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Stretching Too Much

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It is not uncommon for us to create a persona of a great man, and idolise it on all aspects that go beyond his specific achievements. Gandhi was the greatest freedom fighter who developed a model effective with lessons for everyone. But stretching this greatness and drawing analogies with great economists such as Keynes is debatable. In Beyond Gandhian Economics, B.N. Ghosh researches ‘Gandhian Economics’ and brands this genre by drawing parallels with what he has written at different points of time. He says Gandhian economics goes well beyond the defined domain of economics by including social, political and ethical implications. So, it is more of political economy than economics in its virgin form. Curiously, Gandhi never followed any specific model or methodology of his own.

Ghosh likens Adam Smith’s analogy of the invisible hand to that of Gandhi’s God. He feels we can never distance ourselves from God and cannot neglect religion. Gandhi felt free market had its limitations and could not solve problems such as unemployment, stagflation, labour market imperfections, discrimination, etc. Gandhi castigated pure economics as it is not based on morality and ethics. Everything should be driven by ethics. This brand of economics does not rule out dependency at internal and international levels, but can lead to injustice depending on who has superior power. Exploitation leads to poverty and, hence, capitalism — which in those days was associated with colonial rule — is not the best model as it destroyed, say, villages and small industries. Gandhi felt industrialisation was not needed when we had surplus labour.

While reading this interpretation of economics, the reader could get the impression that all these tenets would have held at the time of colonialism and these paradigms appear antiquated in the days of globalisation and open markets. So his brand of economics does not seem to be too relevant, especially the emphasis on ‘exploitation’. Gandhi’s view of conflict management is refreshing, though. Dialectics is the way out for such resolution and he draws analogies with Hegelian concepts of thesis, antithesis and synthesis with Gandhian principles of negotiation, persuasion and satyagraha.

So, then, how should we view Gandhian economics? Balanced development not just in terms of economic standards but also the four tenets of — dharma, artha, kama, and moksha. Decentralised governance is the best way out.

While our focus on SMEs today is similar to Gandhi’s emphasis of cottage industries, we are talking of up-scaling them and not retaining their existing structures. Also, in a consumption-led growth strategy, simplicity appears anachronistic. The social and ethical standards that Gandhi emphasised, however, still hold with more fervour, which should be the lesson to be assimilated after reading this book.

(This story was published in Businessworld Issue Dated 28-01-2013)