The only sustainable path to national development is to allow people the greatest possible opportunities to participate in economic activities, subject only to such collective mediation as is necessary and justifiable. When individuals are able to engage in enterprise in a hassle-free environment, they create wealth, generate employment, and foster innovation, all of which contribute to national development.
Indeed, what is commonly described as negative liberalism I regard as positive liberalism. I view it from another, and arguably more realistic, perspective. By leaving initiative in the hands of individuals, particularly the entrepreneurial class, it expanded the scope of voluntary cooperation, enterprise, and civil society. While it is often criticised for producing economic inequality and exploitation, such criticism captures only one part of the historical experience. It is commonly argued that democracy evolved in opposition to exploitation and inequalities. which capitalism engendered. Yet the more substantive historical fact is that capitalism created the economic and social conditions that enabled people to organise themselves, demand a more humane life, and press for political rights. Prosperity generated resources, education, and an increasingly independent middle class, all of which strengthened the capacity for collective action.
The French Revolution of 1789 illustrates this dynamic. Although its causes were multiple, it occurred in one of Europe's most economically dynamic societies, where a commercially prosperous bourgeoisie had acquired sufficient economic strength to challenge the privileges of the ancien régime. More broadly, many institutions of civil society, voluntary associations, professional organisations, trade unions, and democratic movements flourished in societies where individuals enjoyed substantial economic freedom. Thus, rather than viewing liberal capitalism merely as the object of democratic opposition, it may also be understood as one of the principal conditions that made democratic mobilisation and civic advancement possible.
One must also keep in mind what capitalism replaced. It displaced a ruthless feudal order in which ordinary people were often treated little better than the property of their masters. Equally important is the fact that modern imperialism extended the capitalist model to the colonies in exploitative ways, and many of those societies eventually evolved into democratic political orders. This does not absolve imperialism of its sins, but it does suggest that some of the institutional and economic transformations associated with capitalism, most notably the emergence of a capitalist class and a market-based middle class, later provided conditions conducive to democratic development. These social groups acquired sufficient economic independence and organisational capacity to demand political representation, civil liberties, and constitutional government.
This is not to deny that regulations are necessary to prevent crimes, fraud, manipulation, breaches of trust, and other vile tendencies found among people. Nevertheless, the expansion of individual economic liberty has historically been one of the principal forces behind civic mobilisation, institutional development, and national progress. The challenge, therefore, is not to abandon laissez-faire but to optimise it by preserving economic freedom while ensuring that the state performs its essential functions of maintaining the rule of law, protecting competition, enforcing contracts, and preventing coercion, monopoly, and privilege.
The development school, in fact, confused the outcomes of capitalism with the conditions necessary for economic take-off in backward economies. Its emphasis on institutions, governance, property rights, infrastructure, education, and other structural prerequisites mistook the products of a successful developmental process for its primary causes. These institutions are undoubtedly important, but they are themselves the historical outcomes of a society in which informed human agency, entrepreneurship, voluntary cooperation, and economic freedom have been allowed to flourish. Development does not begin with institutions alone; rather, enduring institutions emerge from the cumulative exercise of responsible and productive human agency. It is this agency, more than the institutions it eventually creates, that constitutes the true foundation of development.
The concept of Dharma, in fact, predates the doctrine of laissez-faire by millennia. At its core lies a fundamental principle: the recognition of the proper sphere of individual action and the limits of external interference. Laissez-faire is but one modern economic articulation of this much older civilisational insight. I have invoked it only to explain the dynamics of development in the contemporary world. If we embrace the free-market principle, we are not merely borrowing a lesson from elsewhere; we are, in an important sense, rediscovering an insight long embedded in our own civilisational wisdom.
At its core, dharma enjoins each person to pursue one's legitimate pursuits without encroaching upon the legitimate sphere of others. Correspondingly, rajdharma requires the state not to direct or usurp the legitimate pursuits of individuals, but to ensure that no one interferes with others, violates justice, or undermines the common good. Its role is not to substitute individual initiative with bureaucratic control, but to preserve the conditions in which freedom, justice, and social harmony can coexist. Economic freedom, therefore, is not antithetical to the Indian conception of governance; rather, it is entirely consistent with a dharmic order in which individual initiative flourishes within a framework of justice, public responsibility, and the rule of law.
Viewed in this light, laissez-faire is neither a foreign prescription nor an imported ideology. It is a modern economic expression of a principle that Indian civilisation recognised long ago: individuals should be free to pursue their legitimate ends, while the state ensures that such freedom is exercised without injustice, coercion, or harm to others.
Niraj Kumar Jha
