Acceptance of an expansive role for government in the daily lives of citizens is deeply-embedded in the psyche of India’s political leaders, babus & intellectuals. One possible explanation for this might come from a mischaracterization of colonialism as a hand-maiden to capitalism. In turn, opposition to colonialism meant that one must logically be opposed to capitalism.
As it is, freedom fighters like Subhas Chandra Bose freely mixed socialism with their nationalism & Gandhi’s self-reliance principle (swaraj) rejected involvement with extensive markets or globalized trade. Perhaps the most important cause is that being birthed under Nehruvian socialism at Independence infected India’s political DNA with a “virus” that led to a mistaken belief state interference is the best way to organize diversified communities.
But free market capitalism is at sharp odds with colonialism, which is merely another form of state control over an economy such that imperial domination should be seen as a variant of socialist intervention.
In contrast to colonialism:
Free market capitalism–involves free & open flow of trade, capital and labor across international borders.
Free market capitalism–is based on open competition & the absence of privileges to any producer, regardless of origin or gender or any other characteristic.
Free market capitalism–leads to moral & “just” outcomes inasmuch as it is an expression of voluntary exchange with rewards being based on merit.
Free market capitalism–encourages social cooperation & communal harmony since success comes from offering things that others value & willingly pay for them.
Free market capitalism–encourages & rewards innovation. Living standards tend to rise when technological change is combined with capital so that labor productivity increases thereby causing wages to rise & more, better goods & services being offered.
Free market capitalism–allows individuals to learn from their own mistakes in having to bear the direct consequence of making errors if such costs are not shifted to others.
The article first appeared on Spontaneous Order.