The economic philosophy of Gandhi is written about, discussed and talked
about. However, when it comes to implementation, it is criticized
for being impractical and imaginary. For instance, the concept of
trusteeship as enunciated by Gandhi demands non-possession. It
seeks individual to dispossess his wealth and income beyond his
requirements so that the economic welfare of the less capable is
realized. The principle of non-possession and trusteeship is not
realized practically because individuals are immensely attached to
their wealth in the ordinary course of life. Gandhi and even later
day Gandhians have not been able to find the root cause of
attachment to wealth and its accumulation overtime.
The family according to me the basic unit of a capitalist system in which
wealth and property is personally owned by individuals and
families. The family not only owns and accumulates material wealth
but also owns progeny. The ownership of progeny is established
through sexual relations between husband and wife (the union of
sperm and the egg). It is in fact the ownership of the sperm and
the egg that leads to the ownership of progeny. However, sperms and
eggs are autonomously produced inside the body of human beings
irrespective of the desire or command of the person. What is
therefore autonomously produced and the man or the woman has no
contribution in the production of sperm and egg, cannot therefore be
owned by man or woman and hence husband and wife cannot claim
ownership over the progeny. Parenthood (motherhood and fatherhood)
is social and not biological. The bodies of men and women are only
apparatuses used by nature to procreate in an endless series of
generations. Once the realization of the non-ownership of progeny is
dawned on human beings, the principle of non-possession and
trusteeship as enunciated by Gandhi will complete its loop and the
Idea will assume pragmatism. Sarvodaya or the rising of one and all
will not only become possible but also become a fact of life once
the root cause of possession and accumulation is exposed to the
satisfaction of one and all. Gandhi was perhaps not been able to
look at non-possession of sperms and eggs because of his
pre-occupation with celibacy or brahmacharya.
The towering presence of Gandhi in Indian society and the world at large need no
further emphasis or restatement. A millennium of democracy in Great
Britain, roughly three centuries of democracy and capitalism (post
Adam Smith) in the United States and France and other countries of
Europe, America, Africa, Asia and the continent of Australia is yet
to create a society free from the worries of bread and free from the
fears of penury. Wide income inequalities both within and between
the nations of the world, widespread poverty in Asia and Africa and
the countries of Central America point to the fact that the Western
Model of capitalism that was adopted by the countries of the world
(save exceptions) and that which survives along with its flip side
to this day has not really delivered the people to light, wisdom and
happiness. Economic growth without social justice and equity,
destructive technological development and mindless consumerism that
has engulfed the spirit of modern men and women is creating a
dysfunctional society that is on the brink of disaster and destruction.
The synthesis of the ideas of Mahatma Gandhi with the ideas of the modern world will
create a more holistic and integrated society. It will deliver more
happiness, generate more altruistic economic surplus and bring about
a more egalitarian society than what is now available to us.
Mahatma Gandhi never created a body of literature known by the name ‘Gandhian
Economics’. He neither claimed to be an economist nor was trained
in Economics. He was not a voracious reader of economic
literature. Nevertheless, he expressed his views on economics at
various points of time in his life. His reflections on Economics
found expression in his writings and thoughts. Students of Gandhian
thought and writings collated his reflections on economics and
created a body of literature known as ‘Gandhian Economics’. The
literature thus created is known to be enormous enough to be
unparalleled in the history of modern Indian economic thought.
Synthesis of Economics and Ethics
Thomas Weber says that Gandhi was deeply influenced by Ruskin’s book ‘Unto
This Last’ and that it would not be out of place to say that
Ruskin was the father of Gandhian economic thought. Gandhi
summarized the teachings of ‘Unto This Last’ under three basic truths:
1. The good of the individual is contained in the good of all (Sarvodaya).
2. Each person has the right to earn livelihood from his work and there is
dignity of labor, meaning thereby that there is nothing called high
and low labor (Bread labor).
3. The life of the tiller of the soil and the handicraftsmen is the life worth
living (Village industries and Swadeshi).
Gandhi admitted that he was clearly aware of the first truth with little awareness
about the second and clearly he was unaware about the third truth.
However, Gandhi realized that the second and third truths contained
in the first. Gandhi revealed that Ruskin’s book transformed him
overnight from a lawyer and city dweller into a rustic living away
from Durban on a farm called the Phoenix Settlement (ashram).
Another writer who deeply influenced Gandhi was Leo Tolstoy.
Tolstoy’s work ‘The Kingdom of God is within you’ left an
indelible impression on Gandhi. Gandhi admitted that the profound
morality, independent thinking and truthfulness of Tolstoy’s work
had overwhelmed him and everything else paled into insignificance.
Gandhi realized that the best way to help the poor was to get off
their backs and practice ‘bread labor’ – that man must earn his
bread by laboring with his own hands. The principle of ‘bread
labor’ is central to the economic philosophy of Gandhi.
Gandhi claimed that “True economics never militates against the highest ethical
standard just as all true ethics must also be good economics…. True
economics stands for social justice; it promotes the good of all
including the weakest and is indispensable for decent life”.
Subhash Mehta writing on Gandhi’s economic philosophy says that,
Khaddar economics was based on ethics and self sufficiency. That
the ideal of man is spiritual progress first and last and no
economic progress can violate this principle. Gandhian economics
lay emphasis on spiritual satisfaction. Spiritualism holds sway
over consumerism. Gandhi emphasized on minimizing wants and keeping
away from luxuries. (A handbook of Sarvodaya, Part-2, compiled by
Subhash Mehta, pp 69-72).
Gandhi never advocated the destruction of factories and machines but sought
regulation of their excesses. He felt that production and
consumption must be decentralized and both these functions must take
place near the source of production. Gandhi had explained that his
small scale rural based economic system was not based on the
rejection of machinery but on objection to the craze for machinery.
“The craze is for what they call labor-saving machinery. Men go
on ‘saving labor’ till thousands are without work and thrown on the
open streets to die of starvation. I want to save time and labor
not for a fraction of mankind but for all. I want the concentration
of wealth not in the hands of few but in the hands of all. Today
machinery merely helps a few to ride on the backs of millions. The
impetus behind it all is not the philanthropy to save labor but greed”.
Gandhi says that greed leads to parasitism. Both greed and parasitism are
unsustainable. He says that “earth provides enough to satisfy
every man’s need but not for every man’s greed”. Gandhian
economics was thus normative and highly ethical.
Diwan and Lutz while pointing out the essentials of Gandhian economics says that
Gandhian economics boils down to a simple injunction that “never
advocate actions or policies that lead to material advancement at
the cost of social, moral or spiritual impoverishment”. (Diwan &
Lutz, ‘Essays in Gandhian Economics’, p-13). The seven social
sins of Gandhi constituted the key elements of Gandhi’s political
and economic thought. They are: politics without principles, wealth
without work, pleasure without conscience, knowledge without
character, commerce without morality, science without humanity and
worship without sacrifice.
Swadeshi and Bread Labor
During his Salt March to Dandi in 1930, in his speech at village Bhatgam, Gandhi
said, “to live above the means befitting a poor country is to
live on stolen food”. Bread labor became central to the
economic philosophy of Gandhi. Bread labor means, each person
should labor to earn his bread. Gandhi quotes Gita to emphasize
bread labor, “one who eats without labor eats stolen food”.
Gandhi saw humility inherent in labor. If you labor for others, it
becomes Yajna or sacrifice. If you labor in a spirit of service, it will lead to self realization
(talks with ashram women, 1926 CWMG Vol.32, p-491).
Gandhi wanted people to consume locally produced goods and particularly village
industry produced goods instead of imported or factory goods. Diwan
and Lutz point out that Swadeshi demands the sacrifice of utility
for the sake of loyalty. The trade-off between utility and loyalty
is exemplified in Gandhi’s explanation of the principle of
neighborliness. He said, “I refuse to buy from anybody anything
however nice or beautiful if it interferes with my growth or injures
those whom nature has made my first care” (Swadeshi and
Nationalism, Young India, 12 March, 1925). At a women’s meeting in
1919, he pointed out that “Swadeshi is that spirit in them which
required them to serve their immediate neighbors before others and
to use things produced in their neighborhoods in preference to those
more remote. So doing they served humanity to the best of their
capacity. They could not serve humanity neglecting their neighbors”
(Diwan and Lutz, “Essays in Gandhian Economics”, p-14).
Trusteeship and Non-possession
Gandhi believed that when we take more than what we need, it amounts to stealing.
He says, “We are not always aware of our needs and most of us
improperly multiply our wants and thus unconsciously make thieves of
ourselves. Today we only desire possession of a thing; tomorrow we
shall begin to adopt measures, straight if possible, crooked when
thought necessary, to acquire its possession” (Gandhi from
Yeravada Mandir, pp 14-15). Gandhi thus believed that ownership was
a form of violence. He felt that there is enough in nature for
everyone and therefore there is no need for exploitation.
Accumulation of wealth is a sin and non-possession will end
inequalities of wealth.
According to Gandhi’s theory of trusteeship, the rich will be free to possess
their wealth but will use only that part of their wealth which is
required to satisfy their needs and hold the rest in trust for the
use of the society. Non-violence was subsumed in the principle of
trusteeship and if the rich did not come forward to help the poor by
holding their surplus wealth in trust, Gandhi had the weapon of
non-cooperation for he believed that the rich cannot accumulate
wealth without the cooperation of the poor. Gandhi wanted to
delegitimize gross accumulation of wealth and follow trusteeship as
a principle of economic conscience. Gandhi felt that the rich could
be persuaded through moral pressure to become trustees. And if the
capitalists still refuse to act as trustees, ownership of wealth can
be regulated through legislation (Practical trusteeship formula,
Harijan, 25th October, 1952). The legislative measure
quoted here was approved by Gandhi during his lifetime. Gandhi’s
belief in trusteeship came from his belief in non-violence and
non-possession (aparigraha). Possession necessarily implies
storage of wealth and violence is inevitable in defending the stored
wealth. Hence, non-possession or trusteeship becomes complementary
Gandhi was against capitalism but not the capitalists. He was against the
destruction of the capitalist class and wanted to use them as
managers of industries. He said, “In reality, the toiler is the
owner of what he produces. If the toilers intelligently combine,
they will become an irresistible power. That is how I do not see
the necessity of class conflict. If I thought it inevitable, I
shall not hesitate to preach it and teach it”. (A Handbook of
Sarvodaya, Part-2 by Subhash Mehta, pp 69-72, Ch.10 Economic Philosophy).
While answering a question at a Round Table Conference in England on the mechanism
to bring about trusteeship, Gandhi replied, “…..My means are
non-cooperation. No person can amass wealth without the
co-operation, willing or forced of the people concerned”.
Further, he advised the workers to unite for a non-violent struggle
and aimed at a stateless society through non-violent revolution
because anything secured through violence will fail in the end.
The problem of economic inequality and equitable distribution of income and wealth
was sought to be addressed through the principle of trusteeship.
The principle of non-violence was at the center of Gandhian
thought. The modern world sought to address the problem of economic
inequality through violent means. For instance, Marx prescribed
class conflict and the annihilation of the capitalist class and the
modern welfare State sought to achieve equitable distribution of
income by imposing heavy income and corporate taxes on the rich and
redistributing it in favor of the poor. While class conflict was
essentially and actively violent and inhuman, the policy of heavy
taxation created a feeling of grudge amongst the tax payers against
the poor and perpetrated the classes of haves and have-nots. By
propagating the principle of trusteeship, Gandhi also sought to
create a single class of workers with the class of entrepreneurs as
specialized workers who would hold capital in trust and function as
the trustees of the society. A trustee is a person who holds public
wealth in trust. He or she manages wealth to bring about economic
welfare of the people. In order to ensure equity, Gandhi said that
a person should only use that part of his wealth which is required
for his personal well being and give away or use the rest for the
economic welfare of the society. In this way, every person should
become a trustee.
Gandhi wanted capitalism to be replaced by trusteeship where in no person will
accumulate wealth beyond his needs and part the balance of his
wealth to the trust and production will not be guided by desire but
by need. Mr. Jamnalal Bajaj was greatly inspired by the Gandhian
idea of trusteeship and went on to set up the Jamnalal Seva Trust at
Wardha in Maharashtra.
Sarvodaya or the rising of all
the rising of all in the society. In the economic context, it means
the economic welfare of all. Gandhi believed that the followers of
non-violence will not stop at the utilitarian principle ‘greatest
good of the greatest number’ but move ahead and achieve the greatest
good of all. The rich could uplift their moral statue and walk the
ethical path by giving up their privileges and become trustees by
dispossessing their wealth for the welfare of all. Gandhi
paraphrased John Ruskin’s book ‘Unto This Last’ into Gujarati with
the title ‘Sarvodaya’. Literally, sarvodaya means the rise of all
human beings. The society should function as an organic whole
rather than being disjointed into economic classes or social
castes. In order to maintain purity in personal life, Gandhi wanted
the people to follow vegetarianism and be teetotalers. The practice
of non-violence, respect for others religion, serving neighbors and
eradicating untouchability were at the core of the principle of
Sarvodaya. Gandhi felt, if justice and right wages were given to
all, no person will be able to accumulate wealth beyond his requirements.
According to Gandhi, women epitomized non-violence. She must enjoy
equal rights with men. There should be no illiteracy and disease in
the society. Poverty and cowardice shall be banished from the
society following Sarvodaya. A Sarvodaya State shall be a secular
State. The Sarvodaya program as charted out by Gandhi and
supplemented by Dr. Rajendra Prasad, the first President of
independent India has the following features:
1. Farmers and workers will be at the center of a Sarvodaya State. There will
be no exploitation of the farmers and the workers. To this end, the
farmers and the workers should organize themselves.
2. Children will be given basic education and adults will be given basic as well
as technical education.
3. Village industries, health and hygiene will be emphasized.
4. The villages to become self sufficient republics.
5. Every household will spin yarn in the village.
6. There shall be social justice and communal harmony.
Industrialization or Khadi and Village Industries
Reflecting on the problems of industrialization, Gandhi observed that “any
machinery which does not deprive masses of men of the opportunity to
labor but which helps the individual and adds to his efficiency and
which a man can handle at will without being its slave was a good
thing” (A discussion, Harijan, 22nd June, 1935). In
fact, he would prize every invention of science made for the benefit
of all…the heavy machinery for work of public utility which cannot
be undertaken by human labor has its inevitable place but all that
would be owned by the State and used entirely for the welfare of the
people. I can have no consideration for machinery which is meant
either to enrich the few at the expense of the many or without cause
to displace the useful labor of many. Gandhi was therefore against
labor displacing machinery and conceded the use of labor displacing
machinery only when enterprises using such machinery were State
owned because the profits made by State enterprises were used for
the welfare of all. Any private use of such machinery would lead to
concentration of economic power and wealth. Further, the workers
working for the State enterprises will be working under ideal
conditions unlike private enterprises where there is little concern
for the working conditions of the laborers.
Gandhi believed that human beings cannot become the slave of the machines and in
fact the machine must help the man in his work. The workers must
have the freedom and control over the machines. Gandhi wanted the
decentralization of all economic functions and industries. In 1928,
Gandhi said, “According to me, the economic constitution of India
and for that matter the world should be such that no one under it
should suffer from wants of food and clothing. In other words,
everybody should be able to get sufficient work to enable him to
make the two ends meet. And this ideal can be universally realized
only if the means of production of the elementary necessaries of
life remain the control of the masses. These should be freely
available to all as God’s air and water are or ought to be, they
should not be made a vehicle of traffic for the exploitation of
others. This monopolization by any country, nation or group of
persons would be unjust. The neglect of this simple principle is
the cause of destitution that we witness today not only in this
unhappy land but other parts of the world too”.
(A Hand Book of Sarvodaya, Part-2, compiled by Subhash Mehta,
P.No.70, Ch.10: Economic philosophy).
India lives in her villages and hence the village economy must be revived. In
order to create village swaraj, Khadi and village industries must be
established. Gandhi considered the spinning wheel as a symbol of
non-violence and akin to the sun in the solar system with the
village industries as the planets within it. A person wearing khadi
will abjure violence and hypocrisy. In 1920, Gandhi estimated that
each person would require 13 vars (measure of cloth) of cloth. The
textile mills in India are incapable of taking care of the clothing
requirements of Indian people. Hence, Khadi industries should be
promoted to make villages self-sufficient. Khadi industry was
sought to be promoted to make value addition to make the final
product within the villages so that the villagers become the
beneficiaries of the value addition/final product. Gandhi proposed
that every villager must have one spinning wheel/charkha and every
village must have one or more looms to make Indian villages self
sufficient in terms of khadi. When each villager produces his own
cloth/khadi, the economic and moral life of the people will be revived.
The khadi industry needs less capital and only elementary training is required
to be given to the people. It ensures certainty of employment
income to the villagers because Gandhi felt that there is a ready
and unlimited market for khadi. Khadi unlike agriculture is not a
seasonal industry but a yearly industry. In order to promote Khadi
and village industry, Gandhi suggested the following measures:
1. Spinning yarn be made an essential and compulsory subject in all primary and
secondary schools in the country and cotton may be cultivated in
non-cotton growing areas also. The weaving industry may be
organized through cooperative institutions.
2. Employees from the departments of education, cooperation, municipality, zilla
parishads and gram panchayats must pass the spinning yarn examination.
3. Cloth produced by mechanized looms be banned in areas where hand spun
cotton clothe is abundantly available.
4. Government employees must use handloom clothes.
5. Old textile mills should not be permitted to expand capacity and new
mills should not be set up and textile imports should be banned.
Other village industries such as jiggery making, handicrafts, rope making, oil
pressing, soap making, flour making, match box making, paper making,
leather making, toy making, mat making and honey extraction be
promoted. These industries will provide gainful employment to the
villages and the surplus can be sold to the cities. These
industries need only rudimentary capital and basic skills which can
be easily arranged and cultivated or imparted. The village
industries will also play an important role in providing nutritious
food for the villages. He emphasized on the consumption of hand
milled coarse wheat flour which is more nutritious than the powdered
machine milled wheat flour. Similarly, jiggery is more nutritious
than sugar which is artificially manufactured in the sugar mills.
The oil extracted by the village oil presser is again free from
adulteration than the factory made refined oil. Coarse rice is more
nutritious than the polished rice of the rice mills. Thus the
village industries will not only provide employment and alleviate
rural poverty but also provide healthy and nutritious food the rural population.
Six decades down the line, India today faces all kinds of problems across the
segments of the population and across the length and breadth of the
country. In his times, there were seven lakh plus villages and today
we have six lakh plus villages. More than one lakh villages have
got transformed into urban areas. There are overcrowded villages
and overcrowded cities. Unemployment is widespread both in the
cities and in the villages. Poverty is widespread across the
country. There is mal-nutrition, disease and early death amongst a
large number of poor. Then organic farming and organic food was the
order of the day. Today, the affluent is willing to pay double the
price for what is called organic food which is sold through the
modern retains food chains. What is what was consumed by the
ordinary person until the early 20th century and even
today, in the villages, has become fashionable amongst the urban-elite.
It is true that India cannot be isolated from the comity of nation States which are
rapidly industrializing and growing and some of these have already
become developed and powerful nation States. India must compete and
run along with other to find her place in the sun and to do that
India has no alternative but to go along with rapid
industrialization and economic growth which means increasing the
pace of urbanization or transformation of villages into cities.
However, the problem confronted by Gandhi during his times continues
to confound us to this day. In the name of modernization, we
neither have modern cities nor have we modern villages. What we
have today in the name of cities and villages are both moth eaten.
The heavy industry city centric model of development paid lip service to rural
development leading to massive rural to urban migration. Today the
so called great metropolises of India do not provide any comfort to
the ordinary man. The village swaraj model of development could
have been implemented in select villages of the country by ensuring
sufficient flexibility in the techniques of production so that these
villages not only attain self sufficiency but also generates
sufficient agricultural and village industry surplus for the growing
urban population of the country. More and more villages could have
come under the village swaraj model under various five year plans
and over the years the village swaraj model could have evolved to be
in sync with the changing times without losing sight of the basic
objectives. Industrialization, urbanization and village swaraj
could have simultaneously taken place and perhaps the growth of
overgrown villages and cities with their attendant evils could have
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- A Handbook of Sarvodaya, Part One, Compiled by Subhash Mehta, Geeta Prakashan, 2004.
- A Handbook of Sarvodaya, Part Two, Compiled by Subhash Mehta, Geeta Prakashan, 2004.
- Mahatma Gandhi - His Life and Times, Louis Fischer, Bhartiya Vidya Bhavan, 2003.
- The Story of My
Experiments With Truth, M. K. Gandhi, Translated by Mahadev Desai, NPB, 2008.
- Gandhi A Life, Krishna Kripalani, NBT, India.
Village Swaraj, M. K. Gandhi, Compiled by H. M. Vyas, Navajivan Publishing House, 1962.
- Studies in Gandhism, Nirmal Kumar Bose, Navajivan Publishing House.
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Companion to Gandhi, Judith Brown and Anthony Parel, Cambridge University Press
* Krishnan Nandela is working as Associate Professor & Head, Dept of Economics,
Dr. T. K. Tope Arts & Commerce Senior College, Parel, Mumbai – 400 012, MS, India.