Invitation to corporate bosses

The responses to the PM’s intervention has been along expected lines. Economic restructuring requires a package of policies that involve bitter medicines but only such a package will sustain high growth and only high growth will give us surplus for redistribution. ‘Conspicuous consumption’ and ‘astronomical salaries’ are only the indicators of this policy package and it is quixotic to expect otherwise. While there is strong economic data to support such thinking, to argue that it is the only way is to be less than empirically honest. One has only to look at the policy mix of nations such as Sweden or even Singapore to see the many combinations of equity with growth that are possible.

All policies, even the most technical, have at their very core a set of normative constraints. So ‘anything goes’ does not in fact go, but always gets constrained by some trumping principle. Moral principles, in the last instance, trump all policies, even ones made by the IMF. Only a foolish policy-maker would say he is value-free. The PM’s intervention on conspicuous consumption is about these trumping moral principles. He is right when he implies that the ‘new zamindars’ have begun to believe that whatever they earn is the reward for their hard work, ingenuity, risk-taking, and capability. The ‘new zamindars’ believe what they do with their wealth is their own business. The PM wishes, rightly, to challenge this belief.

In support, read John Locke on property. It served as one of the key justifications of the new capitalist order. In Two Treatises of Government, he says that ‘for this Labour being the unquestionable Property of the Labourer, no man but he can have a right to what that is once joyned to, at least where there is enough, and as good left in common for others’. The injunctions are clear. Firstly, that, from nature, to which you have joined your labour is unquestionably your property, and secondly, there should be ‘enough’ and ‘as good’ left for others to take from nature. The first is an argument for private property, the second for its limits.

But it is Gandhiji’s perspective on trusteeship that needs our special attention. “You have asked rich men to be trustees?” he was once asked. To this he replied, “Everything belonged to God and was from God. Therefore it was for his people as a whole, not for a particular individual. When an individual had more than his proportionate portion he became a trustee of that portion for God’s people.” Here, too, are two principles. First, everything belonged to God and must be used for his ‘people as a whole’. Second, when an individual has more than his ‘proportionate portion’ this remainder is to be held in trust. The extra wealth that capitalists have hence must be held by them ‘in trust’ for the whole people. This idea of ‘trusteeship’ is where we should go to debate the PM’s statement.

But what is that extra portion? Gandhiji wrote in Harijan: “Under my plan of trusteeship, people get not only the use of the capitalists’ wealth but their talent, ability, and know-how also. It is an even bigger revolution. We must not underrate the business talent and know-how which the owning class have acquired through generations of experience and specialisation. So long as we have not got the power, conversion is our weapon by necessity. But after we get power, I maintain that conversion would have to be our weapon of choice. Conversion must precede legislation. Legislation without conversion remains a dead letter.” We now have power. We need to convert the capitalists into trustees. Perhaps the PM’s statement was a weak attempt. Will corporate India join the debate? Let them revisit their history. G.D. Birla was attracted to the idea of trusteeship. Jamanlal Bajaj came near. What about their legatees?

The writer is senior fellow, CSDS, Delhi