Gandhian Engagement with Capital

These days, much is being written and spoken about Gandhi’s thoughts. However, I have a feeling that very little space is given to  his economic views.

Recently, Chaitra Redkar, HoD, Political Science at SNDT University, Mumbai has contributed a wonderful book on this subject, Gandhian Engagement with Capital: Perspectives of J.C. Kumarappa. This is an attempt to introduce this book to readers of Janata. She summarises Gandhi’s economic thoughts as follows:

  1. Though Gandhi used religious idioms, he did not mean ritualistic or hierarchical religion.
  2. His contention was that economics should be coupled with ethics.
  3. The test to be applied to any economic principle is the goodness of its effect on the world.
  4. Primacy should be accorded to individual’s preferences as modified reflections and corrected by knowledge and experiences and regulated by ethical principles. Wants should be restricted to the minimum and Swadeshi should be adhered to.
  5. Altruism and charity as principles of macroeconomic policies. But Gandhi also warns against misplaced benevolence .e.g. laziness should not be tolerated.
  6. Everyone should engage in manual labour. Manual labour is good for psychological and moral health.
  7. Fundamental rights as adopted by the Karachi Congress 1931 should be accepted as broad framework of running the polity.

Gandhi was opposed to western culture based on large scale industries because it was exploitative and  furthered widening disparity between classes. Colonialism propelled by capitalism was oppressive. Later on, this point is elaborated by his staunch follower, J.C. Kumarappa. He argued that mechanised large scale industries are utilising natural resources recklessly and causing great harm to the environment. Also they led to wars.

While studying economics at universities in England and USA, Kumarappa got acquainted with Marxism and also the non-Marxist critique of market economy. Back in India, he met Gandhi in 1928 and was assigned the task of supervising land revenue survey of Matar taluka in Kheda district, Gujarat. He found that the assessment was exorbitant. Later, Sardar Patel launched a satyagraha asking the peasants not to pay land revenue. Kumarappa forcefully pleaded that the colonial rule was causing unemployment in rural areas and augmenting poverty.

Thereafter, Kumarappa concentrated on the issue of poverty allevation. He formulated the model of reforming agriculture, which was the mainstay of Indian economy, and developing village industries. About agriculture, he pleaded for abolition of zamindari or rather elimination of all unproductive and parasitic middlemen. He suggested that a mutilpe cooperative society should prepare a cropping plan for the whole village or rather for a cluster of villages. He was in favour of food crops and was opposed to cash crops, which, he felt, led to making the peasant dependent on the market and money, both of which are exploitative. Today, one may not agree with his total opposition to cash crops, but the policy of formulating a cropping plan suggested by him needs to be accepted so as to protect peasants from the vagaries of the market.

Kumarappa also suggested that the State should provide adequate irrigation facilities to farms.

Kumarappa also stressed on the importance of reviving village industries, and also emphasised on the need to help them improve their efficiency. He visualised that small communities should aspire to be self-sufficient. Of course, behind this thinking, there was the presumption that people would like to  follow the axiom of simple living. It is possible to have adequate production of goods required to satisfy the basic needs of all people in the area by utilising locally available resources, and local manpower. This emphasis on local small scale industries should make it possible to provide full employment to all the people.

Of course, Kumarappa was aware of the fact that a few large scale industries will be needed. For example, it is desirable to use large scale industry to produce paper pulp needed for production of handmade paper. However, it was his firm opinion that large scale industries must be run by the State.

Kumarappa was very worried about the role of money. In his opinion, it was mainly responsible for linking rural people to the market economy. One would like to agree with him. But use of money cannot be totally dispensed with because it is a suitable medium of exchange. Nevertheless, attention needs to be devoted to preventing accumulation of money in a few hands.

The usual criticism leveled at the Gandhian model is that it is utopian and impracticable. Thanks to the policies followed during the last thirty years, large scale industries, owned by capitalists, both foreign as well as indigenous, have come to dominate our economy. Can we put the clock back?

But instead of attempting an answer, let us face the question: Can large scale industry and capitalism last forever?

It needs to be noted that capitalism has aggravated three problems:

  1. Global warming is threatening the very existence of human life on earth.
  2. High rate of unemployment in both developed and developing countries.
  3. Great disparity in income and wealth. In our country, 1% of population is now controlling 58% of the country’s wealth.

Would  the vast multitudes meekly suffer under the pressure of unemployment and inequality for ever? History is replete with examples of rebellion.

We are human beings endowed with urges for freedom and self–respect. We cannot suffer inhuman treatment indefinitely. Instead of inviting bloody uprisings, we should tread the path of sanity. It is time to prepare ourselves for following the Gandhian model of sustainable economy with suitable changes and modifications.

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