An obscure book holds the key to the RSS view of the economy

Few people outside the members of the Rashtriya Swayamsevak Sangh (RSS) have heard of Dattopant Thengadi.

But Thengadi (1920-2004), a lifelong swayamsevak (a volunteer at the RSS), was perhaps the most influential economic thinker within the organisation. He was not only the leading light of the Bharatiya Mazdoor Sangh and the Bharatiya Kisan Sangh, the labour and farmer unions of India’s ruling Bharatiya Janata Party (BJP), but also the founder of the Swadeshi Jagran Manch (SJM), the economic think-tank affiliated to the RSS which many believe was instrumental in nudging Prime Minister Narendra Modi towards demonetisation.

Thengadi’s influence can be estimated by the fact that the prime mover of the SJM, a Chennai-based chartered accountant S. Gurumurthy, is widely credited to have pitched the idea of demonetisation to Modi, and who till date remains the most vocal supporter of the idea. Many economists have argued that demonetisation failed because most of the cash returned to the banking system but Gurumurthy has continuously retorted that the government had no choice but to resort to a drastic measure like demonetisation due to the uncontrollable hoarding of cash and inflation fuelled by cash supply.

Gurumurthy is now a director on the board of the Reserve Bank of India.

Most people don’t realise that some of the core principles that Gurumurthy and others in the SJM and the broader Sangh family use to argue about India forging an independent path in economic prosperity comes from a book called The Third Way.

It is Thengadi who wrote the book that is perhaps the most influential economic treatise in the RSS universe. The Third Way was first published by a small Delhi-based press called Janaki Prakashan in 1995. It is a series of essays written by Thengadi who trained in law, fought in the freedom movement and worked as a trade unionist including with the Left-affiliated Postal and Railway Workers Union before joining the RSS under the influence of Madhavrao Sadashivrao Golwalkar, the influential second sarsanghachalak or chief leader of the RSS. The fundamental argument of the book is a different approach to national economics away from communism and capitalism.

“… world communism has virtually collapsed,” says Thengadi in the book, “capitalism is on the decline. But its demise is being delayed. Knowledgeable circles have started their search for a third alternative”.

Thengadi begins with the argument that: “no material objective transformation can be successful unless it is preceded and accompanied by an appropriate subjective, psychological transformation”.

This translates to something Gurumurthy told me in an interview a few years ago about the importance, in his worldview, of society. He even pitched the individualistic approach, as he saw it, of thinkers like Max Weber and French sociologist Emile Durkheim who, he argued, understood that society was the most important unit for social change. The idea is that a third way focusses neither on the extremes of individual values (capitalism) or enforced collectivism (communism) but sees society as a whole and seeks to maintain a balance between material and non-material needs.

Unless a holistic approach of balancing material prosperity with social satisfaction is achieved, society can never be content, Thengadi argued in his essay in the book called Global Economic System: The Hindu View.

“… it is inevitable to abandon the current version of Eurocentric history, which is devoid of a sense of proportion, and initiate a new phase of historical investigation… a new framework, new terms of reference, a new scale of values, which would facilitate the globalisation,” Thengadi wrote, arguing that the Hindu principle of dharma was the best guide to a new way of looking at the economy which would focus on collective happiness and not just a relentless, competitive process of individual race to material prosperity.

It is impossible not to read the echoes of Thengadi’s arguments in Gurumurthy’s defence of demonetisation as an “investment for the future” which stalled the ceaseless accumulation of hoarded cash and related price rise especially in the real estate sector. Gurumurthy, who considers demonetisation as a critical step towards the enforcement of the Goods and Services Tax (GST), tweeted on September 1, 2018: “Demonetisation was an investment to undo fake asset price led growth; to reduce cash component of economy; to shift to real growth; organise the economy; to expand tax base; to reduce corruption.” India’s tax base has increased by 8.27 crore last fiscal but it is still debated on what exactly caused this.

Thengadi was also prescient in noting that polluting countries might not always join hands with poorer nations to control ecological damage. Even as America has walked out of the global alliance to fight climate change, it is interesting to read that Thengadi wrote, “… some of the advanced countries… do not want to co-operate with the efforts for ecological balance but… only dump their pollution in the courtyard of the developing countries. But this strategy cannot put off for long the global environmental catastrophe which would not spare the northern countries themselves. This is One World, and adversity anywhere would, in the long run, destroy prosperity everywhere.” In a month when Modi, a lifelong swayamsevak quite like Thengadi, has been recognised for his environmental leadership, it is particularly interesting to read The Third Way.

From the scheme of Mudra loans to promote small, local entrepreneurship to Modi’s highlighting of ‘pakoda sellers’, many of these ideas are fleshed out in detail in The Third Way. For instance, Thengadi had much to say about the self-employed and small industries. He argued that the idea of self-employment was so embedded in Hindu culture that there was even a god for the craftsmen and self-employed, Vishwakarma. The Bharatiya Mazdoor Sangh under Thengadi celebrated the day of the Vishwakarma Puja as National Labour Day.

Gurumurthy today has the same enthusiasm for self-employment and the so-called informal sector and often points to data of the sector being the prime job creator after liberalisation in 1991, and Prime Minister Modi started the tradition of wishing people on Vishwakarma Puja Day after he took office in 2014.

In fact, in his writing Thengadi even suggests a bridge between his Hindu economics and Marxism. His view is that the Hindu way is to look at life holistically and not merely through a material lens. Thengadi points out through a letter Friedrich Engels, the co-founder of Marxist theory along with Karl Marx, wrote in 1890, that, if understood correctly, his views and that of Engels many have something in common.

In the letter published in Der Sozialistiche Akademiker on October 15, 1895, Engels said: "According to the materialist view of history what is in the last instance decisive in history is the production and reproduction of actual life. More than this, neither Marx nor I have ever asserted. But when anyone distorts this, so as to read that the economic factor is the sole element, he converts the statement into a meaningless, abstract, absurd phrase. The economic condition is the basis, but the various elements of the superstructure - the political forms of the class-contests and their results; the constitution - the legal forms; and also all the reflexes of these actual contests in the brains of the participants, the political, legal, philosophical theories, their religious views - all these exert influence on the developments of the historic struggles, and in many instances determine their forms.”

All this, of course, is a far cry from the commonly held Communist notion of religion being the opium of the masses and materialism being the key to understanding life. But Thengadi seems to suggest a deeper exploration into not only ancient Indian theory and other philosophies.

In more than one way, therefore, understanding the work of Dattopant Thengadi and his third way could be the path to understanding the economic thought within the RSS and Modi’s economic mind.