Such largely physical impossibilities plagued Gandhi’s khadi experiments, especially in the 1930s and early 1940s. Khadi grew slowly. In two decades the movement organized spinning in perhaps 13,000 villages. The number was big enough to make Gandhi the C.E.O. of the largest nonprofit in India, but too small to transform India’s estimated 700,000 villages. Since the Congress required that its members wear khadi, the movement had a captive market of people who bought its products as a way of paying dues. But it was undercut even in its captive market by unscrupulous manufacturers who made mill cloth indistinguishable from khadi and passed it off as the real thing at a lower price. Imports of British cloth declined, but not because of competition from indigenous homespun yarn. The British lost out mainly to competition from Japanese mill cloth. (24) In 1935 Gandhi himself had a crisis of conscience. He realized that he was running sweatshops. At the extremely low productivity of hand spinning, poor workers were making two pies an hour. (25) A living wage would be an anna per hour, or eight annas per day for an eight hour day. He had the same excuse that other people who run sweatshops have: if the spinners did not have the work that the A.I.S.A offered them, they would have no work at all. Women were standing in line seeking opportunities to make and sell homespun yarn even at the miserable wage of two pies an hour. In 1935 Gandhi decided that this excuse was not good enough. After a series of solemn meetings, the A.I.S.A. decided, at Gandhi’s insistence, to pay a minimum wage of three annas a day, as a step toward eventually reaching a living wage of eight annas a day. They knew full well that they could not sell khadi at the prices that the minimum wage would force. They also invited another problem which soon materialized Unscrupulous shops sold cloth made from yarn that was indeed homespun, but it was produced by “private producers” who paid less than the A.I.S.A’s minimum wage. 

Sales fell at the new higher prices. One of Gandhi’s responses was to put more emphasis on home spinning, which he called self-sufficing khadi. (26). Instead of selling yarn, the villagers would make spin and weave for their own use, and thus become less poor because they would save the money they otherwise would have spent on store-bought mill cloth. But even the home spinners had to buy cotton to make their yarn from, for which purpose they had no money, or else grow their own cotton, for which purpose they generally had no land. Then they would have to pay a weaver to weave their yarn, for which purpose they also had no money. (27)