The austere simplicity of the Bombay Sarvodaya Mandal’s ageing single-storey building illustrates why sarvodaya is regarded as the relic of a bygone era.
Sarvodaya, literally uplift of all, defined Mahatma Gandhi’s agenda for independent India. Yet, it is now commonly associated with either romantic idealism or subsidy socialism – not the kind of economic dynamism required to generate millions of new jobs every year.
What, then, are the prospects for sarvodaya if it is at the core of a framework for economic democracy?
First, it is vital to appreciate why even some of those committed to economic democracy are sceptical about the uplift of all, and prefer to repose their faith in markets.
Second, the real tussle is not between a pro- vs. anti-market approach to economic democracy. Instead, the challenge lies in working out what kind of market culture, not just mechanisms, will foster sarvodaya.
Thirdly, there is need for dialogue among competing perspectives about how to tackle the key problem – the primacy of monetary profits over social and environmental gains. Can value itself be redefined?
In over six decades of democracy, policies and laws meant to foster fairness and equity have been rendered counter-productive.
Hence, one approach to economic democracy calls for shrinking government involvement in the economic sphere. “The state or any powerful citizen should not be in a position to tell me what to produce, consume, own, buy, sell, bequeath and so on”, says Jerry Rao, a serial entrepreneur and promoter of housing for low-income families.
Rao, currently pursuing his Ph. D. in Gandhian economics at IIT Mumbai, argues that the biggest obstacle to economic democracy in India are the endless regulations, permits, licenses needed to do business, which do little or nothing for equitable economic uplift.
Narayan Ramachandran, formerly country head at Morgan Stanley, agrees that the key to economic democracy is a fair and free competitive market system. Ramachandran is now chairman of Inklude Labs, a company that promotes market-based innovations for social justice, as a way of fostering the right sort of market culture.
Somewhat differing from this market-based approach is the view that it is the government’s tilt towards globalisation that is undermining economic democracy.
Dr. Ramanjaneyulu GV, an agricultural scientist and founder of the Centre for Sustainable Agriculture in Hyderabad, says that since government policies are based on a capitalist understanding of the economy, we have a trickle down model rather than equitable distribution.
“Signing World Trade Organisation agreements, or bringing in Foreign Direct Investments and Genetically Modified crops, are not based on any assessment of their impact on local economy”, says Ramanjaneyulu.
Somewhere in between those two views are Dharani and Malkha. Two illustrations of what many social activists regard as the benchmark of economic democracy – empowering the local economy.
By shifting to organic farming, Dharani, a cooperative society of small farmers in Andhra Pradesh’s Anantpur district, aims to give producers higher returns, consumers’ better quality, and revive depleted soils.
Producer-owned companies of this kind are coming up across India, buoyed by the popularity of ‘social enterprise’ and ‘impact investing’ – where returns are defined in terms of monetary profits as well as positive social and environmental impact.
Similarly, the Decentralised Cotton Yarn Trust, a non-profit organisation based in Hyderabad, works with small cotton farmers. These farmers would earlier sell their harvest to distant buyers that supplied large spinning mills, even as handloom weavers nearer home slipped deeper into poverty due to the lack of a reliable and affordable supply of cotton yarn.
The use of small pre-spinning machines makes it possible for the cotton to be locally processed and made ready for being spun into yarn, literally in the handloom weaver’s backyard, thus dramatically improving the weaver’s prospects in the marketplace.
“Given the size of the Indian economy, the scale of the Trust’s work is negligible — five sets of cotton processing machines make around 10,000 kgs. of yarn annually, which is woven on handlooms into 67,000 metres of cloth”, says Uzramma, one of the founders of the Trust.
“But Malkha, the cloth produced by this process, demonstrates an important dimension of economic democracy – locally controlled factors of production leading to decentralised wealth generation, through a product that finds markets across the world. Malkha has caught the fancy of fashion designers in India and abroad”, she says.
Above all, endeavours like Dharani and the Decentralised Cotton Yarn Trust push the envelope on how ‘profit’ can be defined, which is not easy within the prevailing framework of market economics.
Social enterprise has highlighted the importance of social and environmental ‘returns’, without diluting the value of monetary profits.
“There are no simple answers, and much to build upon. For instance”, says Ramanjaneyulu, “ten years ago nobody paid attention to the links between ecologically sound farming and the well-being of both farmers and consumers”.
“Today”, he adds, “there is a shift towards enabling agricultural institutions to deal with the market, with a focus on small and marginal farmers, especially women farmers”.
These might well be the small steps for creating a climate in which, as Ramachandran says, `markets act without hubris and greed’.
At present, there is virtually no dialogue between votaries of the various versions of economic democracy. There are serious differences of outlook on how to link the local with the global economy, and whether it is at all possible to challenge the primacy of capital.
But there is a substantial common ground upon which to build. Evangelists of the different avatars of economic democracy could well work together to – at the very least – prevent vested interests from capturing and distorting the regulatory machinery to benefit a few.
More ambitiously they might collaborate to create a more refined understanding of both the meaning and the mechanism of economic democracy.
Rajni Bakshi is the Gandhi Peace Fellow at Gateway House: Indian Council on Global Relations.
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