Inclusive Economics: Gandhian Method and Contemporary Policy

By Narendra Pani

A major part of the world appears to be enmeshed in economic crisis. Most observers would agree on many of the symptoms of the malaise in the world. Unemployment, alienation from work, cruelty and violence to others, self abuse, environmental degradation and a technological that is be out of control. The impact of panic in the markets, the moral hazard created by guarantees, the asset bubbles that result from crony capitalism and the effects of competitive devaluation. What prevented economists from using their knowledge to anticipate the crisis in Asia?

Our occasion to ponder over the subject is the book "Inclusive Economics: Gandhian Method and Contemporary Policy" by Narendar Pani. There was no fiscal imbalance on the eve of the crisis, the inflation rates were low, there was no substantial unemployment and the economies seemed to have completed a boom-bust cycle. This collective failure is a reminder that even economists are fallible. Relatively speedily economists came up with explanations for the various dimensions of the Asian crisis, but what stopped them from arriving at these theories before the crisis took place? This questions gets intriguing when we consider that the concepts used to explain what happened were known before the crisis.

These illusions did not require any fundamentally new concepts in economics. They behaved differently in a new context. Economists need to recognize that their theories can function very differently as situations change. One becomes progressively convinced that the present global crisis is a problem within man, not outside him, and so is any possible solution. This is precisely what Mahatma Gandhi preached. To quote his own words, " The world will live in peace only when the individuals composing it make up their mind to do so." The most important factor on which human destiny depends is human quality of plainly the average quality of the billions of inhabitants of the planet.

Gandhi formulated his economic order in the context of his design of an ideal social order through the avenue of truth and nonviolence. No one's gain should be anybody's loss - financial, physical, moral or spiritual. It is the first block upon which his entire economic philosophy stands. Gandhi gave the economic aspect of life its due importance. All men have material needs. Science of economics is based on the outlook of the materialist. Economics counts as cost any activity that fails to cater to material needs. Economics says that only those activities are called productive which cater to material wants. Economics is concerned with welfare, but even welfare is a term completely rooted in materialism.

Where Mammon is God, no one worships the true God. Gandhi equated God with 'Daridranarayan' meaning God of the poor. On the deep feeling of spirituality and divinity of man that Gandhi based his economic order. This is not the route this book has taken. The roots of this book lie in the environment of economics academia in India in the 1970's. When Indian economists were paying a great deal of attention to village studies. It was in this search that one went into Gandhi's ideas and emerged convinced if we could distil his method from his voluminous writing, it could provide the framework for an inclusive economics.

This route to Gandhi's ideas distances this work from that of those who began with fascination with the Mahatma. It recognizes that it is possible that it is possible to accept his method even without supporting all his judgments. And it is more concerned with the contemporary economy that is with the economy of Gandhi's time. 

Inclusive Economics: Gandhian Method and Contemporary Policy

Author: Narendar Pani

Sage Publications, New Delhi, 2001, pp 205