What is Gandhian banking?
The banking system is raw power, like horses, bullocks, steam or electricity, that may be used for evil (as it has so far in modern times) or for good (as I propose). The principal tool of this magnificent system of unrivaled power is interest.
The banking system flows capital to various channels and receives a reciprocal flow called interest. That is natural and the way it should be. Interest is ever flowing in the opposite direction of the flow of capital.
However, interest has been misused so far to create poverty rather than wealth, to drain communities of wealth rather than build communities. This has happened because of the misuse and abuse of the concept of interest.
A Gandhian banking would involve the simple proposition:
That interest is ever flowing as a reciprocal flow to capital and that interest should be paid on productive loans but be unpaid on use loans.
When money is borrowed for productive purposes, to start or expand a business for instance, a profit is expected to be realized, new wealth is created in the world, and so the paying of interest is the most natural thing in the world. It is simply sharing of the new wealth so created.
When money is borrowed for use, to buy food or shelter for instance, no profit is expected, no new wealth is created, and so the paying of interest would be the most unnatural thing in the world. In this case interest if paid would lead to the impoverishment of the borrower and would make the world a poorer place.
For much of the history of the modern world interest has been charged and paid for both productive loans (where it is natural to do so) and use loans (where is is unnatural to do so). The result of this is that wealth has multiplied (as a result of the former) even as people have been impoverished (as a result of the latter).
Understanding the difference between productive loans and use loans is crucial and has so far been ignored in the modern economy since the industrial revolution. But the ancients understood this distinction perfectly, always allowing interest on productive loans while frowning upon interest on use loans. The ancients called this latter practice usury, meaning 'wearing down'.
Let us summarize the economics of Gandhian banking:
1. Interest flows always as a reciprocal flow to capital.
2. In the case of productive loans interest is borne by the borrower. This is a business transaction. The profits are shared out of new wealth created.
3. In the case of use loans interest is borne by the lender. This is a social transaction. There are no profits involved and to charge interest drains the borrower. By charging no interest wealth is maintained and not drained.
4. The system of Gandhian banking is a sustainable system of banking. Like the ancients we recognize that charging interest on productive loans is simply sharing profits while refraining from charging interest on use loans keeps wealth from being drained from those in need.
The banking system is indeed raw power, like bullocks, horses, steam or electricity. Together let us use it for good.
And then there is also this: If we see corruption we become corrupt. If we see self-interest we become self-interested.
Krishnamurti said in the last talk he gave in Bombay, "Corruption is not just passing money under the table. Anytime there is self-interest there is corruption. Self-interest is corruption."
What is the task ahead of us? It is not to change anything 'out there'. It is to change ourselves bit by bit. I am the most selfish man alive, the most greedy. However my task is not to judge. My task is not to make a leap.
My only task is to be a little less selfish and a little less greedy each day. Every single day. And to share this profound change with you, my readers.
Change, however small, can be seen. At first only we ourselves see it. And we change. And then others see us change. Then they become the change.
Friends, you, me, we, are One.
Gandhian economics is a simple and honest program to end misery. The poor are humanity! We are the 100%! Let us work together as brothers and sisters to change the world.
The economics of more more more is based only on two things. They are FEAR and GREED.
Bertrand Russell pointed out a long time ago that society and schooling instill in the child, at an impressionable age, the idea that life is a fearful matter. That bad things are just waiting to happen. That life is a punishment rather than a gift. This twisted indoctrination made in every modern society on earth leads to the modern man and woman being split. This split causes behavior actuated by and based on greed.
When the world is seen as a dangerous place the acquiring of material possessions and the inherent power in such possessions becomes a 'natural' part of the life of men and women. In such a state maximizing behavior is described as the 'natural' expression of human consciousness and self-interest is justified as a logical basis for the functioning of life.
A society based on self-interest is a society based on unTruth. UnTruth is self-defeating. UnTruth causes anxiousness, distrust of one's fellow beings, loneliness, stress, self-aggrandizing behavior. UnTruth is violent.
A society based on the simple principle of universal love as Gandhiji taught us is a society based on Truth. Such a society has no place for FEAR and GREED.
Let us turn our backs on unTruth. We can do so quite easily by eliminating FEAR and GREED from our own lives. When we begin to do that the economy of more more more loses its power base and withers away leaving behind only the economy of use.
Then Truth prevails and we are whole.