The Transition between the Old and New Traditional Economies in India
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The Transition between the Old and New Traditional Economies in India J BARKLEY ROSSER JR & MARINA V ROSSER Economics, MSC 0204, James Madison University, Harrisonburg, VA 22807, USA. E-mail: [email protected]
We extend Karl Polanyi’s traditional economy concept to modern economies with advanced technology that are embedded in a traditional socio-cultural framework. This is the New Traditional economy, seen in parts of the Islamic world and with the Hindu nationalist movement in India. However, rural India is also the largest repository of the Old Traditional economy with its Hindu caste and jajmani system of reciprocal labour relations. The changes in India’s complexly mixed economy, with its increasing market and strong planned elements, constitute a transition from the Old to the New Traditional economy. We shall consider this transition both ideologically and systemically. Comparative Economic Studies (2005) 47, 561–578. doi:10.1057/palgrave.ces.8100059
Keywords: old traditional economy, new traditional economy, transition, India JEL Classifications: P4, O5
INTRODUCTION Rosser and Rosser (1996, 1998, 1999) introduce the concept of the New Traditional Economy to the discussion and analysis of economic systems. This idea derives from the trichotomisation between tradition, market, and command made by Karl Polanyi (1944). For Polanyi and his followers the traditional economy is embedded within a broader socio-cultural framework.1 1 This idea that economic behaviour may be subordinated to socio-cultural frameworks is acceptable to most social economists and Old Institutionalists, and in economic anthropology Polanyi’s position is known as substantivism (Sahlins, 1972; Halperin, 1998). However, this view is criticised by the formalists who see all behaviour as reflecting rational economic decisionmaking, irrespective of the socio-cultural context. LeClair and Schneider (1974) and Pryor (1977) present the formalist argument within economic anthropology.
JB Rosser & MV Rosser New Traditional Economies in India
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They see the traditional economy associated with backward technology and pre-modern societies, with the rise of the market economy leading to a ‘disembedding’ of the economy from its socio-cultural framework to come to dominate that framework rather than the other way around. This was the Old Traditional Economy. In the New Traditional Economy there is an effort to re-embed a modern or modernising economy within a traditional socio-cultural framework, usually associated with a religion, but to do so while maintaining or adopting modern technology. The most well-known example is that of the Islamic economies such as Iran where a reconstructed view of Islamic economics has been pursued that was developed initially in Pakistan (Maududi, 1975 [1947]) as part of the anti-colonialist struggle. Eventually this became part of the search for an independent identity separate from the competing ideologies of capitalism and socialism during the Cold War.2 But it is also seen as emergin
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