The Moral Technologies of Markets: Multinational Supermarkets in the Indian Bazaar

• In Event: 239 - Regular Session. Development

Abstract

This article analyzes India’s puzzling decision to liberalize FDI in retail food markets. Neoliberalism has become synonymous with state retreat in the face of liberal markets and powerful multinational firms. However, we show how Indian policymakers paradoxically seek foreign firm entry to increase state governance of markets by strengthening their control over food supply chains. We argue that the appeal of global retailers rests on a deeply institutionalized discourse of political legitimacy, from liberal goals during the colonial era, through statist attempts in the post-independence period, to political challenges of food price inflation under contemporary neoliberalism. Crucially, across radically different periods, the problem has remained the same: governing politically crucial food markets and the recalcitrant local market actors that constitute them. Multinational corporations are now the solution to this governance problem. Policymakers believe they will supplant fragmented markets dominated by kinship-based networks of ‘traditional’ traders who for centuries have been deemed illegitimate market actors. These traders are embedded in patron-client relations with local officials and abuse monopoly power by leveraging feudal relations with poor farmers to purchase goods at low prices while charging high prices to end consumers. They are embedded in networks that use informal pricing conventions that appear opaque, inefficient and unethical. Policymakers believe global retailers can transform these “traditional” systems into “modern” rationalized supply chains governed by formal rule of law. Liberalization thus offers state actors new mechanisms of transparency and regulatory control, market governance capacities that have eluded the state from the colonial to neoliberal periods.

Author

• Jason Jackson, MIT