Cultural Influences on Economic Thought in India: Resistance to diffusion of neo-classical economics and the principles of Hinduism

This paper analyses the reasons why, despite the ascendancy of ?liberalising? neo-classical economics in the 1980s, many Indian economists have remained determinedly resistant to the IMF/World Bank pro-stabilisation and structural adjustment arguments that so dominate global political economic thinking. We argue that part of the objection to economic ?global liberalisation? in India is explicable from the significant, but not exclusive, role played by Hinduism and caste in producing a distinctive form of society in India. Caste arguably gives deep cultural legitimation to socio-economic perspectives grounded on non-individualism, ones with a strong sense of collective peer group awareness, albeit segmented into hierarchial distributional sub-groups. Despite the glaring inequalities and corruption in Indian society, the concept of dharma is still consistent with an ideal of a strong civil society which has high levels of trust and confidence, and which appears to offer security and certainty. We contend that there is a deep-rooted, ?national? ideological predisposition in India to a position in economic thought which is broadly consistent with western neo-Ricardianism and some versions of the new institutional economics, albeit one in which caste to some degree plays the theoretical role of class. This coherent body of a broader socio-cultural thought arguably explains some of India's continued resistance to the economics of global liberalisation.?