What did Gandhi mean by trusteeship?

Gandhi did not ask the rich to give their wealth away. He asked them to keep it and to stop treating it as theirs. That is the idea he called trusteeship, and it sits between two ideas he rejected: private property without limit, and its abolition by force. It is on the PSIR syllabus under Gandhism and Indian political thought, and it comes up in GS Paper IV whenever the question is what wealth owes to society.

What is the idea, in his words?

That wealth beyond a decent living is held for others. Writing in Harijan on 3 June 1939, Gandhi put it in the first person. If he came by a fortune, he said, what belonged to him was the right to “an honourable livelihood”, no better than that of millions of others. “The rest of my wealth belongs to the community”, to be used for its welfare.

He wrote it about the possessions of zamindars and ruling chiefs, at a time when socialists were asking for those classes to be abolished. His answer was that the owner could stay, keep the title and run the estate or the business, and use his talent to increase the wealth, but for the sake of the nation, not for his own.

What does the trusteeship formula say?

Six points, written down near the end of his life. His colleagues Kishorlal Mashruwala and Narahari Parikh drew up a “simple, practical trusteeship formula” after their release from detention in the Aga Khan Palace; Gandhi made a few changes in it, and Pyarelal, his secretary, later published it. In short:

1. It is a way to turn the capitalist order into an egalitarian one. It “gives no quarter to capitalism, but gives the present owning class a chance of reforming itself.”
2. “It does not recognize any right of private ownership of property except so far as it may be permitted by society for its own welfare.”
3. It does not exclude laws regulating the ownership and use of wealth.
4. So under trusteeship regulated by the State, no one is free to hold or use wealth for selfish satisfaction or against the interests of society.
5. As there should be a minimum living wage, there should be a limit on the maximum income anyone may have, and the gap between the two should keep narrowing.
6. What is produced is to be decided by social necessity, “not by personal whim or greed.”

What if the rich refuse?

Then the State may act, but as a last resort. Gandhi's first method was conversion, by argument and by non-violent pressure. He did not think the State was a better owner: in an interview with Nirmal Kumar Bose in the 1930s he said that “the State represents violence in a concentrated and organized form.” But he did not stop at persuasion either. If owners would not behave as trustees, the answer was to “deprive them of their possessions through the State with the minimum exercise of violence.”

So the order runs: persuade, then regulate by law (point 3 of the formula), then take over. Each step is more violent than the one before, and Gandhi wanted to go no further than he had to.

Where does it show up in Indian law?

Most clearly in the Directive Principles. Article 39(b) asks the State to secure “that the ownership and control of the material resources of the community are so distributed as best to subserve the common good”, and Article 39(c) that the economic system does not concentrate wealth and the means of production to the common detriment.

The words are not Gandhi's, and the Directive Principles cannot be enforced in a court (Article 37). But the idea is close to point 2 of the formula: what is owned is to be distributed for the common good, and the State is to see that it is.

Is CSR trusteeship?

No, though it is often called that. Section 135 of the Companies Act, 2013 applies to a company with a net worth of ₹500 crore or more, a turnover of ₹1,000 crore or more, or a net profit of ₹5 crore or more in the preceding financial year. Its board must see that the company spends “at least two per cent of the average net profits of the company made during the three immediately preceding financial years” on the activities the Act lists.

CSR takes a share of profit for social purposes and leaves the rest of the company's wealth as the company's. Trusteeship reverses the presumption: the owner keeps a livelihood, and the rest was never his.

What does the idea leave open?

Two questions it does not settle. How much is “an honourable livelihood”: the formula says incomes should have a ceiling and the gap should narrow, but names no figure. And who decides what society's welfare requires: the formula leaves it to society and, through law, to the State, which is the very concentration of power Gandhi distrusted. An answer that uses the idea well says both things: what trusteeship asks of the owner, and the questions it hands to the State.