‘Speculative Bazaar Traders, ‘Cowboy Multinationals’, or ‘Captains of Industry?’ Contesting Cultural Categories of Capitalist Legitimacy in India

This paper analyzes political contestation over foreign direct investment rules in India. It shows how economic agents compete to present themselves as legitimate actors through which the development ambitions of the Indian state can be realized. This process involves significant agency and contestation between business and state actors. The paper argues that economic actors battle to legitimate themselves and delegitimize others by developing and deploying cognitive and cultural categories of ‘traditional’ and ‘modern’ business actors. These categories are underpinned by rationalized causal economic ideas about the developmental role of foreign firms in the process of industrialization, which are further imbued with deep social meaning through historically salient cultural representations of domestic and foreign business actors. The paper shows how these categories were created in the late colonial period, become institutionalized in post-independence import substitution policies, and now serve as interpretive frames through which state actors determine the legitimate role that foreign and domestic firms should play in the national development project. This legitimacy in turn shapes the policy rules that govern the balance of ownership and managerial control of industry between Indian firms and multinational corporations in equity joint ventures during the contemporary period of economic liberalization.

Earlier versions of this paper were presented at the Society for the Advancement of Socio-Economics (SASE) Annual Meeting, University of Milan, June 2013 and the Business History Conference, March 2013.