Foundations of Gandhian Economics

_Foundations of Gandhian Economics_ by Amritananda Das

NY:  St Martin's Press, 1979

ISBN 0-312-30005-0

(1)  We are accustomed to believe that the widespread poverty observable in the less-developed economies reflects the inadequate modernization of these economic systems.  Gandhi asserted, on the contrary, that the growing poverty of the backward economies was the direct result of an excessive and indiscriminate preference for technical modernisation.

(4)   The critical question is whether, as Gandhi realised, the economic system is moving towards fuller or less full utilisation of labour power...  

The urbanisation process reflects not a 'pull factor'.  It is the growing inadequacy of the traditional employment bases of the rural sector _vis-a-vis_ the growing population of the structurally unemployed that drives workers to the cities.  Consequently, the 'growth' of the cities reflects pathological processes unconnected with its actual potency as a growth pole.  Finally, the rural marketing systems decay because of the decay of rural purchasing power and the capitalist market system cannot realise its potentials in the face of the decay of the real consuming power of working-class households...

Before any improvement in conditions of living of the masses can be looked for, growing structural unemployment must be halted.  Investible resources being limited, growing structural unemployment can be halted _only_ by revitalising the labour-intensive occupations of the traditional sector.  This is the _kernel_ of Gandhian economic thought, the fundamental analytical insight from which the rest of Gandhian economic thought can be derived as a series of elaborations.

(8)  The three immediate consequences that the strategy entails are:

1.  a raising of the degree of capital-intensity of production, which involves a faster rate of increase in structural unemployment;

2.  an intensification of the neglect of the agricultural sector, since it unfortunately does not produce machinery;  and

3.  a neglect of the investment needs of industries providing non-agricultural rural employment....

The solution in each case is the same - the development of dispersed but numerous rural industries which can, at the same time, relieve the burden of agrarian unemployment and provide an expanded supply of consumer goods.

(11)  We have seen that Gandhi's basic development strategy is one of increasing the weightage of labour-intensive activities in the investment-mix so as to bring about a reduction in structural unemployment.  The next step, in the context of contemporary conditions, is to see how this idea can be fitted into a theory of investment allocations in a framework of development planning.

(17 - 18)  1.  Gandhi poses the planning choice as between more employment and more accumulation in the current period.  This avoids the unrealistic attempts of conventional development economics to pose the problem as a choice between present and future levels or per capita consumption (capitalist subjective value version) or as a choice between present output and future output (socialist version).

(18)  2.  A second point... is that the problem of making adequate provision for the future is posed on an objective basis;  in the form of the condition that the rate of capital accumulation must exceed or equal the rate of growth of the labour force.

3.  By posing the employment target both concretely and objectively as a certain minimum increase to be attained in the current period;  it brings employment planning to a relevant and practical level.

4.  By posing the planner's decision problem as an exercise in satisficing choice, it rejects the conventional superstition that the planner has the duty of determining a social intertemporal optimum.

5.  Finally, the approach directs attention to the importance of 'balance' in investment allocations and develops it into a trenchant critique of the ideology of rapid growth via investment imbalance.

(19)  The low rate of reinvestment in the labour-intensive activities can be increased by three types of changes.  First, the rates of reinvestment actually prevailing in the labour-intensive sector can be improved by (a) better  arrangements for 'marketing' its products, (b) better organised and less exploitative modes of credit and input supply, and (c) building into the credit-and-marketing cycle institutionalised processes of 'retention and reinvestment' of savings. These are in fact the critical functions which Gandhi set as the prime targets for the assocations of constructive workers he formed to revitalise village industry.

(21)  1.  There should be a programme for marketing of labour-intensive products and for supply of inputs to the labour-intensive activities.

2.  The saving-investment process in the sector of labour-intensive activities must be reformed and institutionalised in such a manner as to increase the own-investment level of this sector.

3.  The propensity of the labour-intensive sector to purchase the products of the capital-intensive sector must be lowered.

4.  Restrictions must be imposed on the competition between products of the capital-intensive and labour-intensive activities.

5.  The labour-intensive sector must be encouraged to utilise the resources and needs not utilised by the capital-intensive sector.

6.  Technical extension and credit must be made available to the labour-intensive activities, so as to encourage labour-intensive technical improvements.

(24)  With the help of Input-Output Analysis, however, several important points connected with the issue of inter-activity relationship within a Gandhian strategy can be effectively cleared up.  Incidentally, a greater degree of precision is also attained in the matter of the overall inter-sector relationship between the labour-intensive sector and the capital-intensive sector.

(26)  The logical basis of the Gandhian approach is that the Government should restore to the labour-intensive sector more than it takes from it.

(30-31)  This 'community planning council' is visualised by Gandhi as controlling (a) the disposal and allocation to various activities of the village land, the 'ownership' right being converted into the equivalent of well-protected tenancy rights, (b) the utilisation of 'surplus labour' available to the community for carrying out community works, and (c) planning the overall purchasing and marketing pattern of the community in consultation with the local farming and craft groups as well as the units of the cooperative agencies located in the central village of the local rural cluster.

(31)  This effort [socio-transformational rural development], Gandhi believed, can be most effectively mounted by voluntary social workers, working through seva ashrams (service monasteries), operating at the rural cluster level.  This approach is based on the principle of living and working among the people, starting with 'minimum level' mobilisation programmes and gradually bringing the local communities to maturity and into full and effective participation in the total programme of the village development described above.

(33)  Gandhi placed great stress on this aspect of the problem [management of the large-scale sector] and suggested the development of trusteeship councils, composed of representatives of owners, management, workers, government, and the public (local), which will supervise the activities of  management. 

(40)  Meanwhile let us note that the approach here recommended is incompatible with 'free trade' in exactly the same sense in which the Gandhian approach to the domestic economy is incompatible with 'free markets'.  The reason also is the same.  All Gandhian decisions are evaluated in terms of incremental employment and incremental savings at the social level.  In free markets this criterion disappears entirely from the picture and is replaced by the national aggregate of incomes or (more realistically) by the sum of expected private profits.

Clearly, therefore, the Gandhian approach to international trade requires that this should be implemented through a single integrated national agency for the management of exports and imports, guided by a joint body of the national representatives of official (central) planners, the cooperative structures, and the privately-owned large industrial units.  Only when all exports and imports are routed through such a single agency does the possibility arise of a socialisation of the process of international trade that Gandhi recommended.

(41)   Gandhi visualises anti-poverty action through the following categories of activity:

1.  The generation of employment/self-employment opportunities which can be utilized by the poor to add to their incomes.

2.  The increased production of the goods that the poor will need to consume and whose demand will grow as the poor secure higher levels of income.

3.  The increased production of the inputs that the mass-employment activities will need in order to sustain the increasing level of production in the labour-intensive sector.

4.  The coordination of credit, input supply, marketing, and saving investment activities which will enable activities of the first three types to flourish.

5.  The application of coordinated measures to ensure that activities competing with mass-employment activities are discouraged and, wherever possible., eliminated.

(42)  1.  The organisation of cooperative groups of small farmers and artisans.

2.  The activisation of local communities as thinking-planning-acting units.

3.  The conversion of large-scale economic organisations into trusteeship units.

4.  The alteration of the working, consuming, and saving habits of the poor in particular and the community in general in the directions required by the macro-strategy against poverty.

5.  The management of class-conflicts that tend to surface in processes of improving the lot of the poor by non-violent methods.

The above may be regarded as the Gandhian strategy of micro-social activity against poverty.

The third and final component of the Gandhian line of attack on poverty is constituted by the _total subordination_ of public policy to the aims defined above.  The entire process of (a) the raising of public money, (b) the allocation of public funds to productive and physical infrastructure investment, (c) the funding and running of socio-infrastructural activities, and (d) even the process of maintenance of external security and internal law and order is visualised as being committed exclusively to the support of the anti-poverty strategy.

(43)  The next level of activity is constituted by the cooperative structure which is visualised as catering to the development efforts being activised by the micro-social work processes.  Thus, the organisation of craft/farmer/artisan groups for self-employment/self-help brings in (as counterpart) the enabling agencies of credit-input supply and marketing cooperatives.  The idea is that these activities progress in each micro area only to the extent there is an already energised, local, felt need for such enabling services....

This programme of expansion/extension/qualitative strengthening of the activities of the cooperative structure will generate both short- and long-term 'planning' of the type undertaken by large multi-plant and multi-outlet business organisations.  Only, the process of planning will be of the growth-maximising and not the profit-maximising type.

(45)  Thus, the first level of development planning is represented by area planning at the cluster level constituted by coordination between the four instruments of:  (1) seva ashram activities, (2) community plans at village level, (3) the cluster plan for infrastructure, and (4) the production, marketing, and reinvestment plans formulated by the local cooperative units.

This coordination is achieved primarily by the catalysing activities of the seva ashrams, so that it is they who constitute the ultimate but indirect leaders of the micro-level development process.  Without either striving for power or seeking the benefits of dominance, they must take up the job of a local elite and also of recreating and transforming local elites into patterns suitable for Gandhian development.

(47)  It is this transvaluation of values which marks out the distinctive feature of the Gandhian approach to planning.  Every feature of the conventional development planning structure is utilised and yet the operational logic of that structure is neatly inverted in that (a) it is the peripheral development patterns which guide the pattern of core sector development, (b) it is the voluntaristic and freely developing sectors of mass employment which guide the centrally directed development of large industry and infrastructure, and (c) it is the developmental initiatives of the peripheral masses which constrain the decisions of the core elite.

(48)  As long as we continue to believe that it is core sector decisions about core sector development that must guide the national planning process, it is impossible to sincerely apply any of the Gandhian principles of economic reconstruction.  Dominance of the core over the periphery, of large industry over small, of town over village - these constitute the essence of exploitation and unless these are replaced by their opposites no cure of poverty has any chance of working.

It is this transvaluation of values to which Gandhi referred when he talked of the necessity of village orientation, trusteeship principles, and of a 'change of heart' on the part of the elite.  Without such a transvaluation of values, the mere replacement of one elite by another through 'political revolution' will not contribute in the slightest to the welfare of the masses....

The end-product of the Gandhian process of economic reconstruction is not a conventional affluent economy of the Western type.  Rather it is a no-poverty economy serving a different concept of mass economic welfare.

(50)  The fundamental characteristic of the behaviour of human beings in the economic sphere consists in the relationship of the individual to socio-economic micro-groups and the relationship of micro-groups to society.  The fundamental economic act is neither the choice between economic alternative nor the social distribution of the national economic product.  It is the adjustment (sometimes happy, sometimes unhappy) between individuals and the micro-groups to which they belong and of those micro-groups to society (conceived as a hierarchical arrangement of micro-groups), which is the fundamental and characteristic economic act.  It is 'collaboration' which is the fundamental theme of economic life.

NB:  Kropotkin

(52)  First, let us note that the choice and behaviour of collaborative micro-groups are subject to Bourdette's four famous axioms of growth preference, equality preference, sharing  preference, and loss avoidance....

1.  The group prefers any given increment of its income the more equally it is shared by members of the group.

2.  The group avoids any increase in group income which leads to increased inequality of incomes within the group.

3.  Among ways which bring about equal reduction in group income, the group accepts the one which causes the greatest reduction in within-group inequality.

4.  The group, however, unless forced, refuses to take any measures to increase within-group equality at the cost of group income.

(55)  Gandhi's answer was the principle of 'trusteeship'. Basically this principle means three things.  In the first place the organisation as a whole cannot be free to set its own goals but must have its goals defined by the planning system.  This provides the context in which the members of such organisations can clearly see their own role as trustees of the community interest as articulated in the targets and norms set by the planning system. Second, using this concept of trusteeship, the two major interest groups within the large-scale unit (labour unions and owner-management groups) must be involved int he face-to-face planning of output, productivity, and income distribution.  Third, the dual context of planning from outside and planning from inside must be coordinated in such a manner that the owner-manager groups come to develop a practical consciousness of their micro-social and macro-social responsibility as trustees.

NB:  Mondragon Cooperatives

(56)  Thus we can see that the entire structure of the Gandhian system of economic organisation is so conceived as to induce collaborative endeavor as the ruling pattern of economic behaviour at every level.  This is why it can be visualised as a consistent application of the principle of non-violence as the logic of economic system design.

(56-57)  In other words, while an individualistic system reckons its progress in terms of per capita consumption, and while collectivist societies equally naturally measure their progress by the rate of growth of aggregate national product, the collabarative economic order is oriented towards the target of full utilisaton of human labour power.

(58)  As against the interpretation that makes him a forerunner of contemporary scare-mongers about 'pollution' and 'resource exhaustion', it deserves noting that Gandhi does not share their concern with population growth as a factor needing to be checked as an urgent priority.  Anyone who thinks in terms of exhaustion of a limited planetary environment, as the modern limited-growth ideologists do, must regard a high birth rate as the greatest possible calamity.  This Gandhi must emphatically did not do.  He cannot, therefore, be regarded as a limited growth-rate theorist.

NB:  Gandhi would have most probably been anti-abortion and most methods of birth control beyond personal discipline

(70)  The logic of Swadeshi is as follows:  (a) if there is any product presently imported of which a domestic substitute could be developed, that substitute must be developed;  (b) the domestic substitute developed must be of the labour-intensive type;  and (c) if there is no labour-intensive domestic substitute possible, the product must simply be dispensed with.  This means at once that the pattern of elitist consumption will become much more restricted and the employment created in order to produce the basket of widely consumed  commodities will become much larger.  The feasibility of Swadeshi, then, depends on the willingness to accept a fairly massive equalisation of the pattern of consumption.

(74)  The changes that will be required in the structure of rich economies in order to remain viable in the face of international economic non-cooperation will be the following:

1.  Planned reduction in outside resource imports and progress towards a situation where the economy is based on domestic resources alone.

2.  Technological change aimed at increased recycling of waste materials and a shift from non-replenishable to replenishable sources of raw materials and power.

3.  Reorganisation of the economic system to permit full employment of domestic labour forces on the basis of domestic resources (involving, in addition to measures under item 2, the planned adoption of labour-intensive and human scale technologies) based on service to localised market systems.

4.  Gradual shift from the concentrated urban industrial regions and agro-specialised rural areas to a more dispersed pattern of industry and the emergence of economically balanced rural communities.

5.  Emphasis on stable ecologies, pollution-avoidance and rational limitation of needs, so that an economy of performance can be established on the basis of self-reliance.

(76)  It [swadeshi] forms the basis of Gandhi's approach to political economy and in particular of his theory of non-violence as a way of economic life.

(77)  The struggle at the _international_ level is seen as a struggle between the predatory _elites_ of each country for a larger share in the fruits of exploitation, and, at the _national_ level, as a struggle between the _international coalition of elites_ against the poor of _each_ nation.  This larger struggle (between the poor of the world, as a whole, against the elites of the world, as a whole) never comes to the surface and is concealed by the fact that, as of now, no international unity of non-elites exists or is conceivable.

(81)  Gandhi realised that the prescription of victory over poverty through modern economic growth can be valid for poor countries in general (and not merely for some specific poor countries) if and only if the world as whole could escape poverty through economic modernisation.  The point that Gandhi wished to make was specifically that the world as a whole, considered as a single economy, could not be expected to reach mass affluence on the basis of modern technologies of production.

This 'impossibility' theorem was argued by Gandhi at, at least, three distinct levels.  The first level argument rests on the need of developed economies for unequal economic relationships with backward economies.  The argument goes like this.  Each 'developed' economy constitutes a region of 'concentrated' industrial/urban development which can maintain its affluence _only because_ there are 'backward' regions from which raw materials can be imported and where the developed region surplus of manufactured goods can be profitably disposed of.

(82) This argument is based on the non-feasibility of the capital accumulation task involved in solving the mass poverty problems of backward economies through modern economic growth...

This involves a 2.5 times increase in investment levels and is plainly a practical impossibility.  Similar arguments can be developed for the rest of the poor nations, with the investment expansion required varying between 2.2 and 2.8 times the currently achieved levels.

(83)  This brings us to a consideration of the final stage of the Gandhian 'proof' of the impossibility of eliminating mass poverty through modern economic growth.  Let us assume that (a) the unequal trade relationship between the rich and the poor countries have been somehow properly adjusted and that (b) the problem of investment resource mobilisation has been solved in some way.  Will it, then, be possible to expect that mass poverty can be eliminated through modern economic growth?  Gandhi argued that the answer will still be negative because there are certain physical limits to growth.

Let us recollect that Gandhi noted the tendency of economic modernisation to rapidly raise per worker resource consumption.  The more 'modernised' the technology, then, the greater the drain on the resources of the planet to keep a worker fully employed.  In order to eliminate mass poverty through modern economic growth over the next 50 years or so, we will need (a) to expand the technologically modern sector of the world economy (and its associated level of employment) at a high rate and (b) simultaneously to allow for a rapid rise in per worker rates of resource consumption.  The resulting very rapid rise in world economy rates of resource consumption will quickly come into clash with the limited supplies of non-replenishable resources of the earth.  Long before 'everyone' comes to reach a state of material affluence, therefore, modern economic growth will be brought to a halt by resource limitations.

(84)  Within a limited resource environment such as the earth, Gandhi argued, the way of wisdom lay in a search for progressively less costly ways of reaching a non-poverty standard of living.  Modern economic growth was following the exact opposite line by making it progressively more costly to attain an acceptable standard of living.  The 'way of unwisdom', declared Gandhi in the most prophetic of his utterances on the subject, 'cannot be relied on for the solution of the economic problems confronting humanity.  They are a sure road to disaster of unimaginable proportions... (the) machine civilisation is cannibalising the resources of Mother Earth and failing to replace them... (this can) lead to nothing but ultimate pauperism and ruin.  My plea is only for a return to the true principles of economy... and for a stop to this insane squandering of resources with which nature has so generously endowed us.'

(86)  To summarise, the Gandhian critique of modern economic growth is at three levels.  First, we have the argument based on the 'need' of developed regions for backward hinterlands and the resulting non-feasibility of an uniformly affluent world.  At the second level, we have the argument of the 'non-feasibility' of the degree of capital accumulation necessary for removal of poverty through modern economic growth in the backward economies.  At the most fundamental level, we have the argument based on the problems of resources exhaustion and environmental damage brought about by modern economic growth and the impossibility of sustaining modern economic growth all over the world at rates which can really have a chance of eliminating poverty.

Once the validity of the fundamental argument is accepted (ie, when the illusion of limitless growth potentials is given up), we see the first two levels of argument also in a new light.  Since the _size_ of the affluent population (in the visible future) is limited, the struggle for development reduces to a struggle for capturing (on behalf of a national economy) a larger share of the available affluence.  To the extent that more and more countries participate in this struggle, the objective chance of failure rises rapidly.  Similarly, there being an upper limit to the world rate of capital accumulation, the idea that sufficient capital can be made available for poverty elimination through modern economic growth in the backward economies is seen to be completely non-feasible.  In this sense, the lower level of Gandhian arguments turn out to be simplified and partial versions of the fundamental critique of modern economic growth.

(87)  Gandhi's vision of the class struggle in terms of a contradiction between _elites_ and _masses_ (rather than in terms of _wage earners_ and _capitalists_) has three distinctive features.  First it is a class struggle which is _inevitable in one sense_ (as the by-product of the evolution of the world economic patterns) and, at the same time, _avoidable_ (since it is open to the elite of any country to opt out of the international pattern of development). This is far superior to either a purely deterministic view which makes the class struggle inevitable without qualification, or a purely voluntaristic attitude which believes elite-mass collaboration to be possible under all circumstances.

(88)  Second, the Gandhian view of the class struggle makes it possible to precisely design the terms on which class collaboration is possible and the terms that make it impossible.  The critical condition is the willingness of the elite to accept the Gandhian pattern of growth.  Whether or not political revolutions take place, whether or not one elite is dethroned by another, whether or not the economic system remains capitalist or is reorganised on a collectivist basis, class contradictions between mass and elite remain inevitable as long as the Gandhian model of development is not accepted.

Finally, the Gandhian analysis also indicates that the adoption by the elite of a poor country of the Gandhian strategy will inevitably deepen the contradiction between workers and elites in the richer nations.  Ultimately, therefore, when a large number of poor countries accept the Gandhian way, the stress of the Gandhian contradictions in rich economies will force them also to adopt a collaborative economic structure.  Every victory for the Gandhian way in a colonial economy is, therefore, a victory for the Gandhian way at the international level.

(91)  The Gandhian gospel of non-violence is not aimed at those who are suffering from societal violence;  it is aimed at the group which gains from violence and is violent.  To recommend non-violence to those who suffer from violence is a type of apologetic which Gandhi detested.  This would, in fact, amount to the 'cowardice' which, he always asserted, was 'worse than violence'....

As Gandhi never tired of emphasising, it was his intention to introduce the concept of 'struggle' to the masses and to cure them of cowardice.  He believed that once the masses learned the habit of 'struggle', non-violent mass struggle would have more than sufficient power to redress _individual wrongs_.

(91-92)  The use of _satyagraha_, he said, 'cannot be visualised as changing a system of wrongs, it is efficacious for the changing of particular wrongs'.  For 'changing society', he added, 'we must look to something else'.  That something was the building up of the capacity of the people to do without the elite: to build up a system of supply of basic needs by the people and for the people on the basis of local organisations.

(94)  At the level of economic analysis Gandhi identifies the causes of growing mass poverty in underdeveloped economies as the result of two kinds of errors in the decision-making of the elite which controls the mobilisation and allocation of investment resources.  The first error consists in an attempt to technically modernise _faster_ than the conditions of the economy permit.  This error is further compounded by an attempt to use the international trade mechanism in an 'accumulationist' fashion, thus increasing the capital-intensity of the investment-mix.  These two errors lead to a situation in which the available resources for investment prove insufficient to generate sufficient new employment.  This causes structural unemployment to increase and this becomes the fundamental basis for increasing poverty.

Behind these errors in decisions lies a fundamental politico-economic misconception.  This is that a state of affluence can be reached in the presently poor economies through modern economic growth.

(96)  Gandhian economics leads to a demonstration of the necessity of opting out of the international development game...

This very decision allows the elites of poor economies to shift from a growth strategy which inevitably escalates class conflicts to a strategy which can prove a stable basis for class collaboration...  The Gandhian development strategy, then, is predicated on a decision by which the elite of a poor economy _sides_ with the poor of its own country against the international elite rather than with the international elite against its poorer countrymen....

The basic ideas behind the Gandhian development strategy are twofold.  On the one hand the strategy is one of redirection of investment flows towards the more labour-intensive sectors of activity and the adoption of certain criteria concerning technological innovations.  On the other hand, it is also a strategy of progress towards a collaborative economic order.

(119)  The economic principle of collaboration involves two features.  First, there must be a group of human beings submitting themselves to common direction and discipline for the attainment of a goal which is common to all.  Second, in the sharing of benefits and costs of the goal-attainment process, there must be a mutual concern for everyone's welfare. 

NB:  Elinor Ostrum's work with commons

(120)  By contrast, collaborative behaviour fails to emerge when the permanent social micro-group pattern is absent.  Neither the anonymity of large market places, nor the centralised large-scale enterprise offers scope for manifestations of collaborative behaviour....

The whole discipline of personnel management has been revolutionised by the finding that the worker responds much better to management initiatives when he is treated as a member of social micro-groups than when he is sought to be manipulated by purely individualistic incentives and penalties.  Similarly, managers of collectivist enterprises have found that effective attainment of collective goals becomes impossible unless the existence of collaborative micro-groups (eg, a work-brigade in a Chinese commune) is recognised and respected.

(121)  First, let us note that the behaviour of individuals within a socio-economic collaborative micro-group is marked by avoidance of economic options by which an individual within the group can improve his economic situation either at the expense of the group or without sharing the gains (at least partly) with the group.  Second, the group tends to shelter and protect its weaker members from external difficulties and threats, by both sharing of goods and the sharing of work responsibilities.  Third, any policy which enriches the group as a whole gets preference over policies which affect part of the group in one way and another part in the opposite direction.  Fourth, leadership within the micro-group devolves on the individual(s) who show particular skill in promoting the group interest and who lead in self-sacrifice in the interest of the group.  Finally, the group tends to display a strong community of tastes and a preference for group-oriented leisure and recreational activities.

Empirical testing of the choice-behaviour of collaborative groups indicates, however, that collaborative group choice follows neither the first (Pareto) nor the second (Kaldor Scitovsky) criterion. Rather, the preference is consistently for changes where each member of the group gains about equally and also for changes which reduce the distributive inequality of gains within the group without actually reducing anyone's economic advantage.

(122)  ... the rules of collective choice for the economy as whole will be:

1.  that economic growth is desirable only if it does not lead to more unequal interpersonal income distribution;

2.  that any increase in interpersonal equality is preferable except when it reduces national income;

3.  that any increase in national income will be the more preferable the more equal is the resultant distribution;  and

4.  that any reduction in national income will be a loss, but it will be the more bearable the more equal is the resultant distribution.

(123)  To discriminate between the alternatives an additional rule must be introduced.  This is found in the principle of antyodaya which was repeatedly emphasised by Gandhi.  By the rule of antyodaya, that alternative is to be preferred which brings the greatest number of the poor above the poverty line.  Of course, this principle does not fully remove the ambiguity in social choice.

(126)  Economic behaviour (or, for that matter, social acts of every type) can be guided by three distinct types of motivational orientation.  The first is represented by I-They orientation (ITO)  in which the individual pursues his I-interest, neglecting the effect of his acts on all other human beings, who are grouped together in the 'they-group'....

A second and more mature orientation is the We-They orientation (WTO) in which the individual recognises an in-group (we) whose welfare he has to take into account in his actions and an out-group (they) whose welfare need not be considered...

Finally, there is the Us-orientation (USO) in which the individual regards the entire humankind as his in-group, without any sub-group being treated as 'they'.  Up to now, such orientations have been consciously maintained only be deviants characterised as 'cranks' or 'saints', depending on the observer's point of view.

NB:  I-Thou relationship which may mediate and include the Us 

(133)  One of Gandhi's basic ideas was that of arming the people.  He was highly impressed by the fact that the Swiss, in a war-torn Europe, could successflly maintain their national existence by (a) dispensing with large armies and maintaining strict political neutrality and (b) arming the people themselves for protection against  aggression.

[Gandhi quote]  An armed people, organised in depth and determined to defend themselves, is better than a large army... with all its spending on armaments, France was unable to defend herself against Hitler... and yet neither Hitler nor Mussolini was prepared to take the risk of violating Swiss neutrality.

(134)  Incidentally, numerous experiences (including that of Vietnam) has shown that the determined armed resistance of _a people_ is nearly always superior to a high-technology professional army which lacks local support. 

1.  Arm and train the people for a 'people's war' against any external aggressor.

2.  Steadily reduce the size of the standing army while improving its hitting power and mobility.

3.  Maintain an attitude of strict neutrality and peace in international affairs.

4.  Try for peaceful settlement of all territorial disputes with neighbours.

(141)  J.  Bourdette, _Axioms of Collaborative Behaviour_, Paris, 1960

More notes on Gandhian Economics books:

Sarvodaya, Swaraj, and Swadeshi
http://hubeventsnotes.blogspot.com/2014/04/sarvodaya-swaraj-and-swadeshi.html

Gandhi’s Economic Thought
http://hubeventsnotes.blogspot.com/2014/04/gandhis-economic-thought.html

Inclusive Economics:  Gandhian Method and Contemporary Policy
http://hubeventsnotes.blogspot.com/2014/04/inclusive-economics-gandhian-method-and.html

Essays in Gandhian Economics
http://hubeventsnotes.blogspot.com/2014/04/essays-in-gandhian-economics.html

Economy of Permanence
http://hubeventsnotes.blogspot.com/2014/04/economy-of-permanence.html

Gandhian Economics:  A Humane Approach
http://hubeventsnotes.blogspot.com/2014/04/gandhian-economics-humane-approach.html