Toward a Free Economy: Swatantra and Opposition Politics in Democratic India by Aditya Balasubramanian. Published in 2023 by Princeton University Press, 41, William Street, Princeton, New Jersey 08540, 99, Banbury Road, Oxford OX2 6JX. Pp: 352. Price: $13.50, £ 11.40.
How did a Parsi, Minoo Masani, become the effective leader of the opposition in the Indian Parliament in 1967? And how did the party he helped helm, the Swatantra Party, carve out a space for neoliberal and libertarian ideas in an avowedly socialist India?
These are some of the questions Aditya Balasubramanian addresses in Toward a Free Economy, an account of the perhaps improbable rise of Swatantra during the 1960s. The party grew out of opposition to Prime Minister Jawaharlal Nehru’s policies which favored the public sector and economic planning, regulated the ambit of private firms and flirted with more radical ideas like the collectivization of agriculture. Quite naturally, the Swatantra party attracted a crowd of Parsis. Balasubramanian’s book, however, is much more than a story of opposition to socialism. It demonstrates how Indian neoliberalism was uniquely homegrown, a product of real worries about the Congress Party’s dominance and a commitment to opposition politics.
At the heart of Swatantra’s ideology was the idea of a "free economy.” Party leaders rallied around free enterprise, the rights of landholders, the promotion of small business and individual liberty. They promoted the scholarship of Ludwig von Mises — leader of the so-called Austrian school of economic thought, intractably opposed to state socialism — and Joseph Schumpeter, who championed the special role of the capitalist entrepreneur.
Minoo Masani (l) and Dr Rustom C. Cooper: Swatantra stalwarts
On the surface, all of this sounds like straightforward borrowing from the Western neoliberal canon. Indeed, in the 1950s and 1960s, Indians on the left worried about American funding and infiltration within conservative organizations. They charged that groups like the International Congress for Cultural Freedom (ICCF), a staunchly anti-communist Western outfit with operations in India, was secretly funded by the CIA (Central Intelligence Agency) and that people such as Masani were American agents.
Balasubramanian evaluates such suspicions. Yes, the ICCF received CIA funding. Masani, however, was no American operative. Chester Bowles, the American ambassador, hinted that he needed no prodding from Washington, pointing out his "blind bitterness against Nehru.”
Instead, what motivated Swatantra’s leaders was a real worry that India was evolving into a one-party state, with the Congress Party exercising unbridled power over the country’s social and economic trajectory. They rallied to the Fundamental Rights outlined in the Indian Constitution and pledged their support to, in C. Rajagopalachari’s words, "a real two-party system.” The party cultivated historical associations with liberal nationalist leaders such as Dadabhai Naoroji and Gopal Krishna Gokhale. And they characterized their struggle as a second freedom movement, "the economic equivalent of independence from British rule itself.” Swatantra might have borrowed certain ideas from videshi (foreign) economists, but its neoliberalism had a strong swadeshi (nationalist) whiff.
Aditya Balasubramanian: evaluates suspicions
Rajagopalachari, former minister of Home Affairs, the man who had coined the term "licence-and-permit raj,” co-founded the party in 1959. The Swatantra party quickly attracted a number of significant political leaders, many of them ex-Congress members. Balasubramanian is careful to note that the party was particularly appealing to certain social groups from India’s west and south. These included Kammas from Andhra Pradesh and Charotar Patidars from Gujarat, agricultural groups which had grown wealthy during colonialism and transitioned to business and industry. Although in his 80s, Rajagopalachari rallied upper caste, land-owning Tamils through his prolific journalism. This diverse makeup influenced Swatantra’s agenda: various groups "advanced specific ideas of change drawn from what was happening in their communities and regions.”
To this mix was added the Parsis. Individuals such as J. R. D. Tata and A. D. Shroff had been involved in the Bombay Plan, the 1944 manifesto where India’s leading capitalists had endorsed strong state intervention in and regulation of the economy. But they had also urged a measure of caution. Masani’s Our India (1940) and Picture of a Plan (1945), popular illustrated books (a young Manmohan Singh was particularly inspired by Our India), evoked ideas such as the liberty of the individual citizen.
By the mid-1950s, Parsi elites were sufficiently disillusioned with Nehruvian socialism and state planning. Masani, himself formerly a socialist, became a "Cold War free enterpriser.” Shroff founded the Forum of Free Enterprise, which propounded the worldviews of Friedrich Hayek and Milton Friedman while supporting Nani Palkhivala’s crowd-pulling public speeches on the annual budget. In 1957 Masani won a seat in the Lok Sabha where he introduced a strident new element of criticism to Nehruvian economics. He joined a small but vocal minority of politicians urging closer ideological and political alignment with America. "Masani’s free economy and society somewhat uncritically took inspiration from the United States,” Balasubramanian comments.
One of the most innovative aspects of Toward a Free Economy is how it portrays Swatantra as a pedagogical endeavor as well as a political party. From the Swatantra party’s offices streamed pamphlets, cartoons and gramophone recordings which introduced liberal economic ideas to the general public and explained inflation, corruption and economic inefficiency as the natural products of statist policies. Here, Masani played a particularly influential role: he orchestrated public relations campaigns revolving around an idealized middle-class citizen. This citizen, in Swatantra pamphlets, was groaning under the weight of bloated socialism, his (and it was rarely ever her) fundamental rights curtailed by red tape and inane regulations.
There were real limits to such outreach. Masani and others in the Swatantra party had an unrealistically rosy conception of who, precisely, was middle class. In one instance, Masani described a middle-class citizen as someone with an annual salary of Rs 25,000 — at a time when per capita income in India was a measly two percent of that figure. While sophisticated and urbane, Masani "could sound more like a business manager than a party leader.” And the publicity material he and others produced was invariably in English — and therefore incomprehensible to the vast majority of Indians. "Free economy could never quite escape its twin, English,” Balasubramanian quips.
Things were not much better on the stump. Maharani Gayatri Devi coasted to victory since many voters in Jaipur still considered themselves as her subjects. Piloo Mody campaigned in English to voters in rural Gujarat, toting along with him a mobile toilet. Despite all of the faults of the Congress Party, it had a much firmer grip on the ground realities of 1960s India.
Nevertheless, the Congress’ hegemony was eroding. In the 1967 elections Swatantra emerged as the second biggest party in the Lok Sabha. Swatantra’s heyday did not last long: Indira Gandhi’s splitting of the Congress in 1969 contributed to its dissolution. But in its brief moment of ascendance, Balasubramanian credits the party with some concrete achievements. Masani, who believed that independent India’s greatest achievements were "the maintenance of free discussion in Parliament, on the platform and in the Press,” enlivened parliamentary debate with furious criticism of Congress policies. "The true significance of such debates,” Balasubramanian concludes, "lay in the fact that dissent previously aired in a Congress working committee session had moved to parliament.” Swatantra members moved the courts against further statist policies which, the party believed, violated constitutional rights. It was the Swatantra treasurer R. C. Cooper, after all, who challenged Indira Gandhi over bank nationalization, winning a short but legally important reprieve.
Like the party it chronicles, Toward a Free Economy ends quite abruptly. A more detailed autopsy of Swatantra would have been welcome, as would coverage of the afterlives of its members such as Masani. That minor criticism aside, Balasubramanian’s book commendably restores the historical importance of Swatantra, portraying the party in all its complexity and brushing aside those stereotypes of it being merely the vehicle of maharajas and big business. Regardless of one’s opinions about neoliberalism, Swatantra’s role as an opposition movement makes this book a compelling read. And, as India wades through another period of one-party dominance, it demonstrates the criticality of vibrant, unfettered opposition politics.
Dr DINYAR PATEL
Patel is assistant professor of History at the S. P. Jain Institute of Management and Research in Bombay. He is the author of Naoroji: Pioneer of Indian Nationalism, published by Harvard University Press in 2020.