When India Embraced Capitalism, Socialism Died In Bangladesh

Socialism survives in Bangladesh in the place where obsolete national commitments often go on to enjoy a dignified afterlife. The Constitution. The preamble promises a socialist society free from exploitation. Article 10 presents socialism as a fundamental principle of the state. Article 15 assigns the government’s responsibility to provide food, shelter, education, health care, employment and social security. Yet, the economy surrounding this text is private, dependent on exports, remittances, small enterprise and privately-accumulated capital.

Even the Awami League, the party that inserted socialism into the constitutional order right after the 1971 Liberation War, governed for decades as an enthusiastic manager of private wealth. This contradiction is usually treated as another specimen of Bangladesh’s constitutional eccentricity. It is more important than that. The country’s attachment to socialism has persisted mainly as language even while socialist politics has approached electoral extinction. Leftist parties retain offices, committees, processions and an abundant supply of declarations.

But they always lacked a constituency large enough to govern, or even to compel those who do govern to answer them. So, essentially, the left remains present in public culture, but absent from the serious contest for power.

Its collapse cannot be explained only by factionalism, or organisational incompetence, although Bangladesh’s communists have experienced plenty of all three. The deeper cause lies across the border. For much of the 20th century, Bengali Leftist thought drew intellectual authority from Calcutta and political confidence from India’s commitment to state-led development.

Once India abandoned the substance of Nehruvian socialism—and then began treating capitalism as a national achievement instead of an embarrassment—the Bangladeshi Left lost its most important external source of validation. India did not abolish socialist language altogether. It did something more damaging and demonstrated that the language could be retained ceremonially while the economy moved on without it.

Jawaharlal Nehru’s socialism was neither Soviet communism nor European social democracy. It was an Indian system of planning, protection, public ownership, and bureaucratic permission. The state claimed the “commanding heights” of industry. Steel, mining, telecommunications, insurance, machine tools and power were placed under public control.

Private producers navigated an elaborate licensing regime governing what they could make, how much they could make, where they could make it and what they could import. India’s share of global trade fell from 2.2 per cent at Independence to 0.45 per cent in 1985. During the first three post-independence decades, GDP growth averaged about 3.5 per cent—a performance that came to be known, misleadingly but memorably, as the “Hindu rate of growth”.

In the 1970s, when Indian socialism reached its most punitive phase, the top marginal income-tax rate rose to 97.75 per cent. Poverty did not begin a sustained decline until the following decade.

Winds of Change

This record does not mean that everything built under Nehru didn’t produce a long-lasting dividend. The Indian state established universities, laboratories, heavy industries and scientific institutions that a weak private sector could not yet have financed. Nor did the market reforms that followed cure India’s deficient schools, public hospitals, courts, police or infrastructure.

Even sympathetic accounts of liberalisation describe the subsequent decades as a combination of private-sector success and institutional failure. Capitalism created new wealth; the state often failed to convert enough of it into competent public services.

But the broad verdict is difficult to evade. Nehruvian socialism restricted production without building an egalitarian society. It concentrated discretion in the bureaucracy and discretion became a commodity. Licences intended to discipline capitalists encouraged them to cultivate officials. Protection from foreign competition rewarded incumbency rather than innovation.

A system designed to prevent private monopolies produced public monopolies and politically connected private ones. Socialism did not eliminate capitalism; it taught capitalists to queue outside government offices.

The reckoning came in 1991, when India faced a balance-of-payments crisis and held foreign-exchange reserves sufficient for only weeks of imports. Prime Minister P. V. Narasimha Rao and Finance Minister Manmohan Singh dismantled much of the licensing system, relaxed import restrictions, welcomed foreign investment and reduced the state’s claim to decide the allocation of nearly every productive resource.

The reforms were introduced as emergency pragmatism instead of any ideological conversion. Yet their cumulative effect was revolutionary. India moved from chronic scarcity to a consumer economy, from suspicion of entrepreneurship to public celebration of founders, and from a protected industrial system to globally competitive sectors in software, pharmaceuticals, telecommunications, automobiles and business services.

Capitalism acquired a social constituency. Millions of Indians whose parents had waited years for a telephone connection could buy mobile phones in minutes. Private airlines, television channels, engineering colleges, banks, retailers and technology companies transformed aspiration into a mass political fact. The reforms produced serious inequalities and recurring forms of regulatory favouritism.

Yet few voters demanded a return to the licence raj. Whatever arguments remained about welfare, privatisation, taxation or labour protection took place inside a market economy.

This shift also altered India’s political imagination. The Bharatiya Janata Party gave wealth creation a nationalist vocabulary. Enterprise became evidence of civilisational confidence. Billionaires appeared beside politicians at national ceremonies. Stock-market valuations became instruments of patriotic reassurance.

Prime Minister Narendra Modi could campaign simultaneously as the defender of welfare benefits and the salesman of investment, infrastructure, digital payments, manufacturing and start-ups. The Indian state remained large, interventionist, and frequently arbitrary. But it no longer apologised for private capital.

Growing Irrelevance

But the Left did not literally disappear from India. Communist parties retain influence in Kerala, pockets of organised labour, universities and some social movements. Their land reforms and welfare policies left durable achievements. But they lost the power to define the economic future.

West Bengal, governed by the Left Front from 1977 to 2011, is the most consequential example. Its communists secured tenancy rights and redistributed political power in the countryside. They also presided over an era associated with militant trade unionism, industrial stagnation, and the flight of capital and professional talent. A recent account of Kolkata’s socialist inheritance records the recollection of an actor who loved the city, but could not remain because there were no jobs.

For Bangladesh, West Bengal’s transformation mattered enormously. The cultural relationship between the two Bengals has never been symmetrical. During the Pakistani period, Bengali Muslims in East Pakistan were fighting a state that attempted to subordinate their language and culture. Calcutta possessed the established publishing houses, universities, literary canon, theatre, cinema and political vocabulary of modern Bengali intellectual life.

Its communists offered a language of class, secularism, anti-imperialism and cultural resistance that appeared especially useful against a Pakistani ruling order organised around religion, military power and economic discrimination.

Those ideas were not simply imported though. East Bengal had its own peasant movements, labour organisers, Marxist parties and material grievances. Pakistan’s economic structure supplied abundant evidence for a class analysis: wealth and industrial ownership were concentrated in West Pakistan, while the eastern wing provided export earnings and a large captive market.

Socialism therefore entered the movement for Bangladesh as an explanation of lived inequality. Secularism and socialism became connected to Bengali self-assertion because the opposing state justified itself through Islamic unity while distributing power unequally.

The conditions of 1971 further strengthened that alignment. The Soviet Union supported Bangladesh diplomatically at the United Nations, while many Muslim-majority states initially stood with Pakistan. The Constituent Assembly, elected in the independence struggle’s aftermath, was dominated almost entirely by the Awami League, but its proceedings still revealed tensions between hard socialists and social democrats, between admirers of Eastern Europe and supporters of Western parliamentary government.

The resulting Constitution combined liberal rights, representative institutions, nationalism, secularism and a promise of socialism. It was less a coherent governing design than an inventory of the victorious coalition’s aspirations.

The Failed ‘Socialist’ Experiment

The first Bangladesh government tried to give the socialist commitment an institutional form. Major industries abandoned by Pakistani owners were nationalised, as were many Bengali-owned enterprises. The decision was partly ideological and partly unavoidable: the country emerged from war with destroyed infrastructure, absent proprietors, scarce capital and limited administrative capacity.

Yet nationalisation created its own problems. State enterprises became vulnerable to weak management, political allocation, overstaffing and corruption. Scarcity encouraged smuggling and black markets. The government’s attempt to centralise political authority through the Bangladesh Krishak Sramik Awami League fused the economic failures of state control with the political failure of one-party rule.

After Sheikh Mujibur Rahman’s assassination in 1975, Ziaur Rahman began loosening these structure years before India’s decisive reform. His government restored a larger role for private enterprise, denationalised industries, encouraged exports, widened relations with Western and Muslim-majority countries and redefined constitutional socialism as “economic and social justice”.

Bangladesh’s later development model—garment exports, migrant labour, microfinance, private manufacturing and non-governmental service delivery—grew from an economy considerably more flexible than the one envisioned in 1972.

Bangladesh thus adopted elements of capitalism before India’s 1991 rupture. But it did so without producing a convincing intellectual defence of capitalism. Reform arrived through military-led government, administrative adjustment and necessity rather than a sustained public argument. The language of the republic remained socialist; the practice became increasingly capitalist. Business was tolerated as an engine of employment while frequently portrayed as morally suspect. Profit could be pursued, but not quite defended.

India’s success after liberalisation made that ambiguity harder to sustain. The old metropolitan source of Bengali socialist authority had turned toward private hospitals, shopping malls, foreign investment and stock-market wealth. Kolkata itself was displaced by Bengaluru, Mumbai, Hyderabad and Gurugram as the emblem of the Indian future. Bangladesh’s Left could continue citing the cultural prestige of West Bengal, but West Bengal no longer offered an attractive economic destination.

The Calcutta that had supplied revolutionary vocabulary became, for many of its own ambitious young people, a city to leave.

Two Different Roads

The social basis of contemporary Leftism has consequently diverged on the two sides of the border. In India and the West, socialism has found a new audience among sections of the educated middle and upper-middle classes. Their politics is not necessarily a demand for nationalisation. It is often a protest against insecure employment, expensive housing, medical debt, climate risk and the concentration of wealth in technology and finance.

The children of market reform can afford to criticise the society that reform produced because they experience its abundance as normal and its exclusions as intolerable. Their socialism is frequently social democracy wearing more dramatic clothes.

Bangladesh has not produced this class in the same form or at the same scale. It has wealthy families, but too much wealth remains linked to bank lending, state contracts, regulatory protection, land, political access and public employment. The country’s problem is not an excess of competitive capitalism. It is a shortage of it. Crony firms obtain credit and protection; independent entrepreneurs absorb the risk. Loan defaults are socialised through the banking system while profits remain private.

This is neither socialism nor a properly functioning market. It is rentier capitalism with socialist phrases preserved on government stationery.

The sociology of the Bangladeshi campus Left is therefore different from the Western stereotype of affluent students playing at revolution. Many activists come from districts outside Dhaka, from lower-middle-income or modest families, and arrive at public universities facing a severe problem of status. The city is expensive, hierarchies are visible and access depends on networks they do not possess.

A Leftist organisation can offer an immediate community, a moral explanation for humiliation and an identity larger than birthplace or family income. Its literature transforms personal dislocation into structural analysis. Its meetings confer intellectual membership.

This should not be dismissed as mere confusion. Class and cultural capital genuinely organise opportunity in Bangladesh. Students who discover Marx while confronting residential scarcity, political patronage and unequal access to employment are responding to real conditions. The error comes when identity substitutes for political economy—when revolutionary vocabulary becomes a complete explanation for a society whose most urgent problems include cartelised markets, captured banks, weak property rights, inadequate competition and a state that is simultaneously intrusive and incapable.

The Left has also damaged itself through political subcontracting. Some parties attached themselves to the Awami League and supplied a progressive vocabulary to an increasingly authoritarian government. In return, they received marginal offices and suffered a much larger loss of credibility. Others remained divided into organisations whose ideological distinctions were more precise than their vote totals.

Their central subjects—the industrial worker, the landless peasant, the informal labourer—often encountered Leftist politics mainly through seminars held in Dhaka.

‘Disaster Capitalism’

Yet the disappearance of Leftist parties does not mean that the questions they once asked have disappeared. Bangladesh’s capitalist expansion has generated growth and lifted living standards, but it has also produced unsafe factories, polluted rivers, urban dispossession, banking scandals and spectacular concentrations of politically protected wealth. Leftist economist Anu Muhammad has argued that Bangladesh moved not from socialism to competitive capitalism, but toward “disaster capitalism”: growth without the constitutional promises of equality, rights and human dignity. His critique identifies a real danger even if socialism is not the remedy.

That distinction is essential. The choice is not between the command economy of 1972 and the predatory capitalism of defaulted loans. Markets require law, competition, enforceable contracts, independent regulators, functioning courts and the possibility that politically-connected firms can fail. Social insurance requires revenue, administrative competence and growth.

Scandinavian welfare states, so often cited as proof of socialism, rest on private property, market prices, productive corporations and democratic institutions. Redistribution can civilise capitalism; it cannot sustainably replace production.

The historical defeat of socialism does not relieve Bangladesh of its duty to protect workers or provide public goods. It clarifies the task. The country needs more entrepreneurs who succeed without political patrons, more medium-sized industries that can grow without joining a cartel and more capital allocated by commercial judgement rather than ministerial telephone calls.

It needs trade unions independent of both owners and parties. It needs universal protections financed by an expanding productive economy, not promises issued by a state that cannot account for its banks.

India’s turn away from Nehruvian socialism did not annihilate Bangladesh’s Left by itself. It removed the backdrop against which that the Left had long appeared historically inevitable. The collapse was completed at home—by nationalisation’s failures, authoritarian alliances, factional vanity and an inability to understand the economy that Bangladesh actually built.

Socialism remains in the Constitution because constitutions are museums of founding hopes. Capitalism governs everyday life because it proved better at creating the goods, jobs and choices that citizens wanted. Bangladesh’s tragedy is not that it abandoned socialism. It is that it adopted capitalism without constructing the institutions that separate enterprise from plunder. Its Left keeps arguing with a system that died decades ago. Its Right too often defends a system that does not yet deserve the name.

(The author is a Dhaka-based journalist who has reported on Bangladesh and South Asia for international outlets such as Al Jazeera, Asia Times and Nikkei Asia)

(Views expressed are personal)