Outline of Gandhi’s Economic Thought

Mohandas Karamchand Gandhi (1869-1948) developed a vibrant critique of the mode of development and also of the very idea of ‘civilization’ as it was then exemplified by the British Empire and the western nations. This model of ideology, as he argued, rested on violence and exploitation (slavery and then colonization), and abandoned both morality and spirituality, while creating new needs which were impossible to satisfy. In all of these senses, western civilization essentially created misery and marginalization. Yet as he forsaw with great prescience: “this civilization is such that one must just be patient and it will self-destruct”. The industrialization and globalization of the economy was, he argued, a disaster for India.

            For Gandhi, the economy was meaningful to the extent that it opened out the possibility of well-being for all people. That implied a system of production, of distribution and consumption defined by the essential needs of most deprived people in the society (antyodaya—‘the least’) with the aim of supporting the highest values of human life, recognizing human dignity, non-violence and creative labour.

            It was in this context that Gandhi’s notion of the ‘well-being of all’ (sarvodaya) emerged as the term to describe social and economic justice. His understanding of the path to sarvodaya was through a village economy which maximized the powers of the traditional Indian handcrafts and only employed modern machines that allowed for a ‘production by the masses’ rather than ‘mass production’. In this light, Gandhi choose the spinning wheel (charka) as a symbol not only of the battle in India for the liberation from British imperialism but also of economic independence.

            Gandhi’s economic thought depended very much on the English artist and writer, John Ruskin (1819-1900). In his outrage at the injustice and inhumanity of industrialization, Ruskin denounced the savagery of capitalism which destroyed the social fabric and created poverty while ravaging society with an economy that had no morality. He proposed to ‘discover a different type of technology which was founded not only on rationality but also on the spiritual life of the human being’: that which is true for science and technology is also true for politics and the economy.

            Gandhi was also inspired by the thought of the American activist and writer, Henry David Thoreau and above all, the Russian writer, Leo Tolstoy. From them, he developed his understanding not only of non-violence but also of his own chosen way of life: a simplicity of needs, a focus on the means and techniques used to achieve the ends, the fundamental requirement for a sharing of wealth among all people, a commitment to the greatest possible autonomy of action, and a focus on grassroots self-organization of decentralized and democratic communities.

            Gandhi was not an economist but his economic vision is full of a rich understanding of economic dynamics and processes as well as of human and social reality. It was also stimulated by the alternatives which it proposed: for the ‘father’ of India’s independence, it was the dignity of the human being rather than their material prosperity which ought to be the basis of economic structures. Both economics and politics should not be reduced to only material things but should become the means to the realization of spiritual and cultural goals.

            In this light, Gandhi distinguishes the following:

1) self-government/self-reliance (swaraj),

            Political swaraj (as in the book, Hind Swaraj) envisages India’s independence of English colonization. Economic swaraj is based on the capacity of each country to use its own resources for its proper development. Gandhi thought that it was not the development of the cities which would make for a non-violent autonomy of the Indian people: only the consolidation of the political and economic autonomy of villages could, in his view, support the building of a non-violent society.

            “True independence”, he said, “will not come from some people seizing power but rather from the power which we all have to oppose the abuse of authority. In other words, we ought to come to independence by inculcating the masses with the conviction that they have the possibility of controling the exercise of authority and of maintaining it with respect.”

            Gandhi’s conception of economic self-reliance is well summarized in a passage from a text drawn from Return to the Sources, written by Lanza del Vasto in May, 1937.* In it, Gandhi, speaking to young people, says:

“I send you to the villages where we will be companions in the struggle against the occupier who awaits you. May each of you care for yourself, and think of yourself and your needs without becoming dependent on anyone: that would be well-ordered charity. At that point where the individual cannot take care of their own needs, may the family take care of them and at the point where it cannot, may the village take care of them and where the village cannot, may the whole region do it.

Always try to produce things in the place where you are and avoid the unnecessary circulation of goods—for that is where waste occurs and then there arise the work of the brokers, the speculators, the national politicians or others who have taken away the products on which the life of the people depends.

You will be supporting or reestablishing the old village industries and you will be creating new ones.

Wherever you are, encourage the spinning of cotton/khadi which will reduce unemployment. The spinning wheels cost very little and cotton is abundant: we ought no longer to buy our cloth from the English, who take cotton from our country make into cloth and import it again to our country.

Prepare for political independence through economic independence: and I remind you of what is the unique goal of the economy—not economic development as such, but rather the development of the human person, of their interior peace, the elevation of their spirit and their liberation.

My children, may the human being always remain greater than what they produce and more precious than what they have! Go, root our misery and cultivate sobriety.”

Swaraj rests upon the satisfaction of needs and not on the abundance created by mass production: “The earth supplies enough to satisfy the needs of each person but not greed of each person. It is more greed and the hardness of heart (rather than a scarcity of resources) that have created the problem as much for this generation as for the following ones”. Greed comes from the desire for excess, swaraj aims to limit human desires and to satisfy first basic needs.

            An important axis of the economic thought of Gandhi is the simplification of needs or more accurately, the self-limitation of desires, that is the reason that many people think that he is the originator of the idea of a ‘zero-growth’ economy: “To live simply so that others can simply live”; “It is necessary to bring an end to this mad rush that drives one to always want more money”; “In what concerns my rule of life, I must say that I have never dared to possess that which I did not need”.

            Among the ingredients of the idea of swaraj, it is necessary to note the predominance of the traditional sector. The highest importance is given to agriculture and to food crops. A balance should be maintained between this primary sector (agriculture, forestry, fishing), the secondary one (industry) and the third sector (service) and the balance should be based on the human resources available in each country.

            Secondly, the villages ought to be more important than the cities. Gandhi observes: “You cannot build non-violence in a civilization of factories, but it can be built in self-limiting villages. You ought therefore to have a rural mentality and to have that you should have faith in the method of weaving”.

Seven criteria characterize economic independence acoording to Gandhi:

  • Elimination of poverty and the minimizing of wealth.
  • Self-sufficiency of each unit in its basic needs.
  • Identification of basic human needs and the means of meeting them.
  • Agriculture that is respectful of the environment as a basis for the creation of a durable economy.
  • Production that is based as far as possible on small groups.
  • Control and elimination of distorted views by basic eduction and technical formation.
  • Limitations to the concentration of economic power.

2) Self-sufficiency (swadeshi)

            Swadeshi is a mode of production that is decentralized, home-based, modeled on handcraft, respectful of life (especially animal life) and of the environment, rather than the modes of production which are centralized, industrial and mechanical. Mass production requires people to leave their villages, their homes, their lands, their customs in order to work in a factory.

            Following the principle of swadeshi, everything that is made in a village should be used above all by the members of the village. Exchange between villages, between villages and cities and even more between nations should be limited to the minimum. Swadeshi thereby avoids the use of unnecessary transportation which is unhealthy, unproductive and destructive of the environment.

            In order to avoid separating the economy from the profound spiritual foundations of life, it is best when each individual participates as much as possible in their own community, when the production of goods is kept to a small scale, when the economy is local, when the preference is given to handcrafts and local manufacturing.

3) The guardianship of ethics and spirituality over economics (trusteeship):

            The Gandhian idea of trusteeship emerges from his faith in the law of non-possession. It is based on the belief that all things come from God and belong to God. All the resources of the universe therefore are ordained for humanity as a whole and not for particular individuals. When an individual obtains more than their respective share, they become a trustee of that portion, they have control of it for the sake of all of humanity.

            In essence, Gandhi is proposing this idea as a solution to the financial inequalities of inheritance and income, a sort of non-violent solution to resolve the social and economic conflicts in the world. It is the dignity of the human being, and not their material prosperity, which the centre of Gandhi’s economic thought. The Gandhian economy envisages a redistribution of material wealth as way of guaranteeing human dignity.

  • Private property is not absolute but is subordinated to the common good.
  • An individual cannot retain and used their wealth for egotistic satisfaction, ignoring the interests of society.
  • The differences in income ought to be reasonable, equitable and variable over time—with the tendency toward reducing the discrepancies.
  • Production should be determined by need and not by personal whim.

            In many texts, Gandhi illustrates the connection between ethics and economics:

“The true economy is never in opposition with the highest ethical principles, in the same way that true ethics, to deserve that name, has to become at the same time a good economics…The true economy defends social justice; it promotes the good of all through an equality that includes the weakest; and it is indispensable for a good life”; “The fact of extending the law of non-violence to the domain of the economy signifies nothing less that taking moral values into consideration when determing the rules of international commerce.”

            Gandhi was far from hostile to science whose methods he admired so much that he attempted to transpose them into the context of his life and action. He did not criticize science itself but rather the uses that were made of it by modern civilization and industry.

            At the same time, Gandhi was not opposed to all technology, indeed, he recognized that it could ease the suffering of people. He was full of admiration for the bicycle and the Singer sewing machine. Yet he wanted machines to remain subservient to the worker and he recommended small machines that could be used by a greater number rather than large machines aimed at mass production. He was very critical of heavy industry. It is necessary, he argued, “to favour production by the masses rather than mass production”, that is to say to give work to all through small enterprises in agriculture, industry or handcrafts and to limit the control of machines.

            For Gandhi, a machine-based civilization was not a civilization. A society in which workers were chained to their work, where animals were treated with cruelty in farm factories, and in which economic activity led to ecological destruction could not be considered a civilization. Its citizens are neurotic, the world is being transformed into a desert and its cities are jungles of concrete, pavement and steel. “The craze of wanting to make everything ‘by the dozen’ is the cause of the world crisis we are experiencing. Suppose for an instant that a machine could meet all human needs. Production would find itself concentrated at certain points in the world so that it would be necessary to organize a complex distribution network to supply those needs of humanity. On the contrary, if each region produced what it needed, the problem of distribution would be automatically solved.”

            The ‘Gandhian plan of economic development’ proposed in 1944 allowed for a limited role for modern industry. “I have never envisaged, nor even less recommended that we abandon even a single of the industrial activies which are healthy and profitable,” he argued. But the Congress Party proposed the ‘Bombay plan’ which was developed by a group of industrialists and supported by Jawaharlal Nehru.*

            While marxist socialism insisted on control and violence for overcoming an oppressive order, the program of Gandhi anticipated first a change of heart on the part of the wealthy, but it didn’t exclude control: “If despite everything, and after the most dedicated efforts we cannot persuade the wealthy to truly protect the poor, and if that latter are truly oppressed, what can one do? It was in trying to answer this question that the methods of non-cooperation and civil disobedience appeared to me to be the one capable of satisfying both justice and effectiveness. The wealthy cannot make their fortune in a given society without the cooperation of the poor. If this truth took root among the poor and if they were convinced of it, they would take confidence and learn how to free themselves on their own, with non-violent methods, from the oppressive inequalities that have borne them to the edge of starvation”. Gandhi clearly sees therefore, the forces on the field of battle and he knew how to apply them through public opinion and the press.

            The call for the conversion of the rich and to a voluntary sharing was to be the conception of Vinoba Bhave, Gandhi’s disciple, in his ‘bhoodan campaign’ (land-gift) aimed at land redistribution to the poor.* The other disciples of Gandhi, however, took a different approach, for example, Jayaprakash Narayan or Martin Luther King Jr. who both understood that the Gandhian political campaigns, while they were addressed to the conscience of the oppressors, also exercised a pressure and constraint which obliged them to act politically. The approach of Rajagopal also moves in this direction based on the recognition that the right to land is a right of the human being and justifies non-violent actions of pressure and constraint with the goal of changing the existing legal and social situations.

            It remains a task for us today to realize intelligently these intuitions of Gandhian thought… The best disciples of a master are those who don’t simply repeat like parrots but rather who adapt to new contexts and eventually dare even to contradict the master on this or that point. Let me give one example in the Gandhian tradition to conclude.

            Joseph Chelladurai Cornelius Kumarappa (1892-1960),  a friend of Gandhi, was his foremost disciple in the area of economics. Kumarappa was a commerce and economics expert trained at Columbia University. He dedicated himself to the study of the practical and theoretical bases of different forms of economy. In 1940 he became the secretary of the AIVIA (All India Village Industries Association). He built his work from the premise that every being, in fulfilling its proper way of acting is at the same time fulfilling the role which is assigned to it in the largest cycle of of life. He explained these ideas in the work entitled, The Economy of Permanence: A Quest for a Social Order based on Non-violence.

            Kumarappa recognized clearly that the world was not made for a complete non-violent cooperation among its different elements. In fact he identifies five types of economies with very different natures: parasitic, predatory, entrepreneurial, gregarious and service-oriented. For him, the service-oriented economy is the highest kind of economy. The contemporary economy, dominated by the quest for infinite growth, generating environmental degradation and social ills, is a transitory economy with a future.

            The work of Kumarappa illustrates how the conception of the human being which is presupposed in classical economic science is really derived from capitalist society and is far from being universal. Kumarappa tried to elaborate on the mechanisms of production and distribution within a sarvodaya economy, but his work remained incomplete, in part because he put so much of his energy toward his work in the area of village industries.

            The Kumarappa Institute of Gram Swaraj or KGS, created in 1967, elaborated and developed his methods toward a development that was based on balance and autonomy. It focussed particularly on women, untouchables, tribal populations and the marginalized through its projects of micro-development to meet the basic needs of peoples (agriculture and cultivation, handcrafts, energy, irrigation, small industry, hygene) and the creation of village councils.

            In this light, finally, we can clarify the key concepts of the colloquium in Bhopal around the three concepts so central to Gandhi.

  • Swaraj is political and economic independence but also the liberaton of the human being from all systems and ideologies which would undermine human dignity.
  • Swadeshi is economic self-reliance, but the reappropriation of one’s own life and an apprenticeship in taking control of one’s own interior power.
  • Trusteeship, predominance given to ethics and the common good. A non-violent economy presupposes the autonomy of everyone, the right and the inspiration of everyone to begin an undertaking according to their own action while at the same time maintaining as the ultimate objective and rule of action, the interests of the community.

            In the past thirty years, the new notion of ‘Thinking globally and acting locally’ has become prominent. To act locally is to express the autonomy of each person, group, village region. To think globally is to take into account together three aspects of our common good: the economic aspect (producing goods to satisfy human needs), the social aspect (protecting the interdependence of society and the dignity of all) and the ecological aspect (preserving the life and the biodiversity of our planet).Etine

* Editor’s Note. Lanza Del Vasto, an Italian born poet and activist, met with Gandhi in India in 1937 and thereafter returned to France to found a Gandhian style community called, The Ark. He wrote and carried non-violent actions in Europe until his death in 1981. The book, Le Pélerinage aux Sources, mentioned was a “huge success” and made him the most recognizable ‘Gandhian’ in Europe.

* Editor’s Note. Wikipedia: “The Bombay Plan is the name commonly given to a set of proposals for the development of the post-independence economy of India The plan, published in 1944/1945 by seven leading Indian industrialists, proposed state intervention in the economic development of the nation after independence from the United Kingdom (which occurred in 1947).

Although Jawaharlal Nehru the first Prime Minister of India, did not officially accept the plan, “the Nehruvian era witnessed [what was effectively] the implementation of the Bombay Plan; a substantially interventionist state and an economy with a sizeable public sector.”Its perceived influence has given it iconic status, and “it is no exaggeration to say that the Bombay Plan has come to occupy something of a mythic position in Indian historiography. There is scarcely a study of postwar Indian economic history that does not point to it as an indicator of the developmental and nationalistic aspiration of the domestic capitalist class.”

The basic objectives were a doubling of the (then current) output of the agricultural sector and a five-fold growth in the industrial sector, both within the framework of a 100 billion Rupee(£72b, $18b) investment (of which 44.8% was slated for industry) over 15 years.

* Editor’s Note: Wikipedia: “The Bhoodan mission was to allow wealthy landowners to voluntarily give a percentage of their land to lower castes. Bhave walked across India on foot, and as it has been well recorded, was quite persuasive. He was followed by crowds nearly everywhere he went. Philosophically, Bhave was directly influenced by the Sarvodaya movement of Gandhi, of which he considered Bhoodan a natural extension. His goal, as stated in his memoir, was to provide holistic uplift.

The movement was started in 1951 when telengana peasant movement on the land issue reached the peak. It was a violent struggle launched by poor peasents against the local landlords.Rural rich must participate in voluntary distribution of land.”