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Why Was Gandhi Never Awarded the Nobel Peace Prize?
Up to 1960, the Nobel Peace Prize was awarded almost exclusively to Europeans and Americans. In retrospect, the horizon of the Norwegian Nobel Committee may seem too narrow. Gandhi was very different from earlier laureates. He was no real politician or proponent of international law, not primarily a humanitarian relief worker and not an organizer of international peace congresses. He would have belonged to a new breed of laureates.
There is no hint in the archives that the Norwegian Nobel Committee ever took into consideration the possibility of an adverse British reaction to an award to Gandhi. Thus it seems that the hypothesis that the Committee's omission of Gandhi was due to its members' not wanting to provoke British authorities, may be rejected.
In 1947 the conflict between India and Pakistan and Gandhi's prayer-meeting statement, which made people wonder whether he was about to abandon his consistent pacifism, seem to have been the primary reasons why he was not selected by the committee's majority. Unlike the situation today, there was no tradition for the Norwegian Nobel Committee to try to use the Peace Prize as a stimulus for peaceful settlement of regional conflicts.
During the last months of his life, Gandhi worked hard to end the violence between Hindus and Muslims which followed the partition of India. We know little about the Norwegian Nobel Committee's discussions on Gandhi's candidature in 1948–other than the above quoted entry of November 18 in Gunnar Jahn's diary–but it seems clear that they seriously considered a posthumous award. When the committee, for formal reasons, ended up not making such an award, they decided to reserve the prize, and then, one year later, not to spend the prize money for 1948 at all. What many thought should have been Mahatma Gandhi's place on the list of laureates was silently but respectfully left open.

1948: A Posthumous Award Considered
Mahatma Gandhi was assassinated on 30 January 1948, two days before the closing date for that year's Nobel Peace Prize nominations. The Committee received six letters of nomination naming Gandhi; among the nominators were the Quakers and Emily Greene Balch, former laureates. For the third time Gandhi came on the Committee's short list – this time the list only included three names – and Committee adviser Seip wrote a report on Gandhi's activities during the last five months of his life. He concluded that Gandhi, through his course of life, had put his profound mark on an ethical and political attitude which would prevail as a norm for a large number of people both inside and outside India: "In this respect Gandhi can only be compared to the founders of religions."
Nobody had ever been awarded the Nobel Peace Prize posthumously. But according to the statutes of the Nobel Foundation in force at that time, the Nobel Prizes could, under certain circumstances, be awarded posthumously. Thus it was possible to give Gandhi the prize. However, Gandhi did not belong to an organisation, he left no property behind and no will; who should receive the Prize money? The Director of the Norwegian Nobel Institute, August Schou, asked another of the Committee's advisers, lawyer Ole Torleif Roed, to consider the practical consequences if the Committee were to award the Prize posthumously. Roed suggested a number of possible solutions for general application. Subsequently, he asked the Swedish prize-awarding institutions for their opinion. The answers were negative; posthumous awards, they thought, should not take place unless the laureate died after the Committee's decision had been made.
On November 18, 1948, the Norwegian Nobel Committee decided to make no award that year on the grounds that "there was no suitable living candidate". Chairman Gunnar Jahn wrote in his diary: "To me it seems beyond doubt that a posthumous award would be contrary to the intentions of the testator." According to the chairman, three of his colleagues agreed in the end, only Mr. Oftedal was in favour of a posthumous award to Gandhi.
Later, there have been speculations that the committee members could have had another deceased peace worker than Gandhi in mind when they declared that there was "no suitable living candidate", namely the Swedish UN envoy to Palestine, Count Bernadotte, who was murdered in September 1948. Today, this can be ruled out; Bernadotte had not been nominated in 1948. Thus it seems reasonable to assume that Gandhi would have been invited to Oslo to receive the Nobel Peace Prize had he been alive one more year.