its founded on political system which is unsustainable. Mind you that i do not criticize the progressive ideas of the constitution like fundamental rights, secularism and principle of natural justice. But these ideas are paradoxically tied with a hopelessly unworkable baggage of political model along with certain destructive provisions that makes the constitution dysfunctional and rudderless to begin with. 

Indian intellectuals take 1947 or more precisely 1950 as starting point of their historical and political narrative and constitution itself as the starting point of all ideas. Much of the Indian intellectuals are oblivious to world history, sociological and political philosophy. Democracy and constitution are their only pillars of intellectual foundation. Hence Indian intellectuals are mechanistic and linear thinkers in a sense that they cannot understand anything outside of their established narrative. Indian intellectuals and thinkers also follow literature of founding fathers as well as other foreign writers which peddle conventional wisdom on subject of politics and Democracy, thus conveniently staying in their realm of their microcosm. Today, the Indian intellectuals blame current politicians for deviating from path of founding fathers and running this country into the ground. The current set of politicians are actually endogenous variables of a political process whose seeds were sown by founding fathers themselves in previous century. 

The worst of Democracy and Populism

Here i lay some bare facts about Indian political system. India's Democratic political system was crafted mostly by emulating British political system which is regarded as mother of modern Parliamentary democracy. Founding fathers had their life experience under British Colonial empire and British system (political, colonial, educational, bureaucratic etc) shaped their thinking and worldview. The critical point is that political systems cannot be copy-pasted from one nation to another, for every nation has distinct social-cultural-economic fabric. Democratic system requires several pre-requisites to work like socially & intellectually advanced society (a large educated middle class) which has objective understanding of self interest and social tendency of constructive and co-operative governance. All this never existed in India.

India has been a socially backward society, mostly uneducated and illiterate population which is also deeply fragmented on cultural, religious and ethnic lines. Such kind of society cannot work in co-operative manner and have no understanding of self interest. With much of the population in socioeconomic backwardness and poverty, the requisite for healthy sociopolitical thinking and capacity for objective & rational decision making is thus nonexistent. These are fundamental facts about India which founding fathers heeded no attention to when formulating parliamentary Democratic model for India. Today's Indian intellectuals also keep agitating about 'Democracy' and 'free and fair' elections even when the system has no basis for functioning.

So disregarding the basic pre-requisites for functioning of Democracy, if the Democratic system is nevertheless adopted (imposed), what we will get is a Potemkin Democracy. The ignorant electorate will be manipulated like pawns & sheep based on religious (Hindu populism) and tribal (caste census) demagogy. The politicians emerging out of this failed system will also be the most corrupt, criminal and incompetent cretins who'll have no understanding of national issues and policies. 

The best fruits of functional Democracy is co-operation, social cohesion and civil rights. But looking at Indian state, the political elites of all stripes themselves shred the social fabric and unity of society for vote bank politics (on basis of religious and caste populism). The civil rights are withering away and there's friction among various sections of country (north vs south divide, secessionist tendencies in certain states etc). The worst of Democracy is Mob rule, political paralysis and national stagnation which is clearly evident in India. So India did not capture the good fruits of Democracy but acquired its malignant side effects greatly.

The worst of liberal capitalism and Neoliberalism 

With decades of destructive socialistic experiments by incompetent political government, the government finally embraced liberal economic reforms. While opening up of Indian markets, foreign direct investments and lifting capital controls was a decent initiative, it was also accompanied by highly destructive social reservation policies which crippled human resources and created further polarization and instability. 

Economic liberalism is a package which consists of positive and negative things. On negative side is ill-conceived privatization policies, austerity, economic disparity, wage cuts for achieving competitiveness etc - all in name of structural adjustment. What's on positive side? There is some. Economic liberalism by definition is about lifting state control over economic institutions and creating flexibility & liquidity of labor markets. The destructive reservation/quota policies in state employment and educational opportunities are precisely antithesis of economic liberalism. Indian intellectuals are completely oblivious to this fact as they continue to worship so called liberal reformers (like former Prime minister Manmohan Singh) who also implemented some of the most reactionary anti-liberal policies of reservation. 

India's political system is incompetent and corrupt. Hence economic reforms, even if well intended, create negative effects. The rise of crony capitalism, gangster capitalism and grabbing of state property by incompetent oligarchs were the side effects of liberal economic reforms in India. These gangster Indian capitalists (just like Russian Oligarchs) didn't have much entrepreneurial characteristic (as in western counterparts), rather they captured state property mostly for rent seeking purposes and corruption. On other hand, the political government created regressive social reforms like expanding the reservation system which obliterated any principle of free, open and flexible labor force. The reservation policies was meant as a populist attraction because liberal economic reforms initially created unpopular sentiments in the public. However, the regressive reservation policies didn't stop there and now manifested into more malignant narrative of caste census. 

A true liberal economic reform would've meant rescuing labor and education policies from clutches of destructive and arbitrary political interference of likes of reservation. But instead, Indian political elites did the opposite. In conventional thinking of Indian intellectuals, activists and so called constitution lovers, they continue to venerate the architects of reservation policies as fruits of 'affirmative action'. These intellectuals and activists have no understanding of affirmative action and neither of liberal economic ideas. 

One big hope from liberal economic reforms was transforming of agriculture dependent rural based economy to industrialization. But here, due to Mob rule and vote bank politics (the worst of democracy), the land reforms stalled for decades. The re-purposing of land for urbanization and industrialization remains a major hurdle. Economic rationalism was also supposed to curb religious populism but that didn't happen as majoritarian politics and Hindu populism took priority over economic progress. Religious institutions also occupy large land banks across the country which government did not claw back.  Economic rationalism was further undermined by rural populism of unsustainable agriculture subsidies and loan waivers. 

Founding fathers themselves subscribed to futile thinking of rural village economy. Industrial capitalism was to a degree seen as legacy of colonial Britishers and founding fathers thus promoted rural populism as a counter to colonial practices. The farmer militancy has been rising ever since and currently the farmers demand ever more subsidies, price guarantees and loan waivers. Challenges to India - like mass poverty, hunger, unemployment, poor standards of living etc - can only be solved by economic restructuring and industrial modernization. No amount of moral virtue, as preached by Gandhi, can discipline a society, create peace and stability if population is in hunger and poverty. 

While Indian intellectuals cherish the wonderful universal suffrage and Democracy, they do not know that Democracy in Britain came only after early phase of industrial revolution and capitalist reforms. Only after Britain stabilized on path to industrial modernization, Britain adopted principle of universal suffrage. In India, we put cart before the horse. The electorate is illiterate, uninformed and have no understanding of self interest. They cannot take informed decisions on national discourse and they cannot work co-cooperatively and constructively. Founding fathers gave them universal suffrage regardless. The result was a thoroughly dysfunctional, corrupted and deeply paralyzed political system. No reforms, co-operation and constructive policy making is possible in such political environment. Yet, all this our Indian intellectuals do not understand. They continue to cheer the rudimentary conventional thinking of founding fathers.

Despite the negatives and baggage of Neoliberalism, it was hoped that it can still be a bitter medicine to transform India's rural economy, religious and culture social backwardness through economic rationalism of market economy, utilitarianism and free thinking. But that didn't happen while the worst tendencies of Neoliberalism materialized like entrenchment of corrupted oligarchs, higher inequality and environmental destruction.

Pseudo Socialism and Socialistic cretinism 

I would skip the debate about efficacy of socialist or capitalist systems. But planning and state control of certain areas of economy can be beneficial provided that the planners are technocrat managers and government ministers are educated, informed, competent and visionary people. In India, the socialistic ideas are peddled by political elites who ironically are also the most incompetent, uneducated and illiterate even. The stock and trade of socialistic slogans is purely to entice ignorant population with short term freebies for electoral gains. 

                                                  Political cretins of Socialistic yolk 

The most reactionary socialistic politics (or pseudo socialist more precisely) comes from the North India - the gaggle of most backward states (Bimaru states) - as they demand Caste census which is a highly destructive doctrine. These self proclaimed socialist politicians and their socialistic parties are not any ideological followers of Marx and Engels. Most of these political cretins have no idea about Marx's concept of historical materialism or have they ever read Das Kapital. So the term 'socialist' itself is a misnomer to describe politics of these scoundrels. "From each according to his ability, to each according to his needs" is the fundamental slogan of Socialism and according to this basic tenet, the Caste census and reservation system itself is thoroughly un-socialist idea. 

Socialism, in some sense was about technocratic takeover of means of production and investment. Through the technocratic and socialized means of production, the rent seeking and profit centric tendencies can be minimized or extinguished altogether. The fruits of socialism will be ripe only after there is abundance of production in economy which then can be more equitably shared among the 'comrades' - the population. The planners, scientists, engineers, economists - the technocratic state are supposed to be the managers of production which will raise the productive capacity of economy.

In India, the demagogic slogans of an illiterate and uneducated politician are perceived as socialism. In crude terms, the socialism of these political cretins is freebies like farm loan waivers, subsidies, reservation etc. There's no actual revolutionary plan to achieve mass production, industrialization or improving standards of living of common people in any meaningful terms as a real socialist would strive for. The so called socialists also created senseless laws like restricting private companies from relieving workers without permission of government thus impairing the working of labor markets. Today, in the name of social welfare and egalitarianism, the political cretins also demand reservation in private employment and a Caste census. 

Conclusion

The current state of Indian political system is not an anomaly or some great deviation from political process as envisioned in the constitution. A faulty structure with internal contradictions is bound to create a dysfunctional outcome in the long run. The activists continue to agitate on microcosmic issues like 'free and fair elections', 'deliberative democracy', electronic voting machines, Caste justice etc because they are trapped in mechanical thinking and tunnel view. The big picture of macrocosm, the systemic thinking evades their view and hence they cannot think of any real solutions and remedies. 

Suggested readings

- The Great Transformation by Karl Polanyi (1944)

- The Crowd: A Study of the Popular Mind by Gustave Le Bon (1895)

- Slouching towards Utopia. An Economic History of the Twentieth Century by Brad De Long (2022)

- Law and the Economy in a Young Democracy: India 1947 and Beyond by T.Roy & A. Swamy (2022)

- On History by Eric Hobsbawm (1997)

- My article 'Caste census and bankruptcy of Indian left'

- My article 'India, Democracy and Political future'

- My article 'India's Agriculture policy and rural economy'