The other day I was talking to an esteemed old friend who holds high office and has a great deal of influence in the ruling party. Talking of the pattern of economic development in this country, he told me that while he shared my dislike of the system of State Capitalism and State Landlordism as developed in Russia and China and was opposed to its establishment in India, he wanted the country to press forward towards the socialisation of all large‐​scale industrial enterprises and the establishment of cooperative farming. I was unable to convince my friend that the destruction of free enterprise and of peasant proprietorship must lead in India as in Russia to the same kind of monolithic totalitarian dictatorship as had developed under Stalin. “We shall not allow it to happen,” he kept repeating with great sincerity, but with what appeared to me to be a singular lack of realism about the fact that human nature is everywhere the same; and that Lord Acton’s dictum that absolute power corrupts absolutely applies to Indians as well as to other species of the human race.

Now, you must all have had experiences similar to mine with friends among socialists, trade unionists and college professors. I suggest it might therefore be worth our while spending the next few minutes in an effort to ascertain the validity of the assumption that a completely nationalised or socialised economy can co‐​exist with the kind of political liberty that is guaranteed by our Constitution and that we enjoy in practice today. I would like to discuss this with you, not for the purpose of enlightening you–since you need no such light–but rather to urge and encourage you to join in the enlightenment of the many in our country who are in need of it.

It may be felt by some that this is a somewhat academic exercise; since nobody in India has yet suggested the complete socialisation of industry, trade and agriculture. While that is undoubtedly true, I venture to suggest that recent developments and trends do not justify too great a measure of complacency. The encroachments in recent weeks and months on services such as life insurance and trades, such as the export of iron and manganese ore on the one hand and the distribution of cement on the other show how constant incursions are being made by the State in unexpected spheres. What is disturbing about these developments is not so much the entry of the State in these spheres, but the fact that in each case a monopoly is sought to be established. Where will this process stop? From the export of ores to the export of jute and from the distribution of cement to the distribution of cloth, are not steps as distant as may be imagined. Even today, we have reached a state of affairs where a manufacturer cannot go in for the production of a new article without the permission of Government under the Industries (Development and Regulation) Act.

Alongside of all this, the Government of India has just sent to Communist China a delegation to study the methods of so‐​called agricultural “co‐​operatives” which are known to students of those developments to be nothing but the collectivisation of the land in accordance with the Stalinist pattern, which led in Russia to the liquidation of millions of peasants and is doing so at present in China.

In the light of these developments, I for one would hesitate to disagree with the Times of India for writing editorially as it did a few months ago:

“The point is whether, under the cloak of an avowedly socialistic pattern of society, the country is not being driven along totalitarian paths to totalitarian targets…Few of us would like to see India converted either into a Communist or a fascist State, but the paths we are treading today seem to lead inevitably to that goal.”

Having said this, let me make it clear that to my mind there are hardly any persons in office today or in control of the Congress Party who have any intention of treading the Soviet path. I am not questioning for a moment the democratic bona fides of our planners. I am aware that all they seek to establish is a society fit for prophets to live in but with a marked aversion for profits. What is open to question is whether, by their support to certain policies, actuated no doubt by the urge to social justice, they are not creating conditions whereby, the liberties guaranteed by the Constitution may be imperilled. Yearning to do good, they believe they can preserve political freedom while hacking away merrily at its economic foundations. They may well be reminded of the observation of Lenin, who was an expert in the manipulation of power: “He who says A, says B.”

Some of you may perhaps recall in this context the story of the Administrator of Price Controls in the USA during the last war, Someone once approached him with the proposition that the wage‐​price line need not be held quite so firmly and that just a little inflation would not do any harm. To this, the harassed official replied, “Well Joe, you may be right. A little inflation may not do any harm. But the trouble is that having just a little inflation is like having just a little pregnancy–it keeps growing.”