BackCommunism, capitalism failed us. Can trusteeship work?
The wealth entrepreneurship generates is to be held in trust—for sarvodaya, uplift of all, believed Gandhi
PremiumIt disturbs me that the security guards in my company work a 12-hour shift. If I reduce their hours to eight hours but not their wages, my shareholders will haul me up. If I cut working hours and wages, they will have to take a second job and work 16 hours. How do we solve this?
– Chairman of an Indian corporate house, in a private conversation.
This may seem like the voice of an individual entrepreneur’s conscience that is kept hidden from public view. However, it does signal a wider awareness that refuses to fade—despite the full force of a ferocious variety of capitalism. Is this why M.K. Gandhi was confident that trusteeship is the way of the future?
Is trusteeship merely an appeal to individual conscience or can it be a systemic framework that overcomes exploitation? More importantly, can trusteeship address the planetary ecological crisis and do so at the scale and speed required?
At the heart of all these questions is the dynamic between individual conscience and collective action.
Gandhi’s commitment to trusteeship was based on his foresight that capitalism and communism were bound to fail because both gave greater importance to ends rather than means. This is because both systems were a consequence of the 18th-century shift in West European culture which ruptured moral philosophy from the political economy.
It was not Gandhi but John Maynard Keynes who precisely articulated this conundrum. In an essay written in 1930, Keynes famously said: “For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still."
This is what Gandhi revolted against. While socialists and communists were entirely preoccupied with ownership of the means of production and flow of wealth, Gandhi was transfixed by the need to nurture individual and community creativity through all-round fairness. The case he made for trusteeship was based on the following logic.
One, commerce is an important and integral part of human civilization.
Two, entrepreneurial ability and willingness to take risks are rare and important skills.
Three, because they wield an important skill, entrepreneurs have a greater responsibility to society. Entrepreneurial energy, and the wealth it generates, are to be held in trust—for sarvodaya, uplift of all.
Therefore, purity of means, how the wealth is generated, is far more important than how much of it is given away. This is why trusteeship cannot be equated with philanthropy.
All this is possible only if, like Gandhi, you see human beings as inherently moral beings driven to strive for higher levels of consciousness. Gandhi was militating against the Hobbesian claim which dominates the modern mind—that the natural state of humankind is “nasty, brutish, short".
Gandhi was fully aware that history is rife with exploitation and human misery. But this is not the sum total of human experience. There are accounts of people acting out of conscience and seeking to reform themselves. This ability and possibility is the future of humanity, Gandhi said, therefore trusteeship will outlast capitalism and communism.
While the collapse of communism is obvious, capitalism has retained its hold despite financial meltdowns, sharp material disparities and proven culpability in the ecological crisis. However, efforts to save commerce from capitalism, by redefining value and measuring “profit" in more multidimensional ways, have persisted against all odds.
Amy Domini was an American stockbroker in the 1970s when she became troubled by the damages caused by the companies whose stocks she traded. So, she changed tracks and founded some of the earliest institutions that created filters to check the environmental and social impacts of companies. She went on to be known as the founding-mom of socially responsible investing (SRI) in the US. In the 1980s, the fledgling SRI movement pushed American companies to boycott South Africa and thus played a significant role in building the pressure that finally ended apartheid.
In 1999, John Elkington, the environmentalist turned business consultant, gave this movement the powerful concept of commercial success being measured on a triple bottom line—people, planet, profits.
“Who Cares Wins" declared a 2004 report by the United Nations Global Compact, which was endorsed by leading global financial institutions. This trend was further consolidated by the adoption of the United Nations’ Principles of Responsible Investing (UNPRI) in 2006 which provided a framework for how companies can define their operations in triple bottom line terms. UNPRI also has a process to redefine fiduciary duty to give social and environmental responsibilities a legal status.
In 2018, an estimated $11.6 trillion of all professionally managed assets in the US were being invested on the basis of some SRI criteria—this amounts to one in every four dollars invested in the US.
In the same year, the total amount of SRI investments in the US, Europe, Australia/New Zealand, Canada and Japan was estimated to be $30.7 trillion—which was a 34% increase over a two-year period. These changes happened despite the overpowering influence of the economist Milton Friedman’s famous exhortation that the business of business is just business—the rest is for governments and society to handle.
In 2014, Apple’s CEO Tim Cook was heckled by some shareholders during an annual general meeting when he announced the company’s plans to invest in green energy, which would dent the bottom line in the short term. In a rare public outburst, Cook reportedly told the shareholder: “If you want me to do things only for RoI, you should get out of this stock."
Tough stands by individual leaders have produced a slow but sure impact. In August, the powerful American lobbying group, Business Roundtable, adopted a new definition of the purpose of companies. It holds that the interests of customers, employees, suppliers and the environment are as important as the company’s responsibility to shareholders. Challenges to shareholder primacy are not new but this may be the first time that a mainstream business platform in the US has adopted a formal position that moves in the general direction of trusteeship.
The Indian story is more complicated. There are sterling examples of some tech firms taking strides towards renewable energy and higher wages. But the Indian stage is still dominated by the notion that we have to first grow the size of the pie and worry about social and environmental justice later. This is why companies, particularly in mining, have been reported to be complicit in undermining laws that aim to give tribal people control over their lands. There are cases of Indian companies that have been fair and refused to illegally displace local people—but such examples are few and have not been copied on a large-enough scale.
On the labour front, the situation is equally abysmal—with 57% of regular employees earning less than ₹10,000 a month, when the government-stipulated minimum is ₹18,000 per month. Casual workers are worse off with 59% earning only ₹5,000 a month, according to the State of Working India report by Azim Premji University. What then are the signs of hope moving forward?
Let us view this question through the eyes of two vastly different people—Greta Thunberg and Medha Patkar.
Thunberg, a 16-year-old Swedish schoolgirl, is now the global mascot of the movement to halt the climate crisis. In September, Thunberg made global headlines by thundering against world leaders’ inaction on the climate crisis. This is but one face of the larger mobilization known as the “Extinction Rebellion", which demands that governments and businesses stop acting as “users" of the planet and instead become its trustees.
Patkar, 64, has been famous for over three decades as the leader of the Narmada Bachao Andolan, which opposed construction of large dams. She has been consistently pilloried, by political and business leaders, for being “anti-progress". On the contrary, the message of the Narmada Bachao Andolan was prescient. A system of commerce and its related technology that cannot draw benefit from a river system without destroying the river itself is doomed. As the water crisis deepens, despite many large dams, this prediction has become frighteningly true.
Thunberg and Patkar are united by an amorphous and dispersed global movement which is saying that the time for tweaking business models is over. Even the triple bottom line approach is delivering too little too slowly.
How can the moral energy of the corporate leader mentioned at the outset forge a synergy with the rebellious creativity represented by Thunberg and Patkar? The reason why even those who feel the impulse towards trusteeship keep it under cover is because those who ask such fundamental questions in a corporate board room are ignored or ridiculed.
Similarly, individuals, companies or activist groups that seem to be flag-bearers of trusteeship are dismissed as the exceptions that prove the rule that money power alone rules. There is indeed masses of evidence to back this view. But it is still defeatist cynicism.
Those who want to defy such defeatism don’t have to “follow" Gandhi or accept trusteeship as if it were a fixed doctrine. It might suffice to ponder the power of what Gandhi’s experiments revealed to be true: it is possible for individual conscience to forge alliances for systemic change. An epochal struggle to transform society is only possible if it has room for all, from the rich merchant to the daily wage labourer. Some of this is evident in the global struggle to stem the climate crisis.
Here is Gandhi’s answer for those who might feel daunted by the absence of easy answers: “Absolute trusteeship is an abstraction like Euclid’s definition of a point, and is equally unattainable. But if we strive for it, we shall be able to go further in realizing a state of equality on earth than by any other method."
Rajni Bakshi is the author of Bazaars, Conversations and Freedom: For a market culture beyond greed and fear.
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