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This article examines the evolution of class politics and developmental strategies in the state of Kerala in South India. Following Independence, lower‐class mobilisation produced an agrarian transition and resulted in the consolidation of a redis‐tributive‐welfarist state. Since the early 1980s, however, the economic contradictions of labour militancy and redistribution in a sub‐national economy have resulted in the decline of the politics of class struggle in favour of the politics of class compromise. Labour militancy and opposition to capital have given way to corporatist arrangements that emphasise accumulationist strategies of development. This transition has been made possible by the mediating capacity of an interventionist state and the politically hegemonic position of the working class.
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