Thoughts on economics and liberty

Liberalism – A Contemporary View, by SV Raju (2000)

Liberalism – A Contemporary View

S.V.Raju

What is Liberalism all about ?  If it were a dogma or a doctrine a straight answer would be easy. That it is not, is, at once, its strength and weakness. The only dogma, if you can call it that, is the  conviction that Liberal thought is anchored in freedom. The content of Liberalism has never been static.  It is constantly evolving. At times it has meant the democratic state taking on additional tasks not strictly governance and, at other times limiting its role. But at all times it has been in and through freedom.

The most remarkable aspect of the liberal philosophy in the West has been its continuous evolution and vitality responding to social problems as they emerge and seeking to resolve them in a manner that would promote the rights and dignity of the individual. A political philosophy that developed in an agrarian context adapted itself to the requirements of an industrial society, thanks to political philosophers like Bentham, John Stuart Mill and T.H.Green. Liberalism, often asking the state to intervene on behalf of groups of people at the receiving end.

In India Liberalism  evolved as a philosophy of liberation, liberating Indian society from a variety of social and political chains and reminding the education public of the values of civility. In the early part of the twentieth century the Liberal Party of India could not make much headway but it leavened the Congress ideology in many ways. The Indian Constitution, despite the many horrible amendments since 1949, still bears testimony to the resilience of liberal values – emphasizing liberty, equality, and justice as the cornerstone of the Indian Republic.

But the emergence of the Swatantra Party ( a party based on liberal principles and values) in the early sixties was denounced by Jawaharlal Nehru  as a party representing capitalism and the philosophy of Laissez faire . The party's strong defence of the right to property was given as evidence Liberalism being pro-rich and anti-poor.

Despite this assassination of its character the Swatantra Party, during its life-time, did not bother

About being politically correct. On the other hand its policies were dictated by what it considered right in terms of ethical and liberal values.To give some examples: The Swatantra Party repeatedly demanded in Parliament and outside that India honour the pledge of a plebiscite in Kashmir; commended a confederation between India and Pakistan; opposed banks nationalisation; opposed the abolition of privy purses; fought the collectivisation of  agriculture  (attempted in 17th Amendment under the guise of  cooperative farming); opposed the so called 'liberation' of Goa.

The party was able to expose the mantra of socialism for what it really was and to brand the statist policies of the then ruling Congress Party led by Mr. Nehru and his daughter as the 'Licence, Permit, Quota Raj. But despite Rajaji's  and Masani's untiring efforts the Swatantra Party was unable to  break the tag of a 'Rich Man's Party.

The Swatantra Party secured 44 seats in the Fourth Lok Sabha (1967 -71) ( not  60 Sauvik Chakraverti 'The Liberal Vision', The Times of India, July 9). It was 2 more than what the Jan Sangh (now called the BJP) had. But there are two features to be noted in connection with this achievement: 1. Not one of these 44 was from a metropolitan city . All of them were from rural or semi-rural constituencies;  2.It was not  due to a voter appreciation of the election manifesto of the  Swatantra Party – a Manifesto steeped in  Liberal values. The success arose from other factors  mainly in the realm of realpolitik.

The Swatantra Party emphasised freedom as its basic value. Its Statement of Policy was titled "To Prosperity Through Freedom" and its slogan "Farm, Family and Freedom  Repeatedly the party emphasised that it stood for a mixed economy (in fact Minoo Masani is credited with pioneering this concept in a series of lectures to the Bombay University in 1947) where the State would run enterprises that were not attractive to private investors and would leave the rest to private initiative and enterprise.  Later, in both cases the Swatantra Party made it clear during parliament debates that it was opposed to all monopolies the including state monopolies and demanded that the  MRTP should equally apply to the State sector as it did to the private sector.

The Swatantra Party’s economic policies were greatly influenced by Prof. B.R.Shenoy. For instance any one who cares to read the debates on the Finance Bills in the sixties will see Swatantra spokesman advocating a  floating rupee- a proposal that Professor Shenoy tirelessly advocated as was his opposition to deficit financing. At the same time the party did not oppose all subsidies. Subsidies to loss making PSUs were opposed; but the Public  Distribution System had to be rationalised so that it did not subsidise foodgrains to the well-heeled.

It is this legacy of social concern even while advocating a free market economy that the Indian Liberal Group carried on even after the party's eclipse. In 1985 with Minoo Masani and Count Otto von Lambsdorff, an outstanding German Liberal, present, the Indian Liberal Group adopted a manifesto which, in a reference to equality had this to say:

"To try to eliminate poverty and social injustice is not to accept egalitarianism viz. the abstract right to rigid equality of conditions for all, independent of  talent, work or forethought. While Liberals strongly support measures to reduce differences in wealth  to protect each citizen and to increase equality of opportunity, they decidedly oppose egalitarianism which degrades the individual, whereas the recognition of merit in conditions of social justice is stimulating."

The Indian Liberal Group  does not believe that freedom and equality are antithetical ( Sauvik Chakraverti, 'Liberty and Equality – Freedom as the Supreme Value', The Times of India, July 19) 

The Indian Liberal Group values both freedom, and equality born out of that freedom – the equality of opportunity. Even Pandit Nehru who is quoted as saying that 'democracy and private enterprise are incompatible' had, in his later years to amend his assertion somewhat.' Nehru may have had different notions of equality but let us not forget that it is because of his strong commitment to parliamentary democracy that we have in India today, a free society – with all imperfections, a free society nevertheless.

As for Minoo Masani  this is what he wrote on December 1952 when naming the journal he founded Freedom First:

" We selected this title for our Bulletin because we consider Liberty, with the great historian Lord Acton, to be the supreme good.  We do give priority to freedom – not in point of time, but in time of fundamental importance. The fight for bread and freedom has of course to be waged simultaneously . We want both for our people  – we want bread  through freedom because that is the only way to get it."  

Much later in, 1985 , referring to socialism in his seminal article "Liberalism" he wrote inter-alia:

"Socialism has failed to deliver the goods. It has produced neither equality  nor a better life for the masses of the people. The aims of socialism are good. I am still a socialist in that sense. If you put it to me:'Do you believe in Lenin's free and equal society?' I will say 'Yes' . If freedom and equality are the  objectives of socialism, I am for it.  But when I find that the weapon  that I have used  does not create freedom or equality , but creates tyranny and slavery on one side  and inequality and  poverty on the other,  then I would be a fool if I stuck to that weapon.”

In March this year the Indian Liberal Group reviewed the manifesto and incorporated in its  Constitution the following ,among other things, as the Group's  Objectives: "The purpose of the ILG is to foster the values of freedom, responsibility, tolerance, social justice and equality of opportunity based on the liberal beliefs that liberty with individual responsibility are the foundations of civilised society; the State is an instrument of the citizens it  serves; any action of the State must respect the principles of democratic accountability and the rule of law.”

The bottom line is of course a better life for our people

This ought to be the profile of contemporary Liberalism.                                                

July 24,2000

Sanjeev Sabhlok

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