Few people today would credit Mahatma Gandhi, whose 150th birth anniversary falls today, with great rigour in economic thinking. A man who exuded morality from every pore, many of his economic thoughts stemmed from what he considered ethically right or wrong. His economic philosophy, to the extent it can even be considered one, was never very consistent, and can be captured best in this quote of his: “That economics is untrue which ignores or disregards moral values.”
This is not surprising, for even Adam Smith explored the idea in his Theory of Moral Sentiments, where he pointed out that social morality flows from a balancing of self-interest and natural human sympathy for fellow human beings who live in the same society. But where Smith used this core idea to conclude that “it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest”, Gandhi founded his economic arguments on pure morality alone. His economic ideas came straight from religion and god, not from the societal values that came more naturally to fellow Indians. This is probably why we have largely discarded Gandhian economics, while Smith still remains largely relevant even when the pendulum of public opinion has swung against unbridled capitalism.
The derivation of economic ideas from pure morality is evident in many of Gandhi’s observations. Some of them (like his distaste for the use of machines) would be considered Luddite, or protectionist (his emphasis on Swadeshi), or plain wrong. This includes his focus on the village as the centre of development, when all civilisation has been about the unstoppable migration to urban areas.
A few sentences from Gandhi’s massive tome of quotations will tell us the same thing. On Swadeshi, he said: “My swadeshi chiefly centres around hand-spun khaddar and extends to everything that can and is produced in India.” This idea made sense when we were trying to build nationalist sentiment against colonial rule, but independent India ruined its chances of ending poverty quickly by promoting indigenisation and import substitution rather than an open economy. His attitudes to machines and industrialisation can be summed up in these pithy comments: “Machines must not be allowed to cripple the limbs of man…There is no better way of industrialising the villages of India than the spinning wheel.” Or this: “I would not weep over the disappearance of machinery or consider it a calamity.”
His idealisation of rural life and micro enterprises went to an extreme, condemning millions to decades of poverty. “India’s way”, he said, was “not Europe’s; India is not Calcutta and Bombay. India lives in seven hundred thousand villages.” While this was a statement of fact at that time, description became prescription for our policy-makers and Bollywood script-writers. Even today, our small businesses are perennial midgets, never growing to adulthood.
However, it is possible to get too negative about Gandhi’s ante-diluvian ideas on economy and business. In many ways, his home-spun economics, grounded in his own moral theories that placed the human being at the centre of development, can also be considered far ahead of his time. His abhorrence of assembly line work as dehumanising was apt; his focus on the charkha as an emancipating tool should be seen as an attempt to ensure that the worker and the craftsman were not alienated from their work, something which Marx based his theories on. Unlike Marx, though, Gandhi did not see labour and capitalists as enemies. “I do not regard capital to be enemy of labour.”
This proved to be prescient, for one of Marx’s egregious errors was to assume that labour and capital would always be enemies. In the post-industrial knowledge age, the worker carries his tools (skills and knowledge) with him, and today capital chases this empowered workforce. Another differentiator between Gandhi and Marx was that the former never dehumanised capitalists. As someone who believed in the essential goodness of human beings, Gandhi noted that capital may be “lifeless, but not the capitalists who are amenable to conversion.” He saw capitalism as a redeemable ideology provided the capitalist had a change of heart. He exhorted the rich to hold their wealth in trust for the poor. “Each and every one of you should consider himself to be a trustee for the welfare of the rest of his fellow labourers and not be self-seeking.”
Even though Gandhi never expanded on his idea of trusteeship, modern-day creators of massive wealth are effectively giving shape to that dream by pledging most of their wealth to charity. The Tatas put social trusts at the core of their business philosophy, and billionaires like Warren Buffett and Bill Gates, not to speak of Azim Premji, Kiran Mazumdar Shaw and Shiv Nadar, among others, are doing the same. Wealth beyond a certain point adds no value to the quality of life of the rich. Gandhi saw this earlier than most people, and will thus remain a beacon of light to future capitalists.
Gandhian economics is difficult to explain as a coherent system of thought, but its ethical principles can never be ignored.
Jagannathan is editorial director, ‘Swarajya’ magazine
