A recent Gallup poll in the United States revealed a striking shift: Only 54 per cent of Americans now express a positive view of capitalism, the lowest since the survey began. Meanwhile, support for socialism has crept upward, particularly among younger voters. The “poster child” for this change is the front-runner for Mayor of New York, Zohran Mamdani, a self-proclaimed Democratic Socialist who swept the Democratic primary and speaks for immigrant communities and the under-class in that teeming city. The partisan divide is predictable — Republicans largely favour capitalism, Democrats are more open to socialism — but the deeper story is one of generational discontent. For many young Americans, capitalism feels like a system designed for the rich and the few, not the many.
This debate, though rooted in American politics, echoes globally — including in India, where the terms “capitalism” and “socialism” carry their own historical baggage. For decades, India’s economic identity was shaped by Nehruvian socialism, a model that sought to combine democratic governance with state-led development. Public sector undertakings, planned economies, and a cautious approach to foreign investment defined the early decades of independence. The goal was not ideological purity, but national self-reliance and social equity.
Yet, by the early 1990s, the cracks were visible. Bureaucratic inefficiency, fiscal deficits, and a balance-of-payments crisis forced India to liberalise its “licence-permit-quota Raj”. The 1991 reforms ushered in a new era of market-driven growth, foreign investment, and private enterprise. Capitalism, once viewed with suspicion, became the engine of India’s economic resurgence. The middle class expanded, technology boomed, and India began to stake its claim on the global stage.
But as in the United States, the sheen of capitalism has begun to dull for many Indians. Rising inequality, jobless growth, and the concentration of wealth in a handful of corporate houses have sparked unease. The promise of liberalisation was prosperity for all; the reality, for many, has been precarity. Farmers protest against corporate control of agriculture. Gig workers demand basic protections. Youth face unemployment despite degrees. The system, they feel, is rigged in favour of the wealthy.
And yet, as in the American debate, the terms themselves — capitalism and socialism — often obscure more than they reveal. India today is neither a pure capitalist economy nor a socialist one. It is a hybrid, a messy amalgam of market forces and state intervention. We have private hospitals and public health schemes, multinational corporations and subsidised food grains, billionaires and welfare programmes. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), one of the world’s largest social security initiatives, coexists with stock market exuberance and start-up culture.
This blend is not accidental. It reflects a pragmatic recognition that neither extreme — unfettered capitalism nor doctrinaire socialism — can meet the needs of a diverse, populous, and aspirational society. The Indian state, like its American counterpart, has long socialised certain public goods — education, healthcare, food security — not out of ideological commitment, but out of necessity. The goal is not to abolish markets, but to temper them with compassion.
Still, the dissatisfaction is real. When young people in Noida or New York question capitalism, they are not necessarily calling for collectivised farms or five-year plans. They are expressing a yearning for fairness, for dignity, for a system that does not leave them behind. When they invoke socialism, they often mean a society where basic needs are met without anxiety, where opportunity is not hoarded, and where profit does not eclipse people.
This yearning is not new. The welfare states of post-war Europe were built not just to rebuild economies, but to rebuild trust. The National Health Service in Britain, for instance, was founded on the belief that healthcare should not be a commodity. Aneurin Bevan, its architect, argued that a capitalist society must socialise certain services to remain moral. In India, similar impulses shaped our early commitment to public education, rural development, and cooperative institutions.
What’s changed is the vocabulary. Today’s debates are less about ideology and more about outcomes. Does the system deliver? Does it protect the vulnerable? Does it reward effort without punishing misfortune? These are questions that transcend labels. And they are questions that India must confront as it charts its path forward.
The current framing of capitalism versus socialism is historically myopic. When the right warns that socialism leads to dictatorship, pointing to Venezuela or Stalinist Russia, they collapse a wide spectrum into its most extreme endpoint. When the left condemns capitalism as inherently exploitative, they overlook the ways in which modern economies have already absorbed socialist principles — through safety nets, regulation, and redistribution.
In India, the debate is further complicated by cultural and political factors. Our economic discourse is often entangled with identity politics, regional aspirations, and historical grievances. The idea of “social justice” carries different meanings in different states. The role of caste, community, and religion in shaping economic opportunity cannot be ignored. Nor can the legacy of colonialism, which left deep scars on our institutional fabric.
And yet, there is something hopeful in the very fact of this debate. It reflects a refusal to accept the status quo. It signals that people believe society can be better, that the economy can serve more than just shareholders, and that constructive change is possible. The magic of the market will not appeal to those who cannot afford to enter the marketplace. They know what it feels like to be excluded, and they know what it means to dream.
In the end, the labels matter less than the lived experience. Most societies today are hybrids — capitalist in structure, socialist in spirit. The challenge is not to choose one over the other, but to design systems that balance efficiency with empathy, innovation with inclusion. India, with its pluralism and pragmatism, is uniquely positioned to lead this conversation.
As we move forward, let us embrace the moral complexity of our economic choices. Let us resist the allure of purity and instead strive for balance. Let us recognise that dissatisfaction is not a threat — it is a sign of engagement. And let us remember that the goal is not to win an ideological battle, but to build a society where fewer people fall through the cracks.
In that spirit, the debate between capitalism and socialism is not a binary – it is a continuum. And India, like the rest of the world, must find its place along that spectrum, guided not by dogma, but by the lived realities of its people.
Tharoor, fourth-term MP (Lok Sabha), is the Sahitya Akademi Award-winning author of 27 books, including The Battle of Belonging: On Patriotism, Nationalism and What it Means to be Indian
