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I = S - M

The modern way of thinking about economics has been I = M - S Where I is the I as in me, M is what is 'mine' and S is what ...

10/28/10

Traveling across the India Gandhiji found former cloth-weavers, who had once been prosperous, reduced to destitution as a result of British India's free trade policies. This was happening all over the country and in direct proportion to the availability of cheap cloth manufactured in England and sold in India.

The free trade argument artificially divides people into producers and consumers. Free trade gives consumers the lowest possible prices and keeps producers in line by only affording them normal profit. According to classical economics free trade results in consumers having the final say in what is produced and that too at the lowest price. In other words consumer is king.

People cannot be split into consumers and producers however! How we spend our money affects what we do for a living. How we spend is how we earn. As India's masses were being coaxed into buying cheap foreign cloth and other products, more and more Indian artisans and farmers were finding themselves unemployed and under-employed, increasingly reduced to working meaningless menial jobs when jobs were to be found at all. Gandhiji observed free trade reducing the standard of living in the country as it reduced the quality of work available in the country.

It was from these travels and observations that Gandhiji decided to focus his economics on swadeshi, the idea that buying and selling were undertaken by people, not consumers and producers, and that a person was not split into king and slave but rather needed to be whole and trade with neighbors who were themselves whole.

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