Tracing the rise of populist nationalism worldwide to the diminution of the community at a time of heightened economic worries, former RBI Governor Raghuram Rajan says that liberal “open-access” values are under threat in India from the Hindu nationalist movement which taps into people’s desire to anchor themselves to tradition in a context of rapid change.
The local community is at the center of Rajan’s latest book “The Third Pillar: How Markets and the State Leave the Community Behind”, published by HarperCollins India and released on Tuesday. It explores how globalization and technological advancement have also produced a strong backlash of populist nationalism.
The community is the third pillar that has got left behind as the two other pillars – the state and the markets – scaled up and expanded their powers at the expense of the former, Rajan says.
“India, with its more pluralistic and open-access political system is better positioned for the community to create more separation between the state and the markets. Its weakest pillar is the state,” he writes.
“India also has a private sector that is still dependent on the state, which makes it a feeble constraint on it.
“India’s challenge in the years to come is not its democracy, which is probably the only way to keep a country with such varied communities together, but the need to strengthen state capacity and private sector independence.”
Given the plethora of languages, religions, castes and ethnicities, India needs a system that allows grievances to be expressed through democratic protest and dialogue, “rather than one that bottles them up so that they explode later”, he says.
The “Third Pillar” is a philosophical exploration of the imbalances between state, markets and local communities, and Rajan writes that the wrong choice could derail human economic progress at this critical moment in history.
Noting that the questions populist nationalists are raising are reasonable, the former Governor says that re-emergence of populist nationalism in the industrial West is based on economic worries.
The “primary source of worry” seems to be that moderately educated workers are rapidly losing or at the risk of losing good “middle class” employment, and this has grievous effects on them, their families and the communities they live in.
Rajan, currently a University of Chicago professor and one of whose earlier works predicted the 2008 global financial crisis, draws India’s parallel with China both of whom have large young migrant populations “yet to be integrated into solid new communities” who are ideal raw material for populist nationalists’ vision of a “cohesive nationalist community”.
“The Hindu nationalist movement tries to tap into such people’s desire to anchor themselves in tradition. It exploits the sense among the majority Hindu population that they have bent over backward to appease minorities, especially Muslims.”
“The committed Hindu majoritarian leader,” Rajan says, “are a serious threat to a liberal tolerant innovative India.”
According to him, the lure of populist nationalists is that they propose simple solutions that don’t deal with the fundamental question, while populist nationalism in one country breeds populist nationalism in another, increasing the risk of conflict between countries.