Gandhi’s Economics: Practical Ethics for Systemic Transformation
FEATURED RESEARCH PAPER, 2 Dec 2019
Here the concept of basic cultural structure (BCS) is used to argue that Gandhi, with deep roots in a different basic cultural structure, is able to offer a deeper and in the end more realistic critique of, and alternative to, neoliberalism than critiques that remain within the basic cultural structure of modernity. It also sheds light on troublesome questions that need to be addressed, such as ‘Why have moral economies failed to materialize? Is it now too late to prevent inevitable irreparable disastrous ecocide? Is it really true that by practicing the ideals of Gandhi and other great moral exemplars we are contributing to building a peaceful, just and sustainable world?’
Two years ago, Ela Gandhi[i] visited us here in Chile and talked about dharmic living. What struck me most was that what she proposed was something I could do every day and every night. What I want to consider here is the proposition that the more people do dharmic living, or something equivalent with some other name, the closer humanity will come to peace, justice and sustainability.
I think I am agreeing with Ela and with what her grandfather would say if he were alive when I call for the transformation of the constitutive rules of modern markets and the meeting of human needs through what Gavin Andersson calls unbounded organization;[ii] aligning across sectors to solve problems, doing what works; meeting needs because they are needs, not meeting them if and only if the person who has a need is also a person who has money.
Greta Thunberg has been amazingly successful in getting a hearing for reality. When she says that either we listen to what physics, chemistry and biology are telling us and act accordingly, or else we go extinct, people wake up and take notice.[iii] Reading her speeches got me thinking about pivoting on natural science to deconstruct the imaginary world of neoliberal economics that dominates the real world.
Reflecting on what I have learned from Ela and on what I have learned from Greta generated the ideas in this chapter.
By ‘Gandhi’s philosophy’ I mean, in one-word dharma. It is the philosophy you practice when you do dharmic living. It does not mean you get everything right and all your plans succeed. God knows Mahatma Gandhi did not get everything right. It means you emulate his attitude, in your successes and in your failures.
This one word dharma speaks volumes. It speaks roots thousands of years old and thousands of years deep in numerous cultures, most of them in South Asia. It speaks the culture and the social organization of the ancient Indian village Gandhi idealized, a village which, like the Russian village Tolstoy idealized, survived from century to century as empires ruling over it came and went. Among the common and poignant translations of this essentially untranslatable word into English are: acting in accord with the sacred principle that makes life possible, the right way of living, virtue, purification and moral transformation, custom, duty, path of righteousness, cosmic law, the rules that created the cosmos from chaos, vocation, and religion. Gandhi’s writing and thinking support all of these and more. Perhaps more important, his behaviour demonstrated all of these and more. He could truly say, ‘My life is my message.’ Gandhi’s philosophy starts with dharma. It ends with seeing one’s life as a series of opportunities for service: feeding the hungry, bringing water to the thirsty, clothing the naked, sheltering the homeless, caring for the sick (he trained to learn nursing skills), visiting the imprisoned (and calling their needs to the attention of the prison authorities), and burying the dead.
In his first famous book, Hind Swaraj (written in Gujarati in 1909, a decade before his pioneering work in nonviolent resistance began in Johannesburg, on a boat on his way from England to South Africa) Gandhi asserted that modernity cannot possibly last because it is adharma. Adharma is often translated as ‘irreligious.’[iv] Drawing on other translations, calling modernity adharma carries the connotations of violating the sacred principles that make life possible, the wrong way of living, vice, pollution and moral degradation, social disintegration, shirking duty, the path of injustice, disobeying cosmic law, breaking the rules that created the cosmos out of chaos, missing one’s calling or working 9 to 5 just for the pay with no moral purpose. Life is a series of opportunities to become a success. If my neighbour is hungry, or thirsty, or has no clothes, or no roof over her or his head, or is sick or is in prison, or is dead, it is not my problem.
Although modernity has now survived 110 more years since 1909, 110 years is just a blip in historical time and less than a blip in geological time. At present the hard facts are—as Greta Thunberg tells us that science tells us—that Gandhi’s prophecy is coming true.
Jeremy Rifkin and David Korten and Pierre Calame must be counted among the optimists who agree with Gandhi that modernity cannot survive—although, like most of the rest of us, and probably like Gandhi himself on further reflection, they would add a list of modernity’s positives to the story of its negatives Gandhi tells in Hind Swaraj. Rifkin, Korten and Calame agree with Gandhi that modernity cannot survive. They are optimists because they believe that humanity can survive by creating new post-modern civilizations.
Friedrich von Hayek, on the other hand, can be read as agreeing with Gandhi that dharma and modernity are incompatible, but disagreeing with his values. According to von Hayek, caring and sharing are ethical principles suitable for small traditional villages. But small traditional villages cannot produce enough food, or enough of anything else, to make possible a planet with 7 or 9 billion people on it.[v] Modern production calls for modern rules. It calls for free markets. (His main argument for free markets is epistemological: planners cannot possibly know and process the countless detailed facts that must be managed to achieve economic efficiency.) Von Hayek calls modernity an ‘extended order.’ The morality of freedom in an extended order must reject caring and sharing and embrace accumulation. Its rules are first and foremost the moral analogues and the ethical grounding of the legal rules that constitute markets: property and contract.[vi] According to von Hayek, it is dharma that cannot survive.
Gandhi can be read as making the opposite choice: if modern wealth requires abandoning traditional morality, then moral frugality is preferable to immoral wealth. Similarly, if manual labour is good for the soul, and employment provides the dignity and security of earning one’s daily bread, then labour-saving machinery is a curse, not a blessing.
Walter Rostow, author of The Stages of Economic Growth,[vii] like many of the development experts who have been funding and advising the third world since 1948, must be counted as a social democrat when compared to capitalist purists like von Hayek. Indeed, in view of the prevalence of views favouring some degree of planning and mixed economies among his fellow economists, von Hayek in the end resigned from the profession. He declared that he no longer wanted to be identified as an economist, since in his view economic science led to socialism.
Rostow, although according to von Hayek he was unacceptably pink, was adharma when judged by Gandhian criteria. The first stage of his stages of economic growth consisted of replacing traditional values with the modern rule of law. Customary exchanges had to be replaced by markets. Land had to become a commodity. People had to learn to work for money, to put their money in banks, and to borrow money from banks. The flexible justice of the panchayat, the indaba, and the cabildo had to be replaced by the police, the written law, and the jail. A developing country had to offer a disciplined work force trained to arrive and leave on time and to obey the foreman. Thus—rephrasing his historical research to write a normative theory about what had long been practiced—Rostow advocated preparing the culture to receive the investor (even when the investor was a state-owned enterprise), to offer investors profits, and to minimize investors’ risks.
Dharma and Cultural Structure, viewed in the third decade of the 21st century
Given that Gandhi’s advocacy of dharma and critique of modernity prioritized morality and the good of the soul, it is not surprising that when J.C. Kumarappa drew up a more systematic Gandhian economics, it took the form of moral stages. In place of Rostow’s stages of economic growth, Kumarappa proposes stages of economic morality:
- Killing one’s prey or otherwise living by destroying one’s sources of benefit.
- Kumarappa seems to have had in mind leisure classes that live off the work of others without making a positive contribution themselves, as in Marx’s critique of the owners who appropriate the surplus value created by the labour and sweat of the workers and by the thinking and stress of the managers.
- The hard-working business person is economically creative and has a sense of enlightened self-interest and social responsibility.
- Now it is the group that is enterprising. Human relations are democratic within the firm and in what Alexander Osterwalder[viii] might call each key relationship of the firm’s business model.
- Servant leadership committed to an economy of permanence, living in harmony with nature by using its income while preserving and replenishing its capital.[ix]
Now, as the third decade of the 21st century begins, civility dissolves, and ecosystems wither, we should be concerned, I suggest, with the following three general and three specific questions expressing doubts about Gandhi’s economic philosophy. Generally: (1) Why did moral economies like the ones Gandhi, E.F. Schumacher and others advocated fail to materialize? (2) Is it still possible at this late date to reform human behaviour to reverse the dissolving of civility and the withering of ecosystems? (3) To what extent is our major premise correct? i.e. If we practice dharmic living and encourage others to do so, then life will be better and more likely to survive and flourish.
Specifically: (1) How do we reply to the charge that although Gandhi’s economics might sound somewhat reasonable in theory, when he tried to put it into practice—most famously in his scheme to relieve poverty by teaching the unemployed to spin—it was a failure? (2) How do we account for the fact that the economic programme of the Congress, which was expected to be implemented and which was approved by Gandhi shortly before his assassination, was quickly brushed aside and ignored; except for a few peripheral aspects like emphasizing rural rather than urban development, which were more slowly brushed aside and ignored? (3) Why did social democracy, in its Nehruvian, British, Scandinavian and other forms also fail to put the economy at the service of the people; and after promising beginnings, decline until now social democracy is at best in a process of orderly retreat, in a world dominated by neoliberalism?
My proposal is that plausible answers to these six doubts, and support for dharmic living as a practical and transformative ethic, can be framed in terms of a concept of basic cultural or social structure. (I do not distinguish cultural structure from social structure,[x] although I find it convenient to use sometimes one of these two adjectives and sometimes the other, depending on the point being made in the context.)
Structural Explanation and Why it is Important
It will take me nineteen paragraphs to explain what I mean by basic cultural structure, not counting the paragraphs it will take to explain how that concept serves a realistic approach to dealing with the doubts the six questions pose.
During the last thirty years co-authors and I have demonstrated in detail in numerous books, chapters in books, and papers that peace, justice and sustainability require the transformation of the basic cultural structure of the modern world.[xi] Not always in those exact words. Anything true can be said in more than one way—would you not agree?
Let me try to explain why nothing short of cultural transformation (also called social transformation) will save us.[xii]
God help me to be clear. So much depends on being able to communicate.
What is the basic cultural structure of the modern world?
In one word: Sales.
In two French words: séparation marchande.[xiii]
The French phrase—literally ‘merchant separation’ or ‘commercial separation’—corresponds to what is sometimes called in English ‘the exchange relation’ which might also be called ‘the exchange non-relation,’ or ‘your problem is not my problem’ or ‘what’s in it for me?’ It corresponds to the point Adam Smith makes when he writes that to get our bread from our baker we appeal entirely to his interests and not at all to our needs or to any family or social or ethical ties that bind us. It also corresponds to the similar point the Pie Man makes when he says to Simple Simon, ‘Show me first your penny!’
The poor people in the modern world are the people whose goods and/or services have either remained unsold or have been sold for too little to live on. This description of poor people reflects Keynes’ point that supply usually equals demand (so that everything supplied is sold and if more were supplied it would not be sold) not when all needs are met but when the needs of people with money and a desire to spend it have been met.[xiv]
Transposing to an ethical key, there can be a duty to work, or at least a duty to be willing to work, but there can be no duty to earn an income by working. Being employed requires finding someone able and willing to buy your work. There can be no duty to buy, hence no duty to employ, and hence no duty to be employed.
Given sales as the basic structure, history and logic tell us that over time, inevitably, investing in order to produce for sale for profit will become essential.[xv] Investment will become essential to ‘create employment.’ It will become essential because without investment many (normally most) people’s physical needs will not be met. As happened in Chile in 1973, and as is happening in Venezuela now, ‘the economy comes to a standstill.’
As Michael Kalecki wrote: ‘Under a laissez-faire system the level of employment depends to a great extent on the so-called state of confidence. If this deteriorates, private investment declines, which results in a fall of output and employment (both directly and through the secondary effect of the fall in incomes upon consumption and investment). This gives to the capitalists a powerful indirect control over Government policy: everything which may shake the state of confidence must be carefully avoided because it would cause an economic crisis.’[xvi]
The result is that whatever else happens, investors must be pleased. They can shut the system down for any reason or no reason. Jobs depend on them. Food depends on them. Normally (i.e. not in cases like those just mentioned where political motives are major factors) everything depends on sales being large enough at high enough prices to keep the motor that drives the system going. Some people call such a way of life a ‘regime of accumulation.’ This phrase has come to mean that everything about a culture—all its institutions and all its behaviour and beliefs and ideals—must be—whatever else they are—conducive to investors making profits.
This does not mean humans do not do other things that cause problems—like spending their free time having fun in ways that multiply the human population beyond the carrying capacity of the planet. Or like poor people when they stop being poor wanting to live like rich people, making ecological and other problems (like traffic) worse.
The perspective here proposed does not mean governments can always succeed in attracting all the investors they need to get the growth and employment they want. No amount of sacrifice of social, financial and ecological objectives on the altar of growth guarantees that there will be growth, or that there will be employment, or that employment will bring with it dignity and security.
Thus, all governments are compelled (until the basic cultural structure is transformed) to play a game only some governments can win. Even the winners only win some of the time. Each has 195 other governments competing with it to attract investment to its shores, and also to attract people with high incomes to be domiciled for tax purposes within its territory.[xvii] Usually, anywhere on the planet footloose capital may roam seeking to multiply itself, usually it finds that all or most of the profitable business niches have already been found by someone else and occupied. It is a hard sell to convince an investor to come to one’s country, start a new business and create new jobs.[xviii]
The greed of the rich, or some fraction of them, no doubt explains some of the persistence of intellectually indefensible ideologies that (falsely) appear to serve their interests. Greed explains some of the concentration of wealth in their hands and some of the physical dependence of life on their decisions. But the main factor is not greed. It is structure. The necessities of life structurally depend on investing to produce for sale to customers who have money to buy. This is a fact about the rules of the game—about the rules that constitute and govern markets. The cultural rules constitute the material positions that constitute the system.[xix] It is not a fact about psychology or about self-serving ideology or about original sin. Redistributing wealth, and other necessary changes, on the scale necessary to achieve governability sufficient to cope with today’s and tomorrow’s mass unemployment, global warming, and other existential crises, call for making the basic legal-cultural-social structure more susceptible to amendment in the light of physical facts.
In more detail: the reason why the main cause of inequality, exclusion, and paralysis in the face of climate change and other existential threats is structure, not greed, is this: The poor person gets a job (…the consumer finds a well-stocked supermarket, the government gets a tax base… etc.) only if the investor gets a profit. Therefore, people who already have money must end up with even more money, in order for the penniless to get anything.
Once the basic cultural structure, the séparation marchande, is established, it is inevitable, as a matter of history and as a matter of logic, that life will come to depend on the confidence of investors. If investors lose confidence, or pretend to lose confidence for whatever reason, meeting the basic needs of life is in jeopardy. Governments sense that trouble is ahead and act to avoid it. For example, in 2004 Sonia Gandhi, sensing that trouble was ahead when the shares on the Mumbai Stock Exchange tumbled alarmingly, declined to accept the premiership to which she had been elected by the people. She calmed the markets and protected the daily bread of the people by nominating Manmohan Singh to serve instead.
Of course, there have always been counter-currents existing alongside séparation marchande: not just Gandhians and Tolstoians, but also other people marching to the beat of a different drummer, mothers, neighbours, non-profit institutions, anarchist collectives, coops, governments of many kinds at many levels, and so on in endless variety. I am talking about markets—which Jürgen Habermas called modernity’s primary institution,[xx] about why they dominate us, about why market phenomena (like capital flight) make it so hard for democracies to change property relations even when inequality is severe and a large majority of the voters favour a smaller Gini coefficient and economic security for all citizens. When push comes to shove, when sales stop, for whatever proximate cause, then society stops.
Greed is not the main issue. Although socio/emotional and moral education forming pro-social habits like sharing is part of building a tomorrow that will be better and more stable than today, it is not the main part. As Peter Drucker points out, even if the CEO of a company is an angel, who has no interest in personal gain, it is still the duty of the CEO to make sure that the company makes a profit.[xxi] The CEO, like everyone else, operates inside what Max Weber called the ‘iron cage’ of capitalism. (Drucker thought her or his salary should never be more than 20 times that of the lowest paid employee.)
Now, some of the investors are small fry who are part of what Jose Luis Coraggio calls the ‘people’s economy,’ that is to say: the economy whose purpose is to maintain households, not to accumulate wealth. The small fry may be counted as ‘investors’ because they own a one-bedroom apartment they rent out to students.
Others are moguls. They have huge holdings parked in trust funds in tax havens that neither tax collectors nor academic researchers can trace. It is the moguls who profit from the main juicy investment opportunities. As Thomas Piketty shows, confirming these theoretical reflections with facts, the largest fortunes, as far as can be discerned with the available evidence, are growing at around 7% per year. Smaller fortunes grow at slower rates. Meanwhile, most governments and most people sink into debt.[xxii] This is the normal pattern, given the basic cultural structure. When tribal, ethnic and kinship loyalties fade away, and new forms of solidarity do not replace them, there is no stopping inequality, insecurity, the growth of a class of paupers and as surely as night follows day a class of criminals. Governments may pretend to be in command, but in reality, they are powerless to do much about many of the problems they are blamed for. The times and places where tendencies toward greater equality have set in are exceptions due to exceptional causes, mainly wars.[xxiii]
The necessity for transformation means that it must become possible to make rational and ethical decisions about climate change, mass unemployment, growing inequality, making social human rights realities instead of empty promises, and so on. Now, as things stand today, decisions switching to sustainable technologies, for example—cannot be made and implemented without first doing whatever it takes to please investors. Therefore, they cannot be made at all. Until further notice there is no rational and ethical set of public policies for country X that coincides with what must be done to try to persuade investors that investment in country X will be profitable, and indeed more profitable than investment elsewhere. Every country simultaneously winning the competition to achieve full employment by becoming a haven capital flees to from elsewhere is a mathematical impossibility. What countries like Switzerland and Singapore had to do to be winners, when they were winners, was what capital found most profitable. Capital finding it most profitable (compared to all its other opportunities) only rarely coincides with paying high wages to install green technologies that will continue to be labour intensive at high wages after they are installed. Every government of every country always outbidding all the others to attract businesses, and always persuading both existing and new businesses to use labour intensive green technologies not just in the instalment phase but permanently, meanwhile leaving the carbon in the ground, is a non-starter.[xxiv]
Therefore, surviving the climate crisis, or social chaos due to mass unemployment, or any life-threatening crisis, requires transforming the basic cultural structure of the modern world, starting by appreciating and strengthening what we call ‘growth points.’ Growth points are points where the system is already transforming itself, cultural structures are already changing, for example the social responsibility movement among business people,[xxv] or for example young people volunteering to plant trees. Transforming does not mean destroying. It does mean, as José Luis Coraggio says, ‘resignifying.’[xxvi] Change meanings, and therefore change behaviours, to make institutions function to facilitate meeting all the needs on Maslow’s list in harmony with nature. The result can be called dharmic living. Remember that one of the translations of dharma is acting in accord with the sacred principle that makes life possible. It can also be called ‘ethical construction,’ remembering that in Aristotle’s ethics, arete (often translated as ‘virtue’ or ‘excellence’) means performing one’s functions as a human being well. It can also be called value-centred social and emotional education. The same philosopher said that a well-educated person finds pleasure in virtue (justice, for example) while a badly educated person finds pleasure in vice (greed for example). I would add that a well-educated person understands that greed is not the main problem. She or he understands cultural structure and why it must be changed. A badly educated person might believe mainstream economics.[xxvii]
Answers to Six Doubts about Gandhi’s Moral Approach to Economics
- Why have moral economies like Gandhi’s not materialized?
It is still true, as Kumarappa alleged when he proposed to think of the history and future of economics in terms of moral stages, that a general trend toward moral progress in history can be discerned.[xxviii] The establishment of the constitutive rules of capitalism and the Republican rule of law in Europe in early modernity can be seen as moral progress,[xxix] even though it can also be seen as the setting up of a pitiless market quasi-machine that amorally grinds out certain outputs given certain inputs. Commercial societies (whether or not capitalist) are organized according to rules; they have ethics. The facts that—as demonstrated above—those rules lead to the marginalisation of those who fail to sell and to growing inequality can be viewed—at least to some extent—as unintended consequences and/or as the necessary price that must be paid to achieve the greatest good for the greatest number (and/or as the price that must be paid to achieve levels of productivity that will make possible the prosperity of all in the long run.)[xxx] The European commercial institutions imposed on the rest of the world mainly by military force have never lacked plausible moral arguments in their favour. Whatever the arguments may be, they have also not lacked mechanisms forcing nations to operate on terms the system dictates whether they choose to do so on moral grounds or not. For example, the Indian economic reforms of 1991 were not voluntary. They were forced on India as a result of a shortage of cash to meet current obligations that required India to seek credit from international sources whether she wanted to or not.[xxxi] Generally, as argued above, modern nations must please investors. And, while it can be argued that the obligatory is the beneficial; for example, that the 1991 reforms put India on the path to prosperity and happiness; it can also be argued—as Gandhi and his followers have—that the path to a truly moral economy leads in a different direction.
The above considerations tend to show, I would submit, why the Gandhian and similar moral paths were not taken. It was because under the prevailing institutions it was a physical necessity to do whatever was necessary to favour investor confidence. Governments were preoccupied by that necessity; they were in the habit of coping with it every day; they hardly had time to think about anything else. But nothing has happened that disproves Kumarappa’s claim that over the broad sweep of history a general tendency toward justice can be discerned.
- Is it still possible to reverse humanity’s march toward self-destruction?
Yes. In the previous section, an unwritten thought expressed between the lines was that although the institutions of capitalist modernity might be seen as the result of the rhetorical victories of the arguments in their favour chronicled by Albert Hirschmann and others, they might also be seen as ideologies serving the interests of the stronger.[xxxii] Liberal ethics and orthodox economics became the dominant ideas—one might advance as an hypothesis not to be lightly dismissed—because of the military victories of the stronger (for example the New Model Army of Oliver Cromwell, the parliamentary army led by William of Orange, and the superior military technologies deployed by the East India Company in India and by Europeans on all continents). Gandhi, of course, claimed that the power of military force had been greatly overestimated, while the power of truth had been greatly underestimated.
But now there is a new reason to believe that truth has a chance. It is that the existing world economy no longer serves anybody’s interest. Continuing on the path of social disintegration and ecocide that we are now on does not serve the interests of even one human being, no matter how rich that human being may be. No not one. We can now speak of unbounded organization, aligning across sectors for the common good, doing what works for the good of all without being partisans of one class against another class, but achieving what the partisans of the working class have always wanted. All classes have the same interest—namely survival in a society with a high degree of equality. The burning question of the exploitation of the surplus value produced by labour and appropriated by capital—one Kumarappa’s moral stages of Gandhian economics set out to solve—is ceasing to be a question. Labour is ceasing to be a factor of production. The burning question is now, who will get the benefit of advanced technology? The ethical answer is: everyone, including the other species that share the planet with us. Psychology and other sciences are learning that the privileged classes would be more mentally healthy and more secure in an economy where everyone had equal privileges—not the dumbing downward of the Chinese cultural revolution, but the smartening upward of lifelong education for everyone who wants it. For those who don’t want lifelong education—if there are any—we will have to listen to them to figure out how they get dignity and security too. Capitalism, conceived as domination by an overwhelming need to create favourable conditions for capital accumulation whatever the social and ecological costs, is not in anybody’s interest. Capitalism conceived as freedom to engage in business, and to find meaning in life by creating the surpluses that make it possible to achieve the common good—most importantly to achieve dignified and happy lives for the majorities who will be redundant in the labour market and to achieve reforestation and similar measures to heal the biosphere—is in everybody’s interest. Now we have a chance to put Gandhi’s ideals into practice quickly on a massive scale. Because in principle we have nobody against us. We are only opposed by people who do not understand. Yet.
- Is our major premise correct? Are dharmic living and a similar commitment to serve Truth and neighbour found in other faiths, and also in humanisms whose followers find moral integrity in Science-talk although they do not do God-talk, really making those who practice them part of the solution and not part of the problem?
Our major premise is half correct. To the extent that it is correct, it is correct by definition. It entails wanting to be good, seeking truth, and working to solve problems to the best of one’s understanding and ability. A world of people whose spiritual practices inspire them and give them strength,[xxxiii] aligning across sectors for the common good must be on its way to saving itself from ecological and social disaster, compared to one where people are hostile or indifferent or whose good will lacks the reliability and resilience that comes from spiritual solidity.
The reason why my answer is ‘half correct’ instead of ‘correct’ is that I want to emphasize structural understanding. I am claiming that the deep generative causes of war, poverty, and unsustainable practices are deep structures[xxxiv] built into law, customs and common sense many generations ago. People long since deceased—who no doubt did not understand and did not intend the present consequences of what they were doing—built the deep foundations of an economic system that has logics of its own. If it were not so, the world today would not exhibit so many phenomena that very few people, or nobody, wants. For example, the World Economic Forum, which is usually thought to be a gathering of the world’s most powerful people, regularly devotes itself to studying how to solve the same problems everyone else wants to solve—including the gross inequality of which they themselves are often thought to be the beneficiaries,[xxxv] and yet the problems persist. If they have as much power as they are commonly thought to have, and their intentions are what they say they are, then, why does what they (and every other sensible person) want keep not happening?
It gets worse. The basic cultural structure punishes good people. Suppose that in any generation some of the people who have resources to share, share them, and share them wisely, thinking as hard as they can about how to be good stewards of their gifts.[xxxvi] Suppose that in the same generation other people with comparable resources share nothing, maximize profits, and recycle the profits to accumulate even more. If this goes on for several generations, then by the power of compound interest the accumulators will end up with most of the wealth, while the good citizens will be far behind in wealth and probably far behind in influence.
The bottom line: We are called to study structures, and how to change them.
- ‘Gandhi’s Economics Failed in Practice’
The concept of basic cultural structure attempts to bring some order into the comparison of economic theories, and some hope into the struggle to reconstruct modern society before it is too late Young Mohandas Gandhi, as we learn from his autobiographical writings, grew up in a cultural structur where self-discipline, serving others and learning to be good were everything. Life in Porbandar and Rajkot, as he remembered it, might be described as following a Hindu version of the Buddhist mantra:
I take refuge in the community
I take refuge in the Dharma
I take refuge in the Buddha
The basic cultural structure had at least two names. Its name was dharma. Its name was truth.
The culture shock young Gandhi suffered when he visited England and France (in spite of his mother’s fear that if he went there he might eat meat), which led to the philippic he delivered against modernity in Hind Swaraj, was repeated in a way that led to the spinning movement when he returned to India in 1914. Technological progress in the form of machine-made cloth had crippled the way of life of the Indian village, and it had exposed the ribs of the now near-starving villagers, by destroying a third or more of the village’s material basis: spinning cloth in the months too dry for farming. Any regrets Gandhi might have had for having exaggerated the irreligion of the British in Hind Swaraj sank in grief.[xxxvii] The culture that had conquered India featured rationalizations for not caring, in the form of the belief that, as Keynes put it, ‘all is for the best in the best of all possible worlds, provided of that we let well alone.’[xxxviii] And in the form of an ethic of freedom limited only by the duty to respect the freedom of others.[xxxix] In this context, the central message of Gandhi’s thirty year (1918-1948) struggle to make spinning generate livelihoods for India’s villagers was somebody cares.
Having made a dharmic response, ‘Yes, I am my brother’s keeper!’ Gandhi then made a logical error. He reasoned that in the dry season the villagers were now idle, producing nothing. If they devoted themselves to spinning, then at least they would be producing something. However little it might be, at least it would be something.
His mistake was overlooking the fact that making a piece of cloth that can be sold and bringing it to market to be sold require a number of other inputs, in addition to the labour of the spinner. When you add up the cost of the other inputs you have already nearly priced the cloth out of the market, without even beginning to think about how to pay a just wage to the spinner. The only people who will buy your khadi garments are people who are willing to pay more than market price for their clothing because they support your worthy cause.
The logic of standard economics tells us that once this mistake was realized, the khadi movement should have died. It should have died for the same reason that the old cottage industry of spinning to make a little money during the off season died in the first place: machine spinning is more efficient than spinning by hand.
But it did not die. Gandhi doggedly tried one way or another to make it work until the day of his assassination, January 30, 1948. And it has not died since his death. It is still alive today. Here is a fairly recent e-mail I received from his granddaughter Ela:
I have just returned from a long journey to India and met many people working in rural areas as well as some who run various NGOs. Yes, khadi has had many problems over the years, both in terms of cost of the product as well as in terms of the amount given to the people who produce it. Problems were also experienced in the sale of the product. But from what I was told, the industry is now flourishing with sales going up. More products are on the market. They have improved their skills at spinning as they now have a new better performing spinning wheel. The cloth is therefore of much better quality and they are also modernising their design and colours. Millions are able to earn a livelihood and a unique feature is that even Bollywood stars are now promoting the product. According to the people I interacted with, this was the one strong factor which was able to mobilize people across India.[xl]
My conclusion is that Gandhi was a pioneer of what is today the burgeoning movement called social entrepreneurship. Yes, for a long time and perhaps even now the only people who buy khadi are people who are willing to pay a price above market price to support the cause. But those people are not few, as are not few the customers of TOMS Shoes (a shoe company that provides personal affectionate delivery of a free pair of shoes to a shoeless person in the third world for every pair of shoes it sells in the first world).[xli] Sure, the cost of Khadi garments, even when the prices are above market, do not reflect the economic value of all the labour that went into them, because many of the labourers (for example many sales people in Khadi shops) are volunteers. But the volunteers are not few either. Often volunteers do the same work other people are paid for. The people who need the money are paid, while those who do not need the money are not paid.[xlii] With all his mistakes and false starts, Gandhi’s practice of his principles created examples of caring cultural structures. They are growth points growing toward the caring and sharing mission-driven basic cultural structures of the future without which peace, justice and sustainability are not possible.
- Why was the initial economic program of the Congress for independent India brushed aside?
Thinking in terms of basic cultural structures helps us to see that it was not simply a matter of the political opposition of people who thought they would lose by it. It was a matter of the causal powers of social structures. Governments necessarily must work every day to keep investors happy, or to make them happy if they are unhappy. The program of the Congress did not focus on this and other urgent necessities. Given the structure of the world as it was in 1948 and in many ways still is, other issues were urgent and had to be urgent.
To repeat: Now, as things stand today and as they stood in 1948, rational and ethical decisions—whether they are about meeting the needs of the poor or about switching to sustainable technologies or anything else—cannot be made and implemented without first doing whatever it takes to please investors. Normally governments are so preoccupied trying to achieve an acceptable level of growth, keeping new investors coming and preventing old investors from leaving, staving off recessions and preventing another depression, that they do not have time or inclination to even think about what it would take to build a win-win world where everybody’s needs were met in harmony with nature. It is true that Nehru’s government made deliberate policy choices, such as writing five year plans emphasizing industrialization and public investment. But behind these major policy choices there were staggering facts established by the basic structure of any commercial society, such as the chronic weakness of effective demand, and the consequent chronic weakness of the inducement to invest and employ. These staggering facts meant that working to keep investment rates up, one way or another, was not a policy choice. It was a systemic imperative.
The accelerated and accelerating technological progress of the last few decades adds new structural issues on top of basic structural issues that were putting Gandhi’s economics on hold in 1948. The relation between investment and employment is complicated today by the fact that now to increase production and productivity firms normally become more capital and technology intensive. Investment then means less employment not more.[xliii] Technology is making labour redundant and that is why the age of economics is over. Over! That is why it is high time for the age of ethics to begin.
Hence, we can conclude: Although they may not be well-stated or completely-stated here, plausible explanations are available explaining why Gandhi’s approach, elaborated by Kumarappa, i.e. an approach which calls for improving human economic relationships through moral progress, has been neglected. These reasons do not imply that the general idea that human moral progress is possible is wrong. On the contrary an intellectually defensible science of moral development has emerged.[xliv] Within business circles numerous movements promoting business with a conscience have emerged. The Journal of Business Ethics has become a leading academic journal in the management sciences. Meanwhile radical socialist critics of capitalism (many of whom advocate mixed economies in which capitalism ceases to be dominant but continues to exist) have been reconstructing radical political economy on ethical foundations.[xlv]
Therefore, ethical alternatives promise to be viable at the same time that technological progress makes traditional orthodox economics, which assumes that most people live by selling their labour, even more out of touch with the real world than it always has been.
- Why did social democracy, in its Nehruvian, British, Scandinavian and other forms also fail to put the economy at the service of the people; and after promising beginnings decline until now social democracy is at best in a process of orderly retreat, in a world dominated by neoliberalism?
This is an important question because now that neoliberalism is failing, many people assume that the next political economy will be a return to the social democratic ideals that neoliberalism defeated and displaced. Many assume that Scandinavian socialism is still thriving and still building social equality as it was in the days when it provided the models most admired by the new nations just emerging from the colonial yoke. They do not look to Gandhi for answers, because they think they already have answers.
Let it be said at the outset, that although it can be argued that the theories of von Hayek, Michael Polanyi and others who claimed that centrally planned command economies were not workable and would lead to tyranny in practice, have been confirmed by history; the same cannot be said of another famous argument by von Hayek. His 1944 book The Road to Serfdom was a polemic against social democracy. It was not a polemic against Communism. In 1944 the story of the horrors of Soviet Communism was already so well known that it did not need to be retold. Von Hayek’s argument was that every hospital built in the public health service, every public utility taken out of private hands and taken over by the city government, every rent control law limiting how much landlords could charge, and so on was a step down a road to serfdom that could only lead to a Hitler or a Stalin. The thirty glorious years of social democracy in Western Europe lasted long enough to refute this other theoretical argument by von Hayek with facts. The British enjoyed their National Health Service and their council housing without the slightest loss of their freedom of speech or of their democratic right to settle their differences by the ballot and not by the bullet. The Swedes succeeded for a time in guaranteeing a good job at high wages to anybody who needed work, without denying every Swede the right to express any political opinion whatever without fear of punishment.
Pace von Hayek, social democracy was not a road to serfdom. But it was a failure. It is important to understand why it failed, because the reasons why it failed are the same reasons why Gandhi’s call for dharmic living needs to be heard today if humanity is to get off another road, which, unlike von Hayek’s road to serfdom is not imaginary: the road to social chaos and to ecological suicide.
Again, the concept of basic cultural structure illuminates what happened and why. It enables us to see the deep causes of social democracy’s decline beneath the surface causes; it helps us to understand what most needs to be understood—that without deep changes, such as those Gandhi both advocated and demonstrated in his own life—the aims of social democracy, which overlap with those expressed by the formula peace, justice and sustainability, can at best only be achieved partially and temporarily.
At a surface level, summarizing for brevity,[xlvi] Swedish social democracy collapsed and was superseded by neoliberalism with some achievements of the welfare state declining but not yet gone, for the following five greatly simplified reasons:
- The voters rebelled against taxes taking 60% or more of their pay checks to pay for the welfare state.
- As industrial production increased in the rest of the world, demand for Swedish exports declined, leading to the closing of some industries (like shoes) and the shrinking of others (like shipbuilding).
- Business start-ups decreased as wages, taxes, and regulations increased.
- Major established Swedish firms, like Volvo, located plants in other countries, like Brazil, where wages and taxes were lower.
- As business and employment declined, the government took over as employer of last resort, guaranteeing every Swede a job with good pay (mostly tending day care and building social housing). But after a few years the government’s ability to do so was overwhelmed. Too many people needed help. For reasons like 1–4 public resources were unable to expand to meet the need.
Question: What can be done to cure setbacks like those to which 1-5 allude, in Sweden and in the rest of the world?
Answer: There is no cure, except in cases where great mineral wealth is owned by the government. No way. That is to say, there is no cure as long as we are thinking and acting inside the ‘box’ of the basic cultural structure. The Swedish social democrats, for example, lacked imagination but they were not stupid. They were very smart. If there were cures to the ills that led to the collapse of their model inside the box, they would have found them.
The following neoliberal mantra is mainly correct inside the box: ‘The inevitable failure of social democracy (or ‘populism’ or ‘socialism’ or ‘the welfare state’) has been proven time and time again by history and by logic. In the exceptional cases where great mineral wealth is owned by the government, failure is also the normal outcome, because the government is usually corrupt and inefficient.’
But if the neoliberals were entirely correct, if history had really proven that all the alternatives to neoliberal theories have failed, then how could we explain that during most of human history quite different basic cultural structures have organized life quite differently? How do neoliberals answer Gandhi’s point that before the British came there were no famines in India? Or Julius Nyerere’s point that before the Europeans came there was no unemployment in Africa? Anthropologists tell us that cultures have been organized around kinship, reciprocity, redistribution, and other non-commercial norms for more than 95% of the time homo sapiens has been on the planet.
Humans have survived and sometimes flourished in cultures with myriad basic cultural structures too numerous to count. Relying less on séparation marchande is not leaping into the unknown. It is going back to the tried and true. It is going back to the tried and true with the modern benefit of incredibly productive new green technologies already in existence and/or already on the way.
Today there are innumerable growth points. Bill Mollison’s permaculture has three principles: Love the land. Love the people. Share the surplus. Bhutan and Indonesia are rediscovering old customs that worked for many centuries and still work. Some business leaders today are going back to the tried and true in novel ways. They are resignifying themselves, as Gandhi suggested (updating dharma), as trustees; or as Robert Greenleaf suggested (in a book published by a press named after the Apostle Paul) as servant leaders. Their mission and purpose are to create social surplus that can be transferred to cover social deficits.[xlvii] Techies are inventing freecycling, and couch sharing and Wikipedia and the free software movement. The list of growth points—of social innovations for the common good—is an endless list. As Elinor Ostrom says, what is possible in practice must be possible in theory.
It is clear that after making promising starts in twenty or so countries, social democracy declined and neoliberalism took command. If the reasoning we summarize here and set out at length elsewhere is valid, this had to happen inside the logic of the basic cultural structure of modernity.[xlviii] The rules of the market game—like the rules of the board game Monopoly[xlix]—imply blocking democratic socialist options; for example they set up what Bowles and Gintis call the exit power of capital[l] (even when governments try to stop capital flight with capital controls). But we also have reason to believe that Gandhi’s mind, and Gandhi’s practice, never followed the logic of the culture the Europeans had imposed by force on India. Mohandas Gandhi was a kid from Rajkot, born in Porbandar, of a mother who made hard vows and kept them, and who worried that her son might corrupt his soul by eating meat. For him spending thirty years trying to make khadi work was not irrationality. It was loyalty to the community, to the dharma, to truth and to God. It was not stubbornly repeating socialistic schemes that according to history and logic inevitably must fail. It was changing history. It was changing logic.
5. Greta Thunberg: Give me hard scientific findings for a fulcrum, and I will move the basic cultural structure of modernity
She never said this. I am hypothesizing that she meant it. She did say that we cannot save the world by playing by the rules because the rules have to be changed.[li]
Ordinarily, if we ask what the rules are that organize what Karl Polanyi called our market society, we find that they are the rules that govern buying and selling. Most people live by selling their labour, and then buying what they need to live with what they have earned. In Aristotle’s terms, this is selling in order to buy. As I have set forth at a little greater length above and elsewhere, this is the basic cultural structure of the system.
If we now ask what ethical principles sacralise this system as what should be, as distinct from being a system that simply is, we are commonly told they are freedom and property rights. If we ask where these come from, we are told the history of the founding of modern republics and how the rule of law came to replace the arbitrary royal decrees of kings and queens and emperors and empresses. There was once a social contract, or a story about a social contract that people came to believe. It provided that people agreed to be ruled by a government provided that the government respected their rights. According to the French declaration of the rights of man and the citizen of 1789 there have always been natural rights; the declaration declares its function to be educational, not to create rights but to declare what they already are; and they are freedom, property, safety and resistance against oppression. The American declaration of independence of 1776 had said that basic rights were ‘self-evident.’ At about the same time (1785–1797) Immanuel Kant was writing that categorical imperatives can be deduced from pure reason; and when he gives examples of what they are, they turn out to be, once again, the constitutive rules of markets, freedom, property and paying debts. More recently, the ethical principles justifying economics can be recognized as belonging to the same tradition as these classic 18th century sources.
Kenneth Arrow (who won a Nobel Prize in economics in 1972) more recently echoed what is still the mainstream of the economics profession and many other academic disciplines and schools of political thought. He succinctly states crucial ethical premises of today’s international order. In modern nations there are essentially two ways to make social choices: (1) voting, and (2) ‘the market mechanism.’ (p. 1) The latter refers to choices made by buyers when they buy. In less modern nations, social choices are frequently made by single individuals or small groups. More rarely they are made by a religious code or traditional rules. The latter two options (either one or a few individual or code/ rules) Arrow labels (3) dictatorship and (4) convention. Rejecting the latter two, he defines the problem to be solved as how to derive a social maximum from individual desires. (p.3, p.22) He cites numerous authorities, thus demonstrating that his thinking is far from idiosyncratic. Arrow adds a ‘condition of citizen sovereignty,’ writing: “We certainly wish to assume that the individuals in our society are free to choose, by varying their values, among the alternatives available.’(p.28) His analysis applies equally to voting in elections and to buying in markets; both are methods for summing individual desires to make social choices.[lii]
If one now turns from classical political philosophy and contemporary economics to the speeches of Greta Thunberg, one notices a marked difference:
“Today we use 100 million barrels of oil every single day. There are no politics to change that. There are no rules to keep that oil in the ground.”[liii]
“…if we are to have a sixty seven percent chance of limiting the global temperature rise to below 1.5 degrees, we had on 1st January 2018, 420 gigatons of carbon dioxide are left in our CO2 budget. And of course, that number is much lower today. We emit about 42 gigatons of CO2 every year. At current emissions levels, that remaining budget is gone within roughly eight and a half years.”[liv]
“I ask you to pledge to do everything in your power to push your own business or government in line with a 1.5-degree world.”[lv]
“You have stolen my dreams and my childhood with your empty words. And yet I’m one of the lucky ones. People are suffering. People are dying. Entire ecosystems are collapsing.”
“We are in the beginning of a mass extinction. And all you can talk about is money and fairy tales of eternal economic growth. How dare you!”[lvi]
Both Greta and the mentioned Great Minds Celebrated by the System (GMCS for short) prescribe. They prescribe, in general terms that lend themselves to elaboration in great detail, what ought to be and what people ought to do and how social structures and institutions should be organized.
A decisive difference is that the key premises of the arguments of GMCS are fictions and/or subjective choices while Greta relies on the best evidence science has gathered so far, acknowledging that it may be and probably will be revised by further research and better theoretical analysis.
From the GMCS we learn of social contracts that never happened, of self-evident truths that do not exist, and of pure reason that does not exist either. These arguments have in common that they cannot be refuted by facts because they were never based on facts in the first place. This does not make them different from the myths that organize all human cultures; one important fact evolutionary biology and anthropology have learned is that humans are cultural creatures who organize the social structures that establish the physical[lvii] cooperation that makes life possible with ceremonies, stories, customs and the like. The difference is that at the dawn of modernity, which was also the dawn of colonialism, the GMCS pretended to have discovered universal and eternal rational principles that elevated the modern West above the other peoples of the world, authorizing their military conquest and their forcible incorporation into a global world system that was an expansion of the European world system.[lviii] False.
A consequence of the fictions-pretending-to-be-eternal-truths of the GMCS is that all of the carefully researched evidence gathered by Amartya Sen showing that the legal entitlements established by today’s global dominant neo-Roman secular law cause famines[lix] does not count. Kant, for example,[lx] deduced the basic maxims of Roman law that had been ‘received’ by modern European jurists from one principle: freedom (Freiheit and sometimes the similar idea Autonomie). First, he argued that all of nature, including human nature, must be conceived as governed by laws. Nevertheless, humans must be conceived as free. That humans really are free can be neither proven nor disproven, but morality requires freedom. Morality’s requirements dictate treating freedom as if were proven. Then, in later works, Kant deduces the principles of ethics Tugendlehre, and the principles of law, Rechtslehre, from freedom.[lxi] Voilà!: universal and eternal principles that never change no matter how many people starve or how many species go extinct.
In economics, objective facts like those Greta cites, are systematically avoided by adherence to subjective theories of value, as implied above in the discussion of Kenneth Arrow’s definition of his problem: how to get individual desires to sum to social choices. Another example is provided by John Hicks, one of many Nobel prize winning neoliberal economists. Hicks wrote:
[…] if an article can be sold at a price which covers its costs of production, it should be produced; if it cannot be sold at a price which covers its cost of production, it should not be produced.
Hicks goes on to say that
“we should accept that the aim of production is to produce the things that consumers want; and that we should accept that the wants of consumers are ‘revealed’ (as Samuelson would say) by their market behaviour.”[lxii]
Echoing many others (including Gandhi, who remarked that Charles Darwin had demonstrated the survival value of ethics[lxiii]) I suggest that we treat Greta’s appeals to facts as a fulcrum to move the historically and socially constructed global economy that is destroying life. Her message is Wake up to reality! Reality requires reconstructing our modern ways of living. I would also suggest, again echoing Gandhi, that reality also requires re-appreciating traditional ways of living that have proven their worth by successfully organizing relations of human beings with each other and with the earth for hundreds, sometimes for thousands, of years.
[i] Ela Gandhi, granddaughter of Mahatma Gandhi, is a peace activist and the president of the Gandhi Development Trust.
[ii] For more visit “Unbounded Organization Academy,” at www.unboundedacademy.org. It is an organization sensitive and committed to the defence and elaboration of civic values and culture, renewal of relationship with mother Earth, and regeneration of respectful stewardship of nature.
[iii] Greta Thunberg is a Swedish teenage environmental activist on climate change. She became famous for her movement School strike for the climate. Time magazine has named her among the 100 most influential people in the world in 2019. Her speeches have been put together in the book No One is Too Small to Make a Difference (UK—India: Penguin Books, 2019).
[iv] M.K. Gandhi, Hind Swaraj or Indian Home Rule, published by Jitendra Desai (Ahmedabad: Navajivan Publishing House). First published in Gujarati in 1909; the English version is available online: https://www.mkgandhi.org/ebks/ hind_swaraj.pdf.
[v] Frances Moore Lappé and Joseph Collins point out a fallacy in von Hayek’s argument that only unbridled capitalist farming can support today’s enormous populations. It is that food production per acre is on average greater on peasant labour intensive farms than on capitalist machinery intensive farms. However, their point does not rule out a mixed view on technology, e.g. supporting peasants with nitrogen fertilizer, as was done during the Allende period in Chile. And it remains true that only high-tech high capital agriculture can support a large population with few employees—a result that for Gandhi is a negative, not a positive. And it remains true that whatever can be learned from the past may not apply to the future. See World Hunger: Ten Myths. New York: Grove Press, 2015 (1986).
[vi] Already in 1861 Sir Henry Maine contrasted traditional law, and specifically Indian traditional law, with modernity, and identified the coming of modernity with its principles of private property and organizing life by contracts, in other words, as I shall discuss later, by sales. Sir Henry Maine, Ancient Law (London: John Murray,  1861).
[vii] Rostow was chief policy adviser to USA President Lyndon Johnson. See W.W. Rostow, The Stages of Economic Growth: A Non-Communist Manifesto (Cambridge University Press, 1960).
[viii] Alexander Osterwalder and Yves Pigneur, Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers (Wiley, 2010).
[ix] Adapted from Mark Lindley, J.C. Kumarappa: Mahatma Gandhi’s Economist (Mumbai: Popular Prakashan, 2007) 147.
[x] However, I do not disagree with Margaret Archer and others, who for their own purposes in other contexts, find it important to distinguish culture from social structure. See Margaret Archer, Structure, Agency and the Internal Conversation (Cambridge: Cambridge University Press, 2003).
[xi] For example, volume two, letters 26-50, of Howard Richards, Letters from Quebec: A Philosophy for Peace and Justice (San Francisco and London: International Scholars Press, 1995) is titled ‘Methods for Transforming the Structures of the Modern World.’
[xii] One could also give many examples of non-Marxists (like Paul Hawken) and Marxists (like Fred Bellamy) and feminists (like Charlene Spretnak) and theologians (like Tom Berry) and philosophers (like Arne Naess) who also claim that nothing less than cultural and social transformation will save life, but give different reasons why deep change is needed and arrive at different answers concerning how to achieve change.
[xiii] André Orléan, L’Empire de la valeur: refonder l’économie (Paris: Seuil, 2011). The expression is introduced at Position 328 and then woven into an account that expresses better than I can show the relationships—and the absences of relationships—it describes are fundamental for economic theory and for economic society.
[xiv] John Keynes, The General Theory of Employment, Interest and Money (London: Macmillan, 1936) 209.
[xv] This point is explained in detail in Howard Richards, “Moral (and Ethical) Realism,” Journal of Critical Realism Vol. 18 (2019): 285-302.
[xvi] Michael Kalecki, “Political Aspects of Full Employment,” Political Quarterly 14 (1943): 325. Paul Krugman makes a similar point in his The Return of Depression Economics (New York: W.W Norton, 2009) 111-114.
[xvii] Jeffrey Winters, Power in Motion: Capital Mobility and the Indonesian State (Ithaca: Cornell University Press, 1996).
[xviii] The Chilean economist Ricardo Ffrench-Davis finds that virtually all the new investments attracted to Argentina by the neoliberal policies of President Carlos Menem went to buy existing firms and finance mergers. Virtually none, only about 2%, went to start new business activities and create employment. Ricardo Ffrench-Davis, Reformas para América Latina (Buenos Aires: Siglo XXI, 2005).
[xix] Douglas Porpora, “Cultural Rules and Material Relations,” Sociological Theory 11/2 (1993): 212-229.
[xx] Jurgen Habermas, The Legitimation Crisis (Boston: Beacon Press, 1975). Karl Polanyi called modern society not capitalism but ‘market society.’ Any number of mainstream scholars like Alex Inkeles have made up any number of lists of indicators defining the variable ‘modernity.’
[xxi] Peter Drucker, “Business Objectives and Survival Needs,” Journal of Business 31/2 (1958): 81-90.
[xxii] Randall Wray has shown that the private sector as a whole can only make a profit if the public sector as a whole goes farther into debt, reasoning on the basis of accounting identities. Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems (Basingstoke: Palgrave Macmillan, 2015). Check out Steve Keen’s debt watch and other debt watches and debt clocks on Google.
[xxiii] Thomas Piketty, Capital in the Twenty-First Century (Cambridge MA: Harvard University Press, 2014).
[xxiv] The mathematical contradictions involved in just keeping the system running, staving off recessions and depressions without even thinking about the higher goal of meeting human needs without ecological damage, were clearly stated in 1913 by Rosa Luxemburg. Her Accumulation of Capital is easily found on Internet.
[xxv] See www.consciouscapitalism.org. The conscious capitalism creed claims: “We believe that business is good because it creates value, it is ethical because it is based on voluntary exchange, it is noble because it can elevate our existence and it is heroic because it lifts people out of poverty and creates prosperity.”
[xxvii] Steve Keen, Debunking Economics (London: Zed Books, 2013). Keen’s findings are kept up to date on his website.
[xxviii] Norbert Elias, The Civilizing Process (Oxford: Blackwell, Vol. I: 1978, Vol. II: 1982).
[xxix] Albert Hirschman, The Passions and the Interests: Political Arguments for Capitalism before its Triumph (Princeton: Princeton University Press, 2013).
[xxx] Joseph Aloïs Schumpeter was a popular economist of the 20th century; his important Works include: The Theory of Economic Development (1911), Capitalism, Socialism and Democracy (1942) and Can Capitalism Survive (1947).
[xxxi] H. Richards and J. Swanger, Gandhi and the Future of Economics (Lake Oswego: Dignity Press, 2013).
[xxxii] Michel Foucault, Society Must be Defended (New York: Picador, 1992).
[xxxiii] See Romans 7:19.
[xxxiv] This use of Noam Chomsky’s idea of ‘deep structures’ actually originated with my co-author Joanna Swanger. Howard Richards and Joanna Swanger, The Dilemmas of Social Democracies (Lanham MD: Rowman and Littlefield, 2006).
[xxxv] That the extremely wealthy are not in fact beneficiaries of today’s gross injustice, but are among its victims, is shown by Richard Wilkinson and Kate Pickett in their book The Spirit Level: Why Equality is Better for Everyone. (London: Allen Lane, 2009). They provide convincing evidence that everyone is better off in societies that are less divided and where fewer people suffer from deprivation.
[xxxvi] I Corinthians 4:6; Luke 12:48.
[xxxvii] See the similar grief of Cecil Woodham-Smith, The Great Hunger, Ireland 1845-1949 (New York: Harper and Row, 1962).
[xxxviii] Keynes, The General Theory of Employment, Interest and Money 28.
[xxxix] Louis-Philippe Hodgson, “Kant on the Right to Freedom: A Defence,” Ethics 120/4 (July 2010): 791-819. Hodgson shares with me and Andrew Sayer, cited below in note 45, a standard interpretation of what Kant’s views on freedom are, although he defends them and we critique them.
[xl] Ela Gandhi, personal e-mail communication, February 18, 2015.
[xli] See the book by Blake Mycoskie, the founder of TOMS Shoes: Start Something that Matters (New York: Spiegel and Grau, 2012).
[xlii] Luke 3:11; Acts 4:35; 1 Peter 4:10.
[xliii] Thomas Piketty, The Economics of Inequality (Cambridge MA: Harvard University Press, 2015).
[xliv] A bibliography on this subject could fill several volumes. For an introduction see John C. Gibbs, Moral Development and Reality (Oxford: Oxford University Press, 2015).
[xlv] See for example, Alex Honneth, The Idea of Socialism (Cambridge: Polity Press, 2017); and numerous works by Andrew Sayer who has devoted himself to correcting what he regards as the historical error of critiquing capitalism without building moral alternatives to it e.g. Radical Political Economy: Critique and Reformulation (Oxford: Blackwell, 1995).
[xlvi] Those not convinced and/or confused by these few words, will find longer accounts with more evidence, with studies of countries besides Sweden and of the world as a whole in Howard Richards and Joanna Swanger, The Dilemmas of Social Democracies and other works by the same authors.
[xlviii] Evidence and argument supporting this point are given in Richards and Swanger, The Dilemmas of Social Democracies, cited previously.
[xlix] Charles Darrow and others designed the game to teach that the rules of capitalism lead to inequality. See “Charles Darrow,” https://en.wikipedia.org/ wiki/Charles_Darrow, accessed on 28 November 2019.
[l] Samuel Bowles and Herbert Gintis, Democracy and Capitalism: Property, Community, and the Contradictions of Modern Social Thought (New York: Basic Books, 1986).
[li] Greta Thunberg, “The Disarming Case to Act Right Now on Climate Change,” TEDX Stockholm, https://www.ted.com/talks/greta_thunberg_the_disarming_case_ to_act_right_now_on_climate. She says something similar in almost every speech.
[lii] Kenneth Arrow, Social Choice and Individual Values (New Haven: Yale University Press, 1963). Unlike most of his readers, I am more interested in his premises than in his famous paradoxical conclusions.
[liii] Greta Thunberg’s Declaration of Rebellion, Extinction Rebellion, Parliament Square, London, 31 October 2018. “Almost Everything is Black and White,” in Greta Thunberg, No One is Too Small to Make a Difference (UK—India: Penguin Books, 2019) 12.
[liv] Greta Thunberg’s speech at the National Assembly in Paris 23 July 2019. https://www.fridaysforfuture.org/greta-speeches?source=post_page—————————#greta_speech_july23_2019
[lv] Greta Thunberg’s speech at The World Economic Forum in Davos, 22 January 2019. “Prove Me Wrong,” in Greta Thunberg, No One is Too Small to Make a Difference (UK—India: Penguin Books, 2019) 18.
[lvi] Greta Thunberg’s speech at the United Nations Climate Action Summit, reported in Express (London) October 25, 2019, page 1.
[lvii] David Sloan Wilson, Darwin’s Cathedral: Evolution, Religion, and the Nature of Society (2002); Nancy Tanner, On Becoming Human (1981).
[lviii] Authors who have traced this history include Maria Mies, Immanuel Wallerstein, Samir Amin, Walter Mignolo. See also Gandhi’s bibliography at the end of Hind Swaraj.
[lix] Amartya Sen, Poverty and Famines: An Essay on Entitlement and Deprivation (Oxford: Clarendon Press, 1981).
[lx] John Rawls remarks in his Lectures on the History of Moral Philosophy (Cambridge: Harvard University Press, 2000) that all the early modern ethical philosophers knew they were supposed to justify freedom and property; they disagreed about different methods for arriving at the same conclusions. (Positions 298-303 of Kindle edition). Kant here is an example of one method among others.
[lxi] Immanuel Kant, The Metaphysical Elements of Ethics [Tugendlehre] (Adelaide: ebooks@Adelaide,  2015); Immanuel Kant, The Philosophy of Law [Rechstlehre] (Edinburgh: T & T Clark,  1887).
[lxii] John R. Hicks, “Economic Theory and the Evaluation of Consumers´ Wants,” The Journal of Business Vol. 35 (1962): 256-263, at 256. Hicks qualifies his succinct remarks by saying there is more to be said, but holds nonetheless that these are the most important points to be made when one is compelled to use few words.
[lxiii] Collected Works of Mahatma Gandhi (earlier edition) Delhi: Government of India, 1956-1994. vol. 6, 317-18. Of course, both Gandhi and Darwin refer to an ethics of cooperation and sharing, not to individualist ethics.
First published in a special issue devoted to Gandhi by the journal Divyadaan, Salesian Institute of Philosophy, Nashrik, India. The Philosopher’s Index: Divyadaan, Vol. 30 (2019), pp. 343-374
Prof. Howard Richards now teaches at the University of Santiago and the University of Cape Town. He is a member of the TRANSCEND Network for Peace Development Environment. He was born in Pasadena, California but since 1966 has lived in Chile when not teaching in other places. Professor of Peace and Global Studies Emeritus, Earlham College, a school in Richmond Indiana affiliated with the Society of Friends (Quakers) known for its peace and social justice commitments. J.D. Stanford Law School, MA and PhD in Philosophy from UC Santa Barbara, Advanced Certificate in Education-Oxford, PhD in Educational Planning from University of Toronto. Books: Dilemmas of Social Democracies with Joanna Swanger, Gandhi and the Future of Economics with Joanna Swanger, The Nurturing of Time Future, Understanding the Global Economy (available in PDF on line), The Evaluation of Cultural Action, Following Foucault:The Trail of the Fox (with Catherine Hoppers and Evelin Lindner), (on Amazon as an e book), Unbounded Organizing in Community (with Gavin Andersson, also on Amazon), Rethinking Thinking (with Catherine Hoppers), Hacia otras Economias with Raul Gonzalez, free download available at www.repensar.cl. Solidaridad, Participacion, Transparencia: conversaciones sobre el socialismo en Rosario, Argentina. Available free on the blogspot lahoradelaetica.
Tags: Economics, Gandhi, Research, Solutions
This article originally appeared on Transcend Media Service (TMS) on 2 Dec 2019.
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