The Political Economy of Economic Conservatism in India: From Moral Economy to Pro-business Nationalism

Published date01 December 2017
Date01 December 2017
Subject MatterSpecial Section: Conservatism
06INP727981_F.indd Article
The Political Economy of Economic
Studies in Indian Politics
5(2) 233–247
Conservatism in India: From Moral
© 2017 Lokniti, Centre for the
Study of Developing Societies
Economy to Pro-business Nationalism
SAGE Publications
DOI: 10.1177/2321023017727981
Adnan Naseemullah1
Economic conservatism in India today is associated with the BJP’s embrace of markets and competition.
This article argues that conservatism within the nationalist movement was founded on rejecting both
the market and the planned economy, embracing instead ‘moral economy’ principles of economic life
guided by social norms, and development founded on small-scale craft production. After independence,
conservative nationalists, while acknowledging the need to enhance state power through industrial
growth, protected the moral economies of craft-based and agrarian production. But as the Congress
party fractured, farmers’ movements asserted interests in market-based agricultural transformation
and liberalization shifted the issue space of economic debate, new pro-business conservatives pre-
sented a new vision based on enhancing national wealth and strength through capitalist enterprise.
Conservatism, nationalism, Congress party, Swatantra party, moral economy, Gandhi, Patel, BJP
Economic conservatism in India today echoes the standard elsewhere: an emphasis on laissez-faire
capitalism, deregulation and the encroachment of the market into spheres of daily life. But economic
conservatives within the nationalist movement critiqued colonialism not to promote the market or the
interests of corporations but to defend a moral economy of social norms and mutual obligations.
Conservative nationalists were suspicious equally of modernization through British ‘free market’
tutelage or through Soviet-style planned economies, given that both were seen as alien to India. Many
nationalists saw Western civilization—capitalism and socialism—as the source of India’s ills. For them,
an Indian economy without colonialism must take its inspiration from an Indian economy before and
apart from alien colonial rule.
In practice, the excavation of ‘tradition’ meant its wholesale creation. Conservative nationalism
understood ‘traditional’ India as idealized sets of social norms and reciprocal obligations that oppose
both the command economy or the commodifying impulses of capitalism. For these conservatives,
development meant a defence of the moral economy: the principle that material production and exchange
should be governed by social norms rather than either market principles or government fiat (Booth,
1 King’s College London, the Strand, London, UK.
Corresponding author:
Adnan Naseemullah, King’s College London, the Strand, London WC2R 2LS, UK.


Studies in Indian Politics 5(2)
1994). Conservative nationalists acted to deploy state power at local and regional levels to protect local
economies governed by social norms from disruption and dislocation.
These notions animated opposition to Congress under Nehru and Indira Gandhi but are almost
completely absent from political and economic discourse now. Six decades later, the contemporary
avatar of right-wing politics in India, the Bharatiya Janata Party (BJP), has wholly embraced free market
ideology and the support of corporate interests. Narendra Modi campaigned on a platform of business-
led economic growth. What could explain this shift in what economic conservatism means in post-
independence India?
The shift in the rhetoric of the right from old allegiances to Gandhian principles of moral economy to
that of a ‘disembedded’ alliance between the state and capitalism arises out of changes in India’s political
economy. Economic liberalization, under Narasimha Rao, allowed a cross-ideological rejection of socialist
planning that also foreclosed traditional Gandhian critiques of the planned economy. The rise of power-
ful farmers’ mobilizations drew right-wing politics away from the defence of agrarian structures and
towards seeking support from urban, upper caste constituencies. As a means of mobilizing these popula-
tions, the contemporary BJP has redefined nationalism to mean development, understood as growth,
through the support of big business. Thus, the article argues that change in ideology is a product of
changes in the material and class foundations of party politics.
Conservative Nationalism and the Moral Economy
India’s underdevelopment was the central idiom for opposition to British rule. Nationalist thinkers chal-
lenged British claims of the salutary and civilizing role of imperial rule by arguing that colonial policies
were making India poorer. British policies of free trade decimated craft-based manufacturing by flooding
Indian domestic markets with factory-made textiles, while the wealth of the country drained outward
(Chandra, 1966). This foundational critique led to an argument that India would be materially better off
with self-rule. But what would an Indian economy free of British domination look like? What institutions
would be built to replace British ones? These questions called for a theory that linked a diagnosis of the
destructive effects of colonial rule with an assessment of how best to remedy these effects.
For Congress socialists, India’s salvation lay straightforwardly in modernizing transformations of
society, driven by a powerful interventionist state. This meant rapid, state-led industrialization and
reforms in agriculture that would dismantle ‘backward’ social structures that prevented resource mobili-
zation (Chakrabarty, 1992; Zachariah, 2005). They had a powerful model in the Soviet Union, which
transformed Russia through state-led economic planning, industrialization, collectivization and mass
mobilization. Nehru’s commitments to planning emphasized his personal faith in positivism and scientism,
as well as a disdain for traditional social structures.
Gandhi’s Moral Economy
Against the popularity of economic planning in the interwar years in India, conservatives within
Congress, particularly Mohandas Gandhi, argued for a different perspective on backwardness and the
means to overcome it. Several features of Gandhi’s thought formed the basis of a conservative economic
and social order. First, Gandhi’s diagnosis of India’s ills was that of the penetration of modern, Western
‘civilization’—with its attendant focus on materialism and acquisitiveness—as part of colonial rule.
He contrasts this to the duty and morality of traditional Indian society:

Naseemullah 235
…our ancestors dissuaded us from luxuries and pleasures. We have managed with the same kind of plough as
existed thousands of years ago. We have retained the same kind of cottages that we had in former times and our
indigenous education remains the same as before. We have had no system of life-corroding competition. Each
followed his own occupation or trade and charged a regulation wage. It was not that we did not know how to
invent machinery, but our forefathers knew that, if we set our hearts after such things, we would become slaves
and lose our moral fibre. They, therefore, after due deliberation decided that we should only do what we could
with our hands and feet… (Gandhi, 1934, p. 58).
Thus, swaraj, or self-rule, meant not just political independence from Britain but independence from
Western habits of mind and society associated with capitalism (Rudolph & Rudolph, 2006).
For Gandhi, the spinning wheel, the handloom and khadi represented a rejection of Western material
culture and a return to a more holistic, craft-based way of life represented by the ideal village republic.
The practice of wearing khadi entailed a deep suspicion of industrialization, which was the principal
objective of Congress socialists. They also defined swadesh, or self-sufficiency, as rejecting Western
definitions of what it is sufficient—catching up to the leading industrial powers in production and stand-
ards of living—and opted instead for a combination of craft manufacturing and the rejection of material
Gandhi also believed that the idealized village community encapsulated morally correct relationships
between the rich and the poor, as each lived according to their own duty or dharma rather than in class
competition. He formulated the principle of trusteeship: that the rich held the wealth of society in
trust for the poor, taking little for themselves and using the rest for the poor’s uplift (Gandhi, 1941).
This approach had the added political benefit of sublimating class conflict within Indian society, which
he saw as necessary for the independence struggle.
Gandhi’s writings and teachings anticipated the framework of moral economy. Polanyi (2001 [1944])
argued that in the period before the rise of the national market for goods, services and factors in Europe,
individual economic exchange was governed by social norms, which were sheared apart by the market
economy and the commodification of land, capital and especially labour. For Gandhi as for Polanyi, free
market capitalism was destructive to societies that were built on moral foundations and restrained by
moral fetters, in which social obligations and thick ties governed production and exchange and protected
the vulnerable. For Gandhi, turning to the mythic era before commodification was not just desirable but

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