(109) In the last analysis, the fundamental problem of global destruction lies in the production of destructive nuclear weapons. A major part of neo-classical economics deals with issues of production: what, why, and how are "goods" produced? ONe wonders if nuclear weapons are "goods". However, neither economic texts, not economies of repute, have made any effort to explain the production of nuclear weapons. On the contrary, economists have shied away from questions about nuclear weapons. Simply because the economists have not raised these questions does not mean that these questions are not important. These questions need to be raised. The question is: why are destructive weapons and things like that produced? What motivates people to produce these things? Who gains and who loses in the production of such destructive things?
(113) It is proposed that the total production in a society be divided into three categories: (i) Production that creates "values-in-use"; these are the "goods". These are the material goods and services that help the advancement of human beings This production is best produced by the voluntary and cooperative systems. (ii) Production that generate "values-in-exchange". This is a set that contains both "goods' and "bads". The nature of htis production is defined by the market and exchange relations. (iii) Production that promotes "values-in-threat". This is a set that contains nothing else but "bads". It has the effect of harming people. Weapons are clear examples. There are a number of other goods that fall within this category. This set is encouraged by large and centralized systems of authority and production.
(114) Work involves two principles: (i) exertion of strength and (ii) accomplishment of something. To answer the question, what is work, one has to answer the two related questions: (a) exertion of whose strength?, and (b) accomplishment of whose definition? For the general case of work, there are tow parties involved: one, the person who exerts the strength, call this person A; and two, the person who defines the task, call this person B. In the special case, A and B can be the same person. The nature of work will depend upon the nature of the relationship between A and B.
(118- 119) Gandhi: The human body is meant solely for service, never for indulgence. The secret of happy life is renunciation. Renunciation is life. Indulgence spells death... No sacrifice is worth the name unless it is joy. Sacrifice and a long face go ill together... This service is impossible without bread labour, otherwise described in Gita as Yajna. It is only when the man or woman had done bodily labour _for the sake of service_, that he or she gets any rights to life. The Gita says that anybody who eats without performing yajna, in Tolstoy's language bread labour, is a thief, 'eats sin'. _but body labour becomes yajna only when it is undertaken in a spirit of service not of indulgence...
(129) One can deduce three major _economic_ objective of the Gandhian economic system: (a) full employment; (b) economic equality; nd (c) emphasis on Swadeshi. These are strictly economic objectives. In Gandhian economic thought, economic objectives are the handmaidens of the moral and ethical objectives of the system. The goal of the Gandhian system is the welfare of total society - "Sarvodaya" - including the poorest of the society. The structure of a Gandhian economic system and the attainment of the above-mentioned economic objectives within the framework of this structure should ultimately contribute to the realization of the overall goal of the Gandhian system - the welfare of the total society.
(131-132) Self-reliance does not mean autarchy; it simply means absence of dependence. There are several elements in a policy of Swadeshi, of self-reliance: (A) The society must be capable of satisfying the basic minimum needs of its people without dependence on external sources. This also means that each society will have to define its minimum standards in terms of its economic capacity. They must be attainable within the productive limits of the society. (B) Self-reliance also means the maximum use of indigenous resources and technology. Society will make an effort to obtain needed commodities from within by utilizing unemployed resources and by the development of an appropriate skill profile of the labour force and by the growth of appropriate technology (C) Swadeshi or self-reliance does not mean absence of trade with other societies, although foreign imports have to be discouraged if, as Gandhi believed, they injure the millions of India. A self-reliant economy will buy only those goods that meet the following conditions: (i) they are essential for the growth of its people; (ii) they are not produced locally; and (iii) it is not possible to produce them locally in the near future by the development of appropriate human skills and technology.
(132) To quote Gandhi: "In this structure composed of innumerable villages, there will be ever-widening, never ascending circles. Life will not be a pyramid with the apex sustained by the bottom. But, it will be an oceanic circle whose center will be the individual, always ready to perish for the village, the latter ready to perish for the circle of villages, till at last the whole becomes one life composed of individuals, never aggressive in their arrogance, but ever humble sharing the majesty of the oceanic circle of which they are integral units."
(133) ... led Gandhi to advocate an economic organization that can be characterized as a decentralized, market-negotiated economic system...
First, Gandhi believed that economic decisions are to be taken by individuals...
Secondly, Gandhian economy postulates a system of private property. Production firms will be privately owned or will be cooperatives of workers and farmers....
Thirdly, a Gandhian economic system uses material incentives for the least-paid members of the society who also have least decision-making authority and rely heavily on moral incentives for the elite. Gandhi advocated the concept of "trusteeship".
(134) Fourthly, a Gandhian economic system postulates participatory democracy in all institutions and emphasizes that economic decisions should be group-negotiated rather than individually-managed decisions....
Fifthly, Gandhian economy visualizes village communities as primary macro units; with the primary responsibilities to attain the goals of full employment, economic equality, and self-reliance...
Sixthly, Gandhian economy emphasizes individual choices and decisions.
(135) Seventhly, a Gandhian economic system will be characterized by some income differentials that are functional in the sense that they are necessary for ensuring the growth of the individuals concerned....
Finally, Gandhian goals of full employment and providing minimum standards of consumption to all can be easily ensured by (a) fixing a minimum wage that will enable a worker to by the minimum amounts of basic necessities at socially determined product prices; and (b) giving him a right to seek a job in productive enterprise - farm or firm - in the community.
NB: Living wage?
(137) A Gandhian society will make these decisions by following Wicksell's "unanimity rule". If the elite or some other group requests a higher income to satisfy some needs, which they claim to be necessary for their moral and creative development, they will have to justify and convince the other members of the validity of their requests. If satisfaction of their unique needs has some adverse impact on other groups, e.g. the cutback in their consumption of basic needs, loss of their jobs, etc., this alternative cost will become visible and will be taken into explicit consideration in social calculus. Such an open dialogue will enable the society to search for an optimum solution. Open and full participation by all in the process of decision-making will ensure that the merging hierarchy of needs will be the one that is necessary for the fullest development of all individuals in the group.
(141) Gandhian society has several in-built mechanisms to control abuse of power by the elite. These mechanisms are:
(a) right to minimum living standard and right to a job;
(b) full participation by all in the decision-making process;
(c) complete access to all information;
(d) clear definition and careful enforcement of elite's prerogatives and responsibilities; and
(e) right to nonviolent non-cooperation and civil disobedience (satyagraha) granted to all individuals.
These mechanisms will help individuals to take themselves away from the rigidities of orthodoxy and from the fanatical furies of collective bodies...
In fact, the smallness of size and large number of firms plus the public availability of all information makes Gandhian economy more akin to the "ideal" competitive system than the ones actually prevailing in the Western world. A Gandhian economic system, therefore, is likely to more efficient in the attainment of the twin goals of such a society - full employment and economic equality. [Suresh Desai]
(146) It was a fundamental creed with him that social evil and economic exploitation go on because they are allowed to go on. Nothing was inevitable in social reality but thinking made it so.
(149) Kenneth Rivett has adequately analyzed this aspect of Gandhian thought by formulating the question"what was Gandhi against?" His answer is that the Mahatma was fundamentally not against the process of economic development, nor against machine civilization as such but against the particular brand of "capitalistic rationality" that leads to a neglect of the social and moral costs of over-urbanization and lays an exclusive stress on the personal profitability of locating the next factory nearest to the major industrial center.
(154) To Gandhi, the right choice was not to plunge into capitalist development but to develop a "communaucratic" social economy, based on decentralized rural life.
(161) "The end to be sought", he wrote, "is human happiness combined with full mental and moral growth". The Gandhian doctrine of economic growth, being a part of his general theory of growth, cannot meaningfully be formulated purely in economic terms.
(161-164) Gandhian Doctrine of Balance Growth
(a) Philosophical Balance: a balance between economic progress and moral progress. To achieve such a balance, one must shift the emphasis from maximization to optimization of production, from abundance to adequacy of the production of material goods and service.
(b) Structural Balance: a balance between the rural and urban sectors of the economy. To achieve such a balance, growth of the urban sector must not take place at the expense of the rural sector. Here one must shift the emphasis from centralization to decentralization of economic activities.
(c) Ecological Balance: a balance in the relationship between man and his environment. Long before social concern grew over the environmental crisis in the Western industrial societies, Gandhi showed his awareness of this crisis as a natural by-product of uncontrolled economic progress and autonomous development of modern, large-scale technology. He stressed the need for deliberate choice of technology and for restraints on the level of production in order to maintain a proper balance between man and his environment.
(d) Technological Balance: a balance between small-scale and large-scale technologies. Gandhi's views on technology have often been misinterpreted Gandhi was not opposed to the use of modern technology as such. He was opposed to indiscriminate, non-selective adoption of imported technology, purely based on its effect on productive capacity. In the context of the Indian economy, he saw a tremendous need for the development of small-scale technology that would increase the efficiency of rural production without creating any technological displacement of labour. At the same time, he saw the need for large-scale technology for which the ideal location would be large urban centers. The point that he strongly emphasized is that the adoption of Western technology to economize on labour and expand production at the cost of rural de-industrialization and mass unemployment was not the proper choice of technology under the prevailing economic conditions in India. He endorsed a proper mix of technology in order to optimize the social benefits of science and technology.
(e) Distributional Balance: a balance in income distribution. Given the existence of gross inequality, to achieve a greater balance would require strategies to redistribute income. In the context of a growing economy, Gandhi's doctrine may be interpreted as a doctrine of dynamic equilibrium in the pattern of income distribution so that exploitation is reduced to the minimum. In modern growth theories, the problem of income distribution is generally assumed away. Gandhi was fully aware that a high rate of growth does not necessarily guarantee an equitable distribution of income. The latter issue is tied up not so much with the rate of growth as with the pattern of growth. This is the reason why Gandhi opposed Western-style economic progress through urban-oriented large-scale industrialization. He would settle for a slower rate of growth for the sake of a greater diffusion of technology and productive capacity to revitalize the rural economy and also for the sake of a greater regional balance in the distribution of income. [AM Huq]
(172) Gandhi once wrote: "The world of tomorrow will be an must be a society based on non-violence. That is the first law... Equal distribution - the second great law of tomorrow's world as I see it - grows out of non-violence. It implies not that the world's goods shall be arbitrarily divided up but that each man shall have the wherewithal to supply his natural needs, no more."
(173) Thus it is clear that despite the emphasis on self-sufficiency, to the extent it si possible, as suggested by the Doctrine of Swadeshi, a positive doctrine of international trade from the Gandhian perspective does indeed emerge out of the mixture of Gandhian idealism and Gandhian pragmatism. The following distinctive features of this doctrine may be noted as follows:
a) it accepts the logic of the principle of comparative advantage but rejects it as the sole basis for trade among nations.
b) it accepts reciprocal _need_ rather than reciprocal _demand_ as the determinant of terms of trade among nations.
c) it postulates an international economic order based on international cooperation and understanding of mutual need, rather than on market forces and competition.
d) it is guided by a purpose higher than the purpose of pure economic gain. That is the moral purpose embodied in the notion of service to govern the flow of trade among nations. It suggests an international economic policy which is hte antithesis of "beggar-my-neighbour" policy, well-known in modern international economics.
e) it is an economic doctrine into which is infused the philosophical principle of "Ahimsa" of Nonviolence and non-exploitation.
f) it offers maximum protection against unequal distribution of gains from trade among nations in sharp contrast with the conventional doctrine of international trade. [AM Huq]
(186) A non-exploitative technology must not create hierarchy and privilege. It must not encourage centralism. For these reasons, technology must satisfy four basic conditions: (i) the operators must have full control of the technology; (ii) the technology must not replace the worker; (iii) the technology must increase the productivity of the workers; and (iv) it must be productive of goods and services _needed_ by the worker. [Romesh Diwan]
(196) Gandhian focus is on the "simplicity" of life founded on basic human needs and a progressist view of moral and ethico-spiritual fulfilment of life...
The Gandhian view is one of Man-in-Nature. This leads to a sensitivity to an ecological balance and man's place in it.,,,,,,,,,
(197) The Gandhian concept of man is one of an integral man and the Gandhian concept of society is that of an integral society. The Gandhian concept is one of an integral transformation of man and society. In the Gandhian conception, the processes of individual (spiritual) transformation and political transformation are inevitably interconnected. The Gandian concept basically pursues the unity of the individual and the social order. Gandhi stresses the unity of the private and public life. It is the Gandhian view that private life must be transparent and in that transparency, we can see the public life too. In the Gandhian thought, the stress is on the unity of the individual and social praxis. The Gandhian conception may be termed as the "Unity of Existence".
(198) Elements of a Gandhian paradigm:
(ii) The cause of all contradictions is centralism. It may be described as a situation in which a few control the means and the power to make decisions which affect many who are left out. By this criterion, for instance, an elective representative system of the present type is centralist. So are, of course, the communist (so-called people's democratic) conceptions and practices.
(iii) Centralism, as the source of social contradiction, has two major locii: (a) the sphere of production (Economy); and (b) Power (State).
(199) (v) Centralism in production leads to exploitation. Centralism in power leads to oppression. The two centralisms reinforce each other.
(200) (xiv) No meaningful process of change can be generated by those who are in the "centralist" structure, either of production or of power - because these are structures of privilege. It is only the victims of centralism, that is, those who are exploited and oppressed, who alone will initiate change.
(xv) The process of change started by the victim of the "structure of privilege" will only reproduce the system if it copies the centralist system itself, even if only in a new form. That is, the victims of change in their process to change society should not have centralism of production or power. This means that for the praxis of change, the following conditions should be fulfilled:
(a) The praxis must be broadly based, that is, it should be a mass movement.
(b) The mass movement be not characterized by centralism in its ideology or in its organization.
(c) If the movement becomes centralist in its organization, then it will acquire the property of the State (such as the Bolshevik Parties are).
(d) The movement should be free of violence. In its objective conditions it should not arm itself. In its subjective conditions it should be firmly rooted in the ideology of nonviolence. It is these two characteristics of the movement to expose exploitation and oppression that gives it the moral force of "truth" against "non-truth". The movement must not engage itself in falsifications like the State. Otherwise this moral force will be weakened and the goal of real and lasting changed will be defeated.
(e) Individuals have a central role in this praxis. It is be incarnating the values of trust and nonviolence, and by the magnificence of their example that individuals express moral force.
(201) A Human State will be a decentralized society of equal partners.
(220) [In Gandhian economics] Labour had four components: (a) bread labour which is a kind of minimum physical labour which must be performed by everybody from the philosopher to the ordinary labourers; (b) earning labour for living as is normally understood in economics; (c) as an instrument for self-actualization; and (d) as a method of service to others. Once this fourfold view of labour is accepted; no degree of division of labour can really dehumanize man totally.
(224) Gandhi defined a polity as some kind of system of oceanic, concentric circles rather than as a pyramidal system as all modern political systems are. In his view, the larger circle has to get its support from the smaller circle so that no matter however small a circle may be, one can play one's role there as well as be linked to the largest circle.
(229-230) But it would be necessary to understand the preconditions Gandhi laid down as absolutely necessary for the practice of Satyagraha. First, there can be no Satyagraha for an unjust cause. Otherwise the principle of truth will be flouted. Secondly, Satyagraha excludes the use of violence in any shape or form, in thought or action. Thirdly, Satyagraha presupposes a clear distinction between a willing obedience to the laws which are good and opposition to those which are immoral. In the final analysis, the superiority of the law of conscience has to assert itself over other laws for a Satyagrahi. Fourthly, Satyagraha is an instrument available only to those who have no hatred towards their opponents. Fifthly, a Satyagrahi must have the capacity and willingness to suffer. That is why Gandhi insisted more on a small revolutionary minority rather than a whole people undertaking it. Sixthly, Satyagraha means, among other things,8 constant engagement in constructive social work so that Satyagraha as a struggle does not become negative. Seventhly, Satyagraha calls for total humility on the part of those who practise it. Last but not least, Satyagraha is the expression of discipline and sincerity. As Gandhi said, it challenges our honesty and our capacity for national work and our willingness to submit to discipline. [JD Sethi]
(232) Collard, David. 1978 _Altruism and Economy: A study in Non-Selfish Economics_. New York, Oxford University Press.
(237) Mathur, JS. (ed) n.d. _The Economic Thought of Mahatma Gandhi_.
McLaughlin, Elizabeth T. 1974 _Ruskin and Gandhi_. London: Associated University Press.
(238) Narayan, Shriman. 1970 _Relevance of Gandhian Economics_. Ahmedabad: Navajivan Publishing House.
(242) Varma, Vishwanath Prasad. 1965 _The Political Philosophy of Mahatma Gandhi and Sarvodaya_. AAgra: Lakshmi Narain Agrawal.
More notes on Gandhian economics: