Thoughts on economics and liberty

Nehru’s unfortunate fascination with socialism

In this extract from BFN, I show how unfortunate it was that a man of such great intellect and talent, and one whom I admire immensely for his many contributions to India, refused to think deeply enough to see through the dangerous creed of socialism. Had Nehru been a more clear-headed thinker, I'd by now still have been in India, happily serving India in some capacity or other.

=== EXTRACT ===

Nehru, who was far more aware of the history of liberalism than Gandhi seems to have been, had surprisingly little faith in an individual’s ability to think for himself and to take personal responsibility. He did not ask us to undertake self-reflection and to choose ethically at each step. He believed, instead, that the government should make our choices for us. In his model, all decision-making powers were to be concentrated in the government. Decentralization, where power and freedom are vested in the people at the lowest practicable level, was anathema to him. His aristocratic background perhaps played a major role in defining his thinking. Whatever the reasons, he clearly veered towards statist thinking.
Nehru’s choice of socialism was a conscious and deliberate decision. His analysis of the Indian Liberal Party in his autobiography shows that he knew quite well about the alternative to socialism, i.e. of freedom. He wrote:
One is apt to be misled by the name ‘Liberal Party’. The word elsewhere, and especially in England, stood for a certain economic policy – free trade and laisser-faire – and a certain ideology of individual freedom and civil liberties. The English Liberal tradition was based on economic foundations. The desire for freedom in trade and to be rid of the King’s monopolies and arbitrary taxation, led to the desire for political liberty. The Indian Liberals have no such background. They do not believe in free trade, being almost all protectionists, and they attach little importance to civil liberties.[i]

Upon reading this observation, we may be forgiven if, for a fleeting moment, we form the impression that Nehru was a fiery liberal, condemning the weak-kneed liberalism of the Indian Liberal Party; wanting to forge ahead with civil liberties and free trade on his own! But Nehru had nothing of this sort in mind, for quickly, elsewhere in the same book, he reiterated his ‘faith’ in socialism, remarking, ‘socialism is thus for me not merely an economic doctrine which I favour; it is a vital creed which I hold with all my head and heart’.
In that same book, Nehru outlined his preference for the Russian formof socialism despite unremitting evidence of state-based violence that accompanied it. Nehru’s Russian influence later came through by his adopting five-year plans and his vigorous opposition to property rights. Nehru argued lamely that the Russian violence was mitigated by the even greater violence that he allegedly found in capitalist societies. He wrote, ‘I had long been drawn to socialism and communism, and Russia had appealed to me. Much in Soviet Russia I dislike – the ruthless suppression of all contrary opinion, the wholesale regimentation, the unnecessary violence (as I thought) in carrying out various policies. But there was no lack of violence and suppression in the capitalist world, and I realised more and more how the very basis and foundation of our acquisitive society and property was violence’.[ii]
Nehru prevaricated here; possibly lied. In continuing his comments, he not only denied the causal link between the ideology of socialism and the violence he saw in Russia, but also argued, ‘Violence was common in both places, but the violence of the capitalist order seemed inherent in it; whilst the violence of Russia, bad though it was, aimed at a new order based on peace and co-operation and real freedom for the masses. With all her blunders, Soviet Russia had triumphed over enormous difficulties and taken great strides towards this new order’. [Emphasis mine. Perhaps I should have added quite a few exclamation marks of disbelief!]
There are at least four objections to this statement:
  • We can’t make out which capitalist societies he was referring to. I don’t know where such capitalist societies ever existed – not the USA, UK or Australia, for sure. No mass detentions and killings of the sort that routinely took place in the erstwhile USSR ever took place in these societies. Given that he lived for many years in the UK himself, where did he experience violence in the UK, apart from possibly (?) an occasional taunt for being a black student at Harrow.
  • Second, even if we were to accept that there was racial discrimination in Western societies, and disregard for the poor among the nouveau riche who are ill-grounded in the logic of freedom anyway, how can one compare verbal rudeness of this sort with the Russian system where life could be taken at the whim of any petty communist party functionary? Capitalist societies had, by Nehru’s time, developed a great many protections of freedom such as the rule of law and democratic accountability of governments. Most communist leaders were, on the other hand, serial killers who revelled in the opportunity to use Marx’s socially acceptable arguments to justify their psychopathic urges. If violence was inherent in either of the two systems, it was clearly so in the Russian communist system.
  • Third, in this manner of interpretation of the facts, he completely glossed over the great advances to mankind’s freedom made by capitalist societies – advances won through furious resistance to feudalism and mercantilism. No capitalist society has ever (even today) achieved complete freedom. Each generation has to work hard to stretch the boundaries of freedom by removing residual kinks. Freedom is a journey which mankind has only recently started to undertake. It is hard to explain why Nehru expected perfection from capitalist societies but was oblivious to the most blatant imperfections of socialist societies.
Statements of this sort that Nehru made from time to time don’t inspire confidence in his wisdom. And yet, the fact that the violence of the Russian system was right ‘in his face’ annoyed him. Given that the ‘disturbing reports of violent purges in the Soviet Union […] repelled Nehru’, he tried to moderate his enthusiasm for Russian socialism by moving towards what is called a ‘pragmatic’ but very similarly highly centralized form of socialism,[iii] namely, Fabian socialism.[iv] This type of socialism is neither fish nor fowl for Fabians imagine they can bring about socialism gradually. They can’t explain how people will be made equal and property rights abolished without coercion.
It was not only Nehru who turned a blind eye towards the violent killing fields of socialism. There was a malaise generally found in the air at that time. Professor Harold Laski taught against freedom even as he enjoyed the freedom of expression accorded by the academic portals of capitalist England. The early 20th century consensus against capitalism seems to have been a Hobbesean consensus which claimed that our freedoms are not an end in themselves, and that the state was the pinnacle of human achievement.[v] It also saw a constant ‘struggle for the control of economic power’[vi] in society, instead of delighting in the vast amounts of freedom available to the West through which people took responsibility for themselves and created ever-increasing levels of wealth. Marxian language clouded the eyes of the beholder.
Further, some economists falsely implicated capitalism as a cause of the Great Depression. The Depression was, however, in large part caused by the monopolistic control over banking brought about in USA by its 1913 Federal Reserve Act.[vii] In this manner, the Federal Reserve made significant errors in the management of the supply of money, errors which in the multiple private banking system that prevailed earlier would at worst have caused a few bank collapses here or there. As it so happened, these errors were magnified by centralization and led to an almost wholesale collapse of banking in USA. This centralization was surely influenced by socialist ideas in USA, for centralization is always the disease of socialism, not freedom. Given false attributions of economic failures to capitalism, Keynesianism and big government were on a further upswing by the 1930s. It was in that sense a time for dirigisme – the direction of our activities by central authorities. Even our industrialists, with the centralized approach recommended by their Bombay Plan,[viii] sided with Nehru.
This confluence of the interests of big business with ideologies that support big government is not really surprising. Barring a few exceptions, big business never likes the competition that freedom and capitalism engender. It prefers to distort markets by colluding with governments to create monopolies. Its activities make capitalism the object of mockery not because capitalism is bad but because politicians love to mingle with big business and give them special privileges. I will show in the second chapter how long-term monopolies are alwayscreated by governments. It is mostly the smaller businesses, farmers and independent thinkers – the ‘small fish’ in the pond – who promote capitalism and freedom.[ix] (Just to keep the record straight, I am not glorifying small business at the expense of big business. Many small businesses are unethical too, and fail to declare their incomes and pay taxes. We therefore need strong systems to check unethical short-cuts taken by business, both big and small.)
Through this period of centralist approaches, Nehru continued to hold the erstwhile USSR, more particularly Stalin, in great esteem.[x] Later, speaking on Stalin’s death, Nehru told the Parliament on 6 March 1953: ‘[L]ooking back at these 35 years […] many figures stand out, but perhaps no single figure has moulded and affected and influenced the history of these years more than Marshal Stalin’. It is astonishing to find that Nehru did not pick Gandhi as the most influential person in the world between 1918 and 1953, but Stalin! Such glorification is a telling commentary on the way Nehru saw the world, and thus himself. Our role models speak for us. They tell the world what we would like to be but haven’t yet become. Similarly, Nehru warmed instantly towards Mao – who arose on the world stage in 1949 as yet another communist butcher. That Nehru’s ardour for communist China cooled soon had to do with realpolitik – about the question of which of them would occupy greater prominence on the world stage, as well as to the events leading to the 1962 India–China war – than to his principled disagreement with Mao’s ideas and methods.
Once it was clear that Nehru was determined to impose the Red Socialism on India, his close colleagues like Jayaprakash Narayan tried to temper his misplaced enthusiasm. Narayan, who had started his career as a Marxist, but later concluded he had been on the wrong path, declared prophetically:
History will soon prove that Communism, instead of being the final flowering of human civilisation, was a temporary aberration of the human mind, a brief nightmare to be soon forgotten. Communism, as it grew up in Russia and is growing up in China now, represented the darkness of the soul and imprisonment of the mind, colossal violence and injustice. Whoever thinks of the future of the human race in these terms is condemning man to eternal perdition.[xi]
But Nehru’s colleagues failed to change his mind. Nehru was also possibly getting too old, being around 60 by then, and was not inclined to be receptive to new ideas.
Fortunately, despite this environment in which socialist ideas flourished, India did get to enjoy at least a few liberties. These included things like the right of assembly under reasonable circumstances, a modestly framed right to property, some freedom of expression including a relatively free press. These became part of the Indian landscape even before independence through British India’s laws. The fact that powerful people like Robert Clive could be impeached (he was acquitted) must have sent strong signals in early British India about the supremacy of the rule of law – a concept that until then was completely foreign to India. Later advances made in British political institutions were also largely transferred and embedded into Indian governance arrangements by its British rulers, at times in response to the demand for self-rule.

            These experiences of the rule of law premised in freedom led to India producing a strangely confused quasi-liberal intelligentsia. Thisgroup saw the benefits of liberal institutions such as democracy, but advanced a socialist agenda; some focused entirely on religious matters, mixing religion and politics. A very confused landscape indeed.

[i] In the chapter ‘The Liberal Outlook’, in Nehru, Jawaharlal, (1936), Jawaharlal Nehru, An Autobiography, Allied Publishers, Bombay, 1962 edition.

[ii] Ibid., p.361.

[iii] Hause, E Malcolm, ‘India under the Impact of Western Political Ideas and Institutions’, The Western Political Quarterly, Vol.14, No. 4, University of Utah Press, 1961, p.883.

[iv] In its current avataar at [], the Fabian Society provides ideological support to the Labour Party of UK, many of whose policies are, however, firmly grounded in capitalism.

[v] E.g. in his 1931 An Introduction to Politics (George Allen & Unwin Ltd), Harold Laski says, ‘The state […] is the crowning-point of the modern social edifice’, p.15.

[vi] Ibid., p.21.

[vii] In his Capitalism and Freedom (The University of Chicago Press, Chicago, 1982, p.45), Friedman summarizes his studies that show that the Great Depression was a consequence of the centralization and consequent bureaucratic ‘acts of commission and omission’ of the recently created central bank of USA, the Federal Reserve, and that in the previous decentralized banking system, such a meltdown was ‘highly unlikely’ to have taken place.

[viii] A Plan For The Economic Development of India (1944–45), also called the Bombay Plan, was authored by J R D Tata, G D Birla, Sir Shri Ram, Kasturbhai Lalbhai, A D Shroff, John Mathai, among others. Unfortunately, it affirmed ‘that practically every aspect of economic life will have to be rigorously controlled by the Government’. There was little in it to distinguish it from the socialist planning approach adopted later by Nehru.

[ix] Political efforts in India to promote freedom have rarely been supported by big business. J R D Tata was an exception in his support for Swatantra Party, but he also contributed heavily to Nehru’s Congress.

[x] In a book entitled, Soviet Russia: Some Random Sketches and Impressions (1929), written after a visit to Stalin’s Russia, Nehru showed how he was enchanted by Russia. Nehru wrote, ‘no one can deny the fascination of this strange Eurasian country of the hammer and sickle, where workers and peasants sit on the thrones of the mighty and upset the best-laid schemes of mice and men’, and ‘Nothing is perhaps more confusing to the student of Russia than the conflicting reports that come of the treatment of prisoners […] We are told of the Red Terror and ghastly and horrible details are provided for our consumption […] Our own visit to the chief prison in Moscow created a most favourable impression on our minds’.

[xi] Cited in Hangen, Welles, After Nehru, Who? Rupert Hart-Davis, London, 1963, p.216.

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11 thoughts on “Nehru’s unfortunate fascination with socialism
  1. Harsh Vora

    Very nice excerpt Sanjeev. Do you have some good sources for me to refer in order learn more about how Russian socialism led to state-led violence? I can understand how Nehru was outright mistaken when he claimed that capitalism engendered equal, if not greater, violence than did Russian socialism. Any way, I am searching for sources to learn more about precisely HOW the socialistic thought, with its processes, caused violence.

  2. Sanjeev Sabhlok

    Socialism can only be imposed through dictatorship of the ‘wise man’. That invariably causes violence. Please study more if you wish. There has been NO exception to this rule.


    I do not agree with what you say, but I will defend to death your right to say it said a French sage … If you have courage of convictions ,get out of your commitments and work for India. It is a pity that you  understand neither  Vedanta,nor  Nehru's motives nor socialist fundamentals. You plan to give Indians freedom from what , to do what and to make yourself  and fellow citizens rich? I can understand the desperation to do something  great before the grim reaper comes to collect but freedom without responsibility is hollow. With hindsight the vision is 30/30. India should fear thoughts expressed just to oppose accepted  values without real substance. 

  4. Sanjeev Sabhlok

    Dear Sarala
    I wish you had read BFN before berating my work! Please show me ONE place where I’ve suggested that freedom should be without responsibility. Reading BFN will also help you understand better where I come from.

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