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A hyperlocal economic plan

The political consensus was that a newly independent India needed to rapidly industrialise if it was to hold its own in the world. Instead, Mahatma Gandhi offered a radically different economic path: one of local consumption; one where the charkha liberated Indians from poverty.
Gandhi argued for an India of household production for local consumption.
Updated on Oct 01, 2019 11:07 AM IST
Hindustan Times, New Delhi | ByNiranjan Rajadhyaksha

MK Gandhi stood outside the nationalist consensus of his day on economic matters. Leaders such as Jawaharlal Nehru, B.R. Ambedkar, Madan Mohan Malaviya, VD Savarkar and Subhas Chandra Bose had frequent disagreements with each other on political matters. Yet, they were all united in the belief that free India needed to rapidly industrialise under state guidance if it was to hold its own in the world as well as provide a decent standard of living for its citizens.

Gandhi offered a radically different path. He argued for an India of household production for local consumption. The Gandhian Plan for Economic Development for India, written in 1944 by Shriman Narayan Aggarwal, is infused with ideas of minimal trade beyond the village boundary, in effect limiting the division of labour as well as wage growth. Gandhi’s suspicion of modern machinery may not have been absolute, and his views evolved over the years, but there was no doubt in his mind that the charkha (spinning wheel) rather than the spindle would liberate Indians from poverty. Independent India rejected the Gandhian option, while paying polite tributes to it.

The roots of Gandhi’s economic beliefs are to be found in the critics of modernity during the Victorian age such as John Ruskin and Thomas Carlyle. Gandhi often acknowledged his intellectual debt to the duo. Their criticism of classical economics was built on moral concerns rather than economic logic, with an added dollop of aristocratic paternalism, in sharp contrast to their contemporary Karl Marx, who both welcomed the industrial age as well as tried to explain why capitalism would die an inevitable death.

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It was much the same with Gandhi. His views were more rooted in broader ethical concerns rather than narrow economic ones. He saw decentralised production in the villages as an economic manifestation of his philosophy of ahimsa. Gandhi believed that the spinning wheel offered the poor a dignified option to reducing themselves to wage labour in urban slums. On the other hand, Ambedkar saw in the glorification of village life a defence of the traditional social order. Even Rabindranath Tagore asked in a 1925 essay, The Cult of the Charkha whether poverty could be tackled with the “mechanical and ritualistic spinning on a primitive wheel”.

All economic life is based on interdependence. Gandhi enigmatically decided that the Singer sewing machine was acceptable in his scheme of things; he described it as one of the few useful things ever invented. It was quickly pointed out to him that sewing machines were made with modern capital equipment of the sort he was opposed to. That capital equipment itself would have been made from steel produced in large factories, and so on. Gandhians may argue that some machinery would be acceptable. The question is: Who decides what is acceptable or not?

The quaint story of the ambar charkha tells us something important about the weak foundations of a village economy based on spinning. The ambar charkha was promoted by the Indian government in the 1950s as a device to generate jobs while the public sector built capital-intensive heavy industry. Its productivity was three times that of a traditional spinning wheel. A young economist named Amartya Sen wrote in 1957 that the ambar charkha actually did not create enough value to cover costs, and that its promotion by the government would have inflationary consequences as well as be an impediment to capital accumulation.

Gandhi began his public career with a strong suspicion of modern technology. His views did evolve over time. However, his support of modern technology was at best sceptical. The broader point is that the Gandhian vision is static rather than dynamic. It is important to remember that Gandhi was not just a critic of the railways but also something as omnipresent today as cinema. Compare his opposition to cinema with the way Lokmanya Tilak welcomed its revolutionary potential way back in 1918. Would a hundred years of innovation — from modern medicine to the Internet — have been possible in an economy organised on the basis of autarchic villages?

Gandhian economic beliefs should, thus, not be seen as a practical programme for a country such as India, but as a broader set of ethical concerns that may inform choices in a world threatened by issues such as climate change. As he once said: “The economic imperialism of a single tiny island kingdom is today keeping the world in chains. If an entire nation of 300 million took to similar economic exploitation, it would strip the world bare like locusts”.

Gandhi was not a structured thinker, so the most useful guide to his economics is not to be found in his own writing but in the writing of JC Kumarappa, an economist trained at Columbia University by ER Seligman, who also happened to be Ambedkar’s thesis advisor.

In books such as Why the Village Movement? A Plea for a Village Centred Economic Order, Economy of Permanence and Gandhian Economic Thought, Kumarappa tried to build an intellectual framework for an alternative economics based on ahimsa. He classified economies with analogies from the animal world — parasitic like a tiger, predatory like a monkey, enterprising like a bird, gregarious like a bee and service like a mother. Much of the distinction is based on how economic activity works within the natural ecological order.

Kumarappa can be clubbed with the pioneering sociologist, Radhakamal Mukherjee, as one of the early proponents of green sensitivities. Parallels can also be drawn between the Gandhian idea of antyodaya (upliftment of the weakest in society) and the Rawlsian idea that justice depends on maximin, or the maximum benefit to the worst off. Some of these ethical concerns about ecology or justice could have resonance in the age of climate change and widening income inequality.

The Gandhian economic vision is impractical — it goes against overwhelming international evidence on how mass poverty is defeated. It can at best provide a broader ethical context to contemporary economic discussions.

A scholar of macroeconomics, political economy and economic history, and former Executive Editor of Mint, Niranjan Rajyadhaksha writes on the influence of Gandhi’s views on economy

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