Economics for People and Earth: The Auroville Case 1968-2008

Economics for People and Earth: The Auroville Case 1968-2008

Economics for People and Earth:
The Auroville Case 1968-2008

Auroville, an international township in South India, was founded in 1968. A small group of pioneers on a heavily eroded plateau, close to the Bay of Bengal near Pondicherry, set out to reforest the barren land and create a new socio-economic, ecological and spiritual habitat with a vision to build “a city the Earth needs”.

Forty years later, a vibrant community of almost 2,000 people from 43 nations had emerged, providing employment to some 4,000 men and women from nearby villages. Meanwhile, they had reforested thousands of acres of land, built homes, health centres and schools, developed organic farms, experimented with renewable energy and cost-effective building technologies, reached out to the neighbouring villages, and set up a plethora of businesses and services.

This book is a result of 15 years of research on Auroville’s economy. It outlines the principles envisaged by its founders, traces its history over the past four decades, investigates the growth of employment opportunities, offers a window on its economic activities through case interviews, and analyses the performance of its commercial and services domains.

It also gauges Auroville’s sustainability as a model of durable socio-economic development “for People and Earth”, and as an antidote for the all-pervading impact of global capitalism.

Book Details

Author: Henk Thomas, Manuel Thomas

Print Length: 351 pages

Publisher: Social Research Centre

Book format: Kindle, PDF, ePub.

Language: English

Price: $39.60

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Economics for People and Earth:
The Auroville Case 1968-2008


1.1 Why Auroville?

In 1968, on a barren plateau in south India, some 200 young adults from all parts of the world responded to a dream and a vision of Mirra Alfassa, called The Mother, to build a “city the Earth needs”. Since that year a remarkable development has taken place. Forty years later, in 2008, a tiny city-in-the-making with a population of more than 1,500 adults and over 400 children had emerged, providing employment to some 4,000 workers from nearby villages, with which Auroville’s core land and its winding paths and roads form an intertwined geography.

This barren plateau with its degraded land, bordering the Indian Ocean in Tamil Nadu, a state in south India, and close to the then medium-sized town of Pondicherry, had been transformed into an ecological miracle, with continuing restoration of flora and fauna creating a separate micro-climate in a tiny area, called Auroville – City of Dawn. Its people lived in small, scattered communities, characterised by a great variety of accommodation, ranging from primitive huts covered with palm leaves to modern apartment blocks; no longer on lands with wide horizons but in areas of dense forests with controlled water flows.

Spirituality, ecology, individual creativity and social ownership have been core elements of a strong commitment from the Aurovilians, as they are called, to their community and its ideals.

Its spirituality is visible in the form of an impressive meditation centre shaped like a slightly flattened globe, called the Matrimandir, with its twelve surrounding gardens located in the central “Peace” area. It is the “soul” of this emerging city, in which schools, public buildings, enterprises, services, guest houses, sports grounds and cultural facilities bear testimony to a lively and vigorous community. The weekly News and Notes, Auroville’s radio station and Auronet, Auroville’s ‘intranet’, together with a comprehensive and regularly updated website, provide markers of an intensive communication culture. One witnesses the beginnings of a city of beauty, quietness, service and reflection, rather than a hectic core of commercial activities and shopping malls, which are almost everywhere else the symbols of urbanisation.

Auroville soon became known in many parts of the world for its environment-friendly products, particularly its textiles and handicrafts. Literally thousands of visitors and tourists started visiting this somewhat exotic social, ecological and spiritual experiment, which stands out by its ambition to become a city of 50,000 inhabitants. Numerous publications have recorded parts of Auroville’s history and development: town planning documents, water studies, agricultural and ecological research papers by professionals of Auroville itself, often in teamwork with experts, nationally and internationally. Books, brochures and publications such as calendars, a monthly news magazine Auroville Today with investigative articles, including reviews on theatre plays or movie festivals, and – last but certainly not least – an excellent website1 with comprehensive introductory and in-depth information have made it easy for any interested person to obtain abundant information.

1.2 Studies on Auroville

Yet, studies and research to date have rarely exceeded descriptive style and quality. Valuable exceptions are an excellent sociological study by Stuart Leard on aspects of Auroville’s administrative structures,2 an essay by Bindu Mohanty on Auroville’s spiritual ideals,3 and Anupama Kundoo’s fine book, in which Roger Anger’s architectural achievements – the architect who realised great buildings both in France and Auroville – have been splendidly presented.4

Interestingly, the economics of Auroville have attracted little attention to date, in spite of the prominence of articulated ideals such as ‘social ownership’ and ‘social commitment’, which are indications of a socially and economically coherent system. The absence of work contracts for members of the Auroville community signifies an emphasis on relations of trust between people, rather than the customary supply and demand in conventional market relationships. Also, the objective of creating a “no-money-circulation” system within the community shows the orientation Aurovilians are searching for in designing the socio-economic contours of their future city.

Auroville’s expansion, now stretching into its fifth decade, gives evidence of its institutional stamina also in the field of economics being sustained by a second and soon third generation of members. It is thus high time for a closer scrutiny and research.

Research on Auroville’s economy – to the extent that it has been undertaken – has mostly focused on two themes: the implications of a no-money-circulation economy and the key role of “contributions” from commercial units to the community.5 The first theme represents a strong preference to search for self-support, and the second tells how surpluses largely determine the community budget for sustaining its members and offering free or subsidised access to goods and services.

The aim of this study is to present an optimal mix of qualitative institutional characteristics with a quantitative analysis of Auroville’s economy. While applying a rigorous analysis, various methods have been used to optimally ensure a high degree of harmony with the fundamental objectives and practices in which this community would ‘recognise itself’. Instead of listing a wide panorama of different possibilities of Auroville’s package of objectives – such as ‘harmony with nature’, sustainable development, modest living, urban expansion – it is left to the concluding chapter to examine whether a coherent mix of objectives could be found by reviewing four decades of Auroville’s economic development in an inductive manner.

In the absence of similar studies, this research project poses numerous challenges both methodologically and in terms of data requirements. The approach adopted in this study towards each of the subsequent themes is spelled out chapter by chapter. Even then, shortcomings are to be expected, since – for instance – no justice can be done to an analysis of the creation of ecological ‘capital’ that in the long run may represent Auroville’s most important contribution to the world at large.

Yet, the research may yield an adequate depth and wideness of evidence to permit well-balanced conclusions about the strength and future options for this fascinating experiment, from a perspective of economic survival, expansion and sustainability.

The analysis will thus not be focused on comparisons of the efficiency of Auroville units with enterprises in the wider market economy. The interpretation of ‘efficiency’ would either be too narrow to do justice to Auroville’s objectives or too wide to assess correctly the data of commercial units in the national market economy, assuming for a moment that available data would even permit such a comparison.

Rather, one may compare Auroville’s complex record with other meso-level (neither national nor purely individual) systems, such as the Mondragon Corporacion Cooperativa (MCC), a high profile cooperative system in the north of Spain; the Kibbutz settlements in Israel; and perhaps the cooperative movement of the province of Saskatchewan in Canada. Also, in India itself, the Self Employed Women’s Association, a trade union of poor self-employed women workers, and the dairy cooperative programmes, may offer a framework for assessing Auroville’s record from a comparative perspective.

A first study aiming at sketching Auroville’s economy in a comprehensive and longitudinal manner was presented as a White Paper on Auroville’s Economy6 in 2002. This book is the continuation of that pioneering research and contains the first comprehensive study to examine the evolution of Auroville’s economy as well as to assess its viability after four decades.7

Chapter 2 introduces biographical notes on the founders, along with an overview of, in particular, the Mother’s vision on Auroville’s economy, after which a remarkable history of complex institution building follows in Chapter 3.

Chapter 4 examines aspects of work by members of the community and of employment of workers from nearby villages. A selection of case studies is presented in Chapter 5, which describes the development of a number of commercial and service units.

The core of quantitative research forms the content of the following three chapters, which probe in particular the extensive record of Auroville’s economy from 1980 onwards.

The final Chapter 9 offers a ‘synthesis’ of the different phases of Auroville’s economy; gauges Auroville’s economic system in the light of the principles and guidelines given by its founders; and assesses Auroville’s sustainability and its coherence as a model for durable socio-economic development.

About Authors


Henk Thomas, a citizen of The Netherlands, did his Ph.D. at Cornell University (Ithaca, NY, USA) in the Department of Economics. Before his retirement, he was for many years professor of Employment and Labour Studies at the International Institute of Social Studies (ISS), The Hague, teaching and researching development issues. He has published on participatory economics and small enterprise development. His work on the successful cooperative movement in the north of Spain, “Mondragon – An Economic Analysis”, (translated in Japanese, Spanish and Italian) is still an authentic source for understanding its origins, democratic institutions, and structural changes.

Manuel Thomas, born in Kerala, India, is a practising Chartered Accountant as Partner in a Chennai-based CA firm, and specialises in formulating and implementing strategies for companies entering India. He also does Audit, Income Tax and FEMA practice, including representations before the Appellate Authorities of the Govt. of India. His involvement in Auroville began in 1998 when he was invited to join the research team, primarily to decipher about 3800 balance sheets in order to create an extensive database for this study. Since then, he has worked with Auroville Groups and Units in various consultative capacities.

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