The right, for all its fascination for economic freedom, has not been an arduous defender of civil liberties against the state. The right, for all its fascination for economic freedom, has not been an arduous defender of civil liberties against the state.

As the Left parties in India stare at political oblivion, they might draw some consolation from the fact that, in economic terms, genuine rightwing parties don’t even get off the ground in India. Many supporters are finding that Prime Minister Narendra Modi is not quite the libertarian economic reformer they had hoped he would be. That is a good thing, too. Left and right, as pure ideological forms, have little prospect for success. Creating broad majority coalitions requires eschewing extreme positions. Your ability to get people to go along with you is inverse to your doctrinal purity. But it also has something to do with an intellectual style that leads them to repeatedly misdiagnose the tasks of the time.

Both political tendencies are more at home with abstractions than with diagnosing the actual complexities of economic life. Their respective progenitors, Adam Smith and Karl Marx, were acute at historical diagnosis; even when mistaken, they were instructive. Their self-proclaimed disciples merely want simple formulas. In a strange way, both have fetishised the market: the left in constructing an abstract enemy called neo-liberalism; the right in not understanding how so many sectors of the economy cannot operate on conventional market principles. Land, education, health, finance, infrastructure, insurance, knowledge-based industries and energy require very complex forms of regulation.

Environmental concerns can no longer be ignored. As Keynes suggested, abstract economic calculation made “the whole conduct of life… into a sort of parody of an accountant’s nightmare… We destroy the beauty of the countryside because the unappropriated splendours of nature have no economic value. We are capable of shutting off the sun and the stars because they do not pay a dividend.” They may not pay dividends but the negative externalities their demise might impose can no longer be ignored. These are now the mainstays of the economy, both in terms of their relative size and their importance for future growth. Economists can be reviled for their abstraction and compromised economic advice. But the bulk of serious work, from Joseph Stiglitz’s early technical work to Jean Tirole’s contributions on regulation, is driving home one simple point: we have to think more carefully about conditions under which markets are effective.

In principle, the Indian left could have grasped this point. But grasping it requires nuance. And regulation also requires understanding state failure. The left has been far more comfortable with totalising logic than discontinuous realities. It proposed an abstract conception of the state, unmindful of realities, as an abstract answer to an abstract entity called neo-liberalism. As Marx would have said, it confused its idea of the state with reality.

The right, on the other hand, was so obsessed with state failure that it forgot to ask the question: where was the state needed and how important it was for development? The right also substituted abstract logic for historical judgement. The simple fact of the matter is that no economy has been successful purely on the basis of property rights and the night-watchman state. All successful post-war economies, from Germany to Taiwan, have relied on developmental states. And all successful states have been welfare states of some kind. The post-war success of the United States is unimaginable without the New Deal, which had all the elements the right decries: industrial policy, public education, business regulation, labour protection, curbs on finance and so forth. There are some areas where liberalisation is necessary. But what India needs more is a New Deal state, attuned to contemporary realities.

Both the left and right also had an equally abstract conception of geopolitics. The left had a point in suggesting caution about the exercise of American power, not always benign. But it then fetishised its distaste for America to the point where it could not think of how to leverage American power for India’s gain. The right, on the other hand, in its zeal to emulate the nonexistent laissez faire utopia of the US, was not just prepared to hitch its star to everything American, it was happy to outsource all thinking.

Both also operated with abstract conceptions of historical agency. The left has always had this problem. It had assumed that the proletariat was the natural subject of history, and it then replaced it with other categories like peasants and so forth. But it could not quite deal with the fundamental reality that political agency is almost never an automatic function of the category a theorist slots you into. Politics requires managing overlapping identities, commitments and often contradictory interests that run through each individual. The right fetishised individual agency to the point that it had no resources to think about collective action. Both, in a sense, don’t understand politics: the left sees it as an epiphenomenon, the right as instrumental to economic efficiency.

The left’s dogmatism on history compromised its intellectual integrity. The right, too, looked for history in service of identity. Both converted history into a simplistic battle of medieval India: for or against? Ancient India: for or against? The left, in the name of protecting minorities, sought to freeze their identities. Right-wing economic ideologues often hitch their star to reactionary forces. The economic right has not been much of an intellectual force in India but it often taints itself with the odour of cultural majoritarianism. Neither has a stellar record on freedom. The Left’s institutional conduct in West Bengal left a poisonous legacy from which the state will find it hard to recover. The right, for all its fascination for economic freedom, has not been an arduous defender of civil liberties against the state. It does not see the tension between freedom and state muscularity.

It is not an accident that both the left and right come across as strangely deluded. The sins of theory have been compounded by the sordid associations of their practice. If the Left parties are to play any constructive role in bourgeois democracy, they will have to go back to the drawing board. And India’s economic right is living in a fool’s paradise if it thinks a libertarian utopia is about to unfold. The script of democracy and the demands of development are a lot more open ended. A contest between the power of privilege and the claims of the poor will always matter to politics. But it will take more than ideological templates to negotiate those tensions. It will take the ability to craft a genuinely New Deal.

The writer is president, Centre for Policy Research, Delhi, and a contributing editor for ‘The Indian Express’

express@expressindia.com

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Opinion News, download Indian Express App.