In the tributes paid to Manmohan Singh, he has been described as the architect of economic liberalisation since he was appointed Finance Minister in 1991 by the then Prime Minister, P.V. Narasimha Rao, and he pursued it when he was Prime Minister from 2004 to 2014. This is a narrative that has been widely shared within India and abroad. Like any narrative that develops and assumes the character of common sense about a subject, it has two broad aspects. First, most people passively repeat what is commonly said in the age of mass media. Two, there are deliberate political-ideological objectives in promoting that narrative.
Those who promote that narrative come from two opposing perspectives. Those on the Right promote it by describing the earlier era as one of Nehruvian socialism and hailing that liberalisation as a corrective capitalist response to what they describe as the flawed socialist vision of the Nehruvian era. Those on the Left promote this narrative as a way of criticising the IMF-World Bank approach to economic policymaking even if they disagree with the description of the Nehruvian regime as socialist.
Both these takes on understanding Manmohan Singh’s economic vision are wrong in different ways. The right-wing perspective is flawed because the Nehruvian policy regime was not socialist; it was a state capitalism model, and the Manmohan Singh era was not one of unfettered capitalism. The left-wing perspective is wrong because the reforms Manmohan Singh initiated were not a passive acceptance of the IMF-World Bank approach; he had the intellectual power and credibility to make changes to that approach by incorporating in it the pro-poor egalitarian inclinations he inherited from the economics he was trained in at Cambridge and Oxford and from the teachings of Guru Nanak. The formative influence of his Sikh upbringing on his economic vision is mainly unknown, especially to economists.
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He studied at Cambridge and Oxford during a period of post-war capitalism heavily influenced by the Keynesian economic paradigm. Keynesianism, which was especially dominant at Cambridge, was a critique of neoclassical economics. The Great Depression of 1929-33 dealt neoclassical economics with its religion-like belief in the market as an unblemished corrective of economic disequilibrium a mortal blow. Massive unemployment and deficit demand due to low wages for workers ripped apart the market-driven model of capitalism based on the neoclassical economics paradigm. Welfare economics with state intervention in the market and redistribution of income to raise the purchasing power of the poor was a direct outcome of the Keynesian economic refutation of the reliance on the market.
It was also a period of the rise of Fabian socialism in the UK, a doctrine of making redistributive changes within capitalism to reduce the social injustice inherent in a capitalist economy. Jawaharlal Nehru was particularly attracted to Fabian socialism. The formation of Manmohan Singh’s economic vision in the UK was influenced both by Keynesianism and Fabian socialism. This explains why, contrary to the dominant narratives, Manmohan Singh viewed himself as close to Nehruvian thinking.
Influence of the Sikh faith
My understanding of the influence of his Sikh faith on his world-view emerged through discussions with the late Professor Ajit Singh, his close friend and a leading light of the Cambridge School, and from the time I spent with Manmohan Singh and his wife, Gursharan Kaur, at their house in 2019. My 2019 visit coincided with the global celebrations of the 550th birth anniversary of Guru Nanak. I was invited to deliver a lecture on “Guru Nanak and Ecology” at Delhi’s Bhai Vir Singh Sahitya Sadan, of which Manmohan Singh was the president.
While remembering his teachers and some of Oxford and Cambridge’s current economists, he and his wife spoke particularly warmly about the late Prof. Ajit Singh. His appreciation of Ajit Singh as a person and scholar, even though Ajit Singh had been a sharp critic of the IMF-World Bank approach to economic policy in the developing world, reinforced the understanding Ajit Singh and I had reached over several discussions that although the historical moment of the July 1991 balance of payments crisis in India at which Manmohan Singh made his economic policy contribution made it appear to the broader world that he was a votary of market liberalisation, he was, in fact, a heterodox economist who understood the limitations of the market economy.
While not wholly rejecting neoclassical analytical tools, the heterodox economics approach criticises the sole reliance on orthodox neoclassical economics and values alternative economics paradigms—Marxist, Keynesian, institutional, and feminist, to name a few. Manmohan Singh engaged with the economists and thinkers of this heterodox approach personally and professionally.
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This broader heterodox frame of thinking goes beyond the narrow market-oriented frame of thinking and was visible in the introduction of innovative welfare schemes such as the National Rural Employment Guarantee Act, 2005, as a job programme for the rural poor. This was a remarkable egalitarian programme violating the cold logic of market functioning. So was the waiving of considerable amounts of farmers’ debts. NGOs and social activists working to spread education (especially in rural areas) and to empower poor people were welcomed and helped.
This also demonstrated the intellectual calibre of Manmohan Singh and his close policy associate, Montek Singh Ahluwalia. They could proactively influence the changes in World Bank-IMF policy measures that no other top economic policymakers in the developing world could do.
A great mind
It is the hallmark of a great mind to admit the limitations of one’s knowledge. When I expressed my view during our visit that the two overriding problems in India and globally were increasing inequalities and ecological devastation, he admitted that he had not fully grasped environmental economics.
With time, the Indian people will remember with pride that at one time in the country’s history there was a Prime Minister with an intellectual calibre the world respected, with personal integrity unmatched by any other world leader, who steered the economy with dedication, and who, within the limitations of a capitalist economy, tried to empower the socially underprivileged.
Pritam Singh is Professor Emeritus, Oxford Brookes Business School, Oxford.