Monday, November 30, 2009

Gandhi and Capitalism

Following up from the previous post and the post in reply: Gandhi was in principle against modernization. He chose to reject the West. His vision was in terms of village republics, each as self-sufficient as possible. And somehow factors of production were to be held in a trust rather than owned for private gains. He believed that there was such an ideal India some time in the past and that an independent India would revive such a true village.

Agriculture when optimized, will not employ more than 10% of India's population directly. Currently it employs 58%. Capitalism is currently the only guarantee for the removal of poverty. The problem with capitalism is that it progresses through periods of unstable equilibria like the last two years searching for an optimized solution. Upheavals create new industries and banish the old. Capitalism grows through these downturns. This risk scares politicians. It was the desire to prevent such uncertainties which led our leaders to choose the Soviet model. Gandhi on the other hand believed in contentment and no trade. He also believed in population controlled by self-abdication; self-avoidance, and therefore he did not worry about the population problem and how it would support a growing populations through village republics.

It is fortunate that Nehru took over from Gandhi. He believed in steel, in cars and power. Gandhi's economic thinking in no way lessens his contribution to India's cause. Rather, we should recognize that he was no Hayek, just a lawyer and our leader. The fact that caste and regional politics are so prevalent in India are a sign of the flourishing of our democracy where all opinions are heard and diversity allowed to flourish. That will be his contribution to a free India.

1 comment:

  1. Geeta: Nice article. The comparison between Hitler and Gandhi in your previous post is interesting. However, I do feel that Nehru was not the best person to set the direction for the newly independent India. He was more rooted in theory than in practice. Sardar Patel was the man for the job. And it was Sardar, not Nehru, who was the real boss of the Congress party - Nehru was merely the public face.