The Mahatma and his economic worldview

Foreigners generally focus on Gandhi’s civil disobedience campaigns and his non-violent political tactics. They also focus on Martin Luther King, Nelson Mandela and Lech Walesa and the Gandhian imprint in their work. For academics, Gandhi is invariably featured in some course or other connected with the discipline of political science.

Indian observers indulge in paroxysms of hypothetical counterfactuals and project current judgements on past events. Should Gandhi have stopped the non-cooperation campaign after Chauri Chaura? Was he right or wrong in supporting the Khilafat movement? Was Gandhi’s emphasis on handloom reactionary? Did Gandhi exploit women? Was Gandhi a supporter or a secret oppressor of the Dalits?

While the approaches of foreign and Indian observers are valid, they also impose limitations with their excessive focus on political matters. We miss out on several incandescent and useful insights of a seminal thinker of the 20th century. Gandhi’s encounter with economics, or more correctly with the larger field of political economy, is largely left under-studied. We all lose out as a result.

The common quasi-caricature approach is to think of the sparsely-clad Gandhi obsessing over his spinning wheel and actually advocating backwardness and poverty. This is a completely incorrect position, and at variance with many of the Mahatma’s writings and speeches. In his brilliant speech in 1916 to the Economics Society at Muir College in Allahabad, Gandhi comes out emphatically against “grinding pauperism” in his own words. He was not a lover of poverty. In fact, he sought a decent standard of living for Indians at a time when poverty seemed their inescapable fate.

Gandhi was not an opponent of wealth creators. He repeatedly emphasised the importance of talented persons who created wealth and prosperity. He was totally against any system that smothered individual initiative or entrepreneurial spirits. He railed against an intrusive and rapacious State. He attacked ideas involving the forcible expropriation of wealth from their creators and owners.

At the same time, Gandhi was opposed to a tawdry worship of wealth. To him, wealth was not an end in itself, but an instrumental tool in the human armoury. Gandhi derived his ideas of trusteeship from different sources: The Isavasya Upanishad, English Common Law and Snell’s Equity, Gujarati Vaishnava and Jain traditions, the Gospels of Mark and Matthew, his association with the Quakers and his own unusual interpretation of the Bhagavad Gita. In the aftermath of the 2008 crisis, those who wish to revisit the moral basis of market capitalism may find it worthwhile to read up on their Gandhi. They may find an unlikely guru there.

Many also assume that Gandhi was completely opposed to Western civilisation and that his ideas had an overlap only with Western dissenters such as Leo Tolstoy, Henry David Thoreau and John Ruskin. In my book, Economist Gandhi: The Roots and the Relevance of the Political Economy of the Mahatma, I have attempted to discredit this argument. Indeed, there are significant parallels between Gandhi and Adam Smith, the quintessential Scottish Enlightenment thinker and the father of modern economics.

Smith, in his role as a distinguished moral philosopher, had coined the expression “impartial spectator”, an imaginary being that each of us creates in order to judge the moral position of our own actions. The resemblance of Smith’s impartial spectator to Gandhi’s “still small” inner voice of conscience is uncanny. Starting with different priors, Adam Smith and the Mahatma independently concluded that the pursuit of wealth, while desirable, needed to be informed with a moral purpose.

Gandhi was among the earliest thinkers, if not the first one, to argue that the economic sphere was not only about the relations between capital and labour. He introduced the consumer/customer as the third element of a tripod and argued for the three parties supporting and constraining each other. He was way ahead of current thinkers who talk about stakeholder capitalism. Gandhi’s thoughts can also be linked to modern ideas in behavioural economics and the discipline of identity economics.

Those who criticise Gandhi for his so-called soft approach to caste may find Gandhi’s experiments in identity economics an eye-opener. While Gandhi’s personal actions, in association with young women late in life, are completely indefensible and deserve condemnation, it must be noted that in the social and economic spheres, his feminist positions were prescient and forward-thinking.

Free India has ignored Gandhi’s Nai Talim. I have argued that this is a mistake. Nai Talim — with its emphasis on eye-hand coordination, development of motor skills (as explored by Maria Montessori, a friend of Gandhi’s) and implied left brain-right brain balance — actually can set right the excessive focus on rote learning and examinations that we suffer from. We might be able to establish a “tinkering” tradition in education reminiscent of James Watt, another Scottish Enlightenment figure. Our government’s recent successful introduction of Atal Tinkering Laboratories in select schools shows that this approach has great promise. Once more, we may need to acknowledge the Mahatma as a guru in the field of the economics of human capital development.

In conclusion, in the contemporary context, Indians as well as economists around the world may benefit from re-reading not just Adam Smith but the work of our own Mahatma as well.

Jaithirth Rao is an Indian entrepreneur and author

The views expressed are personal