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Book Review
Ajit K. Dasgupta, Gandhi's Economic Thought, London, Routledge, 1996; ix + 208 pp.
Dasgupta covers a wide range of topics on Gandhian economics. The chapters on Gandhi's views
on preferences, utility and welfare, industrialization, economic inequality, education, and his theory
of trusteeship are of particular interest to economists. Other topics such as Gandhi's belief that
rights follow from duties performed, his opposition to the caste system and untouchability, his
practice of absolute equality between men and women, and his views on population policy offer the
reader a sense of the coherence which underlies all Gandhian thought and a glimpse into some of
the political and social causes in which Gandhi was actively engaged.
In accordance with perhaps any social scientist, the set of (economic) questions which occupied
Gandhi and the particular viewpoints he formulated can be at least partially understood from the
times and circumstances (most notably, India under British rule) in which he lived. Dasgupta
repeatedly illustrates Gandhi's pragmatism towards social and economic issues combined with his
lucid, timeless and ideal ethical code. His theory of trusteeship, in which the wealthy retain
ownership of their assets but use them for the benefit of society as a whole rather than solely for
private profit, developed in response to the violent confiscation of property and the denial of the
importance of individual abilities which followed the Russian Revolution. His faith in the notion of
bread-labour arose out of opposition to the soul-destroying properties of leisure and its erosion of
human faculties he observed in rural India. In the modern age of television and video games,
Gandhi would have undoubtedly criticized even more tenaciously the use of leisure in the West and
its impact on human character.
Dasgupta points out on more than one occasion Gandhi's insistence that ethical preferences and
actions be sound economically. Still, as Dasgupta writes (p.7), "Gandhi's approach to economics
was explicitly based on ethical considerations." Gandhi held non-violence, truth and the value and
dignity of all life to be supreme. It is these principles which unify and distinguish Gandhi's
(economic) thought. He therefore cannot, persistent attempts notwithstanding, be easily pigeonholed into any traditional economic or political school of thought. Dasgupta provides a service by
dispelling some of the false notions and oversimplifications concerning Gandhi's economic views.
He was not a socialist. While he shared with socialists similar viewpoints on income distribution
and the right to a minimum standard of living including a job, he opposed centralization and
publicly-funded charities and education.
It is perhaps Gandhi's views on industrialization and large-scale production which have been most
oversimplified and poorly understood. Gandhi was not unequivocally opposed to industrialization.
Dasgupta notes that Gandhi regarded the elasticity of factor substitution as product specific and
therefore permitted many exceptions including heavy industry which clearly requires power-driven
machinery. Dasgupta divides Gandhi's general economic argument against the industrialization of
India into three components and provides a critical evaluation of each. First, India suffered from
mass unemployment, Gandhi therefore argued that India needed to think of creative ways to put to
use the idle labour power instead of mechanical power. Gandhi's second main economic argument
against large-scale production was that it concentrated economic and political power in the hands of
an urban elite. Consequently, the villages became increasingly dependent on cities. His solution
was production by the masses through self-employment in village industries. Thirdly, Gandhi
argued that sustained growth in output a country involved the pursuit of preferential access to
foreign markets. This quest for markets, Gandhi feared, leads to economic imperialism in the form
of exploitation, colonization, armed conflicts and attempts to encourage the adoption of a Western
lifestyle in order to stimulate the demand for foreign goods.
Gandhi also developed a set of moral arguments against industrialization and large-scale
production. Dasgupta does not do justice to Gandhi's moral opposition to industrialization when he
writes (p.80), "Gandhi does not really tell us why machines, or mills using them, are such a great
moral evil but appears to suggest that it is the low wages and poor working conditions of workers
that he finds unacceptable." This is actually only a part of Gandhi's moral plea against the `craze for
machinery'. In fact, Dasgupta's section on trusteeship and industrial relations in chapter 6 contains
Gandhi's principal moral objection to industrialization and large-scale production. In Gandhi's
view, mechanization and (foreign-owned) mills do much damage to the dignity of labour and his
ideal of labour-capital relations. According to Gandhi, small-scale local industry permits greater
contact and cooperation between labour and management. He sought that "mill owners, no less than
other business and commercial firms, ought to take a parental interest in the welfare of their
employees. The relations between the employer and the employee have been up to now merely
those of master and servant, they should be of father and children" (Young India, 03.05.1928,
p.139). Furthermore, mechanization and large-scale production in factories and mills serve to
centralize production and decision-making. Centralization, in Gandhi's view, leads to corruption,
concentration of wealth and power and a deterioration of labour-capital relations. In brief, Gandhi
considered centralization "inconsistent with [a] non-violent structure of society"
(Harijan, 18.01.1942, p.5).
Dasgupta devotes the final chapter to an assessment of Gandhi's legacy to the realm of economics.
Although his impact on policy was short-lived and very limited, a few of his methodological points
endure. Gandhi's factor proportions argument (that a labour-abundant society should try to adopt
labour-intensive techniques) is today a part of the received wisdom in development economics.
However, a neglected goal of economic development which Gandhi emphasized is self-respect
through production and consumption activities. Self-respect can be attained through self-reliance,
education adapted to local needs, and improved sanitation rather than charity or centralized
regulation. The recent recognition that preferences may be dynamically inconsistent or habitforming and the inclusion of non-monetary arguments, such as other-regarding behavior, in utility
are movements in the direction of Gandhi's moral consequentialist reasoning and notion of
preference. By incorporating ethics into economics, Gandhi helped to enrich the quality and
relevance of economic analysis and expand its scope. As a critic of neo-classical economic theory,
he did not fail to appreciate its methodological strengths including analytical reasoning based on
abstraction and its focus on the individual. The problem as Gandhi saw it was that the ethical
considerations from which economic theory abstracted were central, not peripheral, to the
phenomenon under study. Dasgupta concludes by hinting that he views Gandhi's most valuable
methodological contribution as his insistence on individualism as the basic unit of account
combined with -- in contrast to modern economic theory -- his commitment to resolving injustice
and inequality.
Dasgupta's book is superbly researched and documented. He draws heavily upon Gandhi's
journalistic writings from Young India, Harijan, and Navajivan, sources still not widely available in
the West. His book thus serves as a valuable resource for anyone interested in Gandhi's unique
brand of economics or the relationship between economics and ethics more generally.
Bradley J. Ruffle
Ben-Gurion University