The Congress And Industry: Big Industry versus Cottage Industry


The Congress, under Gandhiji’s leadership, had long championed the revival of village industries, especially hand-spinning and hand-weaving. At no time, however, had the Congress been opposed to the development of big industries, and whenever it had the chance, in the legislatures or elsewhere, it had encouraged this development. Congress provincial governments were eager to do so. In the twenties when the Tata Steel and Iron Works were in difficulties, it was largely due to the insistence of the Congress party in the Central Legislature that government aid was given to help to tide over a critical period. The development of Indian shipbuilding and shipping services had long been a sore point of conflict between nationalist opinion and government. The Congress, as all other sections of Indian opinion, was anxious that every assistance should be given to Indian shipping; the government was equally anxious to protect the vested interests of powerful British shipping companies. Indian shipping was thus prevented from growing by official discrimination against it, although it had both capital and technical and managerial ability at its disposal. This kind of discrimination worked all along the line whenever any British industrial, commercial, or financial interests were concerned.

That huge combine, the Imperial Chemical Industries, has been repeatedly favoured at the expenses of Indian industry. Some years ago it was given a long-term lease for the exploitation of the minerals, etc., of the Punjab. The terms of this agreement were, so far as I know, not disclosed, presumably because it was not considered ‘in the public interest’ to do so.

The Congress provincial governments were anxious to develop a power alcohol industry. This was desirable from many points of view, but there was an additional reason in the United Provinces and Bihar. The large numbers of sugar factories there were producing as a by-product a vast quantity of molasses which was being treated as waste material. It was proposed to utilise this for the production of power alcohol. The process was simple, there was no, difficulty, except one—the interests of the Shell and Burma Oil combine were affected. The Government of India championed these interests and refused to permit the manufacture of power alcohol. It was only in the third year of the present war, after Burma fell and the supplies of oil and petrol were cut off, that the realization came that power alcohol was necessary and must be produced in India. The American Grady Committee strongly urged this in 1942.

The Congress has thus always been in favour of the industrialization of India and, at the same time, has emphasized the development of cottage industries and worked for this. Is there a conflict between these two approaches? Possibly there is a difference in emphasis, a realization of certain human and economic factors which were overlooked previously in India. Indian industrialists and the politicians who supported them thought too much in terms of the nineteenth century development of capitalist industry in Europe and ignored many of the evil consequences that were obvious in the twentieth century. In India, because normal progress had been arrested for 100 years those consequences were likely to be more far-reaching. The kind of medium-scale industries that were being started in India, under the prevailing economic system, resulted not in absorbing labour, but in creating more unemployment. While capital accumulated at one end, poverty and unemployment increased at the other. Under a different system, with a stress on big scale industries absorbing labour, and with planned development this might well have been avoided.

This fact of increasing mass poverty influenced Gandhi powerfully. It is true, I think, that there is a fundamental difference between his outlook on life generally and what might be called the modern outlook. He is not enamoured of ever-increasing standards of living and the growth of luxury at the cost of spiritual and moral values. He does not favour the soft life; for him the straight way is the hard way, and the love of luxury leads to crookedness and loss of virtue. Above all he is shocked at the vast gulf that stretches between the rich and the poor, in their ways of living, and their opportunities of growth. For his own personal and psychological satisfaction, he crossed that gulf and went over to the side of the poor, adopting, with only such improvements as the poor themselves could afford, their ways of living, their dress or lack of dress. This vast difference between the few rich and the poverty-stricken masses seemed to him to be due to two principal causes: foreign rule and the exploitation that accompanied it, and the capitalist industrial civilization of the west as embodied in the big machine. He reacted against both. He looked back with yearning to the days of the old autonomous and more-or-less self-contained village community where there had been an automatic balance between production, distribution, and consumption; where political or economic power was spread out and not concentrated as it is today; where a kind of simple democracy prevailed; where the gulf between the rich and the poor was not so marked; where the evil of great cities were absent and people lived in contact with the life-giving soil and breathed the pure air of the open spaces.

There was all this basic difference in outlook as to the meaning of life itself between him and many others, and this difference coloured his language as well as his activities. His language, vivid and powerful as it often was, drew its inspiration from the religious and moral teachings of the ages, principally of India but also of other countries. Moral values must prevail, the ends can never justify unworthy means, or else the individual and the race perish. And yet he was no dreamer living in some fantasy of his own creation, cut off from life and its problems. He came from Gujrat, the home of hard-headed businessmen, and he had an unrivalled knowledge of the Indian villages and the conditions of life that prevailed there. It was out of that personal experience that he evolved his programme of the spinning-wheel and village industry. If immediate relief was to be given to the vast numbers of the unemployed and partially employed, if the rot that was spreading throughout India and paralysing the masses was to be stopped, if the villagers’ standards were to be raised, however, little en masse, if they were to be taught self-reliance instead of waiting helplessly like derelicts for relief from others, if all this was to be done without much capital, then there seemed no other way. Apart from the evils inherent in foreign rule and exploitation, and the lack of freedom to initiate and carry through big schemes of reform, the problem of India was one of scarcity of capital and abundance of labour—how to utilize that wasted labour, that manpower that was producing nothing. Foolish comparisons are made between manpower and machine-power; of course a big machine can do the work of a thousand or ten thousand persons. But if those ten thousand sit idly by or starve, the introduction of the machine is not a social gain., except in long perspective which envisages a change in social conditions. When the big machine is not there at all, then no question of comparison arises; it is a net gain both from the individual and the national point of view to utilize man-power for production. There is no necessary conflict between this and the introduction of machinery on the largest scale, provided that machinery is used primarily for absorbing labour and not for creating fresh unemployment.

Comparisons between India and the small highly industrialized countries of the west, or big countries with relatively sparse populations, like the U.S.S.R. or the U.S.A., are misleading. In western Europe the process of industrialization has proceeded for 100 years, and gradually the population has adjusted itself to it; the population has grown rapidly, then stabilized itself, and is now declining. In the U.S.A. and the U.S.S.R. there are vast tracts with a small, though growing, population. A tractor is an absolute necessity there to exploit the land for agriculture. It is not so obvious that a tractor is equally necessary in the densely populated Gangetic valley, so long as vast numbers depend on the land alone for sustenance. Other problems arise, as they have arisen even in America. Agriculture has been carried on for thousands of years in India and the soil has been exploited to the utmost. Would the deep churning up of the soil by tractors lead to impoverishment of this soil as well as to soil erosion? When railways were built in India and high embankments put up for the purpose, no thought was given to the natural drainage of the country. The embankments interfered with this drainage system and, as a result, we have had repeated and ever-increasing floods and soil erosion, and malaria has spread.

I am all for tractors and big machinery, and I am convinced that the rapid industrialization of India is essential to relieve the pressure on land, to combat poverty and raise standards of living, for defence and a variety of other purposes. But I am equally convinced that the most careful planning and adjustment are necessary if we are to reap the full benefit of industrialization and avoid many of its dangers. This planning is necessary today in all countries of arrested growth, like China and India, which have strong traditions of their own.

In China I was greatly attracted to the Industrial Co-operatives— the Indusco movement—and it seems to me that some such movement is peculiarly suited to India. It would fit in with the Indian background, give a democratic basis to small industry, and develop the co-operative habit. It could be made to complement big industry. It must be remembered that, however rapid might be the development of heavy industry in India, a vast field will remain open to small and cottage industries. Even in Soviet Russia owner-producer co-operatives have played an important part in industrial growth.

The increasing use of electric power facilitates the growth of small industry and makes it economically capable of competing with large-scale industry. There is also a growing opinion in favour of decentralization, and even Henry Ford had advocated it. Scientists are pointing out the psychological and biological dangers of loss of contact with the soil which results from life in great industrial cities. Some have even said that human survival necessitates a going back to the soil and the village. Fortunately, science has made it possible today for populations to be spread out and remain near the soil and yet enjoy all the amenities of modern civilization and culture.

However that may be, the problem before us in India during recent decades has been how, in the existing circumstances and restricted as we were by alien rule and its attendant vested interests, we could relieve the poverty of the masses and produce a spirit of self-reliance among them. There are many arguments in favour of developing cottage industries at any time, but situated as we were that was certainly the most practical thing we could do. The methods adopted may not have been the best or the most suitable. The problem was vast, difficult, and intricate, and we had frequently to face suppression by government. We had to learn gradually by the process of trial and error. I think we should have encouraged co-operatives from the beginning, and relied more on expert technical and scientific knowledge for the improvement of small machines suitable for cottage and village use. The co-operation principle is now being introduced in these organizations.

G.D.H. Cole, the economist, has said that ‘Gandhi’s campaign for the development of the home-made cloth industry is no mere fad of a romantic eager to revive the past, but a practical attempt to relieve the poverty and uplift the standard of the village.’ It was that undoubtedly, and it was much more. It forced India to think of the poor peasant in human terms, to realize that behind the glitter of a few cities lay this morass of misery and poverty, to grasp the fundamental fact that the true test of progress and freedom in India did not lie in the creation of a number of millionaires or prosperous lawyers and the like, or in the setting up of councils and assemblies, but in the change in the status and conditions of life of the peasant. The British had created a new caste or class in India, the English-educated class, which lived in a world of its own, cut off from the mass of the population, and looked always, even when protesting, towards its rulers. Gandhi bridged that gap to some extent and forced it to turn its head and look towards its own people.

Gandhiji’s attitude to the use of machinery seemed to undergo a gradual change. ‘What I object to,’ he said, ‘is the craze for machinery, not machinery as such.’ ‘If we could have electricity in every village home, I shall not mind villagers plying their implements and tools with electricity.’ The big machines seemed to him to lead inevitably, at least in the circumstances of today, to the concentration of power and riches: ‘I consider it a sin and injustice to use machinery for the purpose of concentration of power and riches in the hands of the few. Today the machine is used in this way.’ He even came to accept the necessity of many kinds of heavy industries and large-scale key industries and public utilities, provided they were state-owned and did not interfere with some kinds of cottage industries which he considered as essential. Referring to his own proposals, he said: ‘The whole of this programme will be a structure on sand if it is not built on the solid foundation of economic equality.’

Thus even the enthusiastic advocates for cottage and small-scale industries recognize that big-scale industry is, to a certain extent, necessary and inevitable; only they would like to limit it as far as possible. Superficially then the question becomes one of emphasis and adjustment of the two forms of production and economy. It can hardly be challenged that, in the context of the modern world, no country can be politically and economically independent, even within the framework of international inter-dependence, unless it is highly industrialized and has developed its power resources to the utmost. Nor can it achieve or maintain high standards of living and liquidate poverty without the aid of modern technology in almost every sphere of life. An industrially backward country will continually upset the world equilibrium and encourage the aggressive tendencies of more developed countries. Even if it retains its political independence, this will be nominal only, and economic control will tend to pass to others. This control will inevitably upset its own small-scale economy which it has sought to preserve in pursuit of its own view of life. Thus an attempt to build up a country’s economy largely on the basis of cottage and small-scale industries is doomed to failure. It will not solve the basic problems of the country or maintain freedom, nor will it fit in with the world framework, except as a colonial appendage.

Is it possible to have two entirely different kinds of economy in a country—one based on the big machine and industrialization, and the other mainly on cottage industries? This is hardly conceivable, for one must overcome the other, and there can be little doubt that the big machine will triumph unless it is forcibly prevented from doing so. Thus it is not a mere question of adjustment of the two forms of production and economy. One must be dominating and paramount, with the other as complementary to it, fitting in where it can. The economy based on the latest technical achievements of the day must necessarily be the dominating one. If technology demands the big machine, as it does today in a large measure, then the big machine with all its implications and consequences must be accepted. Where it is possible, in terms of that technology, to decentralize production, this would be desirable. But, in any event, the latest technique has to be followed, and to adhere to out-worn and out-of-date methods of production, except as a temporary and stop-gap measure, is to arrest growth and development.

Any argument as to the relative merits of small-scale and large-scale industry seems strangely irrelevant today when the world, and the dominating facts of the situation that confront it, have decided in favour of the latter. Even in India the decision has been made by these facts themselves, and no one doubts that India will be rapidly industrialized in the near future. She has already gone a good way in that direction. The evils of unrestricted and unplanned industrialization are well-recognized today. Whether these evils are necessary concomitants of big industry, or derived from the social and economic structure behind it, is another matter. If the economic structure is primarily responsible for them, then surely we should.set about changing that structure, instead of blaming the inevitable and desirable development in technique.

The real question is not one of quantitative adjustment and balancing of various incongruous elements and methods of production, but a qualitative change-over to something different and new, from which various social consequences flow. The economic and political aspects of this qualitative change are important, but equally important are the social and psychological aspects. In India especially, where we have been wedded far too long to past forms and modes of thought and action, new experiences, new processes, leading to new ideas and new horizons, are necessary. Thus we will change the static character of our living and make it dynamic and vital, and our minds will become active and adventurous. New situations lead to new experiences, as the mind is compelled to deal with them and adapt itself to a changing environment.

It is well-recognized now that a child’s education should be intimately associated with some craft or manual activity. The mind is stimulated thereby and there is a co-ordination between the activities of the mind and the hands. So also the mind of a growing boy or girl is stimulated by the machine. It grows under the machine’s impact (under proper conditions, of course, and not as an exploited and unhappy worker in a factory) and opens out new horizons. Simple scientific experiments, peeps into the microscope, and an explanation of the ordinary phenomena of nature bring excitement in their train, an understanding of some of life’s processes, and a desire to experiment and find out instead of relying on set phrases and old formulae. Self-confidence and the co-operative spirit grow, and frustration, arising out of the miasma of the past, lessens. A civilization based on ever-changing and advancing mechanical techniques leads to this. Such a civilization is a marked change, a jump almost from the older type, and is intimately connected with modern industrialization. Inevitably it gives rise to new problems and difficulties, but it also shows the way to overcome them.

I have a partiality for the literary aspects of education and I admire the classics, but I am quite sure that some elementary scientific training in physics and chemistry, and especially biology, as also in the application of science, is essential for all boys and girls. Only thus can they understand and fit into the modern world and develop, to some extent at least, the scientific temper. There is something very wonderful about the high achievements of science and modern technology (which no doubt will be bettered in the near future), in the superb ingenuity of scientific instruments, in the amazingly delicate and yet powerful machines, in all that has flowed from the adventurous inquiries of science and its applications, in the glimpses into the fascinating workshop and processes of nature, in the fine sweep of science, through its myriad workers, in the realms of thought and practice, and, above all, in the fact that all this has come out of the mind of man.

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The Discovery Of India – Pt. Jawahar Lal Nehru

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