Meghnad Desai Reimagined Markets, Marx and Economics for the Global South

The passing of Meghnad Desai a few days ago, at the age of 85, marks the end of a rare, intellectually expansive life. Spanning more than six decades of scholarship, activism, policy and pedagogy across economics and development studies, Desai’s contributions defied tidy ideological categories.

A Marxist who later championed global capitalism, a British parliamentarian with enduring faith in India’s potential, a public intellectual who brought complex fields of econometrics and the Bhagavad Gita into the same analytical (and teaching) fold – Desai leaves behind a body of work that was fearless, rigorous and profoundly disruptive.

His legacy lies not in loyalty to any economic orthodoxy, but in a relentless commitment to questioning received wisdom, especially when it failed to deliver development, dignity or progress.

An intellectual evolution rooted in Indian experience

Born on July 10. 1940 in Vadodara, Gujarat, Meghnad Jagdishchandra Desai’s early life intersected with the birth of independent India. By the age of 14, he had already completed his matriculation, an early marker of the prodigious intellect that would shape his path.

After completing his undergraduate and master’s degrees in economics at the University of Mumbai, Desai secured a scholarship to the University of Pennsylvania, earning his PhD in 1963. His formative years were deeply shaped by the Nehruvian consensus of state-led development, which he would later critique with searing precision.

Initially, Desai emerged as a formidable Marxian economist. His early works, Marxian Economic Theory (1973) and Marxian Economics (1979), interpreted capitalism through the lens of class dynamics and historical materialism.

Yet Desai’s most audacious intellectual move came not in defending Marxism, but in reinterpreting it.

His 2002 book Marx’s Revenge argued that Marx, had he witnessed the globalisation-fuelled efflorescence of capitalism, would have seen it not as an aberration but as the necessary unfolding of historical forces. Desai’s claim – that Marx was ultimately “on the side of the market” – provoked both orthodox Marxists and neoliberal economists, but reflected his unique stance: markets were not to be idealised, but neither were they to be dismissed when they delivered prosperity.

This ideological pivot was not a betrayal of radicalism but an evolution grounded in realism. As early as the 1980s, Desai had grown disillusioned with the failures of statist socialism, particularly in India. His transformation into what was called a “born-again free marketeer” was not theoretical but empirical. He saw that India’s entrepreneurial dynamism was not being crushed by capitalism, but by bureaucracy.

In The Rediscovery of India (2011), Desai laid out a searing critique of the “Permit Raj” and the stagnation it fostered. India, he argued, had mistakenly prioritised state control over individual creativity, and self-reliance over global integration. His counterfactuals were telling: South Korea, Taiwan and even Bollywood all achieved global success not through top-down planning, but by unleashing decentralised private enterprise. In an era when India was still looking to manufacturing and heavy industry, Desai presciently saw services, software and global trade as the country’s true comparative advantage.

Challenging economic orthodoxy

Desai’s intellectual restlessness was never confined to theory. He believed economic ideas must stand up to data. His 2013 book Testing Monetarism exemplified this approach, taking on one of the most dominant macroeconomic frameworks of the late 20th century with forensic attention to its empirical flaws.

Far from being a polemic, it was a methodical dissection of monetarist assumptions, models and datasets. In doing so, Desai illustrated a key principle that ran through his academic life: that economic ideas should not be taken on faith, whether they emerged from the left or the right.

This empirical mindset also shaped his long engagement with development economics. Over five decades, Desai studied how private capital and public institutions could – or could not – combine to lift countries out of poverty.

He applied econometric models to questions of famine, disguised unemployment and state failure. He challenged narratives that valorised either unregulated markets or omnipotent governments. Instead, he sought evidence-based frameworks where trade, private enterprise and robust institutions could jointly foster inclusive growth.

Desai’s deep scepticism of centralised control extended beyond India into his critique of the UK’s own welfare state. In one of his more controversial stances, he lambasted the National Health Service as flawed and discriminatory. It was, in his words, “appalling” not for being publicly funded, but for its systemic inefficiencies and inequality.

He suggested that those who could afford it should pay directly for healthcare, so that resources could be better targeted at those most in need. These views were not ideological outbursts but reflected a consistent theme across his work: well-intentioned institutions can fail when they substitute command for responsiveness, or uniformity for accountability.

As a professor, he lectured on econometrics, Marxian thought, macroeconomics and global development with equal ease. As director of LSE’s Development Studies Institute, and later founder of the Centre for the Study of Global Governance, he also shaped institutional spaces that foregrounded interdisciplinary and applied research. These were not merely administrative posts, but strategic interventions to expand the field of economic inquiry beyond its traditional confines.

Many of us, as young development economics scholars and South Asianists, benefited over time from his generosity and contributions at the LSE (and perhaps still do). His presence brought insights from India, South Asia and – later – countries of the Global South into mainstream discussions, seminars and applied economic thinking, which often struggled with being context-free and overly universalist (and mathematical) in their approach.

From Westminster to Mumbai

Few economists straddled the worlds of academia and policy as fluently as Meghnad Desai. In 1991, he was elevated to the House of Lords as Baron Desai of St Clement Danes, after decades of association with the British Labour Party. His parliamentary career spanned health, economic affairs and governance, and his views often ruffled feathers within his own party. In 2020, he left Labour altogether over its alleged handling of antisemitism – a testament, perhaps, to his principled independence.

That same voice, both iconoclastic and lucid, could be heard across op-ed pages in The Guardian, Indian Express, Business Standard, and Financial Express, where he wrote candidly on everything from fiscal policy to faith texts. In 2014, he provoked fresh debate with Who Wrote the Bhagavadgita?, critiquing the sacred text’s role in reinforcing social hierarchy. Even when writing about religion, Desai approached the topic as an economist would: asking who benefits, who decides, and whose voice is missing. 

Desai never ceased to think of India as a laboratory for economic transformation. His founding of the Meghnad Desai Academy of Economics (MDAE) in Mumbai was a gesture of optimism, a belief that India’s next generation needed a space for critical inquiry, grounded in data, but alive to politics and history. He believed that India’s potential would be realised not by emulating the West, but by charting its own model of democratic capitalism, rooted in institutions and entrepreneurial drive.

Recognition came in many forms, honorary doctorates, leadership of the Official Monetary and Financial Institutions Forum (OMFIF), and the Padma Bhushan in 2008. But perhaps his true reward was the rare freedom to speak across camps, admired by Marxists for his analytic precision, respected by liberals for his market realism, and feared by ideologues for his refusal to conform.

The unfinished legacy of a relentless mind

To reduce Meghnad Desai’s intellectual life to a shift from left to right would be to miss the point entirely. His journey was not ideological but dialectical – an attempt to reconcile the ideal of justice with the reality of how economies evolve. He never stopped believing in the role of ideas in shaping the world, but insisted that those ideas be tested, refined and, when necessary, discarded.

In an era where economic discourse often calcifies into tribal loyalties, Desai’s greatest legacy may be his intellectual courage: to challenge his own priors, to reimagine Marx, and to argue that capitalism – tempered by reason and anchored in democracy – could be not just efficient but emancipatory.

In remembering Meghnad Desai, we do not merely mourn the loss of a distinguished economist; we commemorate a rare intellectual whose ideas and contributions spanned continents, theories and institutions, creating pathways for scholars from low- and middle-income countries to gain agency and voice in the teaching, learning and policy application of economic thought in Ivy League institutions.

A maverick in the truest sense, his ideas remain alive not as doctrine, but as an invitation to question critically, to analyse deeply and to think beyond dogma in the service of progress.

Deepanshu Mohan is a Professor of Economics, Dean, IDEAS, and Director, Centre for New Economics Studies. He is a Visiting Professor at London School of Economics and an Academic Visiting Fellow to AMES, University of Oxford.

Ankur Singh is a Research Analyst with Centre for New Economics Studies.

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