The Awakening of Economics

May 11, 2015


(This article was first published by Telesur.)

by Quincy Saul (1)

We are living in the dark ages of economics. The origin of economics, as articulated in ancient Greece, was a vision of agrarian estate management, which revered the farmer and counseled care for the land. What a long strange trip it’s been!

By the end of the year, the richest 1 percent will own more than the rest of the world combined. The sixth mass extinction is underway, and scientists warn of the collapse of complex life on the planet. Yet profits are at a record high and business schools are booming. Economics has become the science which explains the unexplainable: that inequality is efficient and extinctions are externalities.

And yet around the world there is also an awakening taking place. From the revolutionary processes in Venezuela and Bolivia, to people’s movements against austerity in Europe, to uprisings in China, to experiments with worker-owned cooperatives in the heartland of empire, the dark ages are cracking up, and light is shining through. While some of these movements have received headlines around the world, one of the most inspiring examples of awakening arrives from the often overlooked island nation of Sri Lanka.

Sarvodaya Shramadana – the name means “awakening of all through collective labor.” Started in 1958 by a college professor and a few students, the Sarvodaya movement began to try to rectify the poverty and underdevelopment, that had been left after centuries of colonialism, and to reclaim and reinvent an indigenous legacy of cooperation, democracy and harmony with nature. The movement begins on a small, local, village scale, with collective work projects designed and directed according to the needs of a community. Over time, the collective work grows to incorporate more and more activities, building both the physical infrastructure of the village, and also its social infrastructure – from conflict resolution, democratic planning, and participatory budgeting to meditation and other spiritual practices. Since its founding fifty years ago,the Sarvodaya movement has grown from a single work project to what is now a national network in over 15,000 villages.

The Economics of Awakening

How do we awaken from capitalism? Karl Polanyi in his book “The Great Transformation” describes how capitalism started: For thousands of years, markets were embedded within society; subject to higher rules and customs determined by people’s traditions and forms of social organization. The rise of capitalism was the reversal of this relation – society itself became embedded in the market, and the laws of the village became subordinated to the laws of value. What the Sarvodaya movement is doing, in these terms, is the great transformation in reverse. They are building a new economic system from the ground up, embedded within democratically defined principles and practices of human and environmental needs. The awakening begins by going door to door in the village.

This is how A.T. Ariyaratne, the founder of the movement, and his students started over 40 years ago. The goal was a revolutionary transformation of society, with deep roots in Buddhism and connected to the anti-capitalist and anti-imperialist movements of decolonization which swept the world in that era. (2) Their vision of revolution was not a seizure of state power, but a process of awakening, which begins with the individual, then spreads to the family, the village, the nation, and finally the world. Far from idealistic, this economics of awakening can be seen concretely in the development over the years of a Sarvodaya banking system.

In a world subjected to the ruthlessness of finance capital, is it possible to imagine an anti-capitalist bank? The Sarvodaya banking system emerges from a long process (usually about three years per village) of building social, psychological and spiritual infrastructure through collective work projects encompassing everything from collective meditation to village-scale infrastructure development. In the methodology of the movement, finance comes last. Once established, the principles and procedures of the bank remain embedded within the practice and vision of the movement. Similar to the Women’s Development Bank in Venezuela, the most important service provided by the bank is not loans, but training and capacity building, in which Sarvodaya volunteers accompany villagers in the process of developing their already-existing human and natural resources, without material aid from outside. This is the opposite model to the moneylending schemes of Grameen bank and others who on the contrary are extending the laws of the market over the laws of the village. And the Sarvodaya system is a better model financially as well – once villages have gone through years of trainings, individuals and collectives are much better equipped to run enterprises and repay loans. Slowly but surely, the economics of awakening spread into a network of many dozens of offices all over the country.

This is reflected on an institutional level with the transformation of their microcredit system (SEEDs) into a registered bank: the DDFC. Bertold Brecht once asked “what’s the difference between robbing a bank and founding a bank?” Sarvodaya has come up with an answer: Unlike the corporate ceremonies which usher in most banking enterprises, the launch of the DDFC last year was part of a national Deshodaya program which has involved the participation of thousands of people around the nation. This program is a qualitative shift for Sarvodaya as it moves from village awakening to national awakening – not into party politics but cutting out the parliamentary middleman – directly into collective democratic governance.

Dual Power and Deshodaya

“[The] Sarvodaya Movement is also a Government and I am the Prime Minister of that Government.” –A.T. Ariyaratne, to Prime Minister FRD Bandaranaike. Revolution Under the Breadfruit Tree, p181

Sarvodaya has reached a point where over 1 million people – more than one out of every 20 Sri Lankans – have gone through some form of training by the movement. Over 15,000 villages are engaged in some way with the movement, and over 2,000 villages are operating with almost complete self sufficiency and self management. Following their time-tested program, the Sarvodaya movement is now moving into a new stage of its work – from village awakening (gramodaya) to national awakening (deshodaya). No longer is it possible for them to continue only at the village level without contending with structural, political and economic issues nationally and internationally.

While visiting a Sarvodaya village in the town of Kalutara, we spoke to some women in the local Sarvodaya bank (like in Venezuela, I observed that the great majority of the real community organizing work is being done by women). Reflecting on how these women were running their community more effectively than the government was running the country, we asked them what they thought about taking their work to the next level. What did they think about not only organizing their community and running a bank, but organizing a country and running the economy? The answer — delivered with no exaggeration or ego — was yes, we can do it. Decades of organizing in the Sarvodaya movement has prepared generations of leaders capable of taking the awakening from the village to the nation.

What is emerging in Sri Lanka is nearly a situation of dual power. Dual power refers to the transitional period in a revolutionary process where the old government and the revolutionary government are operating simultaneously. As Sarvodaya becomes mainstream, it contends with many contradictions. Can the DDFC remain true to its principles on the Sri Lankan Stock Exchange in the country’s capital Colombo? It may be a challenge, but neither can the movement afford to remain marginal and avoid a struggle for hegemony in the mainstream. Sarvodaya’s strength lies in its principles, which over the generations have preserved its integrity, acting as a force field against the corrupting influences of money and party politics.(3) Students of finance and economics should stay tuned to the DDFC, for pioneering the awakening of economics as it moves from the stage of the village to the platform of the nation.

Sarvodaya and Socialism

“Long before the socialist economic theories were formulated in the West as a reaction to extreme capitalist exploitation, our people practiced a socialist way of life based on the Buddhist philosophy.” A.T. Ariyaratne, Revolution Under the Breadfruit Tree, p150

The Sarvodaya movement is a profound intervention into the history of revolutionary movements, deserving of deep study and emulation. Theirs is a vision of socialism, built slowly but surely from the ground up, with local knowledge, principles and forms of organization. Sarvodaya is socialism and also more than socialism, bringing to the anti-capitalist tradition a time-tested methodology of awakening the mind and spirit through the process of collective labor. Similar movements in Latin America are pioneering experiments in endogenous development, a framework which prioritizes local knowledge and production practices over development patterns imported from abroad. The Sarvodaya movement is a leader in this worldwide process of breaking from the paradigm of development and opening up new horizons for the awakening of economics.(4)

Like everywhere else in the world, Sri Lanka is racing against time. The end of its decades-long civil war has brought in its wake a scourge of capitalist predation characterized by land grabs and questionable infrastructure projects, all under the name of development. From an ecological perspective, this long-awaited development has actually been worse than the war.

All the more important then, to recognize the Sarvodaya movement’s ecological praxis. It inherits from Buddhism a profound respect and compassion for all life, and embedded in all of its work is an understanding of the unity of humanity and nature. From this perspective, Sarvodaya can be understood as ecosocialist – arguably one of the largest ecosocialist movements and organizations in the world. Their experience in building a peace army, and actions which have gathered hundreds of thousands in satyagraha, is exactly what the whole world needs today in the shadow of catastrophic climate change.

Sri Lanka is at a crossroads. A new government after recent elections, presents possibilities for the development of awakening and the awakening of development. In this respect, to return to where we started, Sri Lanka today shares some parallels with the country of Greece. Both countries have recently experienced a radical political shift via the parliamentary process. As the governments of Sirisena and Syriza move forward, hopefully they will lead us all closer to the original economics, built on respect and care for the land.

In Xenophon’s oeconomicus, there was no more noble calling than working the land, and the best farmers were those closely attuned to the rhythms and cycles of nature. For countries like Greece and Sri Lanka, with majority rural populations, the awakening of economics from the dark ages offers an alternative to the development model which requires urbanization and industrialization as prerequisites for a poisoned prosperity.

To support this process and help it develop and grow further, the most important thing we can do is to build and develop connections, and build a dialogue between Colombo and Caracas, between Thessaloniki and Thirukkovil, between Beijing and Batticaloa. The world has a great deal to learn from Sarvodaya, and the next step is one we must all take together, from deshodaya to vishvodaya – from the awakening of a nation to the awakening of the world.

(For more reflections about the Sarvodaya movement by the same author, see “On Climate Satyagraha,” an interview by Javier Sethness Castro, published by Counterpunch.)


(1) The writing of this article would not have been possible without the generous support of Dr. Vinya Ariyaratne, Nishantha Preethiraj, Harsha Liyanage, Mr. Careem, and many many others who gave me a lesson in hospitality and the spirit of sarvodaya in January and February 2015. I am also very grateful to John Clark for his written work and personal communication about the Sarvodaya movement. (See “The Impossible Community,” by John Clark) And the biggest thanks of all to Kanya D’Almeida for guiding and accompanying me on this process of awakening.

(2) This story is detailed in A.T. Ariyaratne’s autobiography, titled “Bhava Thanha: An Autobiography” in three volumes. See also “Revolution Under the Breadfruit Tree: The Story of Sarvodaya Shramadana Movement and its founder Dr. A.T. Ariyaratne,” by Gunadasa Liyanage, 1988

(3) In the terminology of Joel Kovel’s “The Enemy of Nature” (Zed 2007) we can understand Sarvodaya’s work as an example of prefiguration, par excellence. The spiritual principles and vision built into Sarvodaya institutions acts as a force-field to resist the temptations of capital, when it attempts like a virus to insert itself into the cell walls of human beings and their organizations.

(4) “Instead of the economic language given to the country by the economic experts who were born and bred according to Western thinking, Sarvodaya gave Sri Lanka a development vocabulary based on indigenous values and indigenous thinking. Words like Shramadana, Gramodaya, Udagama, Grama Swarajya, Pavul Hamuwa, Jana Hamuwa and Jana Sahabagithvaya which are in common usage today were first introduced to the country by Sarvodaya.” (Revolution Under the Breadfruit Tree, p 201)

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