Capitalism-and-Its-Critics-A-History-From-the

In 1936 Kumarappa expanded his ideas into a book, Why the Village Movement? A Plea for a Village Centered Economic Order in India, which was published under the auspices of the AIVIA. It pointed out that in many different handicrafts, India already had a rich tradition of artisanal skills and knowledge: the challenge was to resuscitate and nurture them. To this end, Kumarappa called on the central government to set up vocational schools in every village, where Indian children ages seven to fourteen would be taught basic literacy and numeracy but also handicrafts, such as spinning, basket weaving, embroidery, pottery, beekeeping, and carpentry. These schools would turn out “men and women with a backbone of character and selfrespect who will not purr round the feet of foreign masters for a silken couch to lie on,” Kumarappa wrote, “but who will hold their head erect, be independent, and be prepared to share the lowly life of the general rule of the people.”19

Gandhi, who was a fervent promoter of self-reliance, had spurred some controversy by suggesting that the new village schools should be selfsupporting, which was widely taken to mean their budgets would be paid for by selling goods that their students made. Kumarappa insisted that the mahatma had been misunderstood. “This is too narrow a financial viewpoint and it can never be true,” he wrote. “What is meant is a much wider value, not in terms of money only, but in terms of future services rendered by the child as a well-trained citizen.”20 For decades, Gandhi had supported the swadeshi self-sufficiency movement, which called for the replacement of imported goods with Indian-made ones. Kumarappa portrayed AIVIA’s mission of making India’s villages and their inhabitants more productive as the heir to this tradition. The “import of finished goods which can be made from raw materials available locally is creating unemployment,” he wrote. “This immediately gives us a solution to this problem. The more we use locally made goods the less will the unemployed be.”21

The vision embodied in AIVIA was based on decentralizing production and devolving administrative authority, but Kumarappa also called on the central government to provide technical and financial support to local producers. As an example, he cited leather tanning, a trade that had long been dominated by members of the lowly Chamars caste. “The carcass has to be flayed and the hide should be salted immediately,” Kumarappa noted. “Any delay in salting will allow putrifaction to set in.” To address his problem, he called on the government to provide the tanners with duty-free salt and cheap tanning materials, and to “protect the industry from outside competition.” If these types of policies were introduced, Kumarappa said, the various elements that go into efficient production could be “coordinated and divided between the State and the people, each functioning in the processes it is best fitted to perform.”22

Kumarappa also recognized that the central government had an important role to play in larger-scale projects that were beyond the scope of local communities, such as providing transport links, dams, irrigation canals, and energy facilities. He referred to his vision of decentralized production with government support in some areas as “planning.” But it wasn’t central planning of the Soviet variety, which during the 1930s and ’40s gained the support of many members of the Congress, including Nehru, who was president of the party from 1929 onward. Kumarappa remained skeptical of the Soviet experiment. In one of his essays, “Communism and the Common People,” which was published in 1935, he lauded the Bolshevik regime for modernizing Russia and providing educational and job opportunities to women, but he warned that “economic militarism … is driving away all freedom of thought, speech and action.”23 Kumarappa believed that any system based on maximizing the volume of production was inherently dehumanizing, and in this context, he equated communism with capitalism. “Under mass production, whether under capitalism or communism, every person becomes a ‘hand’ or a ‘mouth,’” he wrote. “We have invented machines that have become masters … Inventors should … devise tools and machines that can be operated by one or two and which will remain the servant of Man and will enable every owner to earn his own modest livelihood without squeezing out the life blood of his fellow man.”24

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In August 1935, the British Parliament passed a Government of India Act that granted more political autonomy to the Indian states and, at the national level, created an Indian central bank. The law stopped short of granting India dominion status of the sort enjoyed by Australia, Canada, and South Africa, but eventual independence now seemed conceivable. In 1938 Nehru invited Kumarappa to serve on a National Planning Committee, which was tasked with drawing up economic plans for self-rule. Kumarappa accepted the post, but a few months later he resigned. Most of the commission members thought that developing heavy industry was the key to India’s future economic success. Kumarappa believed this approach was fundamentally misguided. “We are poor but we have an ocean of labor wealth,” he wrote in a 1939 article. “Therefore an intelligent plan will find that the cottage method fits into the scheme for our country.”25 In some ways, Kumarappa was making a similar argument to the one that Kondratiev had made in Russia, where he argued that the country should exploit its huge endowments of land and labor by prioritizing the growth of agriculture rather than heavy industry. Unlike Kondratiev, however, Kumarappa had little interest in integrating India into the global economy. At the local and national level, self-sufficiency was his goal.

The outbreak of World War II interrupted the debate about economic development policy. In September 1939, Viceroy Linlithgow, the top British official on the subcontinent, announced that India and the Indian Army would enter the war against Hitler. Nehru told Linlithgow that the Congress Party would cooperate with this policy only if the British promised India independence at the end of the conflict. Gandhi supported this stance, and for a time, there was an uneasy standoff. In October 1940, however, the Congress Party launched a peaceful disobedience campaign, and in August 1942, at a meeting of its central committee in Bombay, Gandhi demanded that Britain leave India immediately and called on his countrymen to rally behind this demand. “The mantra is ‘Do or Die,’” he declared. “We shall either free India or die in the attempt; we shall not live to see the perpetuation of our slavery.”26 After this dramatic address, the central committee passed a resolution formalizing the mahatma’s demands. The British government reacted by arresting Gandhi, Nehru, and other Congress leaders, which prompted widespread protests, riots, and further arrests.

Kumarappa participated in the protests. He was arrested and sentenced to seven and a half years of hard labor. At the start of his incarceration in the city of Jabalpur, the only reading material he was allowed was the Bible. Making the best of the circumstances, he wrote a short book titled Practice and Precepts of Jesus. He also started work on a second book, which he completed after being released in 1944 on grounds of poor health. (He had high blood pressure.) This book, The Economy of Permanence, which originally appeared as an AIVIA pamphlet, was Kumarappa’s most ambitious and lasting work. It began with three chapters on “Nature,” in which he introduced the concept of economic sustainability without using the actual term. The world, he said, contains two types of natural endowments: raw materials, such as petroleum, coal, and other minerals and ores, which “being available in fixed quantities, may be said to be ‘transient’”; and other resources, such as “the current of overflowing water in a river or the constantly growing timber of a forest,” which “may be considered ‘permanent’ as their stock is inexhaustible in the service of man when only the flow or increase is taken advantage of.”27 The key to creating a lasting and balanced economy was to rely on permanent resources rather than transient ones, Kumarappa said.

In nature, he explained, the term work means actions that preserve and reproduce the system: plants taking nourishment from the air and the sunlight; earthworms breaking up soil; bees pollinating flowers; animals devouring each other. All this happens without any external prompting. But what distinguishes human activity from the rest of nature, Kumarappa argued, is the free will that humankind exercises and its ability to upend nature’s checks and balances. “By exercising this gift in the proper way he can consciously bring about a much greater co-operation and coordination of nature’s units than any other living being,” he wrote. “Conversely, by using it wrongly he can create quite a disturbance in the economy of nature and in the end destroy himself.”28 Nature is “faithful and submissive to those who respect her,” but to those who “of their own ‘Freewill’ choose to ignore her requirements, she is sterner than justice and visits such transgressors with unrelenting punishments of violence and death as a reward for their sins.”29

Writing in the 1940s, Kumarappa couldn’t foresee environmental disasters like mass deforestation, ocean pollution, and climate change. But he ran through various ways, from small to large, in which nature punished behavior focused on the short term. Overeating damaged people’s health; sexual promiscuity spread disease—on some matters, he was a conservative Christian to the end; bleaching rice and other grains leached out their nutrients, which led to vitamin deficiencies and other ailments. Underlying all these calamities, Kumarappa said, was the substitution of hedonistic and monetary values for eternal human ones. “Our economic system gets a lopsided development,” he wrote. “Our lands are being shifted from food cultivation to the production of raw materials for mills. People are starving due to the shortage of rice, while rice lands are made to produce oil for soap-making … The existence of such a state of affairs proves that money values are not dependable scales of human need.”30

“An economy that is based purely on monetary or material standards of value, does not take in a realistic perspective in Time and Space,” Kumarappa went on. “This shortcoming leads to a blind alley of violence and destruction from which there is no escape.”31 The embrace of material values and mass production for profit wasn’t merely economically harmful, he insisted: it also morally degraded a society and the people who lived in it. Evoking Ruskin and other early critics of industrial capitalism, he wrote: “Moral values are always attached to every article exposed for sale in the market. We cannot ignore such values and say ‘business is business.’ Goods produced under conditions of slavery or exploited labour, are stained with the guilt of oppression. Those of us who purchase such goods become parties to the existence of the evil conditions under which those goods were made.”32

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During his lifetime, Kumarappa was often accused of being a Luddite, a utopian, or some combination of the two. The criticisms of him emanated from two wings of the Congress Party: the pro-business right, which was heavily invested in industrialization, and the neo-Marxist left, which regarded the vision of a decentralized rural economy as reactionary and utopian. “It is reactionary because it turns back the productive forces of society,” Jayaprakash Narayan, a prominent activist and labor leader, commented on one of Kumarappa’s essays. “It is illusory because not having a class basis it cannot materialize. Furthermore, it means lower standards of living for the people.”33

In Economy of Permanence, Kumarappa had sought to preempt some of the arguments that were leveled against him. He recognized the productivity benefits of industrial-scale production, and he foresaw a future in which state-run companies would dominate heavy industries, such as mining, energy, and chemical manufacturing. But he envisaged the rest of the economy being organized on a much smaller scale, around largely selfsupporting communities. Local regions would trade with each other, exchanging items that they had in surplus for things they needed. But this process would take place through organized barter rather than anonymous monetary transactions.

Kumarappa also argued that a shift to mass production and global integration wouldn’t necessarily translate into an increase in human welfare. In a chapter devoted to “Standards of Living,” he compared the lifestyles of a senior Indian government official—a Dewan—and an English gardener or American factory worker. The Dewan resides in a small house with little furniture, goes barefoot at home, and buys mainly products that are locally made, such as sleeping mats made out of reeds, he noted. The English gardener sleeps on a metal-spring mattress. And the American resides in an apartment equipped with comfortable furniture and the latest labor-saving devices. But the latter’s ability to keep up his level of consumption depends on his keeping his job, Kumarappa pointed out. “Thus are his freedom of movement and bargaining power curbed and the worker is glued down to his work bench.”34 Strictly in monetary terms, the Dewan may have a lower standard of living, Kumarappa said, but he lives a freer and more fulfilling life. Moreover, the modest sums he spends on his sleeping mats “go directly to support and maintain the artisans and their families and so forms a complete cycle with the locally available reeds which constitute the raw materials.”35

Echoing Thorstein Veblen, Kumarappa also argued that in modern societies a great deal of consumption was driven by fashion and social pressures rather than genuine need. “For a while the fashion will be to eat soup out of a soup plate with a rim round the bowl, with a large elliptical spoon,” he wrote. “A few years later the fashion will change. A soup bowl without a rim will now be used and a spoon more or less circular in shape will be the proper style. These frequent changes are productive of snobbery and are good for business.”36 Although this type of spending was usually associated with countries like Britain and France, it was spreading to India, Kumarappa complained. In Bombay, “one will soon get to know what to expect in every other house,” he wrote. “The same modern laminated wood furniture with glass tops to tables … There is no variety, no imagination, no original ideas  … These homes are more dead than graves. Everything is done for the consumer by the manufacturer under the pretext of making life comfortable and easy; such ease leads to the benumbing of the higher faculties which spells death to progress and development. If life is to be creative, such deadening standardization must go.”37

Writing in the aftermath of the second disastrous world war in thirty years, Kumarappa also argued that a decentralized, locally based economy would be innately more peaceful than a globally integrated mass-production economy, which he equated with imperialism and international conflict. Returning to his example of the Indian official supporting local producers with his purchases, he wrote: “Such an economy does not require the Army, the Navy and the Air Force to secure their raw materials, find or make the markets and to keep the ocean lanes open and safe. Hence, they have no need of violence, as would be the case if the Dewan patronized spring mattresses made in Britain and included them in his ‘Standard of Living.’”38

Like Smith, Marx, and Veblen, Kumarappa framed his economic analysis in historical terms. Looking back over human evolution, he identified five different types of social organization: the “parasitic economy”; the “predatory economy”; the “economy of enterprise”; the “economy of gregation”; and the “economy of service.”39 The Greek and Roman empires, which were both based on slave labor, were parasitic economies, he said. As examples of predatory economies, he cited the British opium trade in Asia and King Leopold’s plunder of the Congo. But he also classed as predators New York financiers who loaned money to

South American republics and shareholders in modern corporations, both of whom reaped their rewards without “contributing any personal effort in production.”40 Similarly, “the great cartels, trusts and combines, which through monopolistic control, get a greater share of benefit in proportion to their contribution, are largely predatory.” Moving on to enterprise societies, Kumarappa pointed to the ancient civilizations of India and China, which were “supported largely by artisans pursuing their vocations peacefully for profit.”41 He defined an economy of “gregation” as one in which individuals subjugated their own interests to the collective body. As an example, he cited the activities of a village cooperative.

Kumarappa made clear that an “economy of service,” the fifth and final form of social organization, was his ideal because it involved all the people working disinterestedly and peacefully for the good of the community. So far, he conceded, no human society had progressed to this stage, which he also referred to as the “Advanced or Spiritual State.” But referencing the AIVIA and the All-India Spinners’ Association, which the mahatma had set up in 1925, he described attaining this state as the “goal that Gandhi is pressing forward to with all his might.” If it were achieved, Kumarappa concluded, “a nonviolent Economy of Permanence would have been established ushering in a civilization of lasting peace or Ram Raj or Kingdom of God on earth.”42

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When Economy of Permanence was published, the ideas it contained were distinctly out of favor. When India became independent in August 1947, Nehru became the country’s first prime minister. According to sources cited by the historian Mark Lindley, whose admirable 2007 book on Kumarappa I have relied on heavily for biographical details, Gandhi wanted Kumarappa to be appointed finance minister. This didn’t happen, and Gandhi’s assassination robbed Kumarappa of his main political sponsor. The new government did appoint him to an economic planning committee, which put forward radical proposals for rural reforms, including redistributing some land from large estates to village communities and making taxes on farmers more progressive. But nothing much came of these suggestions. The primary focus of Nehru’s government was resolving chronic food shortages and preparing the ground for rapid industrialization. In 1950 it created a Planning Commission, which helped to formulate an initial Five-Year Plan that called for 35 billion rupees of capital investment, with most of the money to be allocated to basic infrastructure: irrigation, energy, and transport. The Second Five-Year Plan (1956–61) raised the capital investment target to 62 billion rupees, with an emphasis on heavy industry, particularly steel. Nehru said the Congress Party’s goal was to achieve socialism, and his government did nationalize some parts of the economy— the railroads in 1951, Air India in 1953, and the Imperial Bank of India in 1955. However, these policies stopped far short of Soviet-style command and control. Much of the Indian economy, including countless small farms, remained under private ownership. Newly independent India became a bureaucratic state rather than a communistic one.

Kumarappa supported some of the infrastructure investments that Nehru’s government made, but he wanted more emphasis on rural development programs of the sort that he and Gandhi had long promoted. In 1949 the Congress Party appointed him head of another committee, this one tasked with making recommendations for further agrarian reforms. The committee’s report echoed Kumarappa’s previous calls for the central government to provide cheap credit to farmers, reduce rural indebtedness, and promote modern agricultural practices. It also recommended that any land seized by the government should be used to set up local farming cooperatives rather than be transferred directly to peasant farmers. Despite the committee’s report, however, Nehru’s government failed to pursue radical land reforms, and Kumarappa gradually became disillusioned with the new regime.

With Gandhi gone, his political influence, which had never been enormous, was rapidly declining. He was approaching sixty, and his health was not good. In 1954 he retired to his native south, where he lived in a modest house surrounded by his books. Before departing the political scene, however, he put together another book, Gandhian Economic Thought, which was published in 1951, the same year that the Congress government’s First Five-Year Plan went into effect. In this short work, Kumarappa reiterated his critique of mass production societies and made some provocative statements. “Large scale industries will politically lead to dictatorship,” he wrote. “Even the so-called democratic countries like

America, Russia etc., became actual dictators under the stress of war  … There is hardly any difference between Stalin, Roosevelt, Churchill, Hitler or Mussolini. One is as good, or as bad, as the other.”43 Equating the wartime heroes of Britain and the United States with fascist and Communist dictators wasn’t designed to win Kumarappa friends in the West. But it reflected his belief that economic rivalry between the great economic powers had caused two world wars. He was convinced that any economic system based on large-scale production and unrestricted growth would eventually extinguish peace and democracy. By contrast, “village industries provide the conditions for the development of democracy,” he wrote. “To make use of village industries is not really going back to savagery unless democracy is savagery, but leads to civilization and culture, bringing out man’s dignity and his independence and taking him out of the slavery of his own fellow men.”44

Kumarappa also provided more details of how his model rural communities would operate. Each one would assess its needs for food, shelter, and consumer goods, then plan its production accordingly. “Supposing we want to have a balanced diet for 6000 persons,” Kumarappa wrote. “We have the menu; we would require 36000 lbs. of wheat if we allow 6 ounces a person. Similarly we calculate all other requirements. Having taken the total requirements we plan the amount of acreage that should be placed under wheat, etc.”45 As this passage indicates, Kumarappa didn’t equate decentralization with maximizing production for the sake of it. To the contrary, he argued that production should be carefully modulated to preserve an ecological balance and prevent wastage. Each community would organize its activities through a local cooperative, which would control some key resources, such as irrigation tanks and fuel oil. Larger infrastructure projects, such as power plants, energy grids, and transport networks, would be organized at the regional or national level. These industries would be regarded as “necessary evils,” Kumarappa said. They “must be under state control and not under private ownership and run not for profit but only run on a service basis.”46 Some manufacturers would also be allowed to operate nationally, but they would be prevented from “flooding the country with unnecessary things.”47 Kumarappa also laid out a political structure for his new society. The smallest administrative unit—the panchayat—would include twenty or thirty villages. There would be larger administrative bodies at the district and provincial levels, all staffed by trained civil servants.