Was Gandhi a capitalist or a socialist? Rethinking

One has to be extremely careful with facts, sources, and interpretations when writing about towering historical figures. Intellectual carelessness does not merely distort history; it diminishes the depth of ideas that shaped nations. I say this deliberately while referring to Mohandas Karamchand Gandhi, a leader who is often reduced to slogans of non-violence while his profound economic philosophy is either ignored or misunderstood.

A few days ago, while revisiting my personal library, I rediscovered 7 to 10 books devoted to Gandhi. Most of these were acquired during my first visit to India in 2014. Some have been read carefully; others continue to be companions in an ongoing intellectual journey.

Among them are Mahatma Gandhi: Essays and Reflections by Dr Sarvepalli Radhakrishnan, Reading Gandhi edited by Surjit Kaur Jolly, Gandhi: Philosophy and Terrorism by UV Singh, Gandhian Satyagraha: An Analytical and Critical Approach by Ajay Shanker Rai, and Gandhian Political Economy: Principles, Practices and Policy by BN Ghosh.

It was the last of these — Gandhian Political Economy — that particularly arrested my attention. Turning its pages, I paused at page 12 under the subtitle “Basic Economic Ideas of Gandhi.” The line was striking in its simplicity and depth: to Gandhi, wealth does not mean welfare. This single statement captures the core of Gandhi’s economic worldview. For him, the accumulation of wealth beyond necessity was not a sign of progress but a moral failure.

Historically, Gandhi’s economic thinking was shaped by multiple influences. His years in South Africa exposed him to racial capitalism and labour exploitation. His reading of John Ruskin’s Unto This Last profoundly altered his outlook, leading him to believe that the good of the individual is contained in the good of all. Leo Tolstoy’s moral philosophy and Indian spiritual traditions further strengthened his conviction that economics must be rooted in ethics.

Gandhi was fundamentally opposed to the concentration of wealth, whether under colonial capitalism or indigenous elites. He viewed unchecked industrialisation as a force that alienated humans from labour, community, and dignity. This position often placed him in intellectual tension with contemporaries such as Jawaharlal Nehru, who envisioned a modern, industrial, state-led economy.

Gandhi did not reject progress or technology outright; rather, he rejected technology that destroyed livelihoods. His famous criticism of large factories replacing human labour was not anti-machine dogma but a defence of employment, self-reliance, and social balance.

One of Gandhi’s most misunderstood concepts is trusteeship. He did not advocate violent redistribution or state confiscation of wealth, nor did he defend absolute private ownership. Instead, he proposed that wealth holders act as trustees, managing surplus resources for the welfare of society.

This idea challenged both capitalist greed and coercive socialism. Trusteeship was moral persuasion, not legal compulsion—a voluntary ethical responsibility rather than state enforcement.

Equally central to Gandhi’s economics was Swadeshi, the promotion of local production and consumption. The spinning wheel was not a romantic symbol; it was an economic weapon against imperial exploitation. By encouraging village industries, Gandhi sought to decentralise production, reduce dependency, and empower the poorest.

His emphasis on rural economies stands in sharp contrast to development models that prioritise urban industrial growth at the expense of villages.

Was Gandhi then a capitalist or a socialist?

The honest answer is: he was neither in the conventional sense. Gandhi rejected capitalism’s obsession with profit, accumulation, and inequality. At the same time, he was wary of socialism that relied on state coercion, class conflict, and centralised control.

His socialism, if it can be called that, was ethical and voluntary, not structural and enforced. His capitalism, if any trace exists, was stripped of exploitation and bound by moral duty.

Gandhi’s economic philosophy belongs to a different category altogether—moral economics. It places human dignity above efficiency, welfare above wealth, and ethics above growth statistics.

In a world grappling with inequality, unemployment, and ecological crisis, Gandhi’s ideas appear less utopian and more prophetic.

Perhaps the real tragedy is not that Gandhi’s economics failed, but that it was never seriously tried.

For Gandhi, rising GDP meant little if it failed to reduce hunger, unemployment, and moral decay. He would have been deeply sceptical of economies that produce abundance alongside despair, skyscrapers alongside slums.

Gandhi also anticipated concerns that dominate modern discourse: environmental degradation, unsustainable consumption, and the psychological emptiness created by material excess. Long before climate economics or sustainable development became academic disciplines, Gandhi warned that the Earth provides enough for everyone’s need, but not for everyone’s greed. His emphasis on restraint, simplicity, and local self-sufficiency was not poverty glorification; it was a call for balance between humans and nature.

Importantly, Gandhi’s economic philosophy demands responsibility not only from governments but from individuals. Consumption itself becomes a moral act. Every purchase, every production decision, carries ethical weight. This sharply contrasts with contemporary systems that externalise social and environmental costs while privatising profits.

Thus, Gandhi’s relevance lies not in offering a ready-made economic model, but in challenging economists, policymakers, and citizens to rethink the purpose of economic activity itself. His legacy urges us to ask a timeless question: what is an economy for—profit, or people?