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Defying capitalism and socialism, Kumarappa and Gandhi had imagined a decentralised Indian economy


Gandhi and Kumarappa shared an objective of building a non-violent social and economic order that promoted equity and justice for all. Their understanding led them to conclude that “the only path to true democracy in political life, and to peace among nations” was a decentralised economic and political system where, necessarily, the “rewards were moderate”.

Excerpted from The Web of Freedom: J. C. Kumarappa and Gandhi’s Struggle for Economic Justice
By Venu Madhav Govindu & Deepak Malghan

Product DetailsIn November 1933, following his fast against a separate electorate on caste lines and the subsequent political settlement known as the Poona Pact, (Mohandas Karamchand) Gandhi embarked on a year-long nationwide campaign against untouchability. Thanks to his extensive travels across the country, he got a first-hand sense of the state of affairs across India. The countryside had not yet recovered from the severe economic dislocation caused by the combined effects of the Great Depression and Britain’s 1931 decision to get off the gold standard.

While the agrarian economy was crying for immediate redress, Gandhi was also confronted with evidence that khadi had its limitations as a means of economic sustenance. Thus, at a time when the urban leadership was keen on rapid industrialisation, Gandhi concluded that the needs of rural India could wait no more. He decided to widen the message of self-sufficiency and self-reliance by reviving other village industries.

The challenge was to enable ordinary people with limited assets, skills, and education to become meaningful economic actors. This, Gandhi argued, was only feasible with a revival and scientific rationalisation of India’s many village industries. Such a move would enable the village to make the best use of its resources and thereby stem the flight of economic surplus from the village to the city. The development of the village economy was meant to be an appropriate answer to the debate between the prevalent economic ideologies of capitalism and communism.

However, Gandhi could neither carry Congress opinion with his political convictions nor generate enthusiasm for constructive work. Therefore, desiring “complete detachment and absolute freedom of action”, in October 1934, at the Bombay session, he resigned from primary membership of the Congress. At the Bombay session, the Congress politely rejected many of Gandhi’s proposals but agreed to put into effect the agenda of the revival and improvement of village industries with (JC) Kumarappa being chosen to lead the effort. On 28 October 1934, the Andhra leader Pattabhi Sitaramayya moved a resolution proposing the formation of the All-India Village Industries Association (AIVIA), also known in Hindustani as the Akhil Bharat Gram Udyog Sangh.


By early February of 1935, both Gandhi and Kumarappa had taken up residence in Maganvadi in Wardha and worked towards establishing the AIVIA.

In the early days, Kumarappa occupied one corner of the spacious accommodation and tried to avoid the nuisance created by some of the other inmates of Maganvadi. However, it was scarcely possible for Kumarappa and others to avoid being experimented upon by the food faddist in Gandhi, who dictated the meals in the common kitchen.

Gandhi’s Maganvadi experiments with nutritious but unappetising soya beans have been remarked upon by many writers. If the unappetising lumps of boiled beans could somehow be tolerated, both Kumarappa and his brother Bharatan seem to have been particularly affected by Gandhi’s experiments with a chutney of neem leaves! Writing many years later, both brothers recalled Gandhi’s paternal indulgence towards them which took the form of additional doses of this culinary delicacy.

Bharatan was a new arrival into the Gandhian fold having chosen to follow his brother into public service. As a result, he was regularly seated next to Gandhi, who plied his ward with extra helpings of goodies like boiled soya beans, orange-skin marmalade, raw garlic, and “bitter as quinine” neem chutney. On one occasion, Kumarappa himself was a recipient of similar munificence when Gandhi placed a spoonful of the chutney on his thali. This act of love was witnessed by Vallabhbhai Patel who wryly remarked, “You see, Kumarappa, Bapu started with drinking goat’s milk, and now he has come to goat’s food!”

Gandhi’s experiments might have led to some humour, but the intent behind them was serious. When he wrote to many scientists asking for scientific information on common Indian foods, Gandhi drew a blank. No such information was available, which led him to wonder: “Is it not a tragedy that no scientist should be able to give me the chemical analysis of such a simple article as gur?”

It was precisely this lack of attention towards the needs of the agrarian economy that the AIVIA was meant to address. But, as is the case today, during his lifetime Gandhi’s agenda of constructive work was deeply misunderstood. Thus, the widening of the constructive agenda to encompass village industries invited great ridicule.

Echoing the socialist critique of Gandhi’s economic programme, his old acquaintance VS Srinivasa Sastri characterised the newly formed association as part of Gandhi’s “endless and quixotic war against modern civilisation”. Gandhi, in turn, pointed out to his critics that the cry of “back to the village” was not meant to be a setback to progress but was merely a demand “to render unto the villagers what is due to them”. If all the needs for raw materials were to be met by the village, Gandhi wondered why the villagers should not be taught to work on it themselves instead of being exploited by the more resourceful city-dwellers.

Much of Kumarappa’s time as the prime mover of the AIVIA was spent in applying his philosophical ideas to everyday practical problems. Keenly aware that philosophers in dealing with the higher aspects of life tend to forget “mundane applications”, he argued that a clear conception of the eternal principles of satya and ahimsa can only be had by “watching them in everyday action”. As a result, he forged a distinct and perceptive understanding of the “economic question” and its relationship to individual and social well-being.


Kumarappa argued that economic questions were not merely technical exercises but were tied to fundamental considerations.

Therefore, if an economy is “well-conceived it will afford free play to all creative faculties of every member of society”. He looked beyond economic growth and was focused on the goal of human development, that is, “the needs of the human being – body, mind and spirit – apart from the material needs of the animal man”.

While mindful that the material deprivation of India’s emasculated masses must be addressed, Kumarappa insisted that an exclusively material focus on economic organisation could not address the challenge of human development. This view on human welfare led him to consistently examine and challenge the received economic wisdom. For going against the grain, he had to contend with critics who argued for the merits of large-scale industrialisation and the virtues of mass production. Consequently, a central and recurring theme in Kumarappa’s work is a wide-ranging and coherent analysis of the modern economy.

Gandhi and Kumarappa shared an objective of building a non-violent social and economic order that promoted equity and justice for all individuals. Their social and economic understanding led them to conclude that “the only path to true democracy in political life, and to peace among nations” was a decentralised economic and political system where, necessarily, the “rewards were moderate”.

In a world where economic growth has assumed the proportions of theological doctrine, this view continues to be misunderstood. The confusion between “simplicity” and “poverty” existed even during Gandhi’s lifetime. The Mahatma’s arguments were “often attributed to the strain of the ascetic in him”, and thereby discredited. But Kumarappa explained that Gandhi’s views stemmed from the fact that “simplicity is the basis of any economy aiming at permanence”.

However, there was some recognition of the moral imperative writ large over the Gandhian espousal of the village economy. Indeed, as the well-known economist JJ Anjaria remarked, this “system of economic thought cannot be adequately appraised merely in terms of [the assumptions of] current economic theory” since “it is a challenge to those assumptions themselves”.

Gandhi and Kumarappa did not wholly depend on the intrinsic goodness of human beings to achieve the objectives of a non-violent economic order. Rather, they attempted to organise society around essential principles that would create conditions conducive to desirable outcomes. Gandhi and Kumarappa believed that economic progress was not to be measured in monetary terms alone. Apart from ensuring the essential necessities of life, the ideal social order should afford every individual the fullest measure of political, economic, social, and spiritual autonomy to fulfil their creative potential.

However, such an individual pursuit could not be acceptable at a cost to the welfare of others, especially when every society had great inequalities in both wealth and opportunity. Therefore, it was imperative that every individual pursues his or her own calling aimed at the welfare of society as a whole. It is these considerations that led Kumarappa to develop what may be termed a moral political economy.


The experience as an exploited colony had turned Indian opinion against capitalism and, as a consequence, the socialist model as exemplified by Russia appealed to many in the freedom movement.

For Kumarappa, this dichotomy was deeply unsatisfactory. Although politically opposed to each other, both the creeds of capitalism and socialism share a deep commitment to the centralised, urban industrial model as the “only panacea for all the economic ills”. However, large centralized industries by their very nature are inimical to the autonomy of the individual and are ultimately an impediment to social progress.

Thus, “if the individual is to be liberated from economic slavery either to the machine or to the capitalist, there appears no other course open to us than to adopt decentralisation of production”. While “there is no doubt that material goods can be increased by standardisation and centralisation”, unfettered industrialisation has profoundly negative consequences on the material, moral, and cultural well-being of individuals in a society. Such social implications led Kumarappa to reject large-scale industrialisation as a remedy worse than the disease.

For him, decentralisation was a natural answer to the search for an economic approach that afforded and preserved individual autonomy while promoting social and economic justice. While Gandhi laid out the broad contours of an argument for swadeshi, it was Kumarappa who out of a prolonged engagement shaped it into a theory of decentralisation.

The value of Kumarappa’s work lies in his ability to present an economic philosophy while working to improve village industries. Right at the inception of the AIVIA, Kumarappa was clear that while “the industries that had long sustained millions” were languishing, if India “was to progress economically and culturally it was imperative that the villages had to become centres of activity”. If the villager had to have social and economic autonomy, the villages had to be made “self-dependent, self-supporting and self-respecting”.


An important, and often forgotten, aspect of this understanding was the emphasis that both Gandhi and Kumarappa laid on adapting and modifying the village economy “to meet the present-day needs”.

Kumarappa repeatedly emphasised that the entire effort of the AIVIA was “to bring science and progress into the stagnant pools that are called ‘villages’ today”. The AIVIA intended to assemble and disseminate reliable and scientifically validated information on all aspects of village-based production as well as carry out research work on its own. But if science was to be brought to bear on the problems of the villages, the association needed trained workers.

In a lament that is strikingly contemporary, Kumarappa pointed out that capable individuals “end up in town in search of secure employment” and “the artistically inclined deserted the indigenous art”. The cumulative impact of this process for many decades has only “brought ruin and distress to our country-side”. Sapped of skill, energy and hope, the villagers had neither “the enterprise …nor the resources to carry out experiments” towards improving their methods of production.

The crux of the problem, as Kumarappa saw it, was the “dearth of intelligent and venturesome persons” who would “study the needs of the people and by intensive experiment and research” provide the ideas and knowledge needed to help organise the villages into self-sufficient groups. However, “public opinion amongst the educated [was] either apathetic or definitely against” the AIVIA since “even the most enlightened” felt that it was indulging in a futile exercise.

Kumarappa felt that the scientifically trained individuals were most culpable. Instead of serving the needs of the masses, scientists were poor trustees of their knowledge which they placed “outside the reach of the villagers” and sold “their services to the highest bidder”.

 

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