DADABHAI NAOROJI, GOKHALE B. N. GANGULI* AND GANDHI AS EXPONENTS OF NATIONAL ECONOMIC THOUGHT (1) swords. Gandhi was not so learned and sophisticated, but he had a keen sense of Dadabhai Naoroji, Gokhale and Gandhi reality and an instinctive perception of the were three of the most remarkable expo­ economic and social malaise that had nents of nationalist economic thought dur­ afflicted the nation. In many ways, he was ing the formative period of the Indian na­ a class apart, and yet he regarded Dada­ tionalist movement. They appeared on the bhai and Gokhale as his gurus from whom scene of Indian public life in a chronologi­ he derived his background and inspiration. cal sequence. They were an important cross-section of our national intelligentsia Indian nationalists of their generation who reflected, and, in their turn, also shap­ belonged to the educated middle-class to ed, nationalist thinking on our social-eco­ which all the three belonged. It is some­ nomic problems in the last two decades of times a fashion to describe them as bourge­ the 19th century and the first half of the ois nationalists who were the unconscious present century. All the three reacted to instruments of the aspiring middle-class these problems in the manner of heroes that felt frustrated and cramped by the and gave our urge for freedom an econo­ alien rule and alien economic domination. mic dimension and motivation. All the Sometimes British rulers used to pose as three had risen from the ranks and had the champions of the 'masses0 who, they experienced the pangs of poverty. Gandhi said, were the victims of a feudal economic regarded both Dadabhai and Gokhale as and social system. Their condemnation of his preceptors. It is well known that the disloyal middle-class nationalists was a Gandhi and Gokhale were kindered spirits, 'class' approach to the political and econo­ that Gokhale was Gandhi's guide, philoso­ mic problems of the times. Paradoxically, pher and friend during his epic struggle in there is a strange similarity between the South Africa and that they found spiritual 'class' approach of the British ruling class strength and solace in each other. Dada­ and the 'class' approach of certain com­ bhai and Gokhale were close friends. mentators of the present generation who Gokhale said that both Dadabhai and have tried to understand our nationalist Gandhi "affected him spiritually". Dada­ movement. We would be nearer the truth, bhai and Gokhale were sophisticated and however, if we try to understand the learned intellectuals with a wide-ranging thought and aspirations of nationalists, of knowledge and a flair for statistics, for whom Dadabhai, Gokhale and Gandhi marshalling of data and for painstaking re­ were the best representatives, from an search, which was the despair of British eclectic angle. They were, indeed, pro­ administrators with whom they crossed gressive individuals who thought of the * Dr. Ganguli, who is Ex-Vice-Chancellor of Delhi University, Delhi, delivered these lectures on March 4, 1970 at the Tata Institute of Social Sciences, Bombay, The lectures were sponsored by the Ministry of Education, New Delhi. 244 B. N. GANGULI 'masses', rather than 'classes', and of a its essence is concerned. I take the view 'welfare state' in which the masses could that Gokhale's economic ideas, to which acquire the strength and the capacity to concurrent thinking by many others had win and preserve basic freedoms through contributed, form an essential link connect­ simple and cooperative ways of ordering ing early nationalist economic thinking, their community life under the fostering via Gandhi, with the later ideas of econo­ care of the State. mic reconstruction, that are still taking When 'Economics' was unknown, think­ shape as the conceptual framework of so­ ing Indians did think soundly on the basic cial and economic democracy in our coun­ economic problems. They did develop a try. sound corpus of thought, for example, on agrarian relations and land problems, Here I shall deal with the Critical Con­ which still repays careful study. Dadabhai tent of nationalist economic thinking — the and Gokhale were intellectuals who not sharp reaction of the nationalists to the only possessed a wide knowledge of even economic consequences of the alien rule. complicated economic affairs, but were also In my second lecture, I shall review the essentially pragmatic in their assessment positive content of nationalist economic of economic trends and events. They had thought insofar as it was oriented towards a remarkable awareness of the conditions defining the goals and methods of social of the masses. Since they knew what they and economic development with a view to were talking about, they did not merely building up a social and economic demo­ repeat what the western economists wrote. cracy in harmony with our tradition and' They tried to understand their teachings special circumstances when freedom came. in the context of Indian conditions. Gandhi You will realize that I am dealing with a shared these qualities, although he was subject which has a very wide range. I can much less learned and sophisticated, in only be selective and dwell only on certain spite of the fact that once he quoted segments of the great economic debate Adam Smith and also stated the doctrine which set the pace of the nationalist move­ of classical economics that international ment and aroused widespread interest as trade was barter. Both Dadabhai and well as emotional involvement. Even so, Gokhale were born in villages and knew I can hope to present only a synoptic view. what rural life meant. Gandhi's know­ ledge of the Indian village was fabulous. Dadabhai Naoroji and his generation They were not 'economists' in the usual viewed economic problems in the context sense, but they debated the problems of of the abject poverty of the masses of the 'Political Economy' with a rare mastery of population. With his early training in facts and a sound sense of logic. Mathematics and his remarkable sense of I have selected Dadabhai, Gokhale and statistical magnitudes, Dadabhai turned Gandhi for my survey, also because they his attention to the computation of natio­ represent a basic affinity of thinking and nal income in order to get an idea of per also the greatest common measure of natio­ capita national income. His method of nalist economic thought. Since between national income estimation was not a per­ them they spanned almost three genera­ fect one, but what he said about his tions we find a thread of continuity of method, in answer to his critics, seems to thinking — almost a tradition — that has lay bare the anatomy of Indian poverty continued without serious breaks as far as seen in relation to his conception of "eco- DADABHAI NAOROJI, GOKHALE AND GANDHI 245 nomic drain." Dadabhai had derived a Gandhi. With this as the starting-point, per capita income Rs. 20/- for British India Dadabhai sought to understand both natio­ around 1870. He used to describe 2 annas nal income formation and poverty. He a day or less — the average daily income came to the conclusion that the process of — as "an old friend". It was not the parti­ income formation in India was such that it cular figure that really mattered. What left the masses of the population at a static was significant in his analysis was the dyna­ poverty level — indeed, a level of destitu­ mics of national income formation. An im­ tion at which the population was periodi­ portant ingredient of his thought which cally decimated by famines. influenced Gokhale to some extent, but Gandhi completely, was his view that "the Following Dadabhai's lead, Gokhale whole produce of India is from land". He gave an exposition of the poverty problem regarded material primary production as in his famous budget speech of 1902. In the source of wealth and income in direct 1901 Lord Curzon had said that, so far as and indirect forms and considered it basic the economic position of the masses was in a backward economy. He thought that concerned, "the movement is, for the pre­ remuneration for 'services' came out of sent in a forward and not in a retrograde primary production and may not be count­ direction". Gokhale said in his budget ed separately. That the propriety of this speech that the issue was not a particular cannot be dismissed lightly has been con­ figure of per capita income, but whether firmed by modern theory and practice. C. the movement was progressive. Indian F. Paul Studenski says: "National income poverty was 'deep', whatever the figure, restricted to material production may be and it was 'deepening'. Gokhale was con­ an adequate measure of the economic pro­ cerned with "the dynamic view of the eco­ duction and economic welfare of an ex­ nomic situation". To prove that poverty tremely primitive society which is almost was 'deepening' he produced evidence in wholly concerned with the production of terms of certain dynamic variables: vital material goods for the satisfaction of the statistics; per capita salt consumption; most elementary physical needs of its trend of agricultural output; area under members". (The Income of Nations. Part cultivation; imports and exports in so far II, pp. 22-23). as they had a bearing on the increase of national income. The Marxian "restricted material pro­ duction concept" which is strikingly simi­ There are certain factors of economic lar to Dadabhai's method has been the ba­ progress which bring about an increase in sis of national income estimation in com­ the real national income, such as (1) in­ munist countries. The lead was given by crease in the proportion of men engaged Adam Smith who drew the distinction bet­ in production; (2) shifts from less produc­ ween productive and unproductive labour tive to more productive occupations; (3) and emphasized the significance of produc­ better use of the existing production poten­ tion in its material forms.