Western economics, as it developed in England, was concerned with wealth, not poverty. Investors with an attitude of selling for profit and with a competitive instinct were treated as selfish people but invisibly doing good to society in providing requisites of material welfare and happiness. In that sense market groups or the merchants (Banias) did great service and supplied different type of essential and other goods to people just for some profit and money. But this natural order of market instinct tended to built to a market for the rich and to monopoly profits while the poor sections went on losing the battle of markets.
Further, those who were rich but primitive, accumulation and acquisition of property by force in early days had the advantage if investing their savings in machines and mass production for an ever-expanding market. The invention of machines in 18th century England caused an Industrial revolution and numerous factories sprang up under their capitalist masters. The workers would get poorer as the masters became monopolists and started capturing markets. This idea of increasing poverty of larger part of the working men was visualised first on land by Ricardo who found that the landlords usurped land supluses. It was later generalized to cover industrial surpluses by J. S. Mill, and more aggressively by Marx. This concept of poverty of workers was how-ever, Western in origin and was related to factory production in the European countries.
Colonial economics, which was developing with imperialist growth of the capitalist markets and the scramble for colonial markets during the world wars, brought out the new face of poverty which the colonies, with their highly rural and agraicultural base had started to face and suffer. This raised a big but real debate with the neo-Marxists (Leninsts, in particular) who blamed the capitalist expansion of world market as the villian. The Maoists after World war II blamed Russia to have dumped land workers in the industrial sack, and to have become equally imperialist. Nevertheless, all this gave a dialectics of poverty, which had to be fought, as Lenin or Mao did. But the bourgeois economists still harped on their natural order of survival of the fittest. They explained bow competition among producers made goods cheaper, leading to welfare of both, the rich and poor consumers.
They also added that free trade between rich and poor countries led to specialization and exchange of goods and services to the advantage of both. This by passed the problem of unequal exchange and dependency &the poor colonies, while the growing poverty of the dispossessed land workers and wage workers in general was made an issue of fast production alone.
It was only then that the East and the South blocks of the world started challenging the market concept of the rich North and Western countries and hinted at a poverty-oriented paradigm for development for the poor countries. The real debate for the succeeding period has centered round the indigenous development of the poor peripheries around the big centres of multinational and financial companies. Gandhi had initiated such debate in India as back as Lenin had.
This had to be a struggle, initially with the imperialist forces of the west, who were the rulers too, and
basically with poverty caused by drain of resources to richer countries. Gandhi too denied the market theory of the West, which was pro-rich and accumulative. He found that his struggle could be Marxist on that account, but he preferred to be an orderly anarchist rather than an armed communist. He felt that the theory of violence, even in the first phase of a struggle, was super-imposed and this only reverted. The whole process of the struggle back to a coercive state.
But he rejected parliamentary democracy as did Marx, and joined him in his ideas about local councils so that the State withers away. What made a difference was that Gandhi's local republics had the virtues of voluntaries. (This was earlier explained by French anarchists and later by Leo Tolstoy.) But the later anarchists and the later Marxists were for amaring the local communes. The political economy of Gandhi was for empowering the local communes (panchayats) in stead. (It may be noted here that the early Marx was a Hegelian and talked of alienation rather than exploitation and of mediation rather than class struggle. Communism actually meant a lasting peaceful phase of the communes.) Thus Gandhism is so close to Marxism in spirit, yet so different in kind. Pacifist anarchism (the fight against state power) is that links the two systems in one.
The poverty problem in both the systems lies in lo-caring the poor vis-a-vis the privileged seats of power and wealth, and in an ongoing struggle for power to the poor. This gives a Marxo-Gandhian idea of social change. Two such experiments took place after Gandhi-the Maoist civil war in China of the Marxian variety and the J.P. Civil movement of the Gandhian variety, both against the coercive state. Unfortunately both the movements faded into a hunt for political power. China, however, got an advantage of an equalised economic order and discipline, but Gandhian India is again trapped in vicious circle of political corruption, crimes and a semi-feudal state. Some Gandhian solutions might still give a hope, because the Indian Marxism may now reasonably reconcile with the system of change, which is less violent than conceived. J.P. movement created numerous voluntary organizations in India to weaken the political authority of the centralized state. The panchayats also got a new life after this Movement. But this can work only after an egalitarian base is created in society and the panchayats and the voluntary organizations start operating as strong organs of the poor. The concept of Bhoodani (land donated) panchayats of J.P. remains to be forced it to complete the movement.
This issue boils down to some reconciliation between Gandhism and Marxism. It is contended that poverty must be treated indigenous to particular areas and people, and various spatial and ecological consideration have to be introduced if a slower but surer solution against poverty is woven out in the economics of struggle. A review of recent work of Amartya Sen needs to be added to what we call a reformulation of a Gandhian system. But panchayats would remain the unfulfilled part of the Movement, and also the last hope for the poor. Some policy frame has been developed in later parts of this work, what Jan Tinbergen would call be "Gandhian principles of simplicity and austerity".