_Essays in Gandhian Economics_ editors Romesh Diwan and Mark Lutz
New Delhi: Gandhi Peace Foundation, 1985
(xii) Whenever the economic man was found to be inconsistent in his behaviour or to give preference to non-economic considerations or seemed to violate every economic law, this was all explained by the non-operation of the phrase "other things remaining the same". The difference between Gandhi and all other theorists is that he begins with the ceteris paribus. [JD Sethi]
(xx) If the economic man and the economic society are so defined as to make them alwasy feel poor, no matter how rich they are, the core of this contrdiction lies int he theory of consumption and demand and not in the theory of production. Even Alfred Marshall, the master creator of the theory was obliged to draw attention to the artificially generated wants. He wrote: "Although it is man's wants int he easliest stages of his development that fgive rise ot his activities, yet afterwards each new step is to be regarded as the development of activities giving rise to new wants, rather than of new wants givving rise to new activities." In other words, "the purpose of economic organisation is not merely to satisfy wants but to create wants". [JD Sethi]
(32) Underlying every page of his book [Unto This Last] is the basic premise that socially meaningful individual action cannot be deduced from utilitarian principles and "balances of expediency" but by _balances of justice_, "meaning in the term justice, to include affection - such affection as one man _owes_ to another".
We may conclude that it was Ruskin's prime contribution to make a strong case for including "social affections" (which Gandhi rephrased as "heart strength") into a more holistic principle of economics.
(38-39) Axioms of Gandhi's Philosophy
Axiom A: _Truth (Satya) exists in and beyond man in an absolute, eternal and living essence._ Nothing else exists besides it. Truth, not man, is the measure of all things.
Axiom B: _The purpose of all life and evolution is to realize Truth._ For mankind this translates into the biological need for self-realization, to know one's self.
Axiom C: _While truth is the end, ahimsa, i.e., self-givign love, is the means._ Truth and Love are ultimately two sides of the same coin. One implies the other. Pure, self-realizing love knows no distinction between ends and means. From this follows the all-important principle that we cannot realize truth without giving up the means/ends dichotomy. To Gandhi, "realizaton of the goal is in exact proportion to that of the means". This he considered "a proposition that admits no exception". It follows that since "means to be means must always be within our reach... ahimsa is our supreme duty. If we take care of the means, we are bound to reach the end sooner or later".
Axiom D: _Human Truth is always relative._ Although we have the innate need to perfect ourselves, no man _is_ perfect. Truth as we can apprehend it is always personal, subjective, and, to that extent, relative to our individual context of culture and history. The individualized and contextual nature of human truth precludes any rigid and precise principles of social policy and social institutions. What is "true" in one context may not be so in another. All we can do is to serve the ultimate Truth by being truthful, open-minded, and tolerant. Whatever is perceived to promote life and serve the vital needs of all men, particularly the poorest of the poor, _is_ true.
(39-41) Foundational Premises of Gandhi's Socio-Economic Thought
Premise A: _Economics, ethics, politics, and religion constitute an indivisible whole._ As such, Gandhi had no kind words about conventional economics:
True economics never militates against the highest ethical standard, just as all true ethics to be worth its name must at the same time be also good economics. An economics that inculcates Mammon worship, and enables the strong to amass wealth at the expense of the weak, is a false and dismal science. It spells death.
Premise B: _Economics is the science of human welfare. Its goal ought to be sarvodaya, the welfare of all._ "True economics stands for social justice, it promotes the good of all equally including the weakest, and is indispensable for decent life".
Implicit in the doctrine of sarvodaya is the basic presumption of equal dignity of and respect for hte life and welfare of every individual. Translated into the sphere of economic policy, it entails top priority for meeting the most basic material needs (water, food, shelter) of everybody before we allocate resources for goods of a lesser importance. Similarly, the individual preference for a dollar's worth of pet food cannot be put on the same scale as a dollar's worth of a peasant's brown rice.
In summary, "the welfare of all" entails satisfaction of the basic material, social, and spiritual needs of the poorest of the poor. it recognizes that everybody has a right to live. Sarvodaya is in contrast to the doctrine of the greatest good for the greatest number which Gandhi considered "a heartless doctrine" which has done much harm to humanity.
Premise C: _The supreme consideration has to be Man._ Economic theory that ignores the "human element" of owed social affection is meaningless.
Premise D: _human welfare economics focusing on what Gandhi called the "human element" implies the crucial importance of a decentralized social economy._ The ideal is a _community economy_ allowing for a living interaction, mutual access, and voluntary cooperation of all its members. It is only in such a setting "bound together in bonds of mutual cooperation and interdependence" that man can respond to his fellowmen and in the process realize social cohesion tantamount to the "universal" glue of Truth.
Premise E: _Economics has to respect the law of Swadeshi._ As we saw earlier, Swadeshi was to Gandhi one of the most basic organizational principles consistent with our need to express ahimsa. He applied it directly to economics: "I should use only things that are produced by my immediate neighbours and serve those industries by making them efficient and complete where they might be found wanting"....
Premise F: _At the very core of Gandhian economics is the concept of rationality._ Rather than mere cognitive calculations of means (i.e., the manipulating of Ruskin's balance of expediency), Gandhi broadens the concept to involve harmonious action of body, mind, _and soul_. Rational action is guided by the inner faculty of _conscience_ which he also calls inner voice. Gandhi's conscience is rational to the extent that it is critical. In other words, even though an action is pursued regardless of its consequences to one's self, we do have to critically examine the consequences ex post and readjust our inner values and our conscience in the process. This way, "even the mistakes committed while seeking the pure path take us a step forward in the quest".
(41-44) Principles of Gandhi's Economic Thought
Principle (i): Nonviolent Ownership - Trusteeship
Trusteeship recognizes the right to private property in the means of production as long as it is responsible to the needs of the community. It is sarvodaya extended to the firm. Absentee ownership of capital and land, investment and production violating swadeshi, excessiv salaries, and expense accounts are not consistent with trusteeship. Violaters would be pressured by public opinion and in the last resort expropriated with appropriate legislation. Trusteeship is also consistent with workers' self-management provided they act as trustees.
Principle (ii): Nonviolent Production - Appropriate Technology
The term "appropriate" is used to designate the production function that maximizes human need satisfaction. First and foremost, no technology should be used which economizes on manual labour, while there are unemployed workers in the community. This is clearly postulated by the premises of sarvodaya and swadeshi as well as conscience and trusteeship.
Appropriate technology also recognizes the capacity of machinery for violence, i.e., to exploit. Men are used to feed machines instead of viceversa. Capital-intensive technology also promotes concentration of wealth and enables "a few to ride on the backs of millions".
Finally, the most appropriate technology does no harm to body, mind, or soul. Machinery, according to Gandhi, should not be turned into a craze. Mass production, yes, but in people's own homes.
Principle (iii): Nonviolent Consumption - Non-Possession
Non-possession follows strictly from ahimsa. "The less you possess, the less you want, the better you are. And better for what? Not for enjoyment of life, but for enjoyment of personal service to fellow beings; service which you dedicate yourself, body, soul and mind".
Everybody is entitled to the basic necessities but the golden rule "to refuse to have what millions cannot" will prohibit the "infinite multiplicity of human wants" observed in modern western civilization. The insatiable material ambition is evidence of an economic system characterized by violence (himsa) fueled by lack of trust and basic anxiety.
Principle (iv): Nonviolent Work - Bread Labour
Throughout Gandhi's writing runs the thread of the importance of work in men's personal growth. The doctrine of bread labour was inspired by Ruskin, Tolstoy, and the _Gita_.
"I cannot imagine anything nobler or more rational than that, for, say one hour in the day, we should do all the labour that the poor must do and thus identify ourselves with them and, through them, with all mankind."
As a corollary, mental and manual labour should not be divided up by classes but in everybody's lives.
Gandhi was convinced that just one hour of daily manual work would induce poets, doctors, and lawyers to moderate the fees they charge for their talents and that the social proliferation of wants would be minimized.
At the same time, he stressed that bread labour could never be forced on anybody, otherwise it would breed poverty, disease, and discontent.
Principle (v): Nonviolent Allocation - Cooperation
Gandhi was no believer in competition, He saw in it a lash of a material and sensuous stimulus that degrades the population. Competition is predicated on fear and insecurity, both of which breed greed and violence (himsa).
Cooperation, on the other hand, appeals to the )human_ element, our need to serve others.
Yet, he felt it important to stress that true (nonviolent) cooperation could only take place after provision of the most essential material needs. This is true both of the individual (bread labour) as well as of the village (swadeshi). Only such a _voluntary_ cooperation "will produce real freedom and a new order, vastly superior to the new order in Soviet Russia".
The problem of scarcity would be largely dealt with by the institutional features of bread labour and localized eocnomy both acting to internally reduce wants as well as by the principles of non-possession and equality.
Principle (vi): Nonviolent Distribution - Equality
Equality meant to Gandhi primarily two things: First, everybody has a basic right to live, I.e., to meet the basic vital needs and live a dignified life integrated in community with one's fellows. As means to such a goal he strongly denounced charity, "the flinging of free meals" at people unable to find work, but advocated guaranteed employment for everybody who wants to work. Secondly, equality as absence of exploitation. He endorsed non-exploitative capital-labour relations as well as non-exploitation of manual by intellectual labour and _above all_ non-exploitation of the countryside by the city.
Principle (vii): Nonviolence in Reforming Economic Systems
Gandhi was no friend of capitalism. On the contrary, he dedicated much of his life to its destruction. But the destruction of an ideology could not be done with violence. The capitalist had to be redeemed and converted to trusteeship. The doctrine to be followed was that of peaceful communitarian socialism rather than the Marxian path of class war and violent revolution. At the same time, it would be false to classify Gandhi as a utopian socialist. He explicitly rejected such attempts at social engineering since they tended to disregard the dynamic quality of human nature.
(44) More importantly, the Gandhian economic construction resting on this alternative set of axioms may very well be the _only possible_ economics that accepts love, or social affection, as a living _relation_, rather than a bounded object which can be squeezed into a utilitarian equation. Ruskin deserves credit for having raised the issue early, a radical and paradigmatic challenge that we can no longer afford to ignore. When Sir D. Robertson surprised his audience at Columbia University when answering his topical question, "what do economists economize?" with "_love_", he may have understated the problem.
(55) A distinction has to be made among three different states. One is the desired or the ideal state. This state is as yet unachieved. Critics doubt if it is ever achievable. Gandhian thought persists in the possibility of achieving this state, otherwise striving towards it is meaningless. For the individual, the ideal state is the achievement of moksha. For the society, it is swaraj for everyone. This is a state in which everyone is ruled by one's ownself and by no one else. It involves absolute freedom of all kinds. The ruling principle in this society is satya - the Truth. The second state is the transition to the ideal state. Gandhi is very clear about the transition path. Conditions laid for this path are rather stringent. That is why his emphasis on the purity of means become persistent. The ruling principles of the transition are ahimsa and satyagraha. The third is the state of the present order. This determines what is possible and what is not possible. This is what provides historicity to the Gandhian method.
(56) In our view, there are six basic concepts that are essential in Gandhian economics. These are all related to each other. There is no hierarchy among them. In other words, these all have equal importance. The order in which these are present is irrelevant. We feel that these six concepts come in pairs of two. They are: (i) swadeshi, (ii) bread labour, (iii) aparigraha or non-possession, (iv) trusteeship, (v) non-exploitaton, and (vi) equality.
Swadeshi may be translated as self-reliance. It follows from the concept of swaraj. There are various interpretations of swadeshi. Some interpret it narrowly as "autarky" or "self-sufficiency"....
Bread labour provides the ethical dimension to swadeshi at the level of personal action. One cannot be self-reliant if one cannot produce the necessities of living by one's own labour....
Non-possession follows from truth and nonviolence. It involves that a person should not possess _anything_ that one does not need.
(57) We feel that non-possession is not compatible with capitalism....
By trusteeship is meant that all those people who possess things as well as "capabilities, abilities, or other natural gifts" must hold these possessions as trustees for all others. In other words, they should not derive the benefits from these possessions for themselves. On the contrary, the possession brings immediately an obligation. Possession is a burden.
In view of the inequalities and the prevalence of alienation, the very concept of market may be exploitative...
Looking at the other concepts we feel that equality in the Gandhian system involves "all possible achievable quality". It is something more than equality of opportunity. It does accept difference in natural gifts. But this is a part of diversity and not a question of equality.
(59) The fact that consumption is limited does not imply the conclusion that the utilities are also limited. On the contrary, even though the level of consumption is low, the acquisition of utilities may actually be far larger. This follows from the fact that in neo-classical economics, consumption is the only source of utility. In Gandhian economics, there are two other sources.
Work in Gandhian society is, by and large, a source of utility. In neo-classical economics, it is full of disutility. This difference arises from the nature of work. Work in Gandhian economics is "self-defined" work, while in industrialized societies it is "stranger-defined" work.
Secondly the quantity and quality of leisure in Gandhian economics is also far higher. In neo-classical economics, leisure is treated as a source of utilities via consumption of non-basic goods. As Lindler has argued, the leisure in the American society is so little that it has led to the dissipation of the culture and the "very pleasure of life". In Gandhian economics, not only is there more leisure, but the leisure is also not wasted in the process of consumption and its maintenance. Instead, this leisure is available for genuine satisfaction.
(61) In the Gandhian system the production modes cannot be exploitative by their very nature. The technological change must satisfy the following three major conditions:
1. Technology must increase the productivity of the worker.
2. Technology must not replace the worker.
3. The worker must have complete control of the technology.
[Romesh Diwan, Sushila Gidwani]
(69) Apart form economic feasibility, Gandhi's rationale rested on a moral and metaphysical notion of human labour. To him, labour is not just a commodity for sale in the market in exchange for wages to compensate for the disutility of labour. He was reluctant to measure the opportunity cost of work in terms of sacrifice of leisure. In his system, labour had a dignity and a moral substance which was not for sale. This notion he derived largely from the Bhagavadgita. He was especially influenced by the following passage:
Work is more excellent than leisure;
The body's life proceeds not lacking work
...If one eats
The fruits of toil, that thief steals from his world,
He that abstains
To help the rolling wheels of this great world,
Glutting his idle sense,
Lives a lost life, shameful and vain.
(90) If inequalities are minimized, what seems voluntary poverty today will become normal consumption.
(90-91) The concept of "non-possession" implies a very different utility function and a different criterion for seeking an equilibrium value. The basic assumptions are as follows: (i) Welfare depends not only on consumption and the economist's utility concept but also on service to others and the welfare of others; (ii) utility space is limited; (iii) the objective is not maximization of utility but obtaining a certain level of welfare - the underlying philosophy is contentment or "enough instead of greed"; (iv) the prices are determined by an income distribution where inequalities are at a minimum or zero; and (v) there is no need for the existence of a market. However, such consumer behaviour is not incompatible with a limited market.
(93-94) [Swadeshi Propositions] The consumer will cooperate with the producer neighbour _in the process of improving the efficiency of production_. This translates into the idea that the utility function contains not only the commodities produced in the neighbourhood but also a variable reflecting cooperation with the producer. In this sense consumer and producer do not generate antagonistic relationships, such as in the dictum that the consumer is sovereign and the producer the willing slave. On the contrary, the consumer and producer are jointly involved in a cooperative effort.
(96) Gandhi: Economic equality must never be supposed to mean possession of an equal amount of worldly goods by everyone. It does mean, however that everyone will have a proper house to live in, sufficient and balanced food to eat, and sufficient khadi with which to cover himself. It also means that the cruel inequality that obtains today will be removed by purely non-violent means...
(100) Trusteeship is based on the idea that "what belongs to me is the right to an honourable livelihood, no better than enjoyed by millions of others. The rest of my wealth belongs to the community and must be used for the welfare of the community." [Romesh Diwan]