Capitalism Studies Network Launch

Launching our Network

On 23 February 2024, the Capitalism Studies Network hosted a discussion between Professor Melinda Cooper and Dr Aditya Balasubramanian on the latter's book Toward a Free Economy: Swatantra and Opposition Politics in Democratic India. 

The discussion served as an opportunity to launch the Capitalism Studies Network. The Network intends to give academics and research students exploring the political, historical, social, legal and environmental dimensions of capitalism opportunities to collaborate and communicate across ANU’s Colleges and across disciplines.

As co-founder Professor Will Bateman noted in his remarks before the book discussion, the Network ‘aim[s] for an inclusive and intellectually-diverse approach to studies of capitalism’.

Melinda Cooper and Aditya Balasubramanian Discuss Toward a Free Economy

MC: The classical story of neoliberalism locates its intellectual origins in the global North and identifies Thatcher and Reagan as its first serious practitioners. Chile is an authoritarian blip in this story; at most a southern test site for ideas fashioned in Chicago. The established consensus is that neoliberal ideas radiated out from the centre to the rest of the world.

Your book contests this story on several fronts. You’re looking at the emergence of a libertarian movement and party, Swatantra, in post-independence India. You argue that this movement was shaped by local class struggles and developed somewhat independently of global currents of thought.

Can you tell us a little about this story and how it disrupts received wisdom about so-called global neoliberalism?

AB: I think that it’s important that we start here by talking about what we mean by neoliberalism. For some, it’s everything you don’t like about the world since the 1970s. For others, it’s the same as laissez faire. And for still others, there’ s no such thing as neoliberalism. It’s just capitalism, and indeed some have located the origins of what we call neoliberal in the heyday of the mixed economy of the mid-20th century to suggest that this is a bit of neologism without much value.

The most rigorous articulation of neoliberalism as an intellectual movement comes from our colleague (and CSN affiliate) Quinn Slobodian in his book Globalists: The End of the Empire and the Birth of Neoliberalism. Reading the work of interwar period Geneva intellectuals like Röpke, von Mises, and Hayek, he reads it as an anti-democratic, expert driven project to insulate markets from politics by passing laws  to make them work according to the price mechanism. So there is a state component. Hayek and others would go on to found the Mont Pelerin Society in 1947 and seek to reclaim markets from Keynesian policy orthodoxy that he saw as leading the world down the Road to Serfdom. By the way both Hayek and Milton Friedman do use the term to describe their project, something that the naysayers who say that there is no such thing as neoliberalism neglect. But of course there is still the question and I don’t think there is a settled answer, of whether neoliberalism actually operates according to a logic that is different from capitalism as theorised initially by Marx and of course complicated since then by many many figures.

The neoliberals got their breakthrough in the 1970s with the collapse of the Bretton Woods System. Some of their favourite policy prescriptions were privatisation of public enterprises, deregulation, free exchange trades, free trade etc.

But then there is also the introduction of markets and market-style thinking into new institutional context and domains of social life.

Now that we’ve got that out of the way. What is this a book about? I recognize most of you wouldn’t have read the book yet.

When India won freedom from the British Raj in 1947, the Indian National Congress, which was at the forefront of the nationalist movement, assumed the reins of power. It dominated national and state politics in India’s regional system. And it pursued economic planning via import substituting industrialisation to bring about a mixed economy, which they called “socialistic pattern of society”. This was a statist project. My book is broadly about a short-lived opposition movement to planned socialist economy coined as “free economy” that emerged from western and Southern India led by landed and mercantile castes transitioning to capitalism from agriculture and trade and also interested in two party democracy.

Apart from revising our view of this period in Indian history as one of the hegemony of socialist ideas and practice, the book also seeks to question what we mean when we talk about neoliberalism. As Melinda articulated, the standard narrative is about outward diffusion from the minds of intellectuals in the Atlantic and institutional capture by free market economists of spaces like the World Bank or IMF or the ears of Thatcher or Reagan.

But instead, my book suggests that studying academic economists is only of limited use and presumes a rather naïve, elitist, and Eurocentric view of how ideas develop and diffuse. Rather, I suggest that it was tensions between new economic interests in the face of state expansion in a localised context that gave rise to various ideas articulated as free economy. Those who articulate this discourse intersect with western neoliberalism but diverge from them in profound ways.

MC: Your approach to neoliberalism also differs in the kinds of institutions and practices you focus on. Most histories of neoliberalism pay special attention to the role of intellectuals and their role in reshaping academic theory and public policy. By contrast, it seems to me that you are looking at a kind of popular neoliberalism or neoliberalism from below. You are interested in voluntary associations such as the Libertarian Social Institute, the magazines they published and the events they organized.

In your own words, you are interested in the creation of economic consciousness as opposed to economic theories. Can you tell us how you decided on this approach and what it adds to our understanding of (Indian) neoliberalism?

AB: Yes, At the end of the day, it is politicians and publicists who exert a more influential role on economic discourse in our everyday lives than any theorist; think more Albanese or Jacinda Ardern rather than Ross Garnault. These may be less coherent or well-articulated.

I try to understand both how these ideas emerge in socioeconomic context as inchoate and not fully theorised formulations and the various influences that make them up. They could be in response to changing patterns of life in the small town, or encounters with the tax man, or in the process of representing legal clients. They may be in part in response to something that they read. And I also look at the vehicles for expression and embedding they take, whether the newspaper, the speech, or the public gathering. I spend time examining the extent to which people who write to these figures make something of this.

In the Indian context, if we were to look at the intellectuals we find nothing. There was a dominant left-wing hegemonic construction of thought in this time.

Methodologically, then, my work is inspired by the profoundly influential work done in the social history of ideas, and the study of print culture by historians like Robert Darnton. But instead of looking at the American revolution, or Chartism in Britain, or the Enlightenment, I am looking at India in the 1950s and at economic ideas. 

MC: I found your book particularly illuminating on the question of class formation and neoliberalism. You note that the key constituents of the Swatantra (Freedom) party were the urban professional, the peasant proprietor, or the small business owner. Their arch enemies were the bureaucrat, the Congress politician, and the big businessman. Ironically, I think that this is an observation that connects the Indian experience to the rise of popular neoliberalism in the global North. This is tax revolt politics. There is growing interest in the role—real or aspirational—of small business and property ownership in the rise of Thatcherism, Reaganism or neoliberalism in Australia. But here again the literature is playing catch up.

Can you tell us how these figures were mobilized as advocates of economic freedom and democracy against the developmental state? (And whose interests were they really serving?)

AB: That’s a really interesting observation regarding the parallels between India and the North. In the Indian context, these identities are invoked in electoral rhetoric as “cherished communities” under attack, to use Charles Press’ term from the book The Political Cartoon. Appeals are made to represent these figures in print and visual culture, although their numbers were never so substantial as they are in the American context.

Swatantra runs anti-excess taxation and anti-inflation days. It brings challenges against land ceiling legislation to parliament and on the right to property to the Supreme Court in an attempt to mobilize such figures.

But the party actually struggled with this kind of popular mobilization. Very few people actually fit the aspirational “middle-class” identity that Swatantra claimed to represent (it was actually quite an elite identity in India at the time) and because electoral mobilization based on caste was much much stronger. 

MC: You show how Indian libertarians such as C. Rajagopalachari were very attached to the idea of defending the joint family and preserving Hindu personal law. I thought your book very nicely described the way in which economic and sexual politics become inseparable when it comes to the issue of land ownership and inheritance. Can you tell us why Swatantra’s economic liberalism was also a social conservatism?

AB: Yes absolutely, and here I must point to the importance of Melinda’s work in her book Family Values: Between Neoliberalism and the New Social Conservatism in helping me think about these issues. In the book, I point to women as subordinate yet significant. So the founding figure Rajagopalachari is against the Hindu Succession Act, which allows women a claim to their ancestral properties. His Tamil mouthpiece Kalki magazine runs a cartoon titled “Urimai Por!” (“War of Rights”) portraying a woman being pulled on one side by her brother and another by her husband, as if to suggest that having a property claim would divide her loyalties. Rajagopalachari was very clear that this would disrupt the institution of the family. We also see that appeals to women made by the Swatantra Party that are in their capacity as householders—as people who purchase vegetables and keep homes clean.  So “economic freedom” is freedom from excess taxation and inflation, and from regulation and bureaucratic oversight, for the man.

Then there is the vote bank dimension. Much of the Swatantra party’s support electorally comes from feudal communities in North India and the state of Gujarat; this is an unabashedly socially conservative milieu. 

MC: Neoliberals refer to India’s 1991 reforms to liberalize the economy as a second independence. At this point, Swatantra no longer existed. What if any influence did Swatantra have on the later turn to neoliberal policies in India?

AB: Swatantra itself had a rather limited influence on the 1991 reforms. It was pretty well spent as an electoral force by 1971. And so you might ask, what if any salience does this history have for the present?

We can better understand the country’s post-1991 turn because the politics of the castes that disproportionately benefit and help sustain the liberalization ethos trace back to this period. There is a longer history of liberalisation of powerful and politically organized constituencies that were latent and needed a political breakthrough which a balance of payments crisis in 1991 helped provide. The longer embedding of liberalisation beyond the external pressures of the IMF and World Bank is part of what this book helps explain. And it also helps us characterise the so-called socialist period of Indian planning a little better; that was no doubt a dominant ideology and informed policy, but much of Indian economic activity was informal and private, and other ideas about the economic direction to be taken abounded. 

MC: These days, India is under the control of the Narendra Modi’s BJP, which could be described as a fusion of neoliberal economic policies and far right ethnonationalism. This is unfortunately not a unique position on the international stage right now. But this fusion is something different from Swatantra’s neoliberal conservatism, which was not religiously exclusionary. In this context, you note that there has been a revival of interest in Swatantra’s model of opposition politics, sometimes coming from quite disparate directions.

Can you explain what is happening here?
 
AB: So in the West, I think the rise of ethnomajoritarianism globally comes with the end of the heyday of globalization and Third Way politics, right? Those communities who felt left out find appeal in right populist leaders. But I think both third way figures like a Bill Clinton and right populists like Trump, have neoliberal representation in their coalitions. In the Indian context, this is true as well. But it would be difficult to characterize the country’s policymaking as neoliberal (and I’ve written about this elsewhere). You have a bunch of pro-liberalizers who in 2014 got behind Modi because they thought he would unleash another set of reforms like those of the 1990s. However, there is nothing like another wave of liberalization, and what we have instead seen is something more like crony capitalism. This is also not a free market government, even if there have been selective measures like disinvestments of public sector enterprises, attempts to roll back certain government subsidies, etc. For every measure like this, you can also point one that does the opposite.

Most of (but not all) Swatantra’s key leaders were Gandhians and committed to his vision of religious unity in diversity and disavowed Hindu majoritarianism which at the time was a rather small electoral political phenomenon (even if Hindu prejudice against Muslims was—and continues to be—widespread).

Today, I see two constituencies of “Swatantra revivalists”.  First, there are libertarians who may hail from privileged, upper-caste Hindu origins but aren’t truly ethnomajoritarian and believe that India needs a free market party. Some may have gotten behind the BJP at one point, but they are disappointed. Next, there are intellectuals who believe that a broadly secular right-wing party would be a good alternative to the BJP, even if that is not their politics. But I think both of these constituencies have not reckoned with the profound difficulty Swatantra had in popular mobilization, and its (wilful, in many ways) blindness to caste, which remains the dominant vehicle of political mobilization in India. While perhaps the “new middle classes” who have prospered after 1991 might get behind such an agenda, this is far from clear.