In a democracy citizens must live among and negotiate the terms of their common lives with others who hold diverging interests. That means deliberating with people with whom we disagree. As an extension, the relationship between the government and the people is also transactional.

The idea that democracy is transactional with "freebies" and poll promises reflects a critique of how political systems sometimes operate, especially in election seasons. In this view, politicians often make appealing promises—such as giveaways or subsidies—aimed at winning votes, rather than focusing on long-term, structural changes. These promises may seem like an exchange, where citizens are promised immediate benefits in return for their support at the ballot box – a transactional arrangement.

This transactional approach is sometimes criticized for fostering short-term thinking and political cynicism. It can reduce democracy to a system of exchange rather than deliberation, where politicians focus more on securing votes through temporary measures than on addressing complex, systemic issues. Critics argue that such promises often ignore the broader challenges of governance and the need for policies that support sustainable progress.

However, some supporters of these kinds of measures argue that they are necessary to address immediate inequalities and to help marginalized groups, offering tangible relief in the short term while longer-term reforms are debated or implemented. The debate around freebies and promises in a democracy often centers on balancing short-term relief with long-term solutions to societal problems. Often, in these giveaways, economic prudence is a casualty in favour of transactional political advantage.

Lessons from American history

A popular Wild West movie that highlights political influence in railroad building is "Once Upon a Time in the West" (1968), directed by Sergio Leone. The film portrays the construction of a transcontinental railroad and the corruption, greed, and political maneuvering surrounding it. Key themes include the exploitation of landowners, manipulation by wealthy businessmen, and the moral complexities of progress. One of the central figures is a ruthless railroad tycoon who uses hired guns and underhand methods to secure land critical for the railroad's expansion.

This movie not only captures the rugged aesthetic of the Wild West but also delves into the power dynamics and moral compromises involved in industrial progress during the evolution of the American democracy and economy as also the dynamics between business and government.

The USA, the oldest democracy, offers a case in point as to how the relationship between politicians and businessmen has evolved significantly over centuries, shaped by the political, economic, and social transformations over the time. Business interests lobby, often paying donations to the political parties, for favorable tax policies, deregulation, and subsidies. Wealthy individuals and corporations frequently act as kingmakers in politics, using their resources to support candidates or causes. Periodic public outcries, such as those during the Progressive Era, the Great Depression, and modern movements like Occupy Wall Street, have challenged this nexus. The practice of officials moving between roles in government and private sector (e.g., as lobbyists) reinforces close ties between the two spheres. Recently there are reports of the techno honchos cozying up to President-elect Donald Trump, who has even admitted to these overtures in a recent media interaction.

While the nexus between politicians and businessmen has facilitated economic growth and innovation, it has also raised concerns about inequality, corruption, and the erosion of democratic principles. The tension between fostering collaboration and maintaining accountability remains a central theme in American political discourse. Some commentators have opined that the American public is disillusioned with democracy.

Nascent Indian democracy

It is a déjà vu here in India. Symbiosis between the state and the private sector can be especially useful in an economy with immature institutions and imperfect free markets, a theme that runs throughout the post-independence decades in India. Even in the rough-and-tumble early days of private industry, it was not uncommon for hard-charging entrepreneurs and officials in local government to share the fruits of these new, market-driven entities, skirting or bending regulations to the snapping point as they tangoed in tandem. That was during the decades before 1992, a period known in India as “license-permit raj”. Post reforms of early 1992 with the Indian economy partially opening up, the theme was “reforms start with breaking rules” as all those involved, the bureaucracy and the industry, were intent on circumventing rules to share the spoils.

When India came into being in 1947, state enterprises served as bedrock for the Indian economy struggling to hold its ground. At the time, PSUs played nearly every role vital to a fledgling nation. In a country with few economic structures, limited industrial capacity, and very little private wealth, PSUs were tasked with rebuilding infrastructure devastated by war, meeting national output targets, and providing regular wages, medical care, and pensions to employees. Workers were given jobs for life irrespective of performance. 

From the outset, in a socialist mould, financial performance was not considered all-important for the PSUs. They were the agents to maintain stability in society and to carry out important national goals. The state had endowed them with all kinds of advantages, and assumed this would be enough to keep them viable, at the very least. And for a time it was. Eventually, however, troubled by inefficiencies and financial losses, PSUs failed to provide enough jobs and tax revenue to meet the central government’s national economic goals. Many attribute this to the lack of incentive for managers working in state enterprises. But in the past decade with an emphasis on Make in India especially in the defence sector and the railways, the two largest spenders, many PSUs have turned around and are performing well. Some see the success or failure of the state-owned enterprise as a reflection of their own dignity and self-worth.

From this unlikely brew of informal, and sometimes illegal, collaboration, thousands of private companies and small scale industries were born during the late 1990s and early 2000s. But once the euphoria settled and it became clear that the reforms were incomplete and inadequate for ease of doing business their progress was slowed. It took another three decades for the next wave of reforms to kick in and reign in corruption. By then India had lost decades of head start against the burgeoning economy of neighbor China.  The story of India’s corporate world is a narrative of the divergence and convergence of public and private enterprise that is overcoming massive historical roadblocks to infuse the nation’s economy with a vitality whose evidence is reflected since the last decade. 

Government beholden to people 

While India continues to grow as the world’s fastest economy, it faces challenges such as inflation, currency depreciation and trade deficits. The government and central bank are actively implementing measures to address these issues and sustain economic momentum. Externally, the geopolitical conflicts in various parts of the world which are disrupting the established supply chains are posing difficult hurdles to progress. 

The redeeming feature is that the government  is seized of the problems acting proactively to counter the adversities. Hopefully, India will emerge successful in becoming the third largest economy in the world while providing jobs to most Indians. The government of the day, in a democracy, is beholden to its people in this transactional agreement.

(The author is an Indian Army veteran and a contemporary affairs commentator.  Views expressed are personal. He can be reached at  kl.viswanathan@gmail.com )