Industrialization Without
A Human Face Part IIBy Aseem Shrivastava
11 March, 2007
Countercurrents.org“… the western economic model is not going to work for China. All they're doing is what we've already done, so you can't criticise them for that. But what you can say is, it's not going to work. And if it doesn't work for China, by 2031 it won't work for India, which by then will have an even larger population, nor for the other three billion people in the developing countries.
"And in some way it will not work for the industrialised countries either, because in the incredibly integrated global economy, we all depend on the same oil and the same grain.
"The bottom line… is that we're going to have to develop a new economic model. Instead of a fossil-fuel based, automobile-centred, throw-away economy we will have to have a renewable-energy based, diversified transport system, and comprehensive reuse and recycle economies. If we want civilisation to survive, we will have to have that. Otherwise civilisation will collapse."
- Lester Brown, leading environmentalist, quoted in The Independent, Oct 19, 2005
We live in an industrial society. It would be naïve to believe that we can eschew it straight away. Yet, if something is good, it does not mean that more of it is better. This is the simple wisdom of optimization (as opposed to maximization). This is also what the imperative of ecological balance – whereof our choices are ultimately limited, if any – entails.China is a deadly horse to chase!
Water, resource and energy-intensive industrialization is a prelude to ecological catastrophes as the emerging environmental facts from China amply demonstrate. According to a recent report by Greenpeace China is the world’s biggest destroyer of rainforests today. Logging in natural forests was banned in China after catastrophic floods in 1998. Since then, a Greenpeace expert points out, “the Chinese are ripping the heart out of the world's irreplaceable rainforests to make cheap products like plywood for Western consumer markets.” Forests in Russia, Burma, Indonesia and Guinea are suffering on account of the Chinese off-take. The Chinese plywood export market has grown by more than 1300% during the past decade, with customers mainly in the rich countries. Half the world’s tropical hardwood logs are headed for China, much of it illegally logged.
China already consumes more grain, meat, coal and steel (4 of the 5 main basic goods) than the US and is slated to become the biggest consumer of oil in the foreseeable future and the largest emitter of greenhouse gases in the next few years itself. In another two decades its consumption of paper is expected to be twice the entire production of the whole world today. Will there be any forests and water left on earth if this is allowed to happen? And will global climate remain fit for human habitation?
Chinese authorities admit that 16 of the world’s 20 most polluted cities are now in China. Half of the water in its 7 largest rivers is not even fit for industrial purposes. Over a quarter million Chinese die premature deaths every year on account of air pollution. There are 75 million attacks of asthma annually. One-third of the country’s land area receives acid rain. Parts of the world as far afield as Canada, California, Japan and the Korean peninsula now suffer the consequences of particulate pollution and acid rain because of rapid coal-fired economic growth in China (Two coal-fired power stations are being commissioned in China every week.) Chinese black carbon emissions are raising temperatures and impacting weather patterns throughout the Pacific Rim. Desertification in Northern China is growing at an alarming 3500 sq kms a year. Countries downstream from Chinese rivers complain of water shortages, siltation and pollution. The fish catch in the China seas has been declining sharply on account of coastal pollution from industries and overfishing.
Whatever is happening in China is happening in India too, albeit with a slight time lag, given that the Chinese are better organized and much more ahead in the race.
To take just one instance of the sort of problems India is confronted with, consider the growth in the automobile market. If our cities are not able to handle the little growth in traffic on account of the growing affluence and creditworthiness of merely the top 15-20% of our population, how can we expect them to deal with the traffic snarls that will arise from a situation in which 80-85% of the country – like in the West or in Japan – starts finding cars affordable? Success may here betray our greatest failures.
It is not just that urban space and infrastructure are in desperately short supply. Oil and gas resources of the planet are not there forever. Experts across the spectrum concur on the prospect of the coming scarcity of energy, fearing that many future wars will be fought to ensure access to energy reserves. Nor will the global (and local) atmosphere wait to heat up till after countries like India and China have caught up with the indulgent living standards of the West.
Assuredly, we need at least two more planets if the 40% of living humanity in India and China are to live like their counterparts in the USA – who, with just a quarter of the Indian population, are making full use of the planet we do have.
Evidently, if something (energy and resource-intensive industrialization) was once good for the presently enriched nations it does not imply that it would be good for the impoverished nations and for the world as a whole. There may not be a world left to experience the benefit!
Why lessons learnt from the Western historical experience do not apply to India
In relation to the pattern of industrial growth in India, consider another thought. Modern technology has evolved in labor-scarce economies. Thus, it has typically tended to substitute labor. Today, it is impossible to compete in the global market without adopting the latest methods of production, thus ensuring the highest labor productivity and the best quality – which naturally generate little fresh employment, given massive advances in automation. This has given rise to the phenomenon of “jobless” (and in some cases, job-destroying) growth.
More of such industrialization only displaces more labor. If it creates fresh employment opportunities it is for a far lower number of more highly skilled positions. Such a pattern of industrialization gives the lie to the claims to inclusiveness that are made on behalf of it. It is starkly exclusive, not inclusive.
All this is bad news for labor-surplus societies like India where most people are all too dependent on agriculture and allied activities and are thus very vulnerable to dispossession and impoverishment (on account of takeover of their resource base by the state or the corporations) but are in no position whatsoever to step into the few high-skill jobs that are created, especially given the long neglect of primary education and vocational training.
The argument is all too often heard nowadays – sometimes from the highest portals – that it does not pay to farm any more, that agriculture is unable to absorb so large a population as a huge country like India has, that therefore, as in the historical economic experience of the now developed countries, labor must transfer from agriculture to industry and services over time.
Such a seriously mistaken view ignores at least three key features of the Western historical experience which make a replication of those processes in an Indian setting most unlikely, even impossible.
Firstly, when the rich countries of today were setting off on the road to high economic growth, manufacturing industry was able to absorb much of the labor that was (forcibly) removed from the land because of very special circumstances. Markets were expanding, resources were not scarce (yet), there were no fears of environmental crises on the horizon and, as already indicated, industrial technology had not become as capital-intensive as it has today. The employment intensity of economic growth, to use the official parlance, was still high. This situation has changed dramatically in virtually all respects today.
Secondly, most significantly, the colonies and the settler colonies were there to absorb the labor that was thrown off the land in Europe. At least 50 million people migrated from Europe during the first few centuries of the industrial revolution. Migration softened the blows that industrialization had delivered to the European peasantry. Countries like India and China do not have this luxury today. Legend has it that in early United States all a farmer had to do was to let his horse run loose on an area of land to claim possession of it. Where are the Canadas, Americas and Australias that will absorb the surplus labor from India and China today?
Thirdly, the political context in which India is industrializing and urbanizing today is perhaps unique in the history of nations. There is probably no case of a country industrializing and urbanizing from a largely agrarian society under conditions of universal adult franchise in democratic political conditions. Western and East Asian elites were able to uproot huge rural populations and move them away from their homes and livelihoods through coercion by more or less authoritarian regimes. Recall that the political vote in Western democracies – when they were industrializing and urbanizing – was restricted to property-owners till well into the 19th century. Where labor immobility and resource pressures stood in the way of capitalist industrial growth – as in the case of the US Cotton South in the middle of the 19th century – civil wars were fought.
There are other arguments which give the lie to the view popular among our elites and their think-tanks today - that rural populations ought to be shifted from their present locations in order to improve their prospects. So many urban authorities in India are engaged in the task of “cleaning up” the cities, demolishing the homes and hutments of the poor after evicting them. When the rural agricultural poor are forced to migrate to the cities to look for better prospects in industry or in the service sector, they are thrown out summarily from their new abodes. Where – outside petty crime – are they supposed to find their new livelihoods?
Playing with fundamentals: The suicidal step-treatment of agriculture in a primarily agrarian society
It is also said that agriculture has become uneconomical for most cultivators in India. It is never pointed out what has made this so. As a concession to the rich countries under the new WTO regulations, Indian state policies over the past decade and a half have liberalized the trade in agricultural products. Import duties have been reduced or removed from such goods as cotton and wheat, exposing farmers to the winds and vagaries of the world commodities market. Farmers are not offered the support prices they once got from the state.
Meanwhile, governments in enriched nations are routinely subsidizing their agriculture to the tune of $1 billion a day. All this is in conformity with the enriched-country definition of “free trade”. No one argues that agriculture is not an economical activity in the rich world. It may be the underlying truth that the comparative advantage of impoverished nations still lies in the production of agricultural items. But perceptions of comparative advantage are shaped by affluent nations and classes, who have the resources to maneuver policy levers in international economic institutions like the World Bank, the IMF and the WTO.
As a result, American agribusinesses have a free run at Indian agricultural markets, introducing to a labor-rich country a resource and capital-intensive agricultural technology at odds with its production conditions. If Indian agriculture gets industrialized in the coming years at the hands of global agribusinesses our people will reap the bitter harvest of a “disposable labor force”, at a time when 10 million young Indians are being added to the working population of the country. The readily foreseeable outcome will be unprecedented political and social tension.
Agriculture has been made even more uneconomical because of the collapse of public investment in rural infrastructure after the inception of the reforms in 1991. Irrigation falls severely short of requirements, especially in dryland agriculture. Power supply for agricultural operations comes at a premium. Credit for investment purposes is hard to come by, when cheap loans are readily available in the cities for housing, cars and other personal uses. In fact, with the introduction of Special Economic Zones (SEZs) and favored industrial projects in the countryside, a growing fraction of rural infrastructure – meant for agricultural uses – is effectively being handed over for non-agricultural purposes and for artificially inflating real-estate values.
Simply because it obtains huge tax breaks, subsidies and other incentives, no one argues that IT is uneconomical in the country. Nor are so many other industries which receive sops from the state. But agriculture receives step-treatment. Well-informed commentators make gratuitous comparisons between the rates of growth in services and industry on the one hand and agriculture on the other when they ought to know better: agriculture is growing from an already large base (and thus cannot grow so fast) and is regulated by the weather cycles and natural limits: you cannot run three 8-hour shifts every day of the year to accelerate the rate of production, as you can in industry. And nor does one have to wait patiently for harvests in industry whose timing is determined ultimately by nature, and not by working humanity.
Thanks to the cruel and foolish neglect and abuse of agriculture (on which much has been written elsewhere), exemplified by trade policy concessions (to the WTO) that have exposed our farmers to subsidized international competition from the West without creating any sort of safety net for them, over 100,000 peasants (according to the Union Agriculture Minister’s speech to parliament last March) have committed debt-driven suicides across some of the traditional granaries of India, such as Punjab. Moreover, thanks to the collapse of rural purchasing power in the IMF-led deflationary environment that was created during the 1990s (NSS data for 2002/03 reveal that income was less than expenditure for 96% of farming households), food-grain absorption per capita has declined to levels that prevailed before Indian independence, bringing back fears of possible famines in the future – even in a democracy.
Finally, an even more sobering observation: thanks to the increasingly external orientation forced upon the agrarian economy (increasingly growing cash crops, flowers and vegetables for export) even the Union Agriculture Minister Sharad Pawar admits that the food security of the country is now under serious threat, even as a dark shadow appears over wheat imports from countries like Australia – suffering their worst drought in a millennia, thanks to global climate change.
What kind of industrialization does India need?
The question is not whether industrialization is a good idea. Rather, the issues relate to the kind and rate of industrialization, where to locate industry and for whom?
If our policy-making elites in New Delhi and in the state capitals (not to forget the invisible hand in Washington) were genuinely thinking of sustainable development for the mass of poor Indians – and not merely concerned with enriching the already rich and powerful classes of this world – they would be outlawing certain environmentally suicidal forms of industrialization, locating industrial activities far from inhabited and agricultural areas, encouraging investments in labor-intensive, light (possibly low-tech) industries, controlling and moderating the rate of expansion of industry to keep pace with the regeneration of (renewable) resources, protecting our markets from dumping by Western businesses (especially agribusinesses) and investing heavily in health, primary education, the vocational training of our youth.
They would not be offering financial support to leading capitalists acquiring large firms abroad, far from letting them fly around in fighter jets meant presumably for the public task of defending the country.The fact that the economic policies of Indian governments both at the centre and at the states reflects little of all these desiderata reveals their treacherous priorities – in which accretion to the wealth and power of the already powerful classes appears to be the reigning concern. Industrialization as if people mattered would be discernibly inclusive, in stark contrast to the violent exclusiveness which marks the reigning pattern.
Just how socially sustainable and consistent with a democratic political ethos such an approach to economic policy is, and how far the wounded elephant that Indian agriculture is today will accept its fate without striking back, only the future will tell. If “India Shining” was smashed by the results of the 2004 general elections, “India Poised” may be headed for a more violent nemesis.
Meanwhile, we must all agree to consume, obey and shut up, in keeping with the expectations of a cramped democracy under siege from corporate totalitarianism.
Aseem Shrivastava is an independent writer. He can be reached at [email protected].
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