Toward a Free Economy: Swatantra and Opposition Politics in Democratic India

by Aditya Balasubramanian

A history of economic conservatism in India after independence

Neoliberalism is routinely characterized as an antidemocratic, expert-driven project aimed at insulating markets from politics, devised in the North Atlantic and projected on the rest of the world. Revising this understanding, Toward a Free Economy shows how economic conservatism emerged and was disseminated in a postcolonial society consistent with the logic of democracy.

Twelve years after the British left India, a Swatantra ("Freedom") Party came to life. It encouraged Indians to break with the Indian National Congress Party, which spearheaded the anticolonial nationalist movement and now dominated Indian democracy. Rejecting Congress's heavy-industrial developmental state and the accompanying rhetoric of socialism, Swatantra promised "free economy" through its project of opposition politics.

As it circulated across various genres, "free economy" took on meanings that varied by region and language, caste and class, and won diverse advocates. These articulations, informed by but distinct from neoliberalism, came chiefly from communities in southern and western India as they embraced new forms of entrepreneurial activity. At their core, they connoted anticommunism, unfettered private economic activity, decentralized development, and the defense of private property.

Opposition politics encompassed ideas and practice. Swatantra's leaders imagined a conservative alternative to a progressive dominant party in a two-party system. They communicated ideas and mobilized people around such issues as inflation, taxation, and property. And they made creative use of India's institutions to bring checks and balances to the political system.

Democracy's persistence in India is uncommon among postcolonial societies. By excavating a perspective of how Indians made and understood their own democracy and economy, Aditya Balasubramanian broadens our picture of neoliberalism, democracy, and the postcolonial world.

Genres: Economics, Politics, India, History

352 pages, Hardcover

Published July 18, 2023

Reviews

[Revanth Ukkalam · Rating 4 out of 5]

The book is a very fascinating glimpse into an ignored but essential strand of Modern Indian thought and political practice. The book shines when it does not shy away from the gross limitations of the Swatantra party and better when the author is candid about the self-contradictions about the party's members and its aims. An issue seems to be the unclear and unresolved relations between Lotvalas and the Swatantra Party.

[JUSTIN JOS · Rating 5 out of 5]

Towards a Free Economy by Aditya Bala Subramaniam is a fascinating dive into the lesser-known story of how libertarian ideas existed and evolved in British colonial India. It traces how early Indian thinkers—like Bhai Kaka, Lotvala, and even C. Rajagopalachari—drew inspiration from Western economists like Hayek and Von Mises and began advocating for freer markets long before independence. Many of these voices came from the business class, and their economic views were often supported by commercial interests, which makes sense given their emphasis on business freedom.

What’s especially interesting is how the book challenges the common narrative that socialist planning was the only path India seriously considered post-independence. It shows that economic liberalism had its own champions in Parliament, though their influence waned with time. It also documents the rise of the only libertarian political party of the time, before it's demise in 1970s, Swatantra party.

That said, I did feel the book left some important social context underexplored. India at the time was deeply casteist and class-stratified, and while gender and social dynamics are briefly mentioned, they felt somewhat sidelined. I’m not an economic historian, so maybe I’m missing something, but I kept wondering: how do you seriously advocate for economic freedom in a country that wasn’t politically or socially free to begin with? After all, the East India Company was a business too—and we all know how that turned out.

Still, this book opened up a whole new way of looking at India's intellectual history for me. It’s an important read for anyone interested in the intersection of economics, politics, and the history of ideas in India.

[Shahrukh Ahmed · Rating 5 out of 5]

The book gives a very detailed early history of alternate free-market economic ideas culminating in India pre and post-independence. It offers interesting biographies of people involved in the movement. The early chapters on Lotvalas and chapters on Rajagopalachari are a page turner.

My only complaint is when talking about economic policy, plans and implementation, the language can be a bit repetitive. But still, I did learn a lot and gives you a very good picture of early economic ideological diversity in Indian politics and the efforts taken by the personalities to learn further and disseminate them.

[Nihar · Rating 3 out of 5]

Bit disappointed. This book could have been much better. Author seems to have written the book addressing non Indian readers and has tried to conform their thoughts and biases about Indian society and people. The glaring mistake in the maps in the beginning of the book made me skeptical about its quality from the beginning. The author probably doesn't realize the damage that socialism has done to Indian economy in the long run and has not appreciated the fact that a political party was formed in as early as late 50s which supported free market economy and libertarian ideologies which is even unthinkable today in India. Instead of talking about jts positive effect he has unnecessarily highlighted some of the conservative features of the party just to bring it down as an ideology or political force. Added to that he has used different labels for different political parties for similar actions which I found a biased way of writing.

Added to this I found the book not that coherent or easy to read specifically in the initial chapters. It has jumped from one point to another rather frequently which could have been simplified.

[Appu · Rating 4 out of 5]

Why was India so quickly able to transition from a closed economy to an open one in the course of just over a year in 1991? Why was there no significant opposition to the winding down of the socialist edifice which had stood for over four decades. The answer to these questions may lie in the vitality of an indigenous intellectual tradition of free enterprise and less government which is often overlooked by the historians of independent India. This tradition was nurtured by intellectuals and political leaders like, Rajagopalachari, NG Ranga, Minoo Masani, KM Munshi, Ranchodji Lotwala of the Indian Libertarian Institute and B.R Shenoy, the economist. Each of them had their own reasons for opposing the autarchic state and closed economy. N.G. Ranga idealised the peasant proprietor as agent of social dynamism. Rajaji and Munshi looked deep into Indian tradition and lore to challenge state socialism. Simple common-sense nurtured by tradition told them that Utopian programs like socialism would ultimately fail. Shenoy, Minoo Masani and Lotwala drew inspiration from Western libertarian and liberal traditions.
While the Indian libertarians were largely engaged in public debates and education, they briefly dabbled in electoral politics through the Swatantra Party. Under the Swatantra umbrella they managed to bring together social constituencies disgruntled with the Congress such as princes, land lords and small businessmen. The Swatantra achieved considerable success in 1967 becoming the chief opposition party in Parliament. But against Indira’s socialist populism it stood no chance.
Today we are once again seeing the rise of intellectual conservatism in India represented by persons like, Jerry Rao, Gurcharan Das and Ram Guha. But their influence is limited. Right wing politics in India today is based on Hindutva or Hindu Nationalism. This appeals not so much to individual freedom and free enterprise as to atavistic religious passions. Swatantra’s great achievement was the nurturing of a conservative mass politics without falling prey to religious populism or linguistic (Hindi) chauvanism
This book deserves a wide readership and discussion.

[Sagar Sumit · Rating 4 out of 5]

Excellent book. Perhaps, a chapter on interplay between Swatantra party and other parties in opposition at the time, such as Bhartiya Jana Sangh, would have thrown more light on the leadership. Especially how open were other parties to the idea of free economy.