Trusteeship

- By Dhiru Mehta

The business community hailed the economic policy of liberalization and globalization first enunciated by Manmohan Singh in 1991 as finance Minister of our country in the Government of P. V. Narasimha Rao. The same policy continued to guide the later governments. In the thinking on economic policy and matter there is no substantial difference between the different governments. Our country has practiced socialist economic policies for 40 years from 1951 to 1992. Since then the governments have been following policies of liberalization and globalization. At the advent of independence, the combined population of India then consisting of present India, Pakistan and Bangladesh was around 40 crores. Today the people living below poverty line in India alone are over 42 crores. It is reported that 1% of the population of the world would 99% of the resources of its wealth by 2016.¹ The case of India is not much different. This clearly shows that neither socialism nor liberalization is the correct instruments for the economic growth and prosperity of this country. For solving countries economic problems one has to accept Gandhi’s economic solutions. Pandit Nehru realized it in his last days, which was too late for him to change the course. Advocates of present economic policy are getting highly intoxicated. The one of the idea of Gandhi’s economics was the concept of “Trusteeship”.

In the year 1991, for the first time, the Finance Minister of the country had referred in his budget speech² to Gandhi’s Philosophy of trusteeship. There is yet no indication that efforts are being made to translate the concept into a programme of action. In a poor country like ours, the private sector cannot be given unlimited control over the resources and permitted to use these resources ultimately for the private consumption of a few thousand individuals or families. And there lies the relevance of Gandhi’s philosophy of trusteeship which should be the guiding star of our new economic policy, if it is to succeed.

Dada Dharmadhikari, a revered Sarvodaya leader, once said: The world is divided into two camps-communism and capitalism. Communism thrives on the exploitation by the State. On the other hand, the capitalism and communism are shaking and no new social order can be built on either of them. A new social order can be based on the alternative economic policy of Mahatma. That the Soviet economy has failed is known only too well today. One need not presume that capitalism ipso facto has succeeded. Gandhi was probably the first to see the inherent contradictions – of both capitalism and communism and as a practical idealist he propagated the idea of trusteeship which could take the place of capitalism and communism. While the nation, which has been following the Nehruvian brand of socialism and centrist economic planning, is prepared to give more than a fair trial to private enterprise, it is surprising that the business community has not shown any interest in the trusteeship concept.

Roots of Trusteeship idea

The idea of the trusteeship doctrine is to be found in the opening verse of the Ishopanishad. It means that, “All that is in the universe is pervaded by God. Renounce first in order to enjoy. Covet not anyone’s wealth.” It is also to be found in the story of the miracles of five loaves and two fishes in the Bible. Gandhi, like a socialist, believed in the ideal of equitable distribution but, unlike a socialist, recognized that men and women differ in their capacity and ability and have varying needs. Hence equal distribution cannot mean abuniformity. To quote Gandhi: “The real implication of equal distribution is that each man shall have the wherewithal to supply all his natural needs and no more…..For example, if one man has a weak digestion and requires only a quarter of a pond of flour for his bread and another needs a pound both should be in a position to satisfy their wants…Again, all men have no equal talent; no two leaves on a tree are exactly alike. It is not possible to remove inequalities by ‘lopping off the tall poppies’.³ Gandhi did not want the talent of anyone to be wasted. He wanted all talents to be used for the benefit of society. Gandhi even conceded that the owners of the resources could retain a reasonable remuneration for themselves as a reward for their services or usefulness to the society. He believed that complete non-possession is an abstraction which cannot be realised in an absolute sense. While Socialists and Communists dubbed Gandhi’s concept of trusteeship as clever ploy meant to give a new release of life to private ownership. They owe it to the country to explain to what extent their socialism or their opponent’s capitalism has achieved in the reduction in the level of poverty of the poor, which they claim to attain. They wanted that all proprietary concerns to be State-owned. While Gandhi agreed that individuals accumulated capital through exploitation, which in turn amounted to violence, he preferred the violence of the individual to the violence of the State as the lesser of the two evils. Gandhi reflected on the trusteeship ideal when he was under detention at the Agha Khan palace. On his release from prison he discussed it with certain senior members of the Ashram and M.L. Dantwala of the Bombay University. A draft of trusteeship was prepared by Dantwala, Narhari Parikh, Kishorelal Mashruwala and others. Gandhi approved the draft after making a few changes. The final draft as amended read as follows: "Trusteeship provides a means of transforming the present capitalist order of society into an egalitarian one. It gives no quarter to capitalism, but gives the present owning class a chance of reforming itself. It is based on the faith that human nature is never beyond redemption It does not recognize any right of private ownership of property except insofar as it may be permitted by society for its own welfare. It does not exclude legislative regulation of the ownership and use of wealth. Thus, under State-regulated trusteeship, an individual will not be free to hold or use his wealth for selfish satisfaction or in disregard of the Interest of society. Just as it is proposed to fix a decent minimum living wage, even so a limit should be fixed for the maximum income that could be allowed to any person in society. The difference between such minimum and maximum incomes should be reasonable and equitable and variable from time to time so much so that the tendency would be towards obliteration of the difference.

Under the Gandhian economic order the character of production will be determined by social necessity and not by personal whim or agreed.”⁴ Before releasing the formal trusteeship draft to the press it was decided that it might be shown to G.D. Birla and he welcomed it. It was also proposed that the whole effort might not begin and end with the publication of the formula, Birla should first canvas it among some fellow-businessmen so that the announcement about their acceptance could be made along with the publication of the draft. There was no further communication from Birla in this connection. According to Pyarelal, “perhaps he met with discouraging response from those whom he had approached’. Here is a great concept of universal consequence and which offers a new means of removing the ills of social accumulation. Vinoba Bhave’s Bhoodan/Gramdan programmes were essentially derived from a belief in trusteeship. Whether Bhoodan created a revolution or not is a different matter. But the fact remains that the total area of the land received as gifts as part of the Bhoodan Movement for distribution among the landless was probably a little more than the land acquired by all the States in the country under the various land ceiling laws. Ernest Bader of Scott Bader Company Ltd. successfully campaigned for the trusteeship idea in the U.K. The industrial common ownership Act, 1976 was enacted in the U.K. for the same purpose. A number of companies with varying degrees of success tried the trusteeship concept in West Germany where about 40,000 are working today on the basis of trusteeship. Among the organizations working for trusteeship in India has been the Trusteeship Foundation established in Bombay by Govindrao Deshpande under the inspiration of Jayaprakash Narayan. Apart from holding conferences, seminars and group discussions across the length and breadth of the country, Govindrao Dehspande and his team have also tried on an experimental basis to work certain units on the basis of the trusteeship concept. The People’s Trusteeship Packaging Private Limited, Mehsana is one such example. As in all experiments, problems do come up in operating the units but then units learn to walk without falling. The need now is for large business houses to accept and run their business on a trusteeship basis. Relevance of the Concept Is the concept of trusteeship relevant today? Is it not utopian? I personally believe that the concept is not at all utopian. There is much less risk in experimenting with the concept of trusteeship than with the package offered by the World Bank or the International Monetary Fund. Devaluation of the Indian rupee is not likely to increase exports substantially. Surprisingly as it may seem, it was the firebrand socialist leader, Ram Manohar Lohia, who tried to introduce a draft bill to pave the way for trusteeship in the fourth Lok Sabha. However, with the dissolution of Lok Sabha it lapsed. What is the organizational framework to be adopted by a trusteeship organization? While concerted efforts need to be made to get an enabling legislation passed by the Parliament, I believe the present legal framework is sufficient. In the case of proprietary concern or a partnership can be adopted by a simple decision of the proprietor or the partners. The workers and the representatives of community could be associated with such an organization and fully involved in decision-making. Similarly, a limited company can also adopt a trusteeship form of management. A separate trust with representatives of entrepreneurs, owners, employees and the community as trustees could hold the controlling interest in a company. The employees could have the right to vote and their membership of the trust is limited to the period of their employment with the company. Outstanding persons with commitment to the principles of trusteeship and a degree of business acumen and expertise could be invited to join as trustees either for life or for a specified period. Certain structural and other changes may have to be made in the Memorandum and Articles of Association of public limited companies. On the taxability of such trusts certain changes have to be made in the Income Tax and Wealth Tax Acts. The operation of the Industrial Common Ownership Act, 1976 in the U.K. may have some lessons for us. The draft bill placed in the Lok Sabha by Lohia could also be a guide in this regard. The operation of the Peoples Trusteeship Packaging Private Limited at Mehsana in Gujarat (with B.J. Patel as its Chairman) may be studied. A co-operative set-up is not necessarily a trusteeship framework. In a co-operative enterprise one works for the benefit of only its members who may be different in different cases. As experience has shown co-operatives of say, cane growers, do not concern themselves with the interests of other workers, consumers or even the community. Similarly a consumer’s co-operative concerns itself only with the benefits accruing to its consumers.

Trusteeship envisages equal partnership of entrepreneurs, workers, consumers and the community at large. Payment of better wages and salaries and provision of amenities for the welfare of labor do not represent trusteeship. Making periodical donations for the benefit of various projects with or without associating the names of donors is not trusteeship. Holding equity shares of companies by a trust is a far cry from trusteeship. Trusteeship could become wider concept - a movement, in fact a way of life. Let those in power consider themselves trustees and use the vast resources, power and accompanying influence for the good of people rather than for personal good. Similarly, let the intellectuals use their knowledge and intelligence for the benefit of the community. Organized labour must also remember that they are among the 10% of the privileged citizens. Let us not wait for someone else to set the ball rolling. Let us all make a start here and now. Mahatma can only take us to the river, he cannot make us drink.

References

1. Half of world's wealth now in hands of 1% of population – report, The Guardian
2. Budget 1991-92, Speech of Man Mohan Singh, Minister of Finance, 24 July, 1991.
3. India Budget 1991-92
4. Harijan 19-8-1940.
5. M.K. Gandhi, Trusteeship, (Ahmedabad: Navajivan, 1998), pp.39-40.

Courtesy: 'Trusteeship: A Path Less Travelled'.