http://cob.jmu.edu/rosserjb/oldnewtransindia.doc
More recently a variety of Indian economists have followed up on Upadhyaya in trying to construct a "Hindu economics." Much of this effort consciously imitates the efforts of the New Traditionalist Islamic economists of Pakistan in attempting to explicitly reconcile modern economics concepts with traditional Hindu ideas taken from such ancient texts as the Rig Veda. One is Bokare (1993) who claims to subsume all previous economic thought in his system of thought. He supports a decentralized (Gandhian) order of "exploitationless" self-employment (socialism), with no taxes and no interest (Islamic economics), appropriate technology (Upadhyaya), and a general market context. Arguably this sort of effort reflects more an all-embracing incoherence than a genuine alternative economic system.
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We should be clear about why Old Traditionalism simply cannot fill the bill for the Hindu nationalists. Even though much of the rural economy continues to fall into that category, Gandhi was right in noting the breakdown of the autarky of the rural villages with the spread of railroads. British-based legal codes broke down the authority of the old traditions, and the rise of population broke down the old economic equilibrium. More recently since Gandhiâs time this latter has been further accelerated by the introduction of green revolution technologies into the countryside. Furthermore, this rise in population has resulted in large-scale migration to the cities where the more modern market and planned socialist sectors of the Indian economy hold sway, with urbanites more able to escape from the socio-economic strictures of the caste system to some extent.</b>
This pattern repeats that which emerged in Europe initially in the late medieval period, but which accelerated dramatically with the Industrial Revolution, of peasants escaping from the feudalism of the countryside by joining the market economy of the cities. So, the drive for a New Traditional approach in India depends more on being relevant for those who live in the more modern economy of the urban areas than on being so for the still largely Old Traditional rural dwellers, even if this relevance is substantially to provide a nostalgic identity in a rapidly changing economic and social environment.
SYSTEMIC EVOLUTION OF THE INDIAN ECONOMY
Using the Polanyian trichotomization of tradition, market, and command, it can be argued that India possesses the most compexly mixed economic system in the world, with all three elements strongly present. We have already noted the ongoing presence throughout much of rural India of the caste system and its non-monetary set of reciprocal patron-client jajmani relations involving direct compensation in services and products (Lal, 1988). This is the deeply entrenched remnant of the Old Traditional economy, which has largely lost its economic hold in urban areas. We note here that although traditional Brahminic Hinduism has four broad castes: Brahmin priests, Kshatriya warriors, Vaisya merchants, and Sudra workers and farmers, the more detailed reality is a much finer gradation of many specific castes who constitute the elements of the specific jajmani economies in specific local areas of India.
At the same time, even as it was once one of the "ancient empires," India has from the depths of history been a major center of international trade throughout the Indian Ocean. As far back as Mohenjodaro around 2500 B.C.E. there was trade with Mesopotamia and with Rome from the time of Emperor Tiberius out of the southeastern port of Arikamedu. Although the earliest exports were precious jewels, from the time of Tiberius forward cotton cloth would be India's prime export until the industry was severely reduced under the impact of the industrial revolution in Britain during British rule in the early 1800s (Tomlinson, 1993). Indeed, during 1200-1300s, India was arguably the "hinge" of world trade (Abu-Lughod, 1989). There is evidence that prior to the British conquest in the 1700s, India may even have had a higher standard of living than Britain as attested by none other than India's conqueror, Robert Clive:
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"On entering Murshidabad, the old capital of Bengal in 1757, Clive wrote: 'The city is extensive, populous and rich as the city of London, with this difference that there were individuals in the first possessing infinitely greater property than in the last city.' Similar words were used of Agra, Fatechpore, Lahore and many other Indian towns." (Goody, 1996, p. 113) </span>
Whatever the actual reality, it was widely perceived in India that the Indian cotton cloth industry was destroyed by British imperialism and trade policies, a fundamental underpinning of both Gandhi's swaraj ideology of self-sufficiency as well as of the protectionist trade policies adopted after independence by the Congress Party governments initially led by Gandhi's pro-socialist protegé, Nehru. Inspired by the Soviet example, Nehru introduced extensive central planning of the indicative variety (Mohan and Aggarwal, 1990; Byrd, 1990), and established new state-owned enterprises. These policies were carried much further by his daughter, Indira Gandhi, in the early 1970s when she carried out a wave of nationalizations and imposed a series of strict regulations on the remaining privately owned sector and on imports, an ultra-protectionist system known as the "License-Permit Raj" (Nayar, 1989).
Much of Indian economic policy since, both under her son, Rajiv Gandhi in the 1980s, and especially under a Congress government in 1991, has been to undo her legacy. This has included some lowering of tariffs and loosening of controls on foreign direct investment, some loosening of the various regulations on firm size and firm entry, sale of stock in state-owned enterprises, and various monetary and fiscal changes (Bhagwati, 1993; Joshi and Little, 1996; Ahluwalia, 2002). The GDP growth rate has risen since the early 1980s, despite a foreign exchange crisis in 1991 (Clark and Wolcott, 2003; Basu, 2004), and has been accompanied by the emergence of a high technology sector seen to be competing with high income countries such as the United States. However, along with this increased growth rate has come an apparent increase in income inequality, both regionally (Drèze and Sen, 1995, 1996) and between rural and urban areas (Datt and Ravallion, 2002).
Nevertheless, India retains much of its previous socialism, with indicative planning still in place, if weakened, with continuing state ownership of most firms previously owned by the central government (even though some state governments are engaged in full privatization programs), and the continuation of many regulations, especially in labor markets, and a still higher degree of trade protectionism than in all of India's trading partners (Ahluwalia, 2002). Thus it is that India is a deeply mixed economy with significant elements of all three of the principal systemic categories defined by Polanyi, with these elements altering their respective balance over time.
The position of the ideologically pro-New Traditionalism BJP in all of this is highly equivocal and complex and evolving. Prior to its gaining power at the national level in the mid-1990s, the BJP and its predecessor BJS only had governing experience at the state level. Generally the most prominent policies actually implemented were weakening the favoring of lower castes in state government hiring and imposing strict rules forbidding the killing of cows. After marketizing and opening to foreign trade and investment accelerated after 1991 under the Congress Party, state governments under the BJP opposed certain direct foreign investments that had been approved by the central government on cultural grounds, including by KFC and Coca-Cola. The most prominent such example case came in 1995 in the state of Maharashtra which contains India's largest city and financial capital, Mumbai (Bombay), when the local BJP-dominated government cancelled a contract by U.S.-based Enron to build new electricity generating facilities, a particularly severe need in much of India. This decision was later overturned by a federal court and the contract reinstated.
However, since achieving power at the national level, the BJP appears to have at least initially downplayed its Hindu nationalist ideology except for proceeding with building and testing nuclear weapons in confrontation with neighboring Pakistan over Jammu-Kashmir and more generally competing with Pakistan over nuclear energy and space programs. Even so, and despite engaging in military conflict with Pakistan, Prime Minister Vajpayee visited Pakistan in a peace effort and such efforts have continued despite ups and downs in the Indo-Pakistani relationship. In power, the BJP has continued the opening and marketizing reforms initiated by the previous Congress government, although this has been demanded by the coalition partners in its government, most of them regionally based parties without whom the BJP would be unable to rule.
Despite this turn of policy, it remains the case that substantial factions within the BJP (especially those associated with the old RSS) oppose these policies and support a reimposition of protectionism and other more identifiably New Traditionalist policies. Some of these views have been manifested in such phenomena as the suppression of Christian missionaries in some parts of India, and other actions to assert the cultural supremacy of Hinduism within Indian society. This has accelerated more recently since riots between Hindus and Muslims broke out in Gujarat where the BJP-led state government supported a hard pro-Hindu line and was strongly reelected. In 2003, new efforts were made to impose restrictions at the national level on the killing of cows by the BJP, against the wishes of its coalition partners.
The exact balance that the BJP-dominated government will establish between its marketizing reform policies, the maintenance of its socialist indicative planning, and its impulses towards New Traditionalism remain unclear. But, it is clearly the case that the remaining traditional element in Indian economic ideology and reality is increasingly of the New rather than of the Old variety. That particular transition is fully underway.
SUMMARY AND CONCLUSIONS
In India the transition between the Old and New Traditional economies, both ideologically and in fact, has been much closer and immediate than in other areas where New Traditionalist movements are important. In the Islamic world a much longer gap existed between the formulation of the Old Traditionalist doctrines in the medieval period and their replacement by the New Traditionalist ones beginning in the mid-twentieth century after the experience of European colonialism. Similar observations can be made about most other such movements as well.
In the case of India, a substantial actually existing Old Traditional economy has persisted in the villages and countryside, although under pressures to change from modern transportation and agricultural technologies as well as the increasing influence of the official legal system. The writings of Mohandas Gandhi early in the twentieth century represent a strong advocacy of the Old Traditionalist perspective, albeit with some reformist elements such as equal rights for lower castes, women, and religious minorities that put him at odds with Hindu nationalists. Many of his ideas, such as trade protectionism and small village industries, came to have influence on post-independence economic policy, despite a strong emphasis on heavy industry by the socialist central planners under the direction of India's first prime minister, Jawaharlal Nehru. The combination of these socialist-oriented policies with the traditionalist legacy and a deeply entrenched market economy has left India as one of the most complexly mixed economies in the world.
Although they were tainted with the assassination of Gandhi in 1948, Hindu nationalists under the leadership of Deendayal Upadhyaya in the 1960s developed a New Traditionalist ideology that drew heavily on Gandhi's ideas. However, they accepted modern technology in "appropriate" forms while differing with Gandhi on such issues as religious tolerance. While ruling state governments, the Hindu nationalist parties have opposed programs favoring hiring of disadvantaged castes and have implemented such laws as forbidding the killing of cows. In the early 1990s, such state governments opposed foreign direct investments that were being allowed by a reforming central government. However, leading several central governments since the mid-1990s in coalition with parties favoring pro-market reforms, the Hindu nationalist BJP has increasingly shifted toward such policies, although continuing to push certain distinctive policies such as preventing the killing of cows.
Effectively its New Traditionalism in practice may amount to a gradualism that leaves the major elements of the highly mixed Indian economy in place. Such an outcome would be consistent with the long expressed admiration for a "third way" between capitalism and communism by the leaders of this movement in India, and by supporters of New Traditionalism more generally. Thus, the movement has made its transition from the old to the new, both ideologically and in policy terms as well.