Reflections on Gandhi's economic ideas

- By Naresh Kumar Sharma*

Understanding the essence of the phrase - good life is basicto understanding the economic phenomena, economic theory and economic systems.Mahatma Gandhi's economic ideas may be better understood and appreciated in thecontext of a particular view of what constitutes a good life as well as aparticular way of organising economic life (institutions, activities,constitutional provisions etc.,) as it pervades and dominates almost the wholeof the world today.

Even though Gandhi has been discussed much more in relationto politics, philosophy, morality, culture, civilisation, etc, economic issuesloom large in the totality of the work of Mahatma Gandhi. His most importantwork, ‘Hind Swaraj' itself is an important testimony to the same. Inparticular, the chapter on ‘Why was India lost?' presents, basically, aneconomic argument for enslavement of India and not any conventional politicalargument. This work also points to his vision for a good economic system.

Ethics and Economics

Gandhi's abiding concern remained with the economicconditions of the ordinary Indians. In India, the very first movement -Champaran movement - that he came to lead was related to economy. His work onkhadi, village industries, Harijans, health, technology, etc., was allconcerned with economic issues. No doubt, these are not economic issues alone.And that itself is a pointer to how Gandhi understood economics - it could notbe separate from human condition in its totality, including human relations andhuman dignity. Hence Gandhi's economics comes bundled with morality. Gandhisaid, “I must confess that I do not draw a sharp or any distinction betweeneconomics and ethics.”

Interestingly, perhaps, the only paper that he read at alarge gathering of economists (that included Prof. Stanley Jevons, the founderof The Indian Journal of Economics) at a meeting of the Muir Central CollegeEconomic Society on December 22, 1916 was entitled, ‘Does Economic ProgressClash with Real Progress?' and this paper brings out the core of Gandhi's economicideas.

He clearly places moral progress (real progress, according tohim) decidedly above economic progress. He believed that fixation on economicprogress is inimical to the ‘real progress', though it must not be taken tomean neglecting economic sustenance: “No one has ever suggested that grindingpauperism can lead to anything else than moral degradation.”

In the world of Gandhi, economic study would be much lessconcerned with ‘what is' and more with ‘what ought to be'. In the ensuingdiscussion to his talk, he reportedly remarked that if an economist did notinvestigate laws of God and show... how to distribute wealth so that theremight 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'sneed, though, but not enough for anybody's greed. Hence, he laid great emphasison the individual and his transformation. He writes in Harijan in 1942: “Man'shappiness really lies in contentment. He who is discontented with however muchhe possesses, becomes a slave to his desires. And there is really no slaveryequal to that of his desires. And what is true for the individual is true forsociety.”

Much earlier in Hind Swaraj, he had remarked: “We notice thatthe mind is a restless bird; the more it gets, the more it wants and stillremains unsatisfied. The more we indulge our passions, the more unbridled theybecome.” Hence, in his view the task of economics is not merely to study humaneconomic behaviour as a bundle of given facts but to work on principles oftransformation for a well-ordered society - an indication of which, in his ownwords, is as follows: “In well-ordered society, the securing of one'slivelihood 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 offactory-based production system had inexorably led economics to become ascience of scarcity, since consumption became an independent slave to desireswhich are unlimited. Gandhi was perceptive enough to realise the problemsarising out of it and spoke at length about the importance of localisedproduction systems. His emphasis on villages as fundamental units of societyand his conception of organisation of society into oceanic circles aremotivated by such non-predatory social and economic relations.

Thus, he says: “I would categorically state my convictionthat the mania for mass production is responsible for the world crisis.Granting for the moment that machinery may supply all the needs, circles aremotivated by such non-predatory social and economic relations.

Thus, he says: “I would categorically state my convictionthat the mania for mass production is responsible for the world crisis”.Granting for the moment that machinery may supply all the needs, he recalledthat he had announced a Machine Design Contest with a prize of Rs. 100,000 (or7,700 pounds) on July 24, 1929, for an innovative design of the charkha (withdetailed specifications of what is expected of the design).He also had clearviews on the possible decentralising role of technology. He was opposed to allforms of centralisation - economic, political social and etc. This was itself aground for his basic opposition to centralisation of power flowing from largescale production. On Mr. Ford's favourite plan of decentralisation of industryby the use of electric power conveyed on wires to the remotest corner... [with]hundreds and thousands of small, neat, smokeless villages, dotted withfactories, run by village communities Gandhiji was asked, “how far will it meetyour 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 innumerableareas, 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 onehuman agency that I dread to think of it. The consequence, for instance, ofsuch a control of power would be that I would be dependent on that power forlight, water, even air, and so on. That, I think, would be terrible.”

These thoughts indicate a framework forunderstanding and answering questions related to technology, industry, economicorganisation, etc. How relevant such considerations become today in the contextof presumed decentralising role of information technology - just imagine the amountof concentration of information taking place right now?

The Promise and the Potential

From these brief gleanings from Gandhi's work relevant foreconomic ideas, it is possible to form certain broad principles that a Gandhianeconomic thought related work must incorporate. Three inter-related aspects areimportant for developing a Gandhian critique of economic theory and forattempting to construct new economic theories:

1. Importance of taking a long view regarding economicactions

2. Taking responsibility for the consequences of one'sactions

3. Non-separation of means and ends or insisting on at leastas much sanctity of means as of ends.

Last, it is pertinent to address the issue of what can beexpected of an endeavour re-kindling work on Gandhian economic ideas. Will aneconomic system based on Gandhian perspective and ideas provide solutions tothe problems of the present economic systems? It is an extremely difficultquestion to answer. An initial response can only be that the elements that sucha perspective lays emphasis on do address these problems. Gandhi had immensefaith in the possibility of transformation of the individual and the innategoodness of human beings.

The task will be to evolve the institutions that help inconverting the potentiality into actuality. At the very least, efforts in thisdirection should be worthwhile.

Ailaan, NCRI, December 2010

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