The time is ripe to foster a centre right intellectual space to challenge and hopefully eventually displace the hegemony of the leftists through institutions and networks that spread the message of market based economics and individual liberty
When India liberalised its economy in 1991, the economic rules of the game changed almost overnight, but thinking and attitudes were much slower to catch up to the changed reality.
While the new economy was increasingly oriented toward capitalism and the market system, a great many people, not just the usual suspects such as leftist academics and journalists, still held on to the old socialist mindset that prioritised the government’s role in the economy, central planning, and welfare and redistribution over growth.
It’s shocking that almost a quarter century after India, at least in theory, ditched socialism in favour of the market, the weight of intellectual opinion has only recently begun to shift.
One important reason, I believe, why the mindset has been slow to change is that successive governments, of whatever political orientation, have been reluctant to make a bold and forthright case for economic liberalisation and reform.
The original 1991 reforms took place against the backdrop of a looming macroeconomic crisis, and therefore the reform measures could be rationalised and sold to the public as urgently needed necessary steps to stave off the crisis.
But once the immediate danger had passed, there was no serious attempt by the government of Prime Minister P.V. Narasimha Rao, or his Finance Minister Manmohan Singh, to explain to the electorate why reforms were good and necessary, beyond just resolving a short-term crisis.
It’s almost as though the self-styled architects of economic reform were shy or embarrassed to wholeheartedly embrace capitalism and the market system, and packaged reforms almost as a way of saving the old socialist system, not trashing it.
This became even more clear during the ten year rule of the Congress led United Progressive Alliance (UPA), where growth enhancing economic reforms were put on the back burner with an emphasis instead on large rights based redistributive welfare schemes.
If Prime Minister Singh at least theoretically believed in reform but couldn’t act on his belief because he lacked the political muscle to do so, it’s clear that the Congress party high command around Sonia Gandhi, didn’t believe in it at all.
But lack of ideological conviction is not the only reason why governments have been reluctant to make a bold case for the market system, the virtues of competition, private ownership, civil liberties and the whole bundle of liberal policies that go naturally together with a free market capitalist system.
The other big reason is that the Indian intelligentsia and politicians argued and believed that pro-market economic policy would lead to an electoral backlash from poor and especially rural voters.
As I and my co-author in our recent book, and as elaborated further in an article in Business Standard, have argued, a widely held but incorrect reading of the 2004 elections— both the general election and the state election in Andhra Pradesh— are responsible for cementing the idea that “good economics is not good politics”.
As we carefully show, there’s no compelling evidence that the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) lost because of their “India Shining” campaign, anymore than there’s any persuasive evidence that the Telegu Desam Party (TDP) led by Chandrababu Naidu lost in Andhra Pradesh because he was seen as a pro-market reformer unconcerned with the poor.
Rather than this morality tale, which perfectly fits a leftist narrative and refuses to disappear, even when there’s no evidence for it, the unglamorous truth is that a variety of idiosyncratic factors, boiling down to bad luck and poor timing of the elections, led to the defeat of the NDA and the TDP.
What makes the 2014 Lok Sabha elections different?
Unlike politicians in previous elections, Narendra Modi and the BJP explicitly campaigned on the economy, development, governance, and corruption as their key campaign issues. Modi’s oft repeated phrase “minimum government, maximum governance” sums up his campaign themes. The BJP’s overwhelming election victory validated this approach.
Recent research, by political scientist Neelanjan Sircar of the University of Pennsylvania and a group of co-authors, based on a large number of surveys throughout the country, suggests strongly that it’s exactly issues like the economy, rising prices, and corruption that voters considered the main issues in the elections. It’s almost as if voters turfed out the incumbent Congress and voted in the BJP based on the slogan made famous by Bill Clinton when he ran for the White House in 1992: “It’s the economy, stupid”.
With a huge mandate predicated on jumpstarting a floundering economy, will Modi come out swinging in favour of bold economic liberalization?
So far the evidence is mixed. But it’s premature to argue, as some gloating critics from the left are already doing, that Modi won’t deliver major reforms. It’s simply too early to say that. At least symbolically the scrapping of the Planning Commission, a socialist hangover if ever there was one, is a promising sign.
What I would like to stress instead is the missing ingredient which is often necessary in goading political parties and governments further toward the market and capitalism: that is, a thriving and vibrant centre right intellectual eco-system.
It’s not surprising that one doesn’t exist.
After all, except for a few short years, India’s been ruled by a political party whose explicit ideological position is to the left of centre. It’s natural therefore that the intellectual eco-system that the Congress spawned through its patronage, direct and indirect, is centre left.
In fact, it’s even worse than that, since in India commentators who’d be considered far left radicals elsewhere are taken as mainstream in India. The National Advisory Council (NAC) created by Sonia Gandhi as her personal think tank and which fortunately has also died a natural death with the election outcome, was populated with members who were in some cases were far left academics, Marxists and social activists (sometimes all in one).
The need of the moment is to capitalise on the BJP’s victory to foster a centre right intellectual space to challenge and hopefully eventually displace the hegemony of the leftists. A key will be to build credible institutions and networks that spread the message of market based economics and individual liberty, and do so in a way that’s well reasoned and nuanced, not shrill and dogmatic.
Most importantly, such a new center right intellectual space should not be coterminous with the BJP or any other political party.
To win the battle of ideas, one can and does sometimes strategically support a party on specific issues, but it’s vital to keep the intellectual and the partisan as two separate boxes in the centre right universe. That will be a better way in the long run to win over those who’re sympathetic to sensible economics but for one reason or another aren’t sympathetic to the BJP.
Looking at the experience from other countries is instructive. For decades, after the Second World War, socialism, government ownership, and planning held sway in Britain and the entire weight of intellectual opinion supported this approach. When the cause looked hopeless, the presence of Friedrich von Hayek and a small group of disciples and followers around him became the nucleus of a centre right intellectual movement in Britain, which galvanised Margaret Thatcher and the Conservative Party.
A similar story unfolded a few years later in the United States with a few “supply side” economists clustered around Robert Mundell becoming the intellectual foundation for Ronald Reagan and the Republican Party.
Both Britain and America shifted decisively and permanently to the right. In fact, the real tribute to both Thatcher and Reagan is that their successors from center-left parties, such as Tony Blair and Bill Clinton, shifted their own parties to the right to be electorally viable. Recently, something similar has happened in Canada with the rise of Stephen Harper and the Conservatives.
In all of these cases and many others, a key ingredient was a center right intellectual narrative which nurtured ideas and policy proposals that would have been radical and unthinkable under the prevailing leftist orthodoxy—whether deregulation, privatisation, or tight money to combat inflation.
Whether op-eds in the Wall Street Journal, seminars organised by the Institute of Economic Affairs in London, or a new, aggressive breed of conservative commentators in the Canadian media, center right thinking slowly entered the American, British and Canadian mind-spaces.
My own experience of graduate studies in economics and international affairs in Canada featured a student body who, other than myself and a few others, was largely left of centre when they came in, but professors who for the most part were firmly on the right and unashamedly so. By contrast, our Indian university professors and students are by and large still in thrall to defunct leftist ideas.
The important difference between the three cases I cite and India is that things have happened somewhat in the reverse order here in India. In these three Anglo-Saxon countries, the intellectual impetus by and large preceded the election victories of Thatcher, Reagan and Harper, and solidified after their victories.
In India, by contrast, Modi’s overwhelming victory has preceded rather than followed a thriving and vibrant center right intellectual space. This poses the serious danger that without the ideas and institutions to back it up, Modi and the BJP or for that matter any other government which comes to power won’t have the intellectual foundation to pursue a coherent centre right agenda or they may be content to simply win power by doing what it takes to placate voters.
The sort of institutions I have in mind are publications, think tanks, research centers, new private universities with a focus on policy relevant research, perhaps even newspapers and media houses which have a center right ideological orientation. This is a tall order and we need to get to work right away.
It just is not going to be enough to have a few centre right voices scattered on the fringes; as individuals not part of a larger system, they’ll be weak and ineffective compared to the disciplined mass of leftists who control the mainstream narrative.
Capturing mind space is going to require being bold: not being satisfied with minor changes that tinker and tweak rather than remake the whole system from the ground up.
Being bold will also involve refusing to accept the excuses that even some sympathetic to the right tend to offer: that you simply cannot compare India to the rich countries to the West, that capitalism cannot take root in such a poor country, that things are different here because our culture is different and so forth.
Such arguments are nothing other than slightly warmed over rehashes of failed armchair sociological and cultural theories of the past. While China was in the grip of Mao’s brand of communism, it was argued by knowing sages that the Confucian culture of the place was incompatible with capitalism or the market system.
Now that China is beating the West at its own game, admittedly minus western style democracy, it’s now argued by these same sages that it’s precisely the Confucian culture of China that’s allowed an adjustment to a market system that throws up major inequalities that lead to disruptions in more individualistic societies such as those of the United States.
The fundamental problem with all such cultural explanations is that they’re a little more than ex post facto rationalisations and carry little if any explanatory or predictive power.
They’re all descendants in way or another of Max Weber’s thesis that it was the work ethic imbued in the Protestant brand of Christianity which allowed capitalism to develop in northern Europe and failed to emerge in Catholic southern Europe. As it happens, Weber also thought that China would be incapable of supporting capitalism for similar reasons.
Orientalists, whether westerners or those colonised minds in our midst, would like us to believe that we simply cannot grasp how a market system and capitalism should work, and India is doomed therefore to live under some sort of benevolent feudal rule as under the Nehru-Gandhi dynasty since independence.
But the experience of very different societies in Latin America, Asia and even Africa proves that human beings are basically the same everywhere, and that the market system and capitalism empowers them.
People respond to incentives, and when the institutional framework is correct, you’ll see Adam Smith’s virtuous invisible hand — currently enfeebled in India — starting to work.
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