New Clear Vision

A Gandhian Answer to Financial Collapse

by Michael N. Nagler

Last Monday the Dow Jones industrial average fell 634.76 points; the sixth-worst point decline for the Dow in the last 112 years and the worst drop since December 2008. Every stock in the S&P 500 index declined.

It is easy to blame bipartisan bickering for the impasse that led to Standard & Poor’s downgrading of the American debt, and in turn the vertiginous fall of the Dow. This bickering — this substitution of ideology for reason, of egotism for compassion and responsibility on the part of lawmakers — is a national disgrace; but while it failed to fix the problem, we must realize that it did not cause it. The cause — and potential for a significant renewal — lies much deeper.

So let’s allow ourselves to ask a fundamental question: what’s an economy for?

The real purpose of an economic system is to guarantee to every person in its circle the fundamentals of physical existence (food, clothing, shelter) and the tools of meaningful work so that they can get on with the business of living together and working out our common destiny. This was Gandhi’s vision, among others’. We can no longer afford to ignore him in this sector any more than we can ignore his spectacular contributions to peace and security.

By the time Gandhi’s thinking on the subject matured in his classic treatise, Hind Swaraj, or Indian Home Rule (1909), he saw that our present economic system is being driven by a dangerous motive: the multiplication of wants. Because these wants are artificial — being that they created by advertising — and can never be satisfied, it creates what economist David Korten has called a “phantom economy” of fantastic financial manipulations that of course can never endure.

We will never know real prosperity — where we acknowledge that we are much more than producer/consumers and can only be fulfilled when we discover a higher purpose — until we shift to another basis entirely, the fulfillment of needs. We have physical needs, to be sure, but also and more importantly social and even spiritual ones.

While this takes us beyond the domain of economics proper, a sound economy based on our real needs is the foundation. What, then, are the principles of that which has come to be known as Gandhian economics, and how could we implement them?

Arguably the most revolutionary feature of this system is the concept of trusteeship, which defines the relationship of a person to material goods — or, for that matter, any talents they can deploy. Borrowed from English law, it is the nonviolent equivalent of ownership: people regard themselves as trustees of their possessions for the good of their respective societies, rather than as owners for their own real or symbolic benefit (when you have more than you need, you are trying to impress others or yourself with your own importance).

Wherever an attitude of trusteeship is recognized — and clearly it is first of all a psychological, and only then a legal phenomenon — greed would find it difficult to take hold. We would no longer over-consume, no longer surrender our responsibility to corporations as the most efficient instruments for overconsumption and accumulation, no longer need to fight wars over inessentials, no longer ravish the planet in a vain search for happiness — the prospect is giddying.

The trick, of course, is how to bring about this shift. Reeducation at this depth is not easy, but it is any day easier than trying to stop overconsumption and exploitation while so many people still feel that happiness is something they can buy, and there is not enough to go around. No revolution, however violent, has managed to dispossess the wealthy of their wealth against their will; but extremely wealthy people (think of George Soros and a few others) who have cheerfully redistributed it when the concept of trusteeship took hold.

Trusteeship, like much of Gandhi’s thinking, falls in line with the wisdom delivered by scriptures East and West, that we are really not the owner of anything. Indeed it needs no scripture to tell us this, since the stark fact of life is that all we think we own can be taken away by any number of contingencies — and, let’s face it, will be so taken by the final contingency of death. Trusteeship, however difficult to achieve, liberates us psychologically from the existential insecurity that is driving us into this dead end of competition and greed.

Other features of Gandhi’s scheme are (material) simplicity, localism (svadeshi), the sanctity of “bread labour” (a phrase he got from John Ruskin), and nonviolence towards others and the earth itself. All came into play with his stellar program of spinning homespun cloth (khadi, or khaddar) that gave employment to otherwise idled millions (sound familiar?), united the country in a vast network of growers, spinners, weavers, and buyers, and, almost incidentally it seemed, broke the hold of the British Raj in India.

Today many experiments that could potentially provide one or another piece of this program are doing very well, thank you, around the world: community farms, local currencies, “transition towns” and so forth. One thing that would certainly help them coalesce into a real movement, making them a visible alternative to the “multiplication of wants” economy that’s collapsing around our ears, is a voluntary shift to trusteeship carried out by individuals at their own pace in their own applications. And what’s not doable about that—provided we stay clear of television long enough to repossess our minds?

Korten has advanced a brilliant three-part strategy: change the defining stories of the mainstream culture, create a new economic reality from the bottom up, and change the rules to support the values and institutions of the emergent new reality. Gandhian economics in general, and trusteeship in particular, would be a major enabling condition, working as it does within consciousness itself, for these great changes.

Monday’s debacle points out once again that forward-thinking people need to provide a “safe haven” — a plausible, attractive alternative — for every sector of the current system that’s showing signs of potentially terrifying collapse: security, education, healthcare, and of course the economy. Gandhi had eye-opening experiments we can learn from in all these areas, and what we’ve just sketched out would be a great place to start.

Michael N. Nagler, Ph.D., is Professor emeritus of Classics and Comparative Literature at the University of California, Berkeley where he co-founded the Peace and Conflict Studies Program. He is the founder of the Metta Center for Nonviolence, serves as co-Chair of the Peace and Justice Studies Association, and is a Contributing Author for New Clear Vision. Among his many publications in the field of nonviolence, Dr. Nagler is the author of The Search for a Nonviolent Future: A Promise of Peace for Ourselves, Our Families, and Our World (New World Library), winner of the 2002 American Book Award.