Ghandiji was a Liberaliser

Gandhi Jayanti this year will mark the 125th birth anniversary of Mahtama Gandhi, the father of the nation. What would he have thought of the liberalisation of the economy??

I am certain he would have welcomed it, since he was a committed liberal, firmly opposed to intrusive government. Many politicians and intellectuals have fraudulently called themselves Gandhian socialists. In fact Gandhiji was emphatically not a socialist. He was suspicious of governmental power and controls, since he saw instinctively how they corroded human creativity and development, and made people dependent on the largesse of netas and babus. Alas, Nehru and others opted squarely for controls, which soon spawned corruption, waste and callousness.

I recently came across a priceless passage in the works of Professor Colin dark, the famous economist who advised India immediately after independence.

“I was asked by the Indian Planning Commission for a report on the prospects for economic development, which I prepared in November 1947. I had two most interesting interviews, one with Lord Mountbatten and one with Mahatma Gandhi. Gandhi (nobody will believe this) proved to be a convinced free-market economist, strongly critical of price controls, rationing and compulsory purchase of farm crops, which the then Nehru government was introducing. The right solution, he said, was to raise the price of food; then everybody would have to work harder. The source of India’s trouble was that the people were thoroughly idle.”

This passage rings so true. Gandhiji was never what we would now call politically correct. He had no time for bleeding hearts who saw subsidies and doles as the solution to every problem. He saw the need for Indians to work hard and improve their productivity. Above all he stressed the need for attending to the consumer, something that socialists brushed aside as of little consequence. One of the key features of socialism is that some supposedly wise planners are supposed to determine what is produced, by whom and at what price. The consumer is not supposed to choose what he wants that is supposed to be left to socialist geniuses who know what is good for the people, better than the yokels themselves.

This attitude diminishes the consumer in a manner which would have been utterly unacceptable to Gandhiji. Consider the following famous passage from his writings, which you find hung on the walls of many corporations.

‘A customer is the most important visitor in our premises.

He is not dependent on us. We are dependent on him.

He is not an interruption in our work. He is the purpose of it.

He is not an outsider to our business. He is part of it.

We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so.’

These are the words of a committed liberal, not a socialist. It places the consumer at the centre of society, not socialist overlords.

Nehru had the typical Brahmin’s disdain for business. But Gandhiji was a bania, and had no caste bias against businessmen. He was a close friend of industrialists like Ramakrishna Bajaj and GD Birla, and he lived (and died) in Birla House in New Delhi.

Gandhiji envisaged businessmen as custodians of wealth on behalf of the people. This concept drew derisive laughter from socialists, but in fact was a succinct description of the joint stock company. Millions of shareholders of companies place their funds and trust in entrepreneurs.The phenomenon envisaged by Gandhiji has gathered momentum recently, and in 1993-94 households subscribed a record Rs 23, 000 crores to new company issues. Over the years, some crooked businessmen have run away with the money of investors. But the vast majority of investors have profited beyond their wildest dreams. The Bombay stockmarket’s sensitive index has shot up 45-fold since 1978-79. Indian stock exchanges now have 6, 800 listed companies, against only 700 for South Korea, 500 for Hong Kong, and around 200 each for China and Singapore. Gandhiji would have been proud of this.

We could have gone down this path much earlier, but instead suffered the command-and-control system of Nehru and Indira Gandhi. The consequences are evident in the attitude of babus in any government or public sector office.

‘ The customer is the least important visitor on our premises. He is dependent on us. We are not dependent on him. He is an interruption in our work. He is not a part of it. He is an outsider to our business, not part of it. We are doing him a favour by serving him: he is not doing us a favour by giving us an opportunity to do so.’

We have paid only lip service to Gandhiji’s ideals for decades. Now, with liberalisation, perhaps we will do better.

What do you think?