How to rethink India’s messy mix of capitalism and socialism?

Today’s Asian Age carries an article by Paranjoy Guha Thakurta who draws our attention to two recent widely cited articles by Fareed Zakaria (The Capitalitst Manifesto) and Joseph Stiglitz (Wall Street’s Toxic Message). Thakurta does not answer the question he has raised, and concludes thus:
Where does India figure in the debate? One has argued that in the name of a “mixed economy” that Jawaharlal Nehru wanted, the world’s largest democracy took the worst of capitalism and socialism and became a “mixed-up” economy. We in this country still have an opportunity to search for, and find, the best of both worlds. Or is one being too naive?


Thakurta’s reference to Roger Bybee’s critical piece on Zakaria indicates where his sympathies lie. Some of our contributors, who have shown an interest in the history of India’s economic policy, and its future directions, may have something to say on Thakurta’s article.

3 comments

  1. The article, irrespective of one's perspective on India's "liberalisation" does hit the mark very accurately. Since the 1990s, the ideological debate between fundamentalist market ideologies, fabian society economic messages, law and development approaches, and the development as freedom idea expounded by Amartya Sen has not engaged with each other in the minds of policy makers. Thus, our laws reflect older laws that bear the imprint of different times, with varying emphasis – a bit like the vehicles on our roads. Also, the courts have shifted from a socialist approach (very akin to law and economics), where the function of law was to support a socialist economy, to one where the function of law is to support sustainable development, with the emphasis on the latter. I have not found any jurisprudence that tracked the jurisprudential shift, with its problematic dealing with the principle of stare decises, adequately.

    Avi Singh.

  2. I think that's quite right Avi. This comes up particularly around labour laws, which the government has largely left untouched, while dramatically shifting their economic and labour policies. The Court has several times in the past decade made complete or partial u-turns in labour jurisprudence. This is in part because justices attitudes may have changed, but even more importantly government policy changed. To get the government to turn back would be a costly political showdown. Instead, they have read laws developed with a socialist spirit in a way that more conforms with the spirit of the day (I will hold off on defining what the spirit of today is, but it's not socialism). I am interested to see whether the new government will now try to rewrite some of these laws, especially around labour (IDA, Contract Labour Act) to more conform with their policies.

  3. Your Blog has a very live community and the discussions are very informative.

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