Featured Post

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 ...


Gandhiji said that the most important lesson of the Gita was to engage in work without any consideration whatever of the fruits of the work.

Do your work.

You have a right to your work. But you have no right to the fruits of your work. This is the central Gandhian economic organizing principle. Work without regard to its fruits.

Work without engaging ourselves with the fruits of the work disengages the means from the ends. It moves our focus from ends to the means. Our upbringing, our society teaches us to focus on our ends. What will you be when you grow up is a common question we were asked as children. But regardless of what you will or will not be, how are you going to conduct your self right now, today, is a not a question we were asked.

What are you going to do rather than where are you going. What are you doing rather than what are you doing this for? See the difference? If I am focused on where I am going, my destination, my end, then I am likely to adopt any means possible to get to that end.

By focusing only on the means, on what I do, with no regard to the ends whatsoever, I am in a position to examine my work simply in its own light, not as a duality. I am doing this because I want that. A duality such as this can easily disintegrate into I have to do this repellent thing, A, because then I will have this wonderful thing, B.

But surely you can see that A, what you do, is wrong, your conscience says.

Can't you see I am doing this awful, horrible, degrading thing, A, only so as to enable me to get to B, this sublime state I am looking forward to, you answer.

How do you feel about what you do? your work? probes your conscience.

Oh absolutely awful! And everyone else I know is engaged in work that they hate. But we do it because we have our sights on the end which is beautiful, you reply.

How can a series of awful nows in succession lead to a beautiful then? This is what your conscience would ask you if you would but listen to it. This is what Gandhiji asks when he challenges us to create a new economics. Gandhiji said that means and ends are convertible terms. Therein lies the vital clue to the development of a Gandhian economics.


Means and Ends are convertible terms -- Gandhiji

Ram, Allah, and God are convertible terms -- Gandhiji

I am interested in the means used by man in the making of the ends. I am interested in economics and religion. From the two statements made by Gandhiji I draw the implication

Religion and economics are convertible terms.

What does this new statement mean? What does it mean to say 'religion'? Is it not to say that there is history, a personal history that links us to the past through our parents and grand parents and community? That there is more to life and to that chain of lives than meets the eye? That the physical world, the world of commodities is necessarily simply a subset of a much larger scheme?

And then economics. What does that mean anymore? Is it that markets, the acts of buying and selling, are but a subset of the larger act of living? That an embedded economics requires that we relinquish the fiction that working life involves so-called factors of production churning out commodities?


Modern economics says, make sure property rights are well-defined and free markets work great.

We reject property rights and replace them with trusteeship. The idea is that none of us can own nature-given resources or the fruits of the labor of so many. We can only act as trustees and thus act in the interests of everyone in society.

We do not accept property rights and so we do not accept free markets.


Gandhiji said that means and ends are reversible terms. Capitalism is based on the idea that each person pursuing his or her own greed will lead to harmony for society. The idea is that while greed is not our end, it is the means to our end, and so we must accept it as the basis of society. It is for our own good!

In Gandhian economics we reject capitalism because means and ends are not reversible under it. Who would support a system where greed was the explicit end? No one except a very few misguided and disturbed people.

The urgency of adopting Gandhian economics is this: These few misguided and disturbed people are running the current world economic system of capitalism.


Gandhian economics is not about following Gandhiji blindly to the letter. It is not about finding out every word Gandhiji ever said about any topic related to economics and then repeating it, perhaps in modern garb, with econometrics tacked on for respectability. That approach may be called a Gandhist economics. That is the approach that most economists professing Gandhian thinking have taken. They usually limit themselves to one or two of Gandhiji's books that they consider to have economics content. Then they repeat what Gandhiji said with new words.

I have never seen the point of this exercise. We must create a living, breathing study in the spirit of Gandhiji. We must apply his definition of experiments to the world of economics around us. We must look at all his writing, on every topic imaginable, to get glimpses of the brilliant insight that his approach to life can teach us about developing a method of writing about economics. Sometimes it is his writing on diet that may inspire us. For instance, an agitated follower of Gandhiji who had resolved to become a vegetarian even while living in a meat eating family wrote to Gandhiji a letter that carried this thought: Through some substantial self-restraint the writer had managed to become and stay vegetarian while living in an extended Indian family. His family had recently brought to his attention the thoughts of the much-revered Swami Vivekananda, who urged his countrymen to partake of meat offering to take upon himself any sins that may befall people who did so. To this Gandhiji calmly replied that one must always do what feels right to us through a process of inner searching and turn down the views of even the greatest of authorities in favor of the results of our own inner experiments.*

I am always moved by this letter to a man whose own faith had been shaken by the words of authority. I am moved to attempt a creation of a Gandhian economics, in the spirit of Gandhiji, without looking to anyone, not even Gandhiji as the sole authority, but rather allowing bapu to lead us by shining his light upon our world. I have no desire to belittle the great scholars who may know much more than me about what Gandhiji said about this or that. They may be great in their own way. This for me is a personal search, the story of my own experiments with the truth of economics.

*Young India, 7-10-1926. 


I imagine a Gandhian economy without money. I have some slight experience doing that. An economy must be a small unit. Removing money from the picture removes large entities from the picture. It removes profit-seeking firms and it removes government and quasi-government bodies. They all work with a monetary framework. That is how they exert power.

A few years ago I was scheduled to teach a performance art workshop at a university in India. I was under some pressure to kowtow to the head of the university. I refused. So I was banished from the institution. Since interest in my workshop was high, I quickly organized a voluntary economy that enrolled students, acquired studio space, ran a three-day workshop that ended with a public performance. I have lectured about this event and the Institute of Failure has published my work about it so I will not elaborate on it further here. But I will say this: no money changed hands at any point. We had created a small moneyless economy.

I think economies should be small and local and moneyless. It can be done. It is the foundation of our Gandhian economics.


Economics is not and can not be value-free. In the act of using concepts such as supply and demand economists implicitly make value judgements. They are mostly unaware of that. But it is true.

For instance when we say demand. It is not a thing. It's a concept. This concept requires a peculiar world-view. We must suspend disbelief and accept a view of the world where we can quantify intentions and aggregate them. That requires a value judgement. We believe our action increases understanding and that that is a good thing. But that is in itself a belief. Further, the idea that intentions can be conceptualized requires a big leap of faith. That they can then be aggregated has been shown to be a fallacy by economists themselves.

Gandhian economics embraces value judgements. We start with them and use them at every stage of our analysis. Truth, nonviolence, and dignity value are our foundations. They are our means and our ends.


A Gandhian economics must be a nonviolent economics. It must also be an economics where we are constantly experimenting with the truth of the notions that we develop.

Gandhiji clearly gave us hint as to how such an economics could be possible. He said that means and ends must be reversible. So any action we take with an end in mind must pass this test: What happens when we exchange means and ends? Does the action still make sense or does it expose its ugly belly? If we are planning massive upheaval to create a dam (means) with the idea that farmers in the region will have water for their fields (ends) then that plan fails our test. Try it. Would you have farmers work on their fields, watering the crops and displacing people (means) just to achieve a huge ugly dam (ends)? That sounds absurd doesn't it?

Now consider Gandhiji's vision of a society where local communities engage in small-scale projects that lead to a better life for everyone. In all these cases an exercise in interchanging means and ends leads to pleasant, if humorous results. How about teaching neighbors to read and write (means) so that they may become better citizens (ends)? Reversing the two we get this: Create better citizens (means) so that there is greater literacy (ends). Sounds good to me.


Gandhiji wrote

The unity of all life is a particularity of Hinduism which confines salvation not to human beings alone but says that it is possible for all God's creatures. It may be that it is not possible, save through the human form, but that does not make man the lord of creation. It makes him the servant of God's creation.

Here Gandhiji sets the first task of a developing Gandhian economics: Develop an economics that treats all of creation as not only the means but also the ends. Gandhiji continues in the same essay

Now when we talk of brotherhood of man, we stop there, and feel that all other life is there for man to exploit for his own purposes. But Hinduism excludes all exploitation. There is no limit whatsoever to the measure of sacrifice that one may make in order to realize this oneness with all life, but certainly the immensity of the ideal sets a limit to your wants.

Gandhiji hints here that a Gandhian economics would begin with the limiting of wants. He continues

That you will see is the antithesis of the position of the modern civilization which says: 'increase your wants.' Those who hold that belief think that increase of wants means an increase of knowledge whereby you understand the Infinite better. On the contrary Hinduism rules out indulgence and multiplication of wants as these hamper one's growth to the ultimate identity with the Universal Self.*

Gandhian economics may then be defined as the study of how to use our abundant resources to limit our wants and satisfy them over time in a way that enriches both our resources and our selves making self-realization possible for all.

*Harijan, 26-12-'36, p 363-364 (From weekly letters from Gandhiji).


Ahimsa is the law of nonviolence. Gandhiji's practice of satyagraha, or truth-force, was built on this idea of ahimsa. What confuses the student of Gandhian economics is how the idea of karma is to be reconciled with the idea of ahimsa.

Karma is seen by many as a law that teaches an eye for an eye. It has been compared to Newton's laws. The idea seems to be a quaint one: a violator will be violated, a thief stolen from. That is a common, though violent and misinformed idea of karma.

Karma is seen from a more accurate and enlightened perspective as a repayment of rna, or debts. Someone does something to you, let us say steals from you. In doing so they are simply repaying past rna. With that act, the olds debts have been paid and you are now free as long as you do not respond to the act by creating a fresh act. Governments, companies, and people get entangled in ever increasing violence by being reactive and recreating new karmas that are then acted out and reacted out infinitely.

The key to understanding karma is this. What someone does to us, an act, has no power whatsoever on our essence or higher self. It is only with our ego-identification with the act that the debt created by the act, rna, turns into rnanubandhana, or debt-bondage.

Ahimsa, the law of nonviolence, is the only reliable way to end karmic ties with what is undesirable. For once we have paid our debts we are free!
In 1978 E. F. Schumacher, perhaps the 20th century’s most celebrated humanist-economist (author of Small is Beautiful), acknowledged his debt to Gandhiji and called the Mahatma one of the truly great economists and prophesized that one day Gandhiji may be remembered as the greatest economist of all.


Life is violent. Humans are violent. When we talk about nonviolence we are not using it as a descriptive term. We must accept the violence inherent in life. Gandhiji called this sat, a Sanskrit word which means the way things are.

Nonviolence then is our response to sat. We accept that violence is part of our nature and pure nonviolence is impossible. But we also accept that violence is not the entirety of our nature. There is more to us than that. That nonviolent part of us makes a nonviolence response to sat possible.

Pure materialism based on self-interest is pure violence. Yet we must accept that as part of life. So the entire system of classical economics from Adam Smith onwards all the way to the present is not so much wrong as it is limited. Human beings are capable of behaving like profit-seeking selfish calculators, inflicting great violence upon themselves and the environment. However that is not all humans are capable of. Human beings are capable of thought, of contemplation, of transcending the violence of economic life and choosing a nonviolent response.

This nonviolence is what is emerging as Gandhian economics.


Gandhiji gave us a simple criterion with which to evaluate economic theory and policy: are means and ends interchangeable?* In the period before Adam Smith all the way back to Aristotle the preoccupation of economic thinkers was with right economic conduct and the fair prices that would result from it. Here means and ends were undoubtedly not only connected but also interchangeable.

With Adam Smith came the focus on self-interest as the means and a prosperous society as the end. With Smith onwards economic thinking suffers from this inconsistency between means and ends. After all how can pure greed and selfish behavior lead to anything other than a greedy and selfish society? Smith's book was called the Wealth of Nations but really is a system for creating a few fabulously wealthy individuals in a morally broken society.

The other so-called revolution in economics is Keynesian economics. John Maynard Keynes proposed a system of deficit spending during times of critical economic crises to rescue the system. Here the distance between means and ends is compounded! First we must accept a corrupt system based on self-interest (Smith). Secondly, we must accept that such a system must periodically crash and cause untold suffering. Hence we must mortgage our future to save the system (Keynes).

Using Gandhiji's simple criterion we must reject both Smith's classical economics as well as Keynesian economics unless our human imagination is limited to imagining only selfishness and overspending as our ends.

*Young India, 31-12-1931, reprinted in M.K. Gandhi, The Essence of Hinduism. Delhi: Farsight, 2009, p 67.