Gandhian Economy

The Principles of Gandhian Economy: Integrating Spirituality and Ecology

Siby K. Joseph



Gandhi was not an economist in the academic sense of the term. He has not built up any economic theory or system which strictly falls within the realm of mainstream economics. He was deeply concerned with all problems confronted by humanity, all aspects of human life,  and he had therefore expressed his views on matters relating to economic life as well. While delivering a lecture on “Does Economic Progress clash with Real Progress?”, at a meeting of the Muir Central College Economics Society, Allahabad on 22 December 19161, he himself acknowledged that “Frankly and truly, I know little economics as you naturally understand them”. He also admitted the fact that he had not read Mill, Marshall, Adam Smith and such other authors who are cited in studies in economics. Then what was the basis of his views or experiments in matters relating to economics? He answered this question in the same lecture. “There come to us moments in life when about something we need no proof from without. A little voice within us tells us, ‘You are on the right track, move neither to your left nor right, but keep to the straight and narrow way’ With such help we march forward slowly indeed, but surely and steadily. That is my position.” 2

      What is this little voice? For him, it was the Voice of God, of Conscience, of Truth.3  This voice was more real than his own existence and everyone who wills can hear the voice. But like every thing else, it requires previous and definite preparation.4 Gandhi in the address that we have cited articulated his argument that if our goal is materialistic, we will go downhill as far as moral progress is concerned. He said,  “You cannot serve God and Mammon is an economic truth of the highest value. We have to make our choice. Western nations today are groaning under the heels of the monster –God of materialism. Their moral growth has become stunted”.5 He even quoted Wallace, a great scientist, in support of his argument. “This rapid growth of wealth and increase of our power over nature put too great a strain upon our crude civilization, on our superficial Christianity, and it was accompanied by various forms of social immorality almost as amazing and unprecedented.”6 In conclusion he stated, “Let us seek first the Kingdom of God and His righteousness, and the irrevocable promise is that everything will be added with us. These are real economics. May you and I treasure them and enforce them in our daily life.”7 Pundit Madan Mohan Malaviya in his concluding remarks stated that the ideals which Mr. Gandhi put before us were so high that he did not expect all of us would be prepared to subscribe to all of them. But many years later, commenting on this lecture, two economists associated with American universities, Diwan and Lutz wrote, “An examination of his lecture clearly points out to what he knew rather than what he did not know. He was not interested in the scope and method of economic science as we economists naturally understand it. Rather, he worked for a whole lifetime on articulating the principles of an alternative and more real human economy centring on the very themes outlined in his lecture: the lack of correlation between material expansion and genuine progress, the need for an economics-cum-ethics that will enable moral growth and dignity for all, the fallacy of seeking happiness in individual acquisitive behaviour, and the need for encouraging people to seek a life rich in self-esteem and genuine meaning.”8 Gandhi laid more emphasis on moral progress than material progress. In fact, his attempt was to spiritualise economics. He questioned the principle that every human realm is governed by its own set of rules and such rules alone should constitute the standards for success. Instead he stood for introducing ethics into every sphere of human activity and elevated spirituality from its individualist moorings to the status of a collective virtue.

      Gandhian economics is thus based on the foundation of spirituality with ethics and morality as its pillars. In Gandhi’s view, human society cannot be divided into watertight compartments such as economic, political and religious. Human life is an undivided whole. He believed that “One’s everyday life was never capable of being separated from his spiritual being. Both acted and reacted upon one another.”9 True economics according to him “never militates against the highest ethical standard, just as all true ethics to be worth its name, must at the same time be also good economics. An economics that inculcates Mammon worship, and enables the strong to amass wealth at the expense of the weak, is a false and dismal science. It spells death. True economics on the other hand stands for social justice, it promotes the good of all equally including the weakest and indispensable for decent life.”10 True economics cannot ignore or disregard moral values. In a reply to the well-known poet Rabindranath Tagore, Gandhi wrote in Young India, “I must confess that I do not draw a sharp or any distinction between economics and ethics. Economics that hurt the moral well being of an individual or a nation are immoral and, therefore, sinful. Thus the economics that permit one country to prey upon another are immoral.”11

      Gandhian economics is a part of Gandhi’s philosophy of life. He believed in the unity and oneness of all life and its interconnectedness. That all human beings are painted with the divine brush and have the divine element constituted the basis of this relational worldview. The very same relational worldview was equally applicable to animal and plant life.  He wrote, “I do not believe that an individual may gain spiritually and those that surround him suffer. I believe in advaita. I believe in the essential unity of man and for that matter of all that lives. Therefore I believe that if one man gains spiritually, the whole world gains with him and, if one man falls, the whole world falls to that extent.”12 According to Diwan and Bethea “In surveying the beliefs of spiritually-oriented cultures throughout time and across geographical boundaries, one single, common assertion emerges: the immutable unity or oneness of life, at all levels and in all manifestations.”13 Gandhi declared in his Autobiography that self-realization was the ultimate goal of his life. “What I want to achieve-what I have been striving and pining to achieve – these thirty years, is self-realization, to see God face to face, to attain Moksha.”14 All his activities in life were directed to the same end. Then the question arises what was his perception of self-realisation? In order to explore his understanding of self-realisation, it is essential to analyse his concept of God. He did not believe that God was a person.15 To him God was the force among all the forces.16 God is the Lawmaker, the Law and the executor.17 This Lawmaker or God is not a person. Truth for him was God. On the basis of continuous and relentless search for nearly fifty years Gandhi came to the conclusion that it was more accurate to say Truth is God, than to say God is Truth18. Varma argues that human beings have the ability to understand Truth or Law of the universe. “To Gandhi, the glory of human species lies in the fact that, of all the species in nature, it alone has the equipment and ability to look for, discover, and “cling” to truth. The search for truth, then, becomes the highest purpose of human life, the purpose that arises from and conforms to the special powers and potential that nature has vested in the human being. Self-realization is the process of discovering one’s real nature and potential, and realizing that potential as fully as is possible. The highest goal of the human being therefore is self-realization or Truth realization which can also be described as God realization because Truth is God.”19

      In order to achieve/fulfil the goal of self-realization all activities of human beings economic, social, political, religious have to be guided by the ultimate aim of the vision of God. According to Gandhi, the only way to find God is to see Him in His creation and be one with it.20 Gandhi equated the Service of God with the service of Humanity. One cannot find God apart from Humanity. Gandhi wrote in the last chapter of his Autobiography “To see the universal and all- pervading Spirit of Truth face to face one must be able to love the meanest creation as one self.”21  Gandhi’s philosophy of Sarvodaya is based on the principle of well being of all human as well as sentient beings. Unity and oneness of life is the crux of Sarvodaya ideology. The application of the principle of non-violence in all spheres of life is an imperative for the attainment of Sarvodaya society. It calls for restructuring of social, economic, political and educational systems on the basis of non-violence. In the Sarvodaya society of Gandhi’s vision, the economic organization of the society must be based on the Law of Non-violence or Love. Gandhi visualised a just and non-violent economic order free from exploitation and injustice. The application of these principles will allow man to satisfy his needs without harming the interests of his fellow beings. In its best form it also helps them to lead a better life.

Principles of Gandhian Economy

In order to understand the interconnection between economy and ecology and spirituality in Gandhian Economy, it is imperative to discuss its essential elements.

Voluntary Reduction of Wants

Modern economic theory is based on the assumption that human wants are unlimited. Consumerism is the catchword of the present materialist society. The craze for consumerism leads to unlimited production and exploitation of resources, which results in depletion of non-renewable energy sources and disturbing the ecological balance. Gandhi was against the consumerist tendencies of modern times. The golden rule according to Gandhi is “to refuse to have what the millions cannot.”22 The desire for having more and more stands as a hindrance in the way of attaining the goal of human life, that is, self-realization. It fails to bring contentment or happiness in life. For him, “the essence of manliness consists in showing the utmost consideration to all life, animal as well as vegetable. He who in search of pleasure shows little consideration for others is surely less than man. He is thoughtless.”23 Gandhi believed that, human wants are insatiable. He wrote in Hind Swaraj: “We notice that the mind is a restless bird; the more it gets the more it wants, and still remains unsatisfied. The more we indulge our passions the more unbridled they become. Our ancestors, therefore, set a limit to our indulgences. They saw that happiness was largely a mental condition. A man is not necessarily happy because he is rich, or unhappy because he is poor. The rich are often seen to be unhappy, the poor to be happy. Millions will always remain poor. Observing all this, our ancestors dissuaded us from luxuries and pleasures.”24 He stood for voluntary reduction of wants and he considered it as a means of service. “Civilization, in the real sense of the term, consists not in the multiplication, but in the deliberate and voluntary reduction of wants. This alone promotes real happiness and contentment, and increases the capacity for service.”25



Fulfilment of Basic Needs

Gandhi’s call for voluntary reduction of wants in no way advocates poverty. He believed that every human being should have enough for his or her needs. He stated that “the earth provides enough to satisfy every man’s need but not for every man’s greed.”26 This well known dictum of Gandhi reminds us that man cannot infinitely exploit nature to satisfy his unlimited wants. Gandhi was fully aware of the consequences caused by multiplication of wants. He wrote: “I do not believe that multiplication of wants and machinery contributed to supply them, is taking the world a single step near its goals. I whole- heartedly detest this mad desire to destroy distance and time, to increase animal appetites and go to the ends of earth in search of their satisfaction.”27 What is needed is a need-based strategy fulfilling the essential requirements of living. One should not take even a single thing from nature when it is not actually required though it may be available in abundance. Let me cite an incident from Gandhi’s own life. It was painful for Gandhi to see large numbers of leaves plucked at night for him while only few were necessary. He lamented, “Trees are living beings just like ourselves. They live and breathe, they feed and drink as we do and like us they need sleep. It is a wretched thing to go and tear the leaves of a tree at night when it is resting! And why have you brought such a huge quantity? Only a few leaves were necessary…. We should feel a more living bond between ourselves and the rest of the animate creation.”28 There are many such telling passages in Gandhi’s life.

      Limiting oneself to the fulfilment of basic needs does not mean that one remains  poverty stricken. He did not see poverty as a virtue. In fact, the removal of poverty prevailing among the Indian masses was his major concern. “No one has ever suggested that grinding pauperism can lend to anything else than moral degradation. Every human being has the right to live and therefore to find the wherewithal to feed himself and where necessary to clothe and house himself.”29 In short Gandhi was advocating a simple living where everyone must have a balanced diet, a decent house to live in, facilities for education, and adequate medical relief.

Machinery, Industrialization and Methods of Production

In the Gandhian economy the machine does not dominate human beings.  Gandhi’s supreme consideration was man, and he was opposed to all machinery which displaces human labour and throws workers out of employment. His objection was directed towards the indiscriminate use of machinery and labour saving devices. He wrote: “What I object to is the craze for machinery, not machinery as such. The craze is for what they call labour saving machinery. Men go on ‘saving labour’ till thousands are without work and thrown on the open street to die of starvation. I want to save time and labour, not for a fraction of mankind, but for all.”30 Gandhi was most reasonable in his attitude towards mechanization. He welcomed mechanization where there is scarcity of labour. As an intelligent exception he supported even the Singer sewing machine. He wrote, “it is one of the few useful things ever invented, and there is a romance about the device itself. Singer saw his wife labouring over the tedious process of sewing and seaming with her own hands, and simply out of love for her he devised the Sewing Machine, in order to save her from unnecessary labour. He, however, saved not only her labour but also the labour of everyone who could purchase a sewing machine.”31  The objective of machinery should be saving of drudgery and not throwing men and women out of employment.

      In this era of globalisation humanity is facing problems like depletion of finite resources, global warming, ozone layer depletion, deforestation etc., which are the direct results of modern industrialization. Modern industrialization is characterised by automation, which looks upon human labour as a factor that hampers efficiency in the production process. Economists have started using the term jobless growth. Gandhi was highly critical of industrialization. He wrote, “Industrialism is, I am afraid, going to be a curse for mankind. Exploitation of one nation by another cannot go on for all time. Industrialism depends entirely on your capacity to exploit, on foreign markets being open to you, and on the absence of competitors.”32  He was aware of the fact that it would be disastrous if India opts for large-scale industrialization. “God forbid that India should ever take to industrialism after the manner of the west. If an entire nation of 300 millions took to similar economic exploitation it would strip the world bare like locusts.”33

      It was Gandhi’s conviction that mass production was responsible for the world crisis. He visualised an economic system where mass production is replaced by production by masses taking note of the real requirements of the consumers. In this system, production process is completely decentralised utilising the locally available raw materials. This system will avoid the endless difficulties and problems associated with the present economic system because there is an organic relationship between production, distribution and consumption. He advocated the promotion of khadi and village industries for providing adequate employment to the rural masses and ensuring self sufficiency in the villages. According to Gandhi, khadi mentality means decentralization of production and distribution of the necessaries of life.34 For him, khadi is the sun of the village solar system. The planets are the various industries which can support khadi.35 The spirit of swadeshi consists in encouraging and reviving indigenous industries.


Gandhi’s concept of swadeshi is not merely an economic concept. Gandhi defined swadeshi as a Law of Nature. “Swadeshi is the Law of Laws enjoined by the present age. Spiritual Laws like Nature’s Laws needs no enacting; they are self acting…. The Law of Swadeshi is ingrained in the basic nature of man, but it has today sunk into oblivion.”36 In its spiritual sense swadeshi stands for the final emancipation of the soul from her earthly bondage. The first duty of the votary of swadeshi is to identify himself with entire creation through the service of his immediate neighbours in his effort to emancipate from the bondage of the physical body.37 In the light of this understanding Gandhi defined swadeshi as the “Spirit in us which restricts us to the use and services of our immediate surroundings to the exclusion of the more remote.”38 In his definition of swadeshi there is no room for selfishness or hatred. Gandhi advocated this concept in the spirit of universal love and service. A votary of swadeshi will give preference to local products even if they are of inferior grade or dearer in price than things manufactured elsewhere and try to remedy the defects of local manufacturers. Gandhi warned the votary of swadeshi against making it a fetish. “To reject foreign manufactures merely because they are foreign, and to go on wasting national time and money in the promotion in one’s country of manufactures for which it is not suited would be criminal folly, and a negation of the Swadeshi spirit. A true votary of swadeshi will never harbour ill-will towards the foreigner: he will not be actuated by antagonism towards anybody on earth. Swadeshism is not a cult of hatred. It is a doctrine of selfless service, that has its roots in the purest ahimsa, i.e. Love.”39



Bread Labour

In the Gandhian frame of reference work is not mere engagement in bodily labour. It is looked upon as a creative activity to express ones ‘self’, ultimately leading to self-realization. The essence of Gandhi’s concept of bread labour is the law that “to live man must work”.40 According to Diwan, “the concept of bread labour involves a union of two basic principles: (i) the expenditure of energy through body work, and (ii) the moral or ethical values enjoined to such energy use.”41 For Gandhi the third chapter of Gita also talks about the same principle. “I do not go so far as to say that the word yajna (sacrifice) there means body labour. But when the Gita says that ‘rain comes from sacrifice’ (verse 14), I think it indicates the necessity of body labour. The ‘residue of sacrifice’ (verse 13) is the bread that we have won in the sweat of our brow. Labouring enough for one’s food has been classed in the Gita as a yajna.”42 In the Gita it is also said that whosoever eats his bread without offering the necessary daily sacrifice was verily a thief.43 Gandhi further explains: “Yajna means an act directed to the welfare of others, done without desiring any return for it, whether of a temporal or spiritual nature. ‘Act’ here must be taken in the widest sense, and includes thoughts and word as well as deed. ‘Others’ embraces not only humanity, but all life…. Yajna having come to us with our birth, we are debtors all our lives,and thus for ever bound to serve the universe.”44 Thus, in short, work is not only a means of service but also to repay the debt owed to the universe. An individual practising yajna will be leading an ideal life in tune with nature trying to return whatever he or she takes from nature.


Gandhi’s doctrine of trusteeship is a basic tenet of Gandhian economy. It was Proudhon who said “all property is theft.” Gandhi went a step ahead and said “possession seems to me a crime.” His idea of trusteeship is derived from the ideal of Aparigraha. According to Gandhi, “A Seeker of the Truth, a Follower of the law of Love cannot hold anything against tomorrow.”45 This doctrine has the sanction of religion and philosophy. For him, the highest fulfillment of religion requires a giving up of all possessions. Gandhi expanded the meaning of the verse in Isha Upanishad - tena-tyaktena-bhunjeethah (enjoy the wealth by renouncing it) as “Earn your crores by all means but understand that your wealth is not yours; it belongs to the people. Take what you require for your legitimate needs and use the remainder for society.”46 He further stated, “Tena-tyaktena-bhunjheethah is a mantra based on uncommon knowledge. It is the surest method to evolve a new order of life of universal benefit in the place of the present one where each one lives for himself without regard to what happens to his neighbour.”47 It is a means for abolishing the conflict between capital and labour. It is a non-violent revolution aimed at the creation of an egalitarian society. He believed that “A violent and bloody revolution is a certainty one day unless there is voluntary abdication of riches and the power that riches give and sharing them for common good.”48 Gandhi wanted   the rich to hold their property and use it for the common good of the society. The wealthy cannot accumulate wealth without the cooperation of the poor.49 Gandhi advocated the use of non-violent non-cooperation of the poor for persuading the Capitalists or the wealthy to accept trusteeship. In a State built on the basis of non-violence the commission of trustees will be regulated. They will get commensurate with the service rendered and its value to the society. “A trustee has no heir but the public.”50  Schumacher wrote: “If India should be able to move along the path of equality through trusteeship, She could become a beacon to the world. By bringing into life again the best of her marvellous traditional teachings, she could become the most modern of nations while remaining faithful to herself.”51

      From the preceding discussion it is clear that Gandhian economy has its roots in spirituality and ecology. An economic system based on spirituality stands for social justice and non-exploitation. It is based on the notion that every human sphere of life including economics is governed by ethics. It relies on a deeper and secular form of spirituality that cannot in any way be categorized as belonging to any particular religion.  Gandhian economy is often described as an economy of permanence or economy of service or a moral economy. In its very nature it is sustainable and does not create any disturbance to the ecological balance. Undoubtedly Gandhian economy is a radical departure from mainstream economy. I think the alternative vision of economy placed before humanity by Gandhi should be given serious thought as we are increasingly becoming aware of the limits to and problems caused by mainstream economic development. Such rethinking is possible only if we condition our minds to look at problems holistically and not from the perspective of individual disciplines.


Notes and References

      *    This is a revised version of a paper presented in a seminar on Economy, Ecology and Spirituality organised by University Terre-du-ciel, Domaine de Chardenoux-71500 Bruailles, France, from 20th to 26th August, 2006. The author would like to thank Late Ravindra Varma, Chairman, Gandhi Peace Foundation, New Delhi and M. S. John, Mahatma Gandhi University, Kottayam for their invaluable suggestions and insights.

  1.  The Collected Works of Mahatma Gandhi (CWMG) (New Delhi : The Publications Division, Government of India, 1979), Vol. 13, p.310.
  2. Ibid.
  3.  R.K. Prabhu and U.R. Rao, (ed.), The Mind of Mahatma Gandhi ,  (Ahmedabad: Navajivan, , 1996), p. 33.
  4. Ibid., p. 34.
  5. CWMG, op. cit, Vol. 13, p. 314.
  6. Ibid., p. 315.
  7. Ibid., p. 316.
  8. Romesh Diwan and Mark Lutz (ed.), Essays in Gandhian Economics,  (New Delhi: Gandhi Peace Foundation,1985), pp. 9– 10.
  9.  Nirmal Kumar Bose (ed.), Selections from Gandhi, (Ahmedabad: Navajivan, 1996), p. 25.
  10.  Ibid., pp. 39-40.
  11. D.G.Tendulkar, Mahatma, (New Delhi : The Publications Division, Government of India, 1969) Vol. II, p. 63-4.
  12. Nirmal Kumar Bose(ed ), op. cit., p.25.
  13. Romesh Diwan and Shakti Bethea, “Spiritual Living, Gandhian Economics and Well-being” in M. P. Mathai, M. S. John and Siby K. Joseph (eds.), Meditations on Gandhi, (NewDelhi: Concept, 2002),     p. 114.
  14. M. K. Gandhi, An Autobiography or The Story of My Experiments with Truth, (Ahmedabad: Navajivan, 1993), p. x.
  15. M.K.Gandhi, In Search of Supreme, (Ahmedabad: Navajivan, ,2002), Vol. 1, p. 16.
  16.  Ibid., p. 19.
  17. Ibid., p. 21.
  18.  N. K. Bose (ed.), op. cit., p. 4.
  19. Ravindra Varma,Gandhi and Fundamentalism, (Wardha: Institute of Gandhian Studies, 1996), p. 12.
  20. N. K. Bose (ed.) op.cit., p. 25.
  21. M. K. Gandhi, An Autobiography, op.cit., p. 420.
  22. R. K. Prabhu and U. R. Rao, op. cit., p. 191.
  23. M. K. Gandhi, In Search of Supreme, op.cit., Vol. 1, p. 246
  24. M. K. Gandhi, Hind Swarajor Indian Home Rule, (Ahmedabad: Navajivan, 1994), p. 55.
  25. M. K. Gandhi, From Yeravada Mandir, (Ahmedabad: Navajivan, 1992), p. 16.
  26. Pyarelal, Towards New Horizons, (Ahmedabad: Navajivan, 1978),     p. 12.
  27. M.K. Gandhi, Industrialise and Perish, (Ahmedabad: Navajivan), p. 5.
  28. M. K. Gandhi, In Search of Supreme, op.cit., Vol. 1, p. 246.
  29. CWMG, op.cit., Vol. 13, p. 312.
  30. R. K. Prabhu and U. R. Rao (ed.),  op.cit., p. 235.
  31. N.K. Bose (ed.) , op.cit., pp. 66-7.
  32. R. K. Prabhu and U. R. Rao (ed.), op.cit., p. 242.
  33. CWMG, Vol. 38, p. 243.
  34. M. K. Gandhi, Constructive Programme, (Ahmedabad: Navajivan, 1989), p. 12.
  35. M. K. Gandhi, Khadi Why and How?, (Ahmedabad: Navajivan, 1990), p. 7.
  36. M. K. Gandhi, From Yeravada Mandir, op. cit., p. 35
  37. Ibid.
  38. R. K. Prabhu and U. R. Rao (ed.), op.cit., p. 410.
  39. M. K. Gandhi, From Yeravada Mandir, op. cit., p. 38.
  40. Ibid.,  p. 21.
  41. Romesh Diwan, “Economics of Bread Labour” in Romesh Diwan and Mark Lutz, Essays in Gandhian Economics, op.cit., p. 118.
  42. CWMG, Vol. 50, p. 215.
  43. Ibid., Vol. 25, p. 404.
  44. M. K. Gandhi, From Yeravada Mandir, op. cit., pp. 31-2.
  45. Ibid., p. 15.
  46. R. K. Prabhu and U. R. Rao (ed.), op.cit., p. 193.
  47. Ibid., p. 194.
  48. Ibid., p. 257.
  49. CWMG, Vol. 72, p. 401
  50. R. K. Prabhu and U. R. Rao (ed.), op.cit., p. 261.
  51. E.F. Schumacher, “Foreword” in Vadilal Lallubhai Mehta,   Equality through Trusteeship and Full Employment, (Mumbai: Bharatiya Vidya Bhavan,1978), p. ix.



Source: Gandhi Marg, New Delhi, October – December 2006.

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