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There is only one goal. That is to be whole again.

There is only one goal. That is to be whole again. How human beings live and work determines whether they remain whole or are split. ...


Modern economics is a conjuring trick. The effective conjurer creates an illusion of magnificent proportions--chopping a beautiful young woman in half, the disappearance of a wedding ring and its reappearance, the correct prediction of a privately chosen playing card. So does, in like fashion, the modern economist.

The two tools of the act of conjuring that is known as modern economics are misschooling and hijacking

Having gone through the rigorous process of misschooling in modern economics in two continents, I may be considered qualified to make a statement or two on this topic, since no one else has. You see, once you have been misschooled it is in your self-interest to keep your 'bloody mouth shut,' as my adviser in graduate school in economics advised me to do. I have kept my 'bloody mouth shut' for too long not just from self-interest but also from consideration for the feelings of my old teachers and professors. I have come to realize that that is wrong and that I must speak up. 

I was first misschooled at Jamnabai Narsee School in Bombay, where I did not have to read a single word of Gandhiji's in all my years of miseducation. This school was considered one of the best schools in Bombay. The only time Gandhiji came up was right before Gandhi Jayanti one year when the school arbitrarily decided that students would give speeches on Gandhiji's birthday. 

Since I was considered to be the best speaker in my class, my teacher handed me a speech written by one of my classmates' father and asked me to 'mug up' the speech to deliver on Gandhiji's birthday. The speech made me nauseous. It had profoundly stupid statements such as, "He was known as the naked fakir.

Luckily for me I went crying to my father. He had studied in a school run by freedom-fighters and read Gandhiji's autobiography in its original Gujarati (his Principal had given it to him) and was able to help me make my own speech which I delivered to all the other fourth standard students. After that Gandhiji was never mentioned again in my school. 

That brings us to college. I received my BA in economics from St. Xavier's College, Bombay. This college was considered to be one of the best colleges in the country. In my five years of miseducation at St. Xavier's I never had to read Gandhiji and I had never even heard of Kumarappa! The elocution contests were sponsored by the chamber of commerce and needless to say I never once won these competitions or even got selected to represent my college. I must hasten to point out that my professors were some of the sweetest people I have ever met. They were kind, generous and taught us what they themselves had been taught. I remember my mother, who was herself denied an education by her parents because she was a girl, asking me quite innocently in my third year of college if we studied Vinoba in economics class and I asked (much to my shame now but not then), "Who's that?" I would like to point out that as a National Talent Search Examination (NTSE) Scholar I was considered to be one of the brightest that the college had produced. 

I fear things are not much better now. If asked about Hind Swaraj, the bright college student today is very likely to ask, "What's that?" And referring to Ram Rajya, the same student is most likely to think that reference was being made to bigoted ideas of the extreme right. 

I received my MA in economics from Northwestern University, Evanston, Illinois and awarded the title of University Fellow. If India had been a miseducation, America was miseducation magnified. In the name of education, mental gymnastics aided by mind-numbing mathematics were presented and memorized, all in the aid of preserving a patently unequal economic system controlled by the rich and powerful. 

That has been my own experience of misschooling in economics. Had it not been for my father, a brilliant maverick economist, and our family's tradition of reading and long conversations late into the night, I would have been perfectly molded into the model economist. Unfortunately for me, my father died when I was 16 years of age, and that loss left me at the mercy of my misschooling until my awakening

Let us return to our analogy of the modern economist as showman-conjurer. We have examined above the first of the two tricks up the conjurer's sleeve, that is miseducation. We understand through my personal experience how so-called higher education in modern economics is brainwashing in the interests of fear and greed. It is not that Gandhian economics is rejected by this system, it is that it is never ever brought up! Show me the economics professor who talks of Gandhiji in his or her class and I will touch their feet. I have yet to touch any economist's feet. 

The second tool of the economist-conjurer is hijacking! The modern economist hijacks concepts that should with common sense mean one thing but are made to appear as something else altogether. We will examine just two of about a thousand such concepts.

Consider rationality. Common sense tells us that people and animals and as scientists have shown us more recently, even plants, are rational in the sense that they care about being alive and preserving their kind. So we would have to agree that the common sense meaning of Rational Man would be that he (or she) take actions that would preserve mankind. But modern economists insist that the basic axiom (axioms are never proven--they are stated as accepted facts) of life is that individuals only care for themselves, that they want more more more, that human wants are unlimited! Common sense tells us that if every single person wants everything that is in this world and more, mankind would perish from constant conflict. That would hardly be rational for the species!

Consider freedom. Modern economists say freedom consists in being able to buy anything one pleases. But common sense tells us that to buy things means to use money and to use money in turn means to have to earn it. How is a person to be considered free who has to toil long hours, not to grow his or her food, but to make someone at the helm of a very large organization fantastically rich? This so-called freedom is paid for by the blood and sweat of the people forced to work long hours at meaningless jobs, away from their families and communities, to purchase shoddy goods that are put away in a while, food removed of all nutrition that is bad for their health, just to plop down in front of a giant television set where they will be told what they must consume next.

Rationality and freedom are just two of a thousand common sense ideas that have been hijacked by modern economists and brought into the conjuring act.

With the skillful and persistent use of misschooling and hijacking the modern economist is constantly creating illusions for the world to see and believe.

In the meantime suffering increases, we are more lonely than ever before and parents have no time for their children and children have no use for their parents. 

I could go on and on and on. I could write a book on all this. But really, who is listening? Who would bother to read my book?


Modern economics has been marketed to the masses under the guise of freedom. But following my self-interest is not freedom. It is following the basest of my instincts! I admit that I am selfish. I am perhaps the greediest person alive. 

But am I truly free when I am selfish and greedy? No, I feel like I live in a prison of my own making. I am not free.

Something inside me makes me want to be free. And sometimes I feel very deeply the following: 

Freedom consists in following the highest of my instincts. 

Do you think self-interest is the most we can hope from human beings? Is greed the most we can hope for? I do not think so. 

And if the most selfish and greedy person in the world (that I undoubtedly am) feels in his bones that he can be more than he is, is that not a sign that true freedom is possible?

The answer is, yes!

But we must give up on modern economics before true freedom can become a reality.


Modern economics is about what. What kind of school do you go to, what degrees do you earn, what you do for a living. Furthermore, what do you buy, what do you possess, what do you amount to?

Gandhian economics is the name we give to multiplicity of approaches that are all about how. How do you learn, how do you act, how do you live? Furthermore, how do you buy, how do you possess--do you only own things that you use, how do you make your life as a part of society?

How is infinitely more important than what. However, at present, what, being backed by money and power, is trampling over how. This has been the history of our modern era.

However much we are trampled upon and neglected, we must speak up. How we do it is very important. 

Which is why I write and teach. 


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.  


We must "be the change we wish to see." A corollary from this is that we become what we see. If we see harmony we become harmony. If we see selflessness we become selfless.

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.


Gandhiji's image is on all of India's currency. But currency in India and everywhere in the world is part of the modern banking system of more more more that is distinctly un-Gandhian. This is unfortunate because like steam or electricity the banking system is a tremendous force that can be tapped for good.

To understand what banking in the economy of use may look like we must first understand how modern banking emerged and how it works. Once we do that I will outline how we can develop a distinct banking system for what I call the economy of use: A banking system for the benefit of all. 

The history of modern banking can be explained very easily. When people had money that needed looking after a man with a strong box would offer to look after the money for a small fee. Let us imagine 100 villagers leaving their gold money with the man with the strong box; he becomes their banker. The villagers come to the banker to withdraw some of their money and to deposit some new money to be kept safe for them.

The banker soon sees that he has a large reserve that is untouched. Although part of their deposits are withdrawn by the villagers, fresh deposits come in all the time. The banker realizes that in practice this large reserve that is permanently unused is about ten times the amount that he needs to have ready and available for the villagers who withdraw their money in any given period of time.

Imagine that each of our 100 villagers has deposited 11 gold coins with the banker. Then the banker would see that 100 gold coins were enough to keep at hand for any withdrawals and 1,000 gold coins were available to him, the banker, to play with as he saw fit. 

Though the money rightfully belonged to the 100 villagers, it was the banker, by the device of lending and relending money not his own, who tapped into a tremendous power beyond the wildest dreams of agriculturists or manufacturers, kings or queens, conquerers or imperialists. 

Powerful as it is, the story so far is only the story of proto-banking. We need to see Act II of our play to see banking in its real form emerge. 

This happens when our banker realizes that he need not keep any money at hand at all! The villagers keep faithfully depositing their money with the banker and he in turn hands them receipts, little pieces of paper emblazoned with many seals, that are the banker's promise to pay. And lo and behold the entire village starts accepting these little pieces of paper and starts circulating these little pieces of paper for real goods made with real human effort. With this paper money is born and the modern banking system is established. 

Having established how modern banking was created we can now turn to how modern banking works. This can be explained in 4 easy steps:

1. The banking system creates money out of thin air. The amount of money created is about ten times as much as any individual or potentate with that amount of money could create.

2. The banking system governs money completely, creating a State within a State. Money is different from food and other goods and services. While everything else takes effort to produce, money can be produced effortlessly by the banking system. It can be used for evil or it can be used for good.

3. Money which is the 'product' of the banking system is perfectly liquid. It can be used for whatever the banking system wants without having to wait or lose value. Hence the banking system can control business and industry, agriculture and its related infrastructure, and in general the entire economy. Perfectly liquid money, without limit, can energize X and enervate Y, make lives and break lives, and over time drain wealth or revitalize communities by the selective charging or non-charging of interest.

4. No other system, not agriculture, not industry, not services, can outcompete the banking system for the simple reason that the banking system uses money that is counted ten times over and over again. 

We have explained how the banking system was established and how it works everywhere and always in all of the world. We now need to explain what capital and interest are. 

Capital is defined as the produced means of production. Capital is used to do things with: to make things, to buy things, to go places and to do stuff. Interest is capital's reciprocal flow. Like a shadow it is ever present whenever capital is involved and flows always in the opposite direction of the flow of capital.

Capital can flow into two distinct places: productive investments and use investments. Productive investments are activities that involve the use of capital to make more and other stuff. Someone borrowing capital to start a business would be an example of productive investment. Use investments are activities that are concerned with the daily act of living in society. Someone borrowing capital to feed her family or to marry would be examples of use investment.

Historically, although the charging of interest for productive loans was always accepted, the charging of interest for use loans was heavily frowned upon and termed usury. There were legal and more importantly moral safeguards against usury in society. 

Banking in what I call the economy of use would seek to harness the fantastic power of the banking system for good rather than evil. It would consist of the following propositions:

1. We accept that interest is everywhere and always flowing as a reciprocal flow to capital. 

2. While interest is ever flowing, interest should be charged and paid only in the case of productive loans. In the case of use loans interest should not be charged nor paid but borne by the lender rather than the borrower. Thus we shall permit of no usury.

3. The banking system is a tremendous motive force like steam is to a steam engine. We must harness it and use it for good.

4. In the economy of use, productive loans are defined as loans obtained for the purpose of doing something productive in harmony with Mother Nature and contributing to the family and community. Use loans are defined as loans for the purpose of obtaining things that will and must be used rather than hoarded. 

5. Dignity Banks should be set up in village after village, community after community, and should charge a simple interest of 5% for productive loans and 0% for use loans. In a few years if the principal is depleted, fresh infusions of capital should be made to the Dignity Banks.

Thus would banking under the economy of use harness the quiet power of banking to do good rather than evil. I ask people and groups with money and capital to help me achieve this goal. We are all in this together. We are the 100%. 


In the year after India gained independence, 2.1 million acres of good, cultivable land was used to grow peanuts all of which were chemically and heat-converted into hydrogenated oil marketed with duplicity as vanaspati (vegetable) ghee

At the time according to Kumarappa two acres of such land could easily support a family of five year-round. 

The government's support of the vanaspati ghee industry brought unimagined wealth to the owners of the industry and ancillary industries. On average vanaspati ghee was priced at one and a half times as much as cold-pressed locally made oils. 

At the same time that families were paying 50% more for a markedly inferior product detrimental to their health, 5.25 million souls were being denied their right to their most fundamental livelihood: their right to grow and eat food instead of starving. 

Sources for calculations: Gram Udyog Patrika, July/August 1947 and April 1949. 
What is the economic history of my country? Tomes have been written on this subject. Worldwide the media celebrates India's success story. The story of India's suffering and malnourished millions remains untold. Between the obfuscation of the scholarly tomes and the unabashed obsequiousness of the media the Truth lies forgotten.

Let us tell the economic history of my country. And let us do it in a minute. 

Soon after the British left India Gandhiji was put up on a pedestal as Father of the nation and conveniently forgotten. Fear and greed, rather than Truth and Love, ruled the day. The Government supported corrupt and wealthy businessmen in setting up Agricultural Colleges that specialized in removing nutrition from the food. 

Polished rice replaced brown rice, maida replaced whole grain flour, chemically processed hydrogenated oil marketed as vanaspati ghee replaced cold-pressed oils made locally, refined sugar replaced palm sugar once grown on land too hilly for cultivation. 

The hungry, starving millions in India's 700,000 villages paid high taxes and ate worse than they ever had. Their meager food supplies were now devoid of any nutritional content. Their suffering grew. Millions of farmers committed suicide and continue to do so to this day.

Gandhiji's image is on all of India's currency while the economy follows none of his principles. Someone's got to speak up. Which is why I write. 


Kumarappa, the father of Gandhian economics, said that under British India the poor paid 88% of their income in taxes and received back 12% in Government services. The astonishing fact is that this proportion has not changed in India after independence. The still more astonishing fact is that this proportion holds true for the poor worldwide, from poor countries to America, richest of the rich countries.

It does not take more than a quick calculation to realize that the majority of the world is poor. Not only that but that in each and every country in the world the poor constitute a majority! So when we are talking of humanity we are really talking of the poor. Humanity is paying 88% and getting 12%. Once again it is easily seen that under this system misery must grow. 

So we must accept that misery has grown. This is not theoretical. Unless you are really checked out it is self-evident. We can see it everywhere. And we must accept that misery is growing. 

Humanity was miserable, is miserable and will always be miserable at an increasing rate if we continue as we have for centuries. How can we accept this? How can we accept a system that ensures that humanity will always be miserable? Human life is a gift of Mother nature.Could it be that we have disrespected this gift? That we have lost our dignity by denying humanity its dignity?

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 story of my country is the story of fear and greed trumping Truth. 

Barely a year after independence Einstein warned India that the use of chemical fertilizers and tractors would lead to the destruction of the soil and in the long run cause untold misery. 

Kumarappa, the father of Gandhian economics, himself warned my countrymen that unless India were to be organized on decentralized principles focused on organic farming and meeting all its needs through local economies, he feared the worst for the country's future.

Even as bigger and bigger monuments have been placed in the memory of Gandhiji, all around the country and all around the world, his ideas and values have been totally ignored, often by the same people who are putting up the monuments.

And so the story of my country is really the story of the world. In country after country local economies that were once self-sufficient, that once created thoughtful employment for people and animals, that once engaged nature is its awesome flow, have been destroyed. 

Fear makes us follow self-interest and greed makes us maximize. Self-interest and maximization lead to power, centralization, fabulous wealth for the few and destitution for the majority. Together they lead to work that is devoid of meaning, the breakdown of family life and hence the breakdown of society. 

Even Einstein could never have imagined the world that we have created by abandoning Truth. Do we now have the courage to abandon our own self-interest and our own maximizing behavior and instead choose Truth?

That is all that Gandhiji asked us to do. Really!


There is a lot of talk of abundance lately. It has become quite the fashion. But this talk of abundance is bad economics.

The reality is that scarcity is the basic fact of economic life. Resources are limited. When we possess things that we do not use we trap resources, freeze them. Less resources are available to others. Thus scarcity rather than abundance is, and has always been, the hard reality of life. 

If it were true that abundance was the basic fact of economic life then and only then would self-interest be a rational choice. In that imaginary world I may possess all I want without diminishing what is available to you or anyone else. However that is not the reality that we live in. We live in a world of scarcity. When I take more there is less available for you. 

If we can accept that scarcity is the basic fact of economic life we must also accept that in the presence of scarcity sharing is the only rational choice. Unless we share we are doomed! There is not enough to use and abuse resources in any which way. We must share. 

Sharing is good economics. 


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.