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Reflections on Gandhi's Economic Ideas
By Naresh Kumar Sharma*
Understanding the essence of the phrase - good life is basic to understanding the economic phenomena, economic theory and economic systems. Mahatma Gandhi's economic ideas may be better understood and appreciated in the context of a particular view of what constitutes a good life as well as a particular way of organising economic life (institutions, activities, constitutional provisions etc.,) as it pervades and dominates almost the whole of the world today.
Even though Gandhi has been discussed much more in relation to politics, philosophy, morality, culture, civilisation, etc, economic issues loom large in the totality of the work of Mahatma Gandhi. His most important work, ‘Hind Swaraj' itself is an important testimony to the same. In particular, the chapter on ‘Why was India lost?' presents, basically, an economic argument for enslavement of India and not any conventional political argument. This work also points to his vision for a good economic system.

Ethics and Economics
Gandhi's abiding concern remained with the economic conditions of the ordinary Indians. In India, the very first movement - Champaran movement - that he came to lead was related to economy. His work on khadi, village industries, Harijans, health, technology, etc., was all concerned with economic issues. No doubt, these are not economic issues alone. And that itself is a pointer to how Gandhi understood economics - it could not be separate from human condition in its totality, including human relations and human dignity. Hence Gandhi's economics comes bundled with morality. Gandhi said, “I must confess that I do not draw a sharp or any distinction between economics and ethics.”
Interestingly, perhaps, the only paper that he read at a large gathering of economists (that included Prof. Stanley Jevons, the founder of The Indian Journal of Economics) at a meeting of the Muir Central College Economic Society on December 22, 1916 was entitled, ‘Does Economic Progress Clash with Real Progress?' and this paper brings out the core of Gandhi's economic ideas.
He clearly places moral progress (real progress, according to him) decidedly above economic progress. He believed that fixation on economic progress is inimical to the ‘real progress', though it must not be taken to mean neglecting economic sustenance: “No one has ever suggested that grinding pauperism can lead to anything else than moral degradation.”
In the world of Gandhi, economic study would be much less concerned with ‘what is' and more with ‘what ought to be'. In the ensuing discussion to his talk, he reportedly remarked that if an economist did not investigate laws of God and show... how to distribute wealth so that there might not be poverty, he was a most unwelcome intrusion on the Indian soil.

Individual and Society
Gandhi held that there was enough on earth for everybody's need, though, but not enough for anybody's greed. Hence, he laid great emphasis on the individual and his transformation. He writes in Harijan in 1942: “Man's happiness really lies in contentment. He who is discontented with however much he possesses, becomes a slave to his desires. And there is really no slavery equal to that of his desires. And what is true for the individual is true for society.”
Much earlier in Hind Swaraj, he had remarked: “We notice that the mind is a restless bird; the more it gets, the more it wants and still remains unsatisfied. The more we indulge our passions, the more unbridled they become.” Hence, in his view the task of economics is not merely to study human economic behaviour as a bundle of given facts but to work on principles of transformation for a well-ordered society - an indication of which, in his own words, is as follows: “In well-ordered society, the securing of one's livelihood should be and is found to be the easiest thing in the world. Indeed, the test of orderliness in a country is not the number of millionaires it owns, but the absence of starvation among its masses.”

Production and Consumption
Separation of production from consumption as a result of factory-based production system had inexorably led economics to become a science of scarcity, since consumption became an independent slave to desires which are unlimited. Gandhi was perceptive enough to realise the problems arising out of it and spoke at length about the importance of localised production systems. His emphasis on villages as fundamental units of society and his conception of organisation of society into oceanic circles are motivated by such non-predatory social and economic relations.
Thus, he says: “I would categorically state my conviction that the mania for mass production is responsible for the world crisis. Granting for the moment that machinery may supply all the needs, circles are motivated by such non-predatory social and economic relations.
Thus, he says: “I would categorically state my conviction that the mania for mass production is responsible for the world crisis”. Granting for the moment that machinery may supply all the needs, he recalled that he had announced a Machine Design Contest with a prize of Rs. 100,000 (or 7,700 pounds) on July 24, 1929, for an innovative design of the charkha (with detailed specifications of what is expected of the design).He also had clear views on the possible decentralising role of technology. He was opposed to all forms of centralisation - economic, political social and etc. This was itself a ground for his basic opposition to centralisation of power flowing from large scale production. On Mr. Ford's favourite plan of decentralisation of industry by the use of electric power conveyed on wires to the remotest corner... [with] hundreds and thousands of small, neat, smokeless villages, dotted with factories, run by village communities Gandhiji was asked, “how far will it meet your objection?” To this Gandhiji answered, “My objection won't be met by that, because, while it is true that you will be producing things in innumerable areas, the power will come from one selected centre. That, in the end, I think, would be found to be disastrous. It would place such a limitless power in one human agency that I dread to think of it. The consequence, for instance, of such a control of power would be that I would be dependent on that power for light, water, even air, and so on. That, I think, would be terrible.”
These thoughts indicate a framework for understanding and answering questions related to technology, industry, economic organisation, etc. How relevant such considerations become today in the context of presumed decentralising role of information technology - just imagine the amount of concentration of information taking place right now?

The Promise and the Potential
From these brief gleanings from Gandhi's work relevant for economic ideas, it is possible to form certain broad principles that a Gandhian economic thought related work must incorporate. Three inter-related aspects are important for developing a Gandhian critique of economic theory and for attempting to construct new economic theories:
1. Importance of taking a long view regarding economic actions
2. Taking responsibility for the consequences of one's actions
3. Non-separation of means and ends or insisting on at least as much sanctity of means as of ends.
Last, it is pertinent to address the issue of what can be expected of an endeavour re-kindling work on Gandhian economic ideas. Will an economic system based on Gandhian perspective and ideas provide solutions to the problems of the present economic systems? It is an extremely difficult question to answer. An initial response can only be that the elements that such a perspective lays emphasis on do address these problems. Gandhi had immense faith in the possibility of transformation of the individual and the innate goodness of human beings.
The task will be to evolve the institutions that help in converting the potentiality into actuality. At the very least, efforts in this direction should be worthwhile.
Ailaan, NCRI, December 2010

* Naresh Kumar Sharma, Centre for Gandhian Economic Thought & Department of Economics, University of Hyderabad, Hyderabad, India-500046