Gandhi’s Localized Economics

(Food Freedom Blog) By Working Villages International ; Swadeshi, or “localized economics,” is a concept developed by Mahatma Gandhi. At the beginning of the 20th century, India began importing cheap factory-made cloth from England, which forced thousands of local weavers and spinners out of work. The result was dire poverty and social chaos. Gandhi’s response was to throw away all articles made of English mill cloth, and wear only cloth which he spun himself. The image of him spinning on his charka became instantly famous; thousands followed his lead, and the result was India’s independence.

Fifty years after India’s independence, we find these problems all over the world due to the corporate globalized economy. In standard modern-day economics, the goal is to maximize profit at any cost. To this end, corporations will use many techniques to relentlessly pursue the bottom line.They will often:

  • Seek to maximize output per worker, regardless of health and safety concerns
  • Seek areas of the world where wages are low and human-rights laws are lax
  • Seek to ensure low wages by maintaining sufficient unemployment in the worker pool
  • Disempower communities through lobbying, policies and legal action
  • Use economies of scale to reduce per-unit costs, regardless of how much of a product is actually needed
  • Orient production towards the buyers who can pay the most
  • Concentrate capital due to winner-take-all competition and unfettered “free” markets
  • Pump money into advertising to create an imagined need
  • Promote the myth that happiness lies in consumption

It is hard to overstate the social problems that are caused by this corporate paradigm. Many countries now struggle with:

  • Widespread unemployment and plummeting wages
  • A dwindling middle class and a growing income gap between rich and poor
  • An impoverished working class
  • Dangerous or mind-numbing manufacturing work
  • Exploitation of child labor
  • A disenfranchised populace that’s easily incited to fanaticism, violence or terrorism
  • Demographic upheaval and ruptured families due to lack of local work
  • Widespread hunger and accompanying disease
  • Erosion of democracy, human rights, and worker rights
  • Environmental damage due to manufacturing and shipping

As if this were not enough, a globalized economy depends on cheap oil for manufacturing and transportation. This is becoming more and more untenable, for both environmental and political reasons, and is already impossible for countries in the global South. In Congo, for example, gasoline is $12 per gallon and the average person makes $100 per year, making any kind of oil-based manufacturing or transportation impossible for a local business.

The solution is clearly not to be found in globalized economics. A new paradigm must be created, which emphasizes sustainability and quality of life as opposed to mass production and bottom lines. Gandhi’s idea of Swadeshi provides that paradigm, though it can sound deceptively simple. As Gandhi said, “My definition of Swadeshi is well-known: I must not serve my distant neighbor at the expense of the nearest.” This is the heart of Swadeshi, though it encompasses much more than that.

In stark contrast to the bottom-line mentality of standard modern corporate economics, Swadeshi promotes:

  • Full employment
  • Local production to meet local needs
  • Humane working conditions and human rights
  • Simple living and reduced consumption
  • Work as a means of expression and fulfillment
  • Work that is compatible with family, community and spiritual life
  • Sufficient compensation
  • Community input and empowerment
  • Protection for small business
  • Protection for the environment and local living conditions
  • Many small-scale producers with a more equitable distribution of wealth
  • Pursuing happiness through meaningful production, intention, and community

Satish Kumar, the founder of Schumacher College, summarizes Swadeshi as follows:

“According to the principle of Swadeshi, whatever is made or produced in the village must be used first and foremost by the members of the village. Trading among villages and between villages and towns should be minimal, like icing on the cake. Goods and services that cannot be generated within the community can be bought from elsewhere.

“Swadeshi avoids economic dependence on external market forces that could make the village community vulnerable. It also avoids unnecessary, unhealthy, wasteful, and therefore environmentally destructive transportation. The village must build a strong economic base to satisfy most of its needs, and all members of the village community should give priority to local goods and services.”

Gandhi spoke at length on his principles of Swadeshi. “My definition of Swadeshi is well known. I must not serve my distant neighbor at the expense of the nearest…Swadeshi is that spirit in us which restricts us to the use and service of our immediate surroundings to the exclusion of the more remote – I should use only things that are produced by my immediate neighbors and serve those industries by making them efficient and complete where they might be found wanting…

“If we follow the Swadeshi doctrine, it would be your duty and mine to find our neighbors who can supply our wants, and teach them to supply them where they do not know how to proceed, assuming that there are neighbors who are in want of healthy occupation. Then every village of India will almost be a self-supporting and self-contained unit, exchanging only such necessary commodities with other villages which are not locally producible…a votary of Swadeshi will carefully study his environment, and try to help his neighbors wherever possible by giving preference to local manufactures, even if they are of an inferior grade or dearer in price than things manufactured elsewhere.”

In another context, Gandhi spoke more forcefully: “It is sinful to eat American wheat and let my neighbor, the graindealer, starve for want of customers. Similarly, it is sinful for me to wear the latest finery of Regent Street when I know that if I had but worn the things woven by the neighboring spinners and weavers, that would have clothed me, and fed and clothed them.”

Village Self Reliance uses Swadeshi to protect small village economies. In Village Self Reliance, a system of economic incentives is used to protect the local economy until it’s strong enough to thrive on its own. We produce for the needs of the community first, creating a local economy instead of relying of globalization and external markets. We measure our progress in standards of living, as opposed to GDP or other measurements of economic growth that can fail to accurately assess the well-being of the population. Our aim is to create meaningful employment to raise the quality of life in real terms, by building a foundation of humane values as well as a functioning economy.

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