Thoughts on economics and liberty

Tag: Gandhi

The history of freedom in India from 1757 to 1947

This is an extract from the first chapter of Breaking Free of Nehru. Given my readings since 2005-07 when I wrote this book, I could perhaps improve this section if I were to get a chance to revise BFN, but this is still a reasonably good summary of the key facts of the history of freedom in India.

British influence in Bengal arose from Clive’s victory in the 1757 battle of Plassey. That period also coincided roughly with significant developments of political thought in England (e.g. John Locke in the 1680s, Edmund Burke who became influential from the mid 1700s and Adam Smith a little later) and in the USA (e.g. Thomas Jefferson, John Adams, Alexander Hamilton).
After the consolidation of Bengal by Robert Clive, the economic advantages of learning English started becoming increasingly obvious. As a result Indians started to show interest in learning the English language and its literature. By 1835, Indians were paying good money to be taught English. T B Macaulay noted in his famous ‘Minute’ that ‘the natives’ had become ‘desirous to be taught English’ and were no longer ‘desirous to be taught Sanscrit or Arabic’. Indians picked up English very well. ‘[I]t is unusual to find, even in the literary circles of the Continent, any foreigner who can express himself in English with so much facility and correctness as we find in many Hindoos.’[i]
While the British may have wanted to teach English only so that Indians could become their clerks, once the Pandora’s Box of knowledge is opened, its consequences are unstoppable. Indians quickly became aware of the enormous leaps made by Western political thought over the centuries. This awareness laid the seeds for subsequent demands for self-rule. But India faced a steep learning curve first. It had not paid the slightest heed to what had been going on elsewhere for centuries, if not millennia. But in the meantime the world had completely changed. People’s power was on the rise as never before in Britain. While British kings still existed, their powers had been dramatically truncated. In 1757, a young man of 24 years in Scotland by the name of Adam Smith was thinking about the entire world and examining how the wealth of nations was created. His ideas would convert the tiny island of England into the world’s most powerful nation by the mid-1800s.
It was not possible for Indians to advance straight to the forefront of the theory and philosophy of freedom given their late start. While people like Raja Ram Mohan Roy (1772–1833) started to internalize the political arguments of freedom, no one could yet articulate new insights. All that the Indians did in this period, and could have reasonably done, was to catch up with liberal ideas and start demanding self-governance in India. Lest we blame these Indians for lack of creative insight, we must remember that things like ‘independence’, ‘representation of the people’, and even ‘nationhood’ were completely new concepts for most parts of the world then. England had a head-start in freedom which would take many countries a long time to catch up. Apart from Raja Ram Mohan Roy, other contributors to the political discourse on freedom in nineteenth century India included Dadabhai Naoroji (1825–1917), Mahadeo Govind Ranade (1842–1901), Gopal Krishna Gokhale (1866–1915) and Pherozeshah Mehta (1845–1915).
By the time the Indian mind finally caught up with the West by 1850, Western thought had moved even further on its journey. But also by now, a battle against liberty was under way in the West. A competing theory to the theory of freedom had arisen in the dying years of feudalism – the theory of socialism (or communism). Both liberalism and socialism agreed that kings were no longer needed. But on what would come next, they differed completely. These radically opposed Western world views, one founded on freedom, the other on equality, had begun a battle for the minds and hearts of people.
Socialism wanted us to revert to our tribal state without the aristocratic overlay of feudalism. It did not want anyone to become exceptionally wealthy or powerful. Its approach had to be implemented, where necessary, by chopping the heads of the rich. The socialist model did not agree with Adam Smith who saw wealth as an unlimited product of the human mind, a mere consequence of innovation. It saw life as a zero-sum game where people had to fight for a share of the fixed pie: capital versus labour. In the model of socialism individual effort, merit or enterprise was irrelevant, for the total wealth was fixed. Therefore redistribution of wealth was the primary purpose of life.
The vision of socialism held hypnotic sway amongst untutored minds. It was on the upswing by the mid-1800s. In a brave bid to foil socialism, Frédéric Bastiat wrote The Law in 1850 and John Stuart Mill his essay On Liberty in 1859. Thinkers of the Austrian school advanced further explorations on the economic impacts of freedom and created the science of economics. In the early twentieth century Friedrich Hayek and Ayn Rand advanced these ideas even further. While socialism overpowered parts of Europe by the late nineteenth century, England and USA remained the bastions of freedom and kept trying to improve their political and democratic institutions of governance. The greatest advances in freedom therefore took place only in the West, not in India. The Indian intelligentsia remained focused on its challenge of independence.
The Indian mind was distracted by another thing as well. Indians had suddenly come down from being supremely haughty and disinterested in the rest of the world to becoming ruled first by the Mughals and then by the British. A doubt arose in their minds that they were potentially racially inferior. The British encouraged this doubt through their own haughty behaviour, for when one is powerfully placed it is easy to be arrogant. British racism left little breathing space for Indians to focus on the broader global issues of justice and liberty. But British arrogance was clearly misplaced on two grounds:
First, the rapidly growing technological prowess of the British was not a product of racial superiority but the natural consequence of the freedom that its philosophers had propounded and its people fought for over many centuries. It was this freedom of thought which had enabled its society to become increasingly more creative and flexible, and thus technologically superior to other societies. Before the ideas of freedom improved the life of the common man in England, the British ‘race’ was actually quite ‘inferior’, being short-statured with mediocre intelligence. Normally, soldiers are the tallest and strongest representatives of any society, but British soldiers were very short till 1814, averaging only 5 feet 6 inches.[ii] But even these tiny fellows managed to conquer India because they rode the steed of freedom which gave them self-confidence and allowed them to innovate at each step. The rapidly developing sciences in Britain arising from this culture of freedom led to higher survival rates of its infants and consequently to rapid population growth. This excess population also fed into England’s international exploits. The virtuous cycles of freedom kept reinforcing themselves. Their superiority for 150 years or so had nothing to do with race.
Second, it was a great mistake for the British to think that there was nothing for the West to learn from India. That learning is a two-way street became apparent to them when some intrepid European scholars discovered the many-splendoured Indian past using methods of research and analysis hitherto not applied in India.
Such findings about glorious achievements in historical India brought some comfort, even a sense of renewed confidence, to English-educated Indians. Unfortunately, with the advent of European scholarship of Indian history, a lot of navel gazing started among Indians. The Indian mind, both Hindu and Muslim, began to spend most of its time looking backwards, in reconciling its multi-faceted and possibly exciting past with its unhappy present. A few Indians did raise broader issues in relation to freedom, such as Rabindranath Tagore (1861–1941) and M K Gandhi (1869–1948). However, that was incidental to the focus on self-rule and opposing racism.
This great mental energy led to the most awe-inspiring independence movement the world has ever seen. It was an exemplary movement – far ahead of its times in its principle-based standards of political protest. In addition, the British were gently taught a very important lesson in freedom by Gandhi. His exposition of the equality among peoples and of non-violent protest were significant contributions to the freedom of mankind as a whole. Through humane and dignified protest he demonstrated that all humans were equally worthy of regard. This was of course helped by allegiance of the British to their rule of law. It is unlikely that Gandhi would have made a difference with Japanese or German ‘masters’ of that era. His methods also reminded the people of Britain that they should not lower their own principles of liberty by diminishing the liberty of others. As a result of Gandhi’s actions the age of racial officially came to an end in many parts of the world. Oppressed peoples of the past, such as the blacks of the USA and South Africa, acknowledge the contributions of Gandhi. Gandhi has therefore brought about a fundamental shift in the world’s landscape of freedom. In that sense, Gandhi was without doubt the most influential proponent of individual liberty (and thus, indirectly, of classical liberalism) in India in the first half of the twentieth century.
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Gandhi, a liberal during illiberal times

Here are some thoughts on Gandhi and his inclination towards liberalism – despite Nehru's persistent insistence that India must have socialism. This blog post is a direct cut and paste from BFN. This post does not evaluate his enormous contributions to India and the world which I talk about at length in DOF in a number of places.

       Gandhi’s philosophy was the most compatible with the ideas of freedom among Indian thinkers of his period. He placed great importance on individual freedom and independent action. In his mind, the individual remained the maker of his own destiny, with the state having only a very limited role in an individual’s affairs. His views were based on a combination of his interpretation of Hindu ideas mixed largely with the ideas of the liberal American philosopher Henry David Thoreau (1817–62). Thoreau had said, ‘That government is best which governs least’. Gandhi repeated that like a mantra on many occasions. In fact, Gandhi merged the concepts of accountability from classical liberalism with those of the karma theory of Hinduism. His can be said to have been an eclectic synthesis of Hinduism and liberalism. Despite its indifferent contribution to liberty in the past, once an effort is made, it appears that just as Christianity can get along with liberalism, Hinduism can also get along with liberalism quite well, arguably even more so. I have little doubt that Islam can also be interpreted likewise given a broader understanding of its message. Turkey shows us that it is possible to do so. 

      Gandhi opposed the collectivist and centralized approaches of communism not on intellectual grounds but because of his ‘intuitive’ grasp over the concepts of accountability and justice. Quotations from Gandhi in the table below tell us about his liberal credentials. The page numbers at the end of these quotations are from Fisher.[i] My comments on Gandhi’s views are in the second column.

[i] Fisher, Louis, op. cit.

Government that is ideal governs the least. It is no self-government that leaves nothing for the people to do’ (p.196).

The government has a minimal role in a free society – a key message of classical liberalism.

‘I look upon an increase of the power of the State with the greatest fear because, although while apparently doing good by minimising exploitation, it does the greatest harm to mankind by destroying individuality which lies at the root of all progress’ (p.304).

Here Gandhi is reiterating the most fundamental principles of a free society. The individual is the hub of the society; the individual must be allowed to develop self-knowledge, self-respect and become responsible and accountable.

 ‘Submission […] to a state wholly or largely unjust is an immoral barter for liberty […] Civil resistance is a most powerful expression of a soul’s anguish and an eloquent protest against the continuance of an evil state’ (p.165).

Liberalism resists tyranny, and nothing is generally more tyrannical than a state that barters liberty for immorality, as socialist governments have, in India. Gandhi’s chosen method of protest was supremely ethical and persuasive. There was no secrecy involved, no deception. Attacking people, as terrorists do, never changes the beliefs that people hold.

‘[The] means to me are just as important as the goal, and in a sense more important in that we have some control over them, whereas we have none over the goal if we lose control over the means’ (p.305).

Liberalism focuses almost entirely on the process, or the means. The ends are seen as a natural consequence of the means. There is no coercion, only persuasion.

‘I hope to demonstrate that real Swaraj will come not by the acquisition of authority by a few but by the acquisition of the capacity by all to resist authority when abused. In other words, Swaraj is to be attained by educating the masses to a sense of their capacity to regulate and control authority’ (p.202).

Liberalism requires the active participation of each citizen in the regulation and control of their government. In a free society the best of its citizens come forward as representatives. There is no better way to prevent the abuse of authority than for freedom loving people to form the government.

     Let me add that Gandhi was not a ‘full-fledged’ liberal given his lack of intellectual rigour about why he advocated what he did. He had strong liberal inclinations and intuition but no vision for human freedom as a whole (at least not one in which the proper mechanisms of freedom were fully defined). He was clearly not a Hayek and did not even understand the great moral character of capitalism. This is evident from his theory of trusteeship through which he sought (in his mind) a ‘compromise’ between freedom and economic equality. Gandhi did not grasp that these objectives are mutually contradictory. And so he needlessly hit out against capitalism. He wrote, ‘I desire to end capitalism, almost, if not quite, as much as the most advanced Socialist or even Communist. But our methods differ, our languages differ’,[i] his difference being that he did not like using coercion. He also diluted his concept of equality somewhat by saying, ‘Economic equality of my conception does not mean that everyone would literally have the same amount. It simply means that everybody should have enough for his or her needs’.[ii] He then proposed a via-media of sorts – the theory of trusteeship, whereby the rich (‘capitalists’) would use their ‘wealth […] for the welfare of the community’.[iii]

   Unfortunately, this view seriously misrepresents the foundations of liberty and capitalism. For Gandhi to even imply tangentially that capitalists were not using their wealth for the welfare of the community was wrong. Businesses contribute to the welfare of society in many ways:
  • First, they do so through the services they provide. By applying their mental energy to combine natural and human resources with capital, they generate products and services that would not have existed without their efforts. These products and services increase our knowledge and improve our health and longevity. That is their most important contribution.
  • Second, businesses generate employment for thousands, if not millions, of families, taking each such person employed out of the quagmire poverty. This is their second most important contribution.
In this manner, those who achieve wealth through their own initiative have already contributed so disproportionately in comparison to ordinary people that we should be ashamed of asking them to further look after the ‘welfare’ of society. Are we beggars that we can’t stand on our own feet? In the second chapter I will show how a free society readily delivers on things like the removal of poverty without requiring charity from anyone. Anyway, whether or not trusteeship was a good concept, it did not go anywhere. Nehru ignored it and no one else cared to pick it up. 
Also, Gandhi was not a ‘systems’ thinker and was unable to elaborate the design of institutions by which governments of free India would be held accountable. It is not enough to say that a ‘government is best which governs the least’. It is important to specify how this will happen. This inability to think at the systems level, i.e. by building from the level of individual incentives right up to the social level, is perhaps a cultural trait of most Indians. We prefer to tinker with things at the margin or to appeal to the good intentions of people, rather than think about systemic incentives which will give us the results we want. On the other hand, the West has been very competent in this area. And so, given Gandhi’s rather limited understanding of systemic processes, we still need to look to the advances of Western economic theory such as the theory of public choice for a more complete picture of governance.

[i] From the Harijan, 3 June 1939, p.145 (or Harijan, 4 May 1947, p.134).
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[ii] Harijan, 31 March 1946, cited in Swarup, Devendra, ed, Deendayal Upadhyaya’s Integral Humanism, Deendayal Research Institute, New Dehi, 1992, p.126.

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