Small Is Beautiful: A Study of Economics as if People Mattered (26 page)

There are two reasons for this extraordinary preoccupation with exports, as far as I can see. One is real; the other not so good. I shall first talk about the second one. It is really a hangover of the economic thinking of the days of colonialism. Of course, the metropolitan power moved into a territory not because it was particularly interested in the local population, but in order to open up resources needed for its own industry. One moved into Tanzania for sisal, into Zambia for copper, etc., and into some other place for trade. The whole thinking was shaped by these interests.

'Development' meant the development of raw material or food supplies or of trading profits. The colonial power was primarily interested in supplies and profits, not in the development of the natives, and this meant it was primarily interested in the colony's exports and not in its internal market.

~his outlook has stuck to such an extent that even the Pearson Report considers the expansion of exports the main criterion of success for developing countries. But, of course, people do not live by exporting, and what they produce for themselves and for each other is of infinitely greater importance to them than what they produce for foreigners.

The other point, however, is a more real one. If I produce for export into a rich country. I can take the availability of purchasing power for granted, because my own little production is as nothing compared with what exists already. But if I start new production in a poor country there can be no local market for my products unless I divert the flow of purchasing power from some other product to mine. A dozen different productions should all be started together: then for every one of the twelve producers the other eleven would be his market. There would be additional purchasing power to absorb the additional output. But it is extremely difficult to start many different activities at once. So the conventional advice is: 'Only production for export is proper development.' Such production is not only highly limited in scope, its employment effect is also extremely limited. To compete in world markets, it is normally necessary to employ the highly capital-intensive and labour-saving technology of the rich countries In any case, there is no multiplier effect: my goods are sold for foreign exchange, and the foreign exchange is spent on imports (or the repayment of debt), and that is the end of it.

The need to start many complementary productive activities simultaneously presents a very severe difficulty for development, but the difficulty can be mitigated by 'pump-priming' through public works. The virtues of a massive public works programme for job creation have often been extolled. The only point I should like to make in this context is the following: if you can get new purchasing power into a rural community by way of a public works programme financed from outside, see to it that the fullest possible use is made of the 'multiplier effect'. The people employed on the public works want to spend their wages on 'wages goods', that is to say, consumers' goods of all kinds. If these wages goods can be locally produced, the new purchasing power made available through the public works programme dos not seep away but goes on circulating in local market and the total employment effect could be prodigious. Public works are very desirable and can do a great deal of good; but if they are not backed up by the indigenous production of additional wages goods, the additional purchasing power will flow into imports and the country may experience serious foreign exchange difficulties. Even so, it is misleading to deduce from this truism that exports are specially important for development. After all, for mankind as a whole there are no exports. We did not start development by obtaining foreign exchange from Mars or from the moon.

Mankind is a closed society. India is quite big enough to be a relatively closed society in that sense - a society in which the able-bodied people work and produce what they need.

Everything sounds very difficult and in a sense it is very difficult if it is done for the people, instead of
by
the people. But let us not think that development or employment is anything but the most natural thing in the world. It occurs in every healthy person's life. There comes a point when he simply sets to work. In a sense this is much easier to do now than it has ever been in human history. Why? Because there is so much more knowledge.

There are so much better communications. You can tap all this knowledge (this is what the Indian Development Group is there for). So let's not mesmerise ourselves by the difficulties, but recover the commonsense view that to work is the most natural thing in the world. Only one must not be blocked by being too damn clever about it. We are always having all sorts of clever ideas about optimising something before it even exists. I think the stupid man who says 'something is better than nothing' is much more intelligent than the clever chap who will not touch anything unless it is optimal. What is stopping us? Theories, planning. I have come across planners at the Planning Commission who have convinced themselves that even within fifteen years it is not possible to put the willing labour power of India to work. If they say it is not possible in fifteen months, I accept that, because it takes time to get around. But to throw up the sponge and say it is not possible to do the most elementary thing within fifteen years, this is just a sort of degeneracy of the intellect. What is the argument behind it? Oh! the argument is very clever, a splendid piece of model building. They have ascertained that in order to put a man to work you need on average so much electricity, so much cement, and so much steel. This is absurd. I should like to remind you that a hundred years ago electricity, cement and steel did not even exist in any significant quantity at all. (I should like to remind you that the Taj Mahal was built without electricity, cement and steel and that all the cathedrals of Europe were built without them. It is a fixation in the mind, that unless you can have the latest you can't do anything at all, and this is the thing that has to be overcome.) You may say, again, this is not an economic problem, but basically a political problem. It is basically a problem of compassion with the ordinary people of the world. It is basically a problem, not of conscripting the ordinary people, but of getting a kind of voluntary conscription of the educated.

Another example: we are told by theorists and planners that the number of people you can put to work depends upon the amount of capital you have, as if you could not put people to work to produce capital goods. We are told there is no choice of technology, as if production had started in the year 1971. We are told that it cannot he economic to use anything but the latest methods, as if anything could be more uneconomic than having people doing absolutely nothing. We are told that it is necessary to 'eliminate the human factor',

The greatest deprivation anyone can suffer is to have no chance of looking after himself and making a livelihood. There is no conflict between growth and employment. Not even a conflict as between the present and the future.

You will have to construct a very absurd example to demonstrate that by letting people work you create a conflict between the present and the future.

No country that has developed has been able to develop without letting the people work. On the one hand, it is quite true to say that these things are difficult: on the other hand, let us never lose sight of the fact that we are talking about man's most elementary needs and that we must not be prevented by all these high-fainting and very difficult considerations from doing the most elementary and direct things.

Now, at the risk of being misunderstood, I will give you the simplest of all possible examples of self-help. The Good Lord has not disinherited any of his children and as far as India is concerned he has given her a variety of trees, unsurpassed anywhere in the world. There are trees for almost all human needs. One of the greatest teachers of India was the Buddha who included in his teaching the obligation of every good Buddhist that he should plant and see to the establishment of one tree at least every five years. As long as this was observed, the whole large area of India was covered with trees, free of dust, with plenty of water. plenty of shade, plenty of food and materials. Just imagine you could establish an ideology which would make it obligatory for every able- bodied person in India, man, woman and child, to do that little thing - to plant and see to the establishment of one tree a year, five years running. This, in a five-year period, would give you 2.000 million established trees. Anyone can work it out on the back of an envelope that the economic value of such an enterprise, intelligently conducted, would be greater than anything that has ever been promised by any of India's five-year plans. It could be done without a penny of foreign aid; there is no problem of savings and investment. It would produce foodstuffs, fibres, building material, shade, water, almost anything that man really needs.

I just leave this as a thought, not as the final answer to India's enormous problems. But I ask: what sort of an education is this if it prevents us from thinking of things ready to be done immediately? What makes us think we need electricity, cement, and steel before we can do anything at all? The really helpful things will not be done from the centre; they cannot be done by big organisations; but they can be done by the people themselves. If we can recover the sense that it is the most natural thing for every person born into this world to use his hands in a productive way and that it is not beyond the wit of man to make this possible, then I think the problem of unemployment will disappear and we shall soon be asking ourselves how we can get all the work done that needs to be done.

Organisation and Ownership

Fifteen

A Machine to Foretell the Future?

The reason for including a discussion on predictability in this volume is that it represents one of the most important metaphysical - and therefore practical - problems with which we are faced. There have never been so many futurologists, planners, forecasters, and model-builders as there are today, and the most intriguing product of technological progress, the computer, seems to offer untold new possibilities. People talk freely about

'machines to foretell the future'. Are not such machines just what we have been waiting for? Ah men at all times have been wanting to know the future.

The ancient Chinese used to consult the I Ching, also called The
Book of
Changes
and reputed to be the oldest book of mankind, Some of our contemporaries do so even today. The I Ching is based on the conviction that, while everything changes all the time, change itself is unchanging and conforms to certain ascertainable metaphysical laws. 'To everything there is a season.' said Ecclesiastes, 'and a time to every purpose under heaven ... a time to break down and a time to build up ... a time to cast away stones and a time to gather stones together'. or, as we might say, a time for expansion and a time for consolidation. And the task of the wise man is to understand the great rhythms of the Universe and to gear in with them. While the Greeks -

and I suppose most other nations - went to living oracles, to their Pythias, Casandras, prophets and seers, the Chinese, remarkably. went to a book setting out the universal and necessary pattern of changes. the very Laws of Heaven to which all nature conforms inevitably and to which man will conform freely as a result of insight gained either from wisdom or from suffering. Modern man goes to the computer.

Tempting as it may be to compare the ancient oracles and the modern computer, only a comparison by contrast is possible. The former deal exclusively with qualities; the latter, with quantities. The inscription over the Delphic temple was 'Know Thyself'. while the inscription on an electronic computer is more likely to be: 'Know Me', that is, 'Study the Operating Instructions before Plugging in', It might be thought that the I Ching and the oracles are metaphysical while the computer model is 'real'; but the fact remains that a machine to foretell the future is based on meta- physical assumptions of a very definite kind. It is based on the implicit assumption that 'the future is already here', that it exists already in a determinate form, so that it requires merely good instruments and good techniques to get it into focus and make it visible. The reader will agree that this is a very far-reaching metaphysical assumption, in fact, a most extraordinary assumption which seems to go against all direct personal experience. It implies that human freedom does not exist or, in any case, that it cannot alter the predetermined course of events. We cannot shut our eyes to the fact, on which I have been insisting throughout this book. that such an assumption, like all metaphysical theses, whether explicit or implicit, has decisive practical consequences. The question is simply: is it true or is it untrue?

When the Lord created the world and people to live in it - an enterprise which, according to modern science, took a very long time - I could well imagine that He reasoned with Himself as follows: 'If I make everything predictable, these human beings, whom I have endowed with pretty good brains, will undoubtedly learn to predict everything, and they will thereupon have no motive to do anything at all, because they will recognise that the future is totally determined and cannot be influenced by any human action.

On the other hand, if I make everything unpredictable: they will gradually discover that there is no rational basis for any decision whatsoever and, as in the first case, they will thereupon have no motive to do anything at all.

Neither scheme would make sense. I must therefore create a mixture of the two. Let some things be predictable and let others be unpredictable, They will then, amongst many other things, have the very important task of finding out which is which.

And this, indeed, is a very important task, particularly today, when people try to devise machines to foretell the future. Before anyone makes a prediction, he should be able to give a convincing reason why the factor to which his prediction refers is inherently predictable.