Relation of Gandhian Economics and Globalization

RELATION OF GANDHIAN ECONOMICS AND GLOBALIZATION

After critically analyzing the concept of Globalization and Gandhian Economics we can draw the relation between the two. Thus we will discuss the relation under various headings.

1. Human Wants –

In this age of Globalization human wants are unlimited, while the resources for fulfilling them are limited. Hence there is the question of choice. The intensity of human wants differs from individual to individual, place to place and time to time. The objective of society is to bring happiness to man by enabling him to fulfil his ever increasing wants, with the passage of time, wants multiply, and their range and intensity also increase. It is presumed that if physical happiness is ensured, mental and spiritual happiness would follow.

Human unhappiness largely flows from non – fulfillment or inadequate fulfillment of these wants. Wants are classified into three categories: necessities, comforts and luxuries. A comfort for one may be a necessity for another. A luxury today may become a comfort for tomorrow and a necessity the day after. Therefore, the endeavour of society should be to multiply wants and make all out efforts to satisfy them. The ultimate objective is the well being of the people by providing material satisfaction.

Today the progress of society is measured in terms of the satisfaction of these wants. On the other side, Gandhiji denounced, "the principle of the unlimited character of human wants as a determinant of economic activity and its satisfaction an index of economic progress." He said, "I do not believe that multiplication of wants and machinery contrived to supply them is taking the world a single step nearer to its goal. I wholeheartedly detest this mad desire to destroy distance and time to increase the animal appetite and go to the ends of the Earth in search of their satisfaction. If modern civilization stands for all this and I have understood it to do so, I call it satanic." He further said, "Man is a restless bird. The more he gets, the more he wants and still remains unsatisfied. Therefore, the ideal of creating an unlimited number of wants and satisfying them seems to be an illusion and a snare."

In other words, he felt wants are unlimited, and the more you attempted to satisfy them, the more they increase. If you fail to stop them, wants make man pursue them for no purpose, whether needed or not. The demonstration effect also drives man toward fulfilling these wants. He does not try to live within his means. Man should not become a slave of these wants. What can be provided to one and all alone can be considered. Gandhiji protested against the mad pursuit of wealth in the disregard of higher ends.

The centralized capitalistic mode of production would not bring happiness to one and all, which he termed as Sarvodaya, because it is breeds disparities in income, wealth and status, which, in turn, create conflict in society. The basic needs – food, clothing and shelter – should first receive attention. The centralized capitalistic system is bound to give preference to the production of items required by the elite." The quest for an ever – increasing standard of life is degrading and dehumanizing. It leads to a commercial outlook on life. Voluntary curtailment of wants is more indicative of progress than a desire for unlimited accumulation.

1. Mode of Production to Satisfy Wants –

To satisfy wants, the production system has to expand substantially. Only then society would derive benefit. This would call for mass production, which is production on a massive scale or large scale by adopting higher technology i.e., replacing labour by machine to make it more productive. The object is to increase leisure wherever possible and also to increase output and reduce the cost of production. This results into the requirement of greater division of labour, specialization and standardization. Economics of scale are achieved. In a changing society, there is always a tendency for the big to become bigger and then bigger still. This results in considerable concentration of production, which is referred to as the capitalistic mode of production, i.e., where the intensity of capital is very great. There would also be a need for greater automation. In other words, a few will produce more. The production system would became more complex, calling for high technical competence. Technocrats will became powerful.

On the other hand in Gandhian Economic system,a decentralized economic set up would ensure fuller and proper utilization of human and material resources. There would be no problem of alienation which is a common phenomenon in highly industrialized societies centralized production leads to unplanned urbanization, the creation of social problems and concentration of economic and political power in the hands of a few and this is detrimental to the growth of a democracy. A decentralized economic system, on the other hand, will truly be a free democratic society with few social problems. Agriculture should always remain a decentralised activity. In Industry too, decentralising production should be done. What cannot be produced in a decentralized system may alone have to be allowed for centralized production. Gandhiji said: "There would be no objection to villagers using even the most modern machines and tools that they can make and afford to use." Only he added, "they should not be used as a means of exploitation of others." I do visualize electricity, ship building, machine-making and the like existing side by side with village crafts."

Gandhiji believed in harmony between the small and the big. He was even willing to accept the use of heavy machinery. He said: "The heavy machinery for the work of a public utility which cannot be undertaken by human labour has its inevitable place." But he added: "But all that should be owned by the state and used entirely for the benefit of the people."

According to Gandhian economics, the decentralization of the economy is possible because of the availability of power (conventional and non-conventional), communication facilities and wide spread expansion of such infrastructure as banking, insurance, ware housing, facilities, work sheds, repair facilities, consultancy, technical know-how etc. Therefore, what society may lose in small scale operation in contrast to the large scale operations would be more than compensated by other measurable and non-measurable advantages? An, all-out effort, however, should be made in favour of production by masses in contrast to mass production. The direct involvement of the people would eliminate their alienation. There would be no divorce between work and the ownership of the means of production, Physical work has its own advantages for the well being of the human being. Gandhiji believed in bread labour. He asserted that "in a country where people shunned manual labour and thought it was degrading in such cases, when hand-spinning is universalized, it would teach our population, high and low, the dignity of hard labour."

1. Goal of Economic Activity –

In the present time of Globalization societies are based onthe profit motive, competition and the cash nexus. The motto' the ends justify the means' is acceptable. In the present system, man may be able to satisfy his physical wants but may yet be mentally and spiritually starved and sick. He may become a victim of loneliness in the midst of a crowd.

In Gandhian system Man should be at the centre of development. Efforts should be made for his all round development – physical, mental, social and spiritual. For this purpose, an integrated approach is necessary. There should be integration of society and nature and ecological balance needs to be maintained. Agriculture, industry, livestock, forests, plants etc. should grow in harmony. An isolated approach, as adopted in contemporary civilization, would have disruptive effects. Decentralized production and distribution alone can checkmate the tendency to disparities in income, status and wealth and these disparities are the root cause of friction and discontent. Gandhiji was of the view that rapid economic development and social justice can go hand in hand only in decentralized economic system. The aim should be to build a classless society which would ensure the welfare of all. In any economic activity there should be complete harmony between the ends and means.

The Gandhian alternative is Sarvodaya or the welfare of all, a classless society based on the destruction of classes but not on the destruction of individuals who constitute classes. A system of production should not fail to make use of science and technology with a view to create an economy of abundance, but it should not, in the process either kill individual initiative or freedom for development, it should not create a psychology of ceaseless striving for more and more material goods. It should develop a system of distribution that ensures a reasonable minimum income for all and ensure that all private property or talent beyond the minimum will be used as a trust for public good and not for individual accumulation. It should moreover, assist with creation of a social order where all will work but where there is no inequality either in status or in opportunity, where change is the result of persuasion and there is a recognition of mutuality of interests Gandhiji conceded that classes and clashes of interests might still exist. He believed in resolving these clashes through non-violence and at times through resistance based on moral principles. He did not object to the growth of organizations of the poor and of trade unions and their resistance to management. His emphasis was on achieving the ends through good means.

1. Competition Vs Co- existence

In the era of globalization, society has move towards competition. The market approach is the essence of the present system. To create demand, expenditure on advertisement, publicity, sales promotion etc. is ensured. Greater attention is paid to display, product publicity, brand names, packaging, salesmanship etc. Incentives are given to consumers at the sales point.

The producer is always afraid of law of substitution, obsolescence, and change in fashion, change in technology as well as raw materials and the problems arising out of dependence on other producers. It is supposed that,in the absence of competition, it is difficult to make improvement in quality so same amount of competition is necessary for the effective utilization of resources.

In Gandhian Economics, The basic objective should be the overall development of man and for that purpose, economic activities are undertaken, which generate employment ultimately, then production has to be sold. The objective should be to produce that much,which can be disposed of the primary beneficiaries of production that isproducer who is entitled to get an income which would be adequate enough to sustain him, irrespective of the level of technology and the type of production. Therefore, price fixation of product should be on the basis of prime cost plus fixed overheads. Production moreover should be largely for local consumption. It is the responsibility of society to dispose of surplus production. For this purpose, either total or partial reservation of production or purchase and price preference or subsidization may have to be adopted by society as a social obligation. The cost of production may be higher in a decentralized system, but it has to be borne by society as a social cost for social benefit. Overheads cannot be flexible and some limit will have to be laid down, which has to be observed as a Lakshman Rekha i.e. the sacred line. The basic problem is of inadequate margins and scale how the basic needs of food, clothing and shelter can be met in such conditions effectively. There should not be the process of creating artificial demand by propaganda, publicity, advertisement etc. This leads to an unnecessarily increase in the price to the consumer and also creates unnecessary demand. Society also owes responsibility to the consumer. There cannot be competition between unequals. The weaker and smaller units will have to be protected with the adoption of a differential approach in the support mechanism. Co-existence rather than competition (and substitution) should be the strategy in economic development.

1. Mobility of Resources – Self sufficiency –

There is greater mobility of raw materials, labour and finished good today because of increased communication facilities.

According to Gandhian Economics, to the extent possible, local raw materials should be processed locally. If all the processes of production cannot be done locally, at least initial processing ought to be done locally. The objective should be to take work to the people rather than attract them to the places of work. This is not only socially desirable but also economically feasible in a large number of production activities. Some of the goods which are not locally produced can be obtained from other areas, but the aim should be to restrict the movement of the people as well as of raw materials from rural to urban areas or over long distances. Gandhiji said; "under my scheme, nothing will be allowed to be produced by cities which can equally well be produced by villages. The proper function of cities is to serve as clearing houses for village products.

We may have to look beyond the village for this purpose, rural areas should be provided with the required facilities for health, hygiene, sanitation, medical care, education, recreation, housing etc. This should be given concrete expression in the formulation of block plans and their execution. Unnecessary movement of raw materials and labour should be avoided. No plan would be successful without the people's participation. Therefore, the administration of development programmes has to be entrusted to voluntary agencies, local representative bodies etc. In this context, it may have to be pointed out that economic decentralization would not be effective without a purposeful adoption of small technology.

According to Gandhiji although desirable, a mere dispersal of large industry to rural areas would not solve problem. Decaling of the technology too, is essential. Experience shows that dispersal has neither given a push to rural industrialization, nor led to a balanced development of the region. It has only created islands of prosperity in rural areas. It has created urban oasis in the rural areas, having only a superficial impact.

1. Problem of Poverty –

In spite of increased production of Goods and other services poverty is increasing day by day in developing countries or we may say that required things are out of the reach of poor. Gap between rich and poor is increasing day by day in the age of Globalization inspite of various government programmes for the alleviation of poverty, condition is same since years. Today in the name of Gandhi various programme have been launched for employment generation.

According to Gandhiji, a proliferation of work opportunities for the masses is necessary for the alleviation of poverty. In reply to poet Tagore, Gandhiji said: "The hungry millions ask for one poem – invigorating food. They cannot be given it. They must earn it only by the sweat of the brow." He further said: "Grinding pauperization can lead to nothing but moral degradation." Work to the masses can be provided mainly in three activities (a) processing of local (agricultural and non agricultural) raw materials, (b) Manufacturing of textiles, and (c) construction (especially housing). The technology and the product – mix in these three activities should be such as to ensure the maximization of employment, provision of a living wage and increased production. Therefore, a strategy of a common production programme would play an important role; for it would ensure higher production and larger employment simultaneously that would not create the problem of inflation.

The main problem in all poverty alleviation programmes is that there is no method by which the slippage to poverty of the beneficiary, who has already crossed the poverty line, can be stopped after assistance is withdrawn. Secondly, own account employment or self-employment results in the neglect of productive assets. This calls for a new strategy providing for a permanent arrangement to avoid a relapse to poverty as well as an organizational method which would ensure wage employment while retaining self employment character.

Thirdly, poverty alleviation is possible only by increasing work opportunities in the area of food, clothing and shelter, with an open basket approach to employment. Some people are in need of supplementary or subsidiary employment while some need only seasonal. The production system should cater to the needs of all these types. Gandhiji was against the grant of loans. He said, "free meals to a healthy person who has not worked for it in same honest way is not charity."He hated begging and said: "I would stop every Sadavarta where free meals are given. It has degraded the nation and has encouraged laziness, idleness, hypocrisy and even crime." Fourthly, difference, in costs may have to be reduced by subsidization. Subsidization is justified if the net inflow is more than net outflow ie., the quantum of subsidy is less than the net wage generated or net value added. It may be pointed out that Gandhiji never accepted poverty, which amounts to denial of certain immediate needs, because it is degrading and dehumanizing, No higher life is possible in conditions of poverty. At the same time, the quest for over increasing luxury is also degrading and dehumanising.