Innovation and Entrepreneurship in the Global Economy 190

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Economic Ideas of Mahatma Gandhi

Monika Kataria

Introduction
Mahatma Gandhi was the most complex thinker, spiritual saint, politician and a
unique personality. He is greatly admired and remembered due to his
multidimensional personality. His aim in life was to serve the nation and mankind. For
acheiving this aim he performed many political, social, educational, religious and
economical activities. Many forms of his activities were related to economic wellbeing
of society. He was clear that economic self sufficiency for an individual and for a
nation is unavoidable. This led him to think about and study various economic
problems of the country and devise action plans for solving them. This was the root of
his economic thinking.
His economic ideas, much like everything else in his life, were governed by
ethical and moral considerations. Gandhi was influenced greatly by Tolstoy and
Ruskin. “The kingdom of God is within you” written by Tolstoy and Ruskin’s book
“Unto this last” had a profound great influence on Gandhi. From the views of Tolstoy,
he derived the concepts of egalitarianism, asceticism and simplicity, which later on
became the base of his economic ideas. The idea of ‘bread labour’ popularized by
Tolstoy influenced Gandhi and strengthened his conviction that machine technology
should be avoided. From Ruskin’s book he developed a distaste for material progress.
Anarchists like Prince Kropotkin developed hatred against centralization of economic
and political power.
Gandhian Economics
Gandhian Economic Ideas are based on ethical and moral foundations.
According to him economics that hurts the moral well being of an individual or a nation
is immoral, and therefore sinful. He believed that the economics is untrue which


Assistant Professor, Department of ABST, Dr. Bhim Rao Ambedkar Government College, Sri
Ganganagar, Rajasthan, India.
Economic Ideas of Mahatma Gandhi 191

ignores or disregards moral values. The principle ‘Simple living and high thinking’
played a significant role in Gandhi’s life. Gandhi was a practical idealist. His
economics should be described as the economics of non-violence. He opposed
modern capitalism, because according to him it exploits human labour.
Some significant features of Gandhian Economic thoughts can be explained
as under:
 Village Republics: According to Gandhi India lived in its villages. The
progress and development of the nation depends on the development of
villages. That’s why he was interested in developing the villages as self
suffient units. He stressed on the growth of rural industries such as
handlooms, handicraft, khadi, sericulture etc. to promote village’s progress.
Rural industries are based on family labour and they need comparatively less
amount of capital for the production. Required raw materials are available in
local or nearby areas and production can also be sold in local markets. So
there is no problem of material, production and market.
He strongly advised development of cottage industry to reduce the
burden on agriculture. Cottage industry can also work as a good support
system for the villages. All villagers can get employment in their own villages,
which can reduce migration of villagers to cities. Further Gandhi also
recommended citizens of nation to use rural products.
 Appropriate Technology: Gandhi was against that machinery, which
displaces labour and leaves it idle. He described machinery as a ‘great sin’. He
was against machinery if it keeps people idle and creates unemployment
problem for the people. He was against all distructive machinery. He
welcomed such instruments and machinery that saved individual labour and
lightened the burden of million of cottagers. He emphasised that he was not
against large scale production only of those things that villagers can produce
without difficulty. He believed that the machinery method was harmful, when
the same work could be done easily by millions of people not otherwise
occupied somewhere. He was aware of the menace of technological
unemployment, so he emphasized the need for labour-intensive methods of
production in a countly like India with surplus labour.
 Industrialism: Gandhi considered industrialism as a curse to mankind. Large-
scale production is meant to be prafit-oriented and therefore, they are not good
for the society because they led to concentration of wealth and power in a few
limited hands. He thought industrialism depended entirely on a country’s
capacity of exploit. He advocated decentralisation because it can avoid
violence. He suggested delocalisation of production as against concentration
in particular areas. He opposed large-scale industrialism also on grounds of
192 Innovation and Entrepreneurship in the Global Economy
social justice. It would enrich the few at the expense of the many. He thought it
would result in the concentration of economic power in a few hands. Gandhi
hated privilege and monopoly.
 Decentralization: Basic principle of Gandhi’s life was non-violence. According to
him large scale production were laid on violence so he advocated decentralization
of economy. He advocated production at a large number of places on a small
scale or production in the people’s home. He wanted production by masses not
mass production. Mass production doesn’t help the masses.
 Village Sarvodaya: According to Gandhi real India was to be found in villages
and not in towns and cities, so he suggested the progress and development of
self dependent and self sufficient villages. He wanted the revival of village
economy. Khadi programme was the top priority for him for this purpose. He
considered khadi as the sun of the village solar system.
 Bread Labour: Gandhi was highly influenced by Tolstoy’s book. Further he
was greatly attracted by the Gita’s view that “one who eats without offering
sacrificial fruit to others is thief.” For Gandhi, labour is the root of the entire
creation. He believed that nobody should eat his bread without performing
sufficient labour. He made use of the concept of ‘bread labour’ to tell people to
utilize their idle hours which in villages are equal to the working days of six
months in the year. He preached and practised the gospel of manual work.
 The Doctrine of Trusteeship: Trusteeship concept is Gandhi’s most
revolutionary economic philosophy. It is a theory of need-based production
equitable distribution and social justice. The theory of trusteeship is based on
three Gandhian principles-non-violence, swaraj and equality. Truth (Satya),
Non-violence (Ahinsa), Bread Labour and Non-Possesssion (Aparigraha) led
Gandhi to this concept. Everyone, by becoming a trustee for himself and for
other, can cater to the needs of the society. According to Gandhi a man plays
the role of a trustee to devoid of the feeling of social power as well as of a
beneficiary. Gandhi desired the capitalists to become trustees of the nation by
running their business with integrity and efficiency and for the welfare of the
people. In short Gandhi’s theory of trusteeship is “all people having money or
property should hold it in trust for the society.” It means that all money and
property originally belongs to society but it stands distributed among all for the
purpose of their livelihood.
 Food Problem: Gandhi had seen the worst famine of his life during the year
1943-44, when Bengal suffered heavily owing to the country wide shortage of
food. To start with he thought that this scarcity had been artificially created.
But when he visited Madras, Assam & Bengal, he concluded that the shortage
of food was real. He suggested many measures for solving this problem in
Economic Ideas of Mahatma Gandhi 193

India. He suggested that every individual shold curtail requirements of food to

the minimum and as far as possible the consumption of pulses and food grains
should be reduced to the minimum by substituting milk, fruits and vegetables
etc. for them.
 Population: Gandhi opposed the method of population control. He didn’t
agree with the view that food shortage was caused by excessive growth of
population. He believed that “by a proper land system, better agriculture and a
supplementary industry, the country is capable of supporting twice as many
people as there are today.”
 Prohibition: Gandhi advocated prohibition. He felt that it was better for India
to be poor than to have thousands of drunkards. He regarded the use of liquor
as a disease rather than a vice. He believed that the consumption of alcohol
was a major social evil. He didn’t agree with those who held the view that the
introduction of prohibition would cause a steep fall in the revenue of the
Government and because of those sufficient funds would not be available for
education and other social services.
The Relevance of Gandhi’s Economic Ideas to Modern India
Many economists regard Gandhi as a medieval mystic who tried to put back
the clock of human progress. But most of the criticism is based on gross
misunderstanding of Gandhi’s thoughts. To understand and appreciate his economic
philosophy and thoughts, it requires understanding, vision and sympathy.
Gandhian philosophy is based on ethical and moral values. He was a practical
idealist. His thought is basically sound and is also relevant to present times. His ideas
are not medieval and out of date. His thoughts have significant relevance for modern
India. Many things which have happened since he passed away have not diminished
but heightened its relevance.
It is often thought that he was essentially a religious saint who was against to
the modern technology and scientific method. But it is a misconception about him. He
was not against machinery as such. All that he thought was that in a country like
India, where capital was scarce and labour abundant, it would be more profitable and
favourable to use labour intensive industries. He afraid that use of machinery as a
large scale would result in technological unemployment. His ideas on machinery are
still relevant. In spite of many decades of planning machine using and power driven
economic development, unemployment is still present and is growing.
In his Asian Drama, Gunnar Myrdal has broadly supported Gandhi’s emphasis
on village and cottage industries. In under developed countries, full employment of
human resources will depend not on mass production but on production by masses. In
an economic system based on large scale production, generally the rich get richer and
the poor get poorer.
194 Innovation and Entrepreneurship in the Global Economy
Gandhi’s views on non-violence, decentralisation, village swaraj etc. are still
relevant today. Gandhi firmly believed that communist method of violence and class
war are unsuitable to Indian conditions.
Industrialisation and urbanization has resulted in the air and water pollution.
This problem is slowing becoming number one problem of the world. In the ideal
social system based on village economy, pollution will not be a big problem. His
doctrine of trusteeship is also relevant in present circumstances.
Gandhi belongs to the future, not to the past. His message is eternal. He once
wrote, “So long as my faith burns bright, as I hope it will even if I stand alone, I shall
be alive in the grave and what is more, speaking from it.” We may conclude with the
words of Louis Fisher, a great admirer of Gandhi. “If man is to survive, if civilization is
to survive and flower in freedom, truth and decency, the remainder of the twentieth
century and what lies beyond must belong not to Lenin or Trotsky, not to Marx or Mao
or Ho or Che but to Mahatma Gandhi.”
References
 Crawford, S. (2014).” Swadeshi and the economic development of India.”
Available at [Link]/~stucraw/ Lethbridge/ MyArticles/[Link].
 Deshmukh, S. (2011). “Relevance of Ganadhian Thought In 21st Century”.
International Referred Research Journal. VOL-III (26).
 G.S. Sudha, History of Management Thoughts.
 Gandhi Smriti and Darshan Samiti, Concept Publishing Company, New Delhi,
Vol. 4, PP. 78-79.
 Gupta Shanti Swarup (1994): ‘Economic Philosophy of Mahatma Gandhi,
Concept Publishing Company, New Delhi, p. 185.
 Gupta Shanti Swarup (1994): ‘Economic Philosophy of Mahatma Gandhi,
Concept Publishing Company New Delhi, p. 136.
 Narayana, S. (1970). Gandhian Economics, Navjivan Publishing House,
Bombay.
 V. Lokanathan, A History of Economic Thoughts.
 [Link] Relevance of Gandhian
economic thought An Appraisal.
 [Link]
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