New Labour Dies, Long Live New Labour

Labour's poor showing in the UK general elections is being touted as the end of the New Labour project. Jointly initiated by Tony Blair and Gordon Brown, New Labour was credited with bringing to an end the era of Conservative dominance of British politics that had lasted since Margaret Thatcher's victory in the 1979 elections. Labour 2.0 was a marriage of Thatcher's market-friendly policies which transformed the British economy, with a commitment to social welfare which Thatcherism had tended to jettison.
So why (if at all) did new Labour implode? And why should this stuff have any relevance in faraway India, which cut its ties to that doughty island some six decades ago? The fact of the matter is that even in its declaration of independence, India modelled itself closely on the political and economic system existing in Britain at the time, as opposed to the colonial order that the British imposed on India.India adopted the Westminster, "first past the post" system of parliamentary democracy based on universal adult franchise, which came into force in Britain itself barely two decades before, in 1928. It would be a crude and in some ways misleading rule-of-thumb to claim that trends in Indian politics and society lag behind those in the UK by about two decades. But even noting the differences in political evolution between India and the UK can be instructive.
The founding economic vision of the post-1947 Indian republic is closely aligned to that of old Labour, both of which have their roots in Fabian socialism. Fabian socialists favoured a strong state where planners and bureaucrats would be the lightning rods of enlightenment entrusted with the task of ensuring social welfare for all while the industrial working class would be given a corporate status. Besides publicly funded healthcare and education old Labour stood for public ownership of key industries and high taxation for the purpose of redistribution of wealth. The Indian variant of old Labour wasn't so hot on public healthcare and education, but government control over the commanding heights of the economy without going to the communist extreme of nationalisation of all economic activity ignited minds all round.
Unfortunately, the Labourist model gave the British a moribund economy which acquired the dubious status of being 'the sick man of Europe'. And it wouldn't be unfair to describe the pre-1991 Indian economy, subject to the fabled 'Hindu' rate of growth, as the sick man of Asia. While South East Asia's tiger economies roared and Deng Xiaoping set the Chinese on a course of pellmell growth, India stood aloof from this trend.
That has changed now, of course. Following the 1991 economic reforms Indian growth, too, has captured world attention. India is now seen as one of the poles of the new world order, and it has been welcomed into the G-20. And following the economic renaissance triggered by Thatcher, who shredded the Labourist model, the UK too is no longer a pitiable has-been.
Some differences should be noted as well. Thatcher was a conviction politician who believed in the power of the free market. Indian liberalisation, by contrast, has been half-baked at best, undertaken initially for technical reasons: the need to overcome the balance of payments crisis which left the country on an economic knife-edge. The inability to come up with a fully articulated case for reform explains why it has so often to be undertaken 'by stealth', as the belief system of the Indian political class remains anchored in old Labour.
A cynic might query whether this matters much, since India still remains among the fastest growing of the world's major economies. But there are reasons to worry about the quality and sustainability of this growth, which doesn't seem inclusive enough. Thatcher might have gutted social security, but she also made it possible for the British working class to own homes. The benefits of Indian growth, by contrast, haven't percolated significantly beyond the middle class. That means India hasn't made a serious enough dent on poverty it ranked 65 out of 84 countries in the Global Hunger Index of 2009, below North Korea, Sudan and Zimbabwe.
It's too soon to write obituaries for new Labour in the UK. It's moved the British polity to the centre, so that even the Tories had to modernise themselves and appropriate some of the new Labour agenda: social concern, connectedness over unbridled individualism, multiculturalism, environmentalism. David Cameron has clearly distinguished himself from Thatcher. In that sense, the supposed decline of new Labour is a mark of its success. It marks the consensual ground of modern British politics, into which new energies have been infused by the rise of young politicians. Blair became premier at the age of 43, Cameron is the same age now.
Indian politics, by contrast, is dominated by men over 70, which may explain why it is so resistant to change. Can we hope for a modernisation in the outlook of the Indian political class akin to the structural shifts in British politics? Could younger leaders come to the fore, and perhaps upgrade us from old-style Labourist politics to its more market-friendly 21st century variant?