Gandhi’s economics

Gandhi’s economics was based on three key principles – simple living, small-scale production and wealth distribution.

Although he is admired in many quarters for his visionary and humble, yet unyielding, leadership, Mahatma Gandhi is not really taken seriously as an economist. Indeed he has generally become regarded as something of a proto-hippie with his ideas about cottage-industry, simple living and bread labour. Sometimes wrongly viewed as an anti-technology luddite, Gandhi was famously an advocate of non-violence and he believed industrialism was a form of violence, to both people and nature. Ghandi said “God forbid that India should ever take to industrialism after the manner of the west…If [India] took to similar economic exploitation, it would strip the world bare like locusts.”

However, the core of Gandhi’s concern was not how much we consume or how luxuriously we live. It is perhaps natural to want good food, nice clothes and comfort. Gandhi’s question is, do these things give meaning to life? Or is it the development of our higher human faculties, such a sense of moral responsibility, love, compassion and personal improvement that gives us purpose, thereby enriching both individual lives and society as a whole?

Throughout his life Gandhi developed ideas about how best to run an economy as if people mattered. Overall, Gandhi believed that any good economic system will give primary consideration to people rather than to money-capital. If the economy does consider people before profits, there will be less of the violent industrial-scale production and instead there would be more of the gentle and humble human-scale production. 

Gandhi developed three key economic principles for the development of a good economy that could be applied anywhere.

Plain living

The first basic principle of Gandhi’s economic thought is a special emphasis on what he called ‘plain living’ (or what we call simple living » read more). This is about reducing consumption to a level that is sufficient for meeting a peoples’ needs and well-being, and then being as self-sufficient as possible. 

“Earth provides enough to satisfy every man’s needs, but not every man’s greed ”
– Gandhi

A distinction is made between ‘standard of living’ and ‘standard of life’.  Standard of living relates to making a living; it generally involves people being materialistic and it leads to overconsumption. This is what the psychologist Erich Fromm called the ‘Having’ mode (“I have a wife and kids”). A higher standard of life relates to making a life, and comes from intrinsic values and rewards. It involves less focus on having and more on being, or what Fromm called the ‘Being’ mode (“I am a husband and a father”).

“We must realize that when basic needs have been met, human development is primarily about being more, not having more.”
– from ‘The Earth Charter’

Small scale production

Gandhi’s second economic principle is to have small scale production. This implies using local resources (including labour) to meet local needs. The goal is for everyone to have work and to use technology that is labour-using rather than labour-saving.

Bread labour

Gandhi emphasised the dignity of labour, including manual labour and he insisted that all people should do ‘bread labour’. The Russian author Leo Tolstoy argued that everyone should perform some ‘bread labour’, or physical work, to support their own existence rather than simply living off the labour of others. This is an important part of self-sufficiency. Whether it is growing food, building shelter, or making clothes and other goods, for instance, performing ‘bread labour’ ensures that people acknowledge and understand the work that produces our food, homes, and clothing which instills humility and thrift. Gandhi adopted this concept in his campaign for Indian Independence and the freedom and dignity of Indian peasants.

“We make a living by what we get, but we make a life by what we give.”
– Winston Churchill


Gandhi not only fought for independence from colonial British rule for the Indian nation, he also fought for the independence of individuals. By empowering individuals with the means of producing their own cloth and clothes, for instance, they were unshackled from the economic ‘rule’ of British producers. Gandhi promoted the concept of ‘swadeshi’ (made in our country) as an important part of creating independence and self-reliance for individuals as well as the nation as a whole.

The cottage industry of India had to perish in order that Lancashire might flourish.
– Mahatma Gandhi

Appropriate technology

Gandhi was not averse to machinery, per se, but he did think that industrialism with its behemoth machines and reliance on dirty energy was harmful to both people and the planet. Human-scale technology is more natural and more humane. It provides skilled and meaningful work for more people. Gandhi gave the example of the sewing machine as a type of desirable and appropriate technology. 


Trusteeship, the third principle, states that profits (after interest, depreciation, etc) should be put into trust for the welfare of all, especially the most deprived and needy. The intent is to ensure that wealth does not accumulate with the wealthy which is what inherently happens in a capitalist system.

Conclusion – Gandhi’s economics

Our civilisation’s focus on productivity, profit and growth is unsustainable. The three Gandhian principles described – simple living; small-scale, local production; and, better distribution of wealth – are all core principles of Sustainabilism which is advocated by Econation as the way to achieve environmentally sustainable universal human well-being.