E. F. Schumacher, Small is Beautiful: Economics as if People Mattered, 1973.

Part III
The Third World


Based on the Anniversary Address delivered to the general meeting of the Africa Bureau, London, 3rd March 1966.

A British Government White Paper on Overseas Development some years ago stated the aims of foreign aid as follows:

To do what lies within our power to help the developing countries to provide their people with the material opportunities for using their talents, of living a full and happy life and steadily improving their lot.

It may be doubtful whether equally optimistic language would be used today, but the basic philosophy remains the same. There is, perhaps, some disillusionment: the task turns out to be much harder than may have been thought -- and the newly independent countries are finding the same. Two phenomena, in particular, are giving rise to world-wide concern -- mass unemployment and mass migration into cities. For two-thirds of mankind, the aim of a 'full and happy life' with steady improvements of their lot, if not actually receding, seems to be as far away as ever. So we had better have a new look at the whole problem.

Many people are having a new look and some say the trouble is that there is too little aid. They admit that there are many un- healthy and disrupting tendencies but suggest that with more massive aid one ought to be able to over-compensate them. If the available aid cannot be massive enough for everybody, they suggest that it should be concentrated on the countries where the promise of success seems most credible. Not surprisingly, this proposal has failed to win general acceptance.

One of the unhealthy and disruptive tendencies in virtually all the developing countries is the emergence, in an ever more accentuated form, of the 'dual economy', in which there are two different patterns of living as widely separated from each other as two different worlds. It is not a matter of some people being rich and others being poor. both being utilised by a common way of life: it is a matter of two ways of life existing side by side in such a manner that even the humblest member of the one disposes of a daily income which is a high multiple of the income accruing to even the hardest working member of the other. The social and political tensions arising from the dual economy are too obvious to require description.

In the dual economy of a typical developing country, we may find fifteen per cent of the population in the modern sector. mainly confined to one or two big cities. The other eighty-five per cent exists in the rural areas and small towns. For reasons which will be discussed, most of the development effort goes into the big cities, which means that eighty-five per cent of the population are largely by-passed. What is to become of them? Simply to assume that the modern sector in the big cities will grow until it has absorbed almost the entire population -- which is, of course, what has happened in many of the highly developed countries -- is utterly unrealistic. Even the richest countries are groaning under the burden which such a misdistribution of population inevitably imposes.

In every branch of modern thought, the concept of 'evolution' plays a central role. Not so in development economics, although the words 'development' and 'evolution' would seem to be virtually synonymous. Whatever may be the merit of the theory of evolution in specific cases, it certainly reflects our experience of economic and technical development. Let us imagine a visit to a modern industrial establishment, say, a great refinery. As we walk around in its vastness, through all its fantastic complexity, we might well wonder how it was possible for the human mind to conceive such a thing. What an immensity of knowledge, ingenuity, and experience is here incarnated in equipment! How is it possible? The answer is that it did not spring ready-made out of any person's mind -- it came by a process of evolution. It started quite simply, then this was added and that was modified, and so the whole thing became more and more complex. But even what we actually see in this refinery is only, as we might say, the tip of an iceberg.

What we cannot see on our visit is far greater than what we can see: the immensity and complexity of the arrangements that allow crude oil to flow into the refinery and ensure that a multitude of consignments of refined products, properly prepared, packed and labelled, reaches innumerable consumers through a most elaborate distribution system. All this we cannot see. Nor can we see the intellectual achievements behind the planning, the organising, the financing and marketing. Least of all can we see the great educational background which is the precondition of all, extending from primary schools to universities and specialised research establishments, and without which nothing of what we actually see would be there. As I said, the visitor sees only the tip of the iceberg: there is ten times as much somewhere else, which he cannot see, and without the 'ten', the 'one' is worthless. And if the 'ten' is not supplied by the country or society in which the refinery has been erected, either the refinery simply does not work or it is, in fact, a foreign body depending for most of its life on some other society. Now, all this is easily forgotten, because the modern tendency is to see and become conscious of only the visible and to forget the invisible things that are making the visible possible and keep it going.

Could it be that the relative failure of aid, or at least our disappointment with the effectiveness of aid, has something to do with our materialist philosophy which makes us liable to overlook the most important preconditions of success, which are generally in- visible? Or if we do not entirely overlook them, we tend to treat them just as we treat material things -- things that can be planned and scheduled and purchased with money according to some all- comprehensive development plan. In other words, we tend to think of development, not in terms of evolution, but in terms of creation.

Our scientists incessantly tell us with the utmost assurance that everything around us has evolved by small mutations sieved out through natural selection. Even the Almighty is not credited with having been able to create anything complex. Every complexity, we are told. is the result of evolution.

Yet our development planners seem to think that they can do better than the Almighty, that they can create the most complex things at one throw by a process called planning, letting Athene spring, not out of the head of Zeus. but out of nothingness, fully armed, resplendent, and viable.

Now, of course, extraordinary and unfitting things can occasionally be done. One can successfully carry out a project here or there. It is always possible to create small ultra-modern islands in a pre-industrial society. But such islands will then have to be defended, like fortresses, and provisioned, as it were, by helicopter from far away, or they will be flooded by the surrounding sea. Whatever happens, whether they do well or badly, they produce the 'dual economy' of which I have spoken. They cannot be integrated into the surrounding society, and tend to destroy its cohesion.

We may observe in passing that similar tendencies are at work even in some of the richest countries, where they manifest as a trend towards excessive urbanisation, towards 'megalopolis', and leave, in the midst of affluence, large pockets of poverty-stricken people, 'drop-outs', unemployed and unemployables.

Until recently, the development experts rarely referred to the dual economy and its twin evils of mass unemployment and mass migration into cities. When they did so, they merely deplored them and treated them as transitional. Meanwhile, it has become widely recognised that time alone will not be the healer. On the contrary, the dual economy, unless consciously counteracted, produces what I have called a 'process of mutual poisoning', whereby successful industrial development in the cities destroys the economic structure of the hinterland, and the hinterland takes its revenge by mass migration into the cities, poisoning them and making them utterly unmanageable. Forward estimates made by the World Health Organisation and by experts like Kingsley Davies predict cities of twenty, forty, and even sixty million in- habitants, a prospect of 'immiseration' for multitudes of people that beggars the imagination,

Is there an alternative? That the developing countries cannot do without a modern sector, particularly where they are in direct contact with the rich countries, is hardly open to doubt. What needs to be questioned is the implicit assumption that the modern sector can be expanded to absorb virtually the entire population and that this can be done fairly quickly. The ruling philosophy of development over the last twenty years has been: 'What is best for the rich must be best for the poor.' This belief has been carried to truly astonishing lengths, as can be seen by inspecting the list of developing countries in which the Americans and their allies and in some cases also the Russians have found it necessary and wise to establish 'peaceful' nuclear reactors -- Taiwan, South Korea, Philippines, Vietnam. Thailand, Indonesia, Iran, Turkey. Portugal, Venezuela -- all of them countries whose overwhelming problems are agriculture and the rejuvenation of rural life, since the great majority of their poverty-stricken peoples Live in rural areas.

The starting point of all our considerations is poverty, or rather, a degree of poverty which means misery, and degrades and stultifies the human person: and our first task is to recognise and understand the boundaries and limitations which this degree of poverty imposes. Again, our crudely materialistic philosophy makes us liable to see only 'the material opportunities' (to use the words of the White Paper which I have already quoted) and to overlook the immaterial factors. Among the causes of poverty, I am sure, the material factors are entirely secondary -- such things as a lack of natural wealth, or a lack of capital, or an insufficiency of infrastructure. The primary causes of extreme poverty are immaterial, they lie in certain deficiencies in education, organisation, and discipline.

Development does not start with goods; it starts with people and their education, organisation, and discipline. Without these three, all resources remain latent, untapped potential. There are prosperous societies with but the scantiest basis of natural wealth. and we have had plenty of opportunity to observe the primacy of the invisible factors after the war. Every country, no matter how devastated, which had a high level of education. organisation, and discipline, produced an 'economic miracle'. In fact these were miracles only for people whose attention is focused on the tip of the iceberg. The tip had been smashed to pieces, but the base, which is education, organisation, and discipline, was still there.

Here, then. lies the central problem of development. If the primary causes of poverty are deficiencies in these three respects, then the alleviation of poverty depends primarily on the removal of these deficiencies. Here lies the reason why development cannot be an act of creation. why it cannot be ordered, bought, comprehensively planned: why it requires a process of evolution. Education does not 'jump'; it is a gradual process of great subtlety. Organisation does not 'jump'; it must gradually evolve to fit changing circumstances. And much the same goes for discipline. All three must evolve step by step, and the foremost task of development policy must be to speed this evolution. All three must become the property not merely of a tiny minority, but of the whole society.

If aid is given to introduce certain new economic activities, these will be beneficial and viable only if they can be sustained by the already existing educational level of fairly broad groups of people, and they will be truly valuable only if they promote and spread advances in education, organisation, and discipline. There can be a process of stretching -- never a process of jumping. If new economic activities are introduced which depend on special education, special organisation, and special discipline, such as are in no way inherent in the recipient society, the activity will not promote healthy development but will be more likely to hinder it. It will remain a foreign body that cannot be integrated and will further exacerbate the problems of the dual economy.

It follows from this that development is not primarily a problem for economists, least of all for economists whose expertise is founded on a crudely materialist philosophy. No doubt, economists of whatever philosophical persuasion have their usefulness at certain stages of development and for strictly circumscribed technical jobs, but only if the general guidelines of a development policy to involve the entire population are already firmly established.

The new thinking that is required for aid and development will be different from the old because it will take poverty seriously. It will not go on mechanically, saying: 'What is good for the rich must also be good for the poor.' It will care for people -- from a severely practical point of view. Why care for people? Because people are the primary and ultimate source of any wealth whatsoever. If they are left out, if they are pushed around by self-styled experts and high-handed planners, then nothing can ever yield real fruit.

The following chapter is a slightly shortened version of a paper prepared in 1965 for a Conference on the Application of Science and Technology to the Development of Latin America, organised by UNESCO in Santiago, Chile. At that time, discussions on economic development almost invariably tended to take technology simply as 'given', the question was how to transfer the given technology to those not yet in possession of it. The latest was obviously the best, and the idea that it might not serve the urgent needs of developing countries because it failed to fit into the actual conditions and limitations of poverty, was treated with ridicule. However, the paper became the basis on which the Intermediate Technology Development Group was set up in London.

Social and Economic Problems Calling for the Development of Intermediate Technology

First published by UNESCO, Conference on the Application of Science and Technology to the Development of Latin America, organised by UNESCO with the cooperation of The Economic Commission for Latin America, Santiago, Chile, September 1965.


In many places in the world today the poor are getting poorer while the rich are getting richer, and the established processes of foreign aid and development planning appear to be unable to overcome this tendency. In fact, they often seem to promote it, for it is always easier to help those who can help themselves than to help the helpless. Nearly all the so-called developing countries have a modern sector where the patterns of living and working are similar to those of the developed countries, but they also have a non-modern sector, accounting for the vast majority of the total population, where the patterns of living and working are not only profoundly unsatisfactory but also in a process of accelerating decay.

I am concerned here exclusively with the problem of helping the people in the non-modern sector. This does not imply the suggestion that constructive work in the modern sector should be discontinued, and there can be no doubt that it will continue in any case. But it does imply the conviction that all successes in the modern sector are likely to be illusory unless there is also a healthy growth -- or at least a healthy condition of stability -- among the very great numbers of people today whose life is characterised not only by dire poverty but also by hopelessness,


The Condition of the Poor

What is the typical condition of the poor in most of the so-called developing countries? Their work opportunities are so restricted that they cannot work their way out of misery. They are underemployed or totally unemployed, and when they do find occasional work their productivity is exceedingly low. Some of them have land, but often too little. Many have no land and no prospect of ever getting any. They are underemployed or totally unemployed, and then drift into the big cities. But there is no work for them in the big cities either and, of course, no housing. All the same, they flock into the cities because the chances of finding some work appear to be greater there than in the villages where they are nil.

The open and disguised unemployment in the rural areas is often thought to be due entirely to population growth, andv no doubt this is an important contributory factor. But those who hold this view still have to explain why additional people cannot do additional work. It is said that they cannot work because they lack 'capital'. But what is 'capital'? It is the product of human work. The lack of capital can explain a low level of productivity, but it cannot explain a lack of work opportunities.

The fact remains, however, that great numbers of people do not work or work only intermittently, and that they are therefore poor and helpless and often desperate enough to leave the village to search for some kind of existence in the big city. Rural unemployment produces mass-migration into cities, leading to a rate of urban growth which would tax the resources of even the richest societies. Rural unemployment becomes urban unemployment.

Help to Those who Need it Most

The problem may therefore be stated quite simply thus: what can be done to bring health to economic life outside the big cities, in the small towns and villages which still contain -- in most cases -- eighty to ninety per cent of the total population? As long as the development effort is concentrated mainly on the big cities, where it is easiest to establish new industries, to staff them with managers and men, and to find finance and markets to keep them going, the competition from these industries will further disrupt and destroy non-agricultural production in the rest of the country, will cause additional unemployment outside, and will further accelerate the migration of destitute people into towns that cannot absorb them. The process of mutual poisoning' will not be halted.

It is necessary, therefore, that at least an important part of the development effort should by-pass big cities and be directly concerned with the creation of an agro-industrial structure' in the rural and small-town areas. In this connection it is necessary to emphasise that the primary need is workplaces, literally millions of workplaces. No-one, of course, would suggest that output-per- man is unimportant but the primary consideration cannot be to maximise output per man, it must be to maximise work opportunities for the unemployed and underemployed For a poor man the chance to work is the greatest of all needs, and even poorly paid and relatively unproductive work is better than idleness. 'Coverage must come before perfection', to use the words of Mr Gabriel Ardant.1

It is important that there should be enough work for all because that is the only way to eliminate anti-productive reflexes and create a new state of mind -- that of a country where labour has become precious and must be put to the best possible use.
In other words, the economic calculus which measures success in terms of output or income, without consideration of the number of jobs, is quite inappropriate in the conditions here under consideration, for it implies a static approach to the problem of development. The dynamic approach pays heed to the needs and reactions of people: their first need is to start work of some kind that brings some reward, however small; it is only when they experience that their time and labour is of value that they can become interested in making it more valuable. It is therefore more important that everybody should produce something than that a few people should each produce a great deal, and this remains true even if in some exceptional cases the total output under the former arrangement should be smaller than it would be under the latter arrangement It will not remain smaller, because this is a dynamic situation capable of generating growth.

An unemployed man is a desperate man and he is practically forced into migration. This is another justification for the assertion that the provision of work opportunities is the primary need and should be the primary objective of economic planning. Without it, the drift of people into the large cities cannot be mitigated, let alone halted.

The Nature of the Task

The task, then, is to bring into existence millions of new workplaces in the rural areas and small towns. That modern industry, as it has arisen in the developed countries, cannot possibly fulfil this task should be perfectly obvious. It has arisen in societies which are rich in capital and short of labour and therefore cannot possibly be appropriate for societies short of capital and rich in labour. Puerto Rico furnishes a good illustration of the point, To quote from a recent study:

Development of modern factory-style manufacturing makes only a limited contribution to employment. The Puerto Rican development programme has been unusually vigorous and successful; but from 1952-62 the average increase of employment in EDA-sponsored plants was about 5,000 a year. With present labour force participation rates, and in the absence of net emigration to the mainland, annual additions to the Puerto Rican labour force would be of the order of 40,000 ...

Within manufacturing, there should be imaginative exploration of small-scale, more decentralised, more labour-using forms of organisation such as have persisted in the Japanese economy to the present day and have contributed materially to its vigorous growth.2

Equally powerful illustrations could be drawn from many other countries, notably India and Turkey, where highly ambitious five- year plans regularly show a greater volume of unemployment at the end of the five-year period that at the beginning, even assuming that the plan is fully implemented.

The real task may be formulated in four propositions:

First, that workplaces have to be created in the areas where the people are living now, and not primarily in metropolitan areas into which they tend to migrate.

Second, that these workplaces must be, on average, cheap enough so that they can be created in large numbers without this calling for an unattainable level of capital formation and imports.

Third, that the production methods employed must be relatively simple, so that the demands for high skills are minimised, not only in the production process itself but also in matters of organisation, raw material supply, financing, marketing, and so forth.

Fourth, that production should be mainly from local materials and mainly for local use.

These four requirements-can be met only if there is a 'regional' approach to development and, second, if there is a conscious effort to develop and apply what might be called an 'intermediate technology'. These two conditions will now be considered in turn.

The Regional or District Approach

A given political unit is not necessarily of the right size for economic development to benefit those whose need is the greatest. In some cases it may be too small, but in the generality of cases today it is too large. Take, for example, the case of India. It is a very large political unit, and it is no doubt desirable from many points of view that this unity should be maintained. But if development policy is concerned merely -- or primarily -with 'India-as-a- whole', the natural drift of things will concentrate development mainly in a few metropolitan areas, in the modern sector. Vast areas within the country, containing eighty per cent of the population or more, will benefit little and may indeed suffer. Hence the twin evils of mass unemployment and mass migration into the metropolitan areas. The result of 'development' is that a fortunate minority have their fortunes greatly increased, while those who really need help are left more helpless than ever before. If the purpose of development is to bring help to those who need it most, each 'region' or 'district' within the country needs its own development. This is what is meant by a 'regional' approach.

A further illustration may be drawn from Italy, a relatively wealthy country. Southern Italy and Sicily do not develop merely as a result of successful economic growth in 'Italy-as-a-whole'. Italian industry is concentrated mainly in the north of the country, and its rapid growth does not diminish but on the contrary tends to intensify, the problem of the south. Nothing succeeds like success and, equally, nothing fails like failure. Competition from the north destroys production in the south and drains all talented and enterprising men out of it. Conscious efforts have to be made to counteract these tendencies, for if the population of any region within a country is by-passed by development it becomes actually worse off than before, is thrown into mass unemployment, and forced into mass migration. The evidence of this truth can be found all over the world, even in the most highly developed countries.

In this matter it is not possible to give hard and fast definitions. Much depends on geography and local circumstances. A few thousand people, no doubt, would be too few to constitute a 'district' for economic development; but a few hundred thousand people, even if fairly widely scattered, may well deserve to be treated as such. The whole of Switzerland has less than six million inhabitants: yet it is divided into more than twenty 'cantons', each of which is a kind of development district, with the result that there is a fairly even spread of population and of industry and no tendency towards the formation of excessive concentrations.

Each 'district', ideally speaking, would have some sort of inner cohesion and identity and possess at least one town to serve as a district centre. There is need for a 'cultural structure' just as there is need for an '.economic structure'; thus, while every village would have a primary school, there would be a few small market towns with secondary schools, and the district centre would be big enough to carry an institution of higher learning. The bigger the country, the greater is the need for internal 'structure' and for a decentralised approach to development. If this need is neglected, there is no hope for the poor.

The Need for an Appropriate Technology

It is obvious that this 'regional' or 'district' approach has no chance of success unless it is based on the employment of a suit- able technology. The establishment of each workplace in modern industry costs a great deal of capital -- something of the order of, say, Pounds 2,000 on average. A poor country, naturally, can never afford to establish more than a very limited number of such work- places within any given period of time. A 'modern' workplace, moreover, can be really productive only within a modern environment, and for this reason alone is unlikely to ~t into a 'district' consisting of rural areas and a few snail towns. In every 'developing country' one can find industrial estates set up in rural areas, where high-grade modern equipment is standing idle most of the time because of a lack of organisation finance, raw material sup- plies, transport, marketing facilities, and the like. There are then complaints and recriminations: but they do not alter the fact that a lot of scarce capital resources -- normally imports paid from scarce foreign exchange -- are virtually wasted.

The distinction between 'capital-intensive' and 'labour-intensive' industries is, of course, a familiar one in development theory. Although it has an undoubted validity, it does not really make contact with the essence of the problem; for it normally induces people to accept the technology of any given line of production as given and unalterable. If it is then argued that developing countries should give preference to 'labour-intensive' rather than 'capital-intensive' industries, no intelligent action can follow, be cause the choice of industry, in practice, will be determined by quite other, much more powerful criteria, such as raw material base, markets, entrepreneurial interest, etc. The choice of industry is one thing; but the choice of technology to be employed after the choice of industry has been made, is quite another. It is therefore better to speak directly of technology, and not cloud the discussion by choosing terms like 'capital intensity' or 'labour intensity' as one's point of departure. Much the same applies to another distinction frequently made in these discussions, that between 'large-scale' and 'small-scale' industry. It is true that modern industry is often organised in very large units. but 'large- scale' is by no means one of its essential and universal features. Whether a given industrial activity is appropriate to the conditions of a developing district does not directly depend on 'scale', but on the technology employed. A small-scale enterprise with an average cost per workplace of Pounds 2,000 is just as inappropriate as a large-scale enterprise with equally costly workplaces.

I believe, therefore, that the best way to make contact with the essential problem is by speaking of technology: economic development in poverty stricken areas can be fruitful only on the basis of what I have called 'intermediate technology'. In the end, intermediate technology will be 'labour-intensive' and will lend itself to use in small-scale establishments. But neither 'labour- intensity' nor 'small-scale' implies 'intermediate technology',

Definition of Intermediate Technology

If we define the level of technology in terms of 'equipment cost per workplace', we can call the indigenous technology of a typical developing country -- symbolically speaking -- a Pounds l -technology, while that of the developed countries could be called a Pounds 1,000- technology. The gap between these two technologies is so enormous that a transition from the one to the other is simply impossible. In fact, the current attempt of the developing countries to infiltrate the Pounds 1,000-technoIogy into their economies inevitably kills off the Pounds l-technology at an alarming rate, destroying traditional workplaces much faster than modern workplaces can be created, and thus leaves the poor in a more desperate and helpless position than ever before. If effective help is to be brought to those who need it most, a technology is required which would range in some intermediate position between the Pounds 1-technology and the Pounds 1,000-technology. Let us call it -- again symbolically speaking -- a Pounds 100-technology,

Such an intermediate technology would be immensely more productive than the indigenous technology (which is often in a condition of decay), but it would also be immensely cheaper than the sophisticated, highly capital-intensive technology of modern industry. At such a level of capitalisation, very large numbers of workplaces could be created within a fairly short time; and the creation of such workplaces would be 'within reach' for the more enterprising minority within the district, not only in financial terms but also in terms of their education, aptitude, organising skill, and so forth.

This last point may perhaps be elucidated as follows:

The average annual income per worker and the average capital per workplace in the developed countries appear at present to stand in a relationship of roughly 1:1. This implies, in general terms, that it takes one man-year to create one workplace, or that a man would have to save one month's earnings a year for twelve years to be able to own a workplace. If the relationship were 1:10, it would require ten man-years to create one workplace, and a man would have to save a month's earnings a year for 120 years before he could make himself owner of a workplace. This, of course, is an impossibility, and it follows that the Pounds 1,000- technology transplanted into a district which is stuck on the level of a Pounds 1-technology simply cannot spread by any process of normal growth. It cannot have a positive 'demonstration effect'; on the contrary. as can be observed all over the world, its 'demonstration effect' is wholly negative. The people, to whom the Pounds 1,000- technology is inaccessible, simply 'give up' and often cease doing even those things which they had done previously.

The intermediate technology would also fit much more smoothly into the relatively unsophisticated environment in which it is to be utilised. The equipment would be fairly simple and therefore understandable, suitable for maintenance and repair on the spot. Simple equipment is normally far less dependent on raw materials of great purity or exact specifications and much more adaptable to market fluctuations than highly sophisticated equipment. Men are more easily trained: supervision, control, and organisation are simpler; and there is far less vulnerability to un- foreseen difficulties.

Objections Raised and Discussed

Since the idea of intermediate technology was first put forward, a number of objections have been raised. The most immediate objections are psychological: 'You are trying to withhold the best and make us put up with something inferior and outdated.' This is the voice of those who are not in need. who can help themselves and want to be assisted in reaching a higher standard of living at once. It is not the voice of those with whom we are here concerned, the poverty-stricken multitudes who lack any real basis of existence, whether in rural or in urban areas, who have neither 'the best' nor 'the second best' but go short of even the most essential means of subsistence. One sometimes wonders how many 'development economists' have any real comprehension of the condition of the poor.

There are economists and econometricians who believe that development policy can be derived from certain allegedly fixed ratios, such as the capital output ratio. Their argument runs as follows: The amount of available capital is given. Now, you may concentrate it on a small number of highly capitalised workplaces, or you may spread it thinly over a large number of cheap workplaces. If you do the latter, you obtain less total output than if you do the former: you therefore fail to achieve the quickest possible rate of economic growth. Dr Kaldor, for instance, claims that 'research has shown that the most modern machinery produces much more output per unit of capital invested than less sophisticated machinery which employs more people'. Not only capital' but also 'wages goods' are held to be a given quantity, and this quantity determines 'the limits on wages employment in any country at any given time'.

If we can employ only a limited number of people in wage labour, then let us employ them in the most productive way, so that they make the biggest possible contribution to the national output, because that will also give the quickest rate of economic growth. You should not go deliberately out of your way to reduce productivity in order to reduce the amount of capital per worker. This seems to me nonsense because you may find that by increasing capital per worker tenfold you increase the output per worker twenty fold. There is no question from every point of view of the superiority of the latest and more capitalistic technologies.4

The first thing that might be said about these arguments is that they are evidently static in character and fail to take account of the dynamics of development. To do justice to the real situation it is necessary to consider the reactions and capabilities of people, and not confine oneself to machinery or abstract concepts. As we have seen before, it is wrong to assume that the most sophisticated equipment, transplanted into an unsophisticated environment, will be regularly worked at full capacity, and if capacity utilisation is low, then the capital / output ratio is also low. It is therefore fallacious to treat capital / output ratios as technological facts, when they are so largely dependent on quite other factors.

The question must be asked, moreover, whether there is such a law, as Dr Kaldor asserts, that the capital/output ratio grows if capital is concentrated on fewer workplaces. No-one with the slightest industrial experience would ever claim to have noticed the existence of such a 'law', nor is there any foundation for it in any science. Mechanisation and automation are introduced to increase the productivity of labour, i.e. the worker/output ratio, and their effect on the capital/output ratio may just as well be negative as it may be positive. Countless examples can be quoted where advances in technology eliminate workplaces at the cost of an additional input of capital without affecting the volume of output. It is therefore quite untrue to assert that a given amount of capital invariably and necessarily produces the biggest total output when it is concentrated on the smallest number of workplaces.

The greatest weakness of the argument, however, lies in taking 'capital' -and even 'wages goods' -- as 'given quantities' in an under-employed economy. Here again, the static outlook inevitably leads to erroneous conclusions. The central concern of development policy, as I have argued already, must be the creation of work opportunities for those who, being unemployed, are consumers -- on however miserable a level -- without contributing anything to the fund of either 'wages goods' or 'capital'. Employment is the very precondition of everything else. The output of an idle man is nil, whereas the output of even a poorly equipped man can be a positive contribution, and this contribution can be to 'capital' as well as to 'wages goods'. The distinction between those two is by no means as definite as the econometricians are inclined to think, because the definition of 'capital' itself depends decisively on the level of technology employed.

Let us consider a very simple example. Some earth-moving job has to be done in an area of high unemployment. There is a wide choice of technologies, ranging from the most modern earth- moving equipment to purely manual work without tools of any kind. The 'output' is fixed by the nature of the job, and it is quite clear that the capital / output ratio will be highest, if the input of 'capital' is kept lowest. If the job were done without any tools, the capital/output ratio would be infinitely large, but the productivity per man would be exceedingly low. If the job were done at the highest level of modern technology, the capital/output ratio would be low and the productivity per man very high. Neither of these extremes is desirable, and a middle way has to be found. Assume some of the unemployed men were first set to work to make a variety of tools, including wheel-barrows and the like, while others were made to produce various 'wages goods'. Each of these lines of production in turn could be based on a wide range of different technologies, from the simplest to the most sophisticated. The task in every case would be to find an intermediate technology which obtains a fair level of productivity with- out having to resort to the purchase of expensive and sophisticated equipment. The outcome of the whole venture would be an economic development going far beyond the completion of the initial earth-moving Project. With a total input of 'capital' from outside which might be much smaller than would have been involved in the acquisition of the most modern earth-moving equipment, and an input of (previously unemployed) labour much greater than the 'modern' method would have demanded, not only a given project would have been completed, but a whole community would have been set on the path of development.

I say, therefore, that the dynamic approach to development. which treats the choice of appropriate, intermediate technologies as the central issue, opens up avenues of constructive action, which the static, econometric approach totally fails to recognise. This leads to the next objection which has been raised against the idea of intermediate technology. It is argued that all this might be quite promising if it were not for a notorious shortage of entrepreneurial ability in the under-developed countries. This scarce resource should therefore be utilised in the most concentrated way, in places where it has the best chances of success and should be endowed with the finest capital equipment the world can offer. Industry, it is thus argued, should be established in or near the big cities, in large integrated units, and on the highest possible level of capitalisation per workplace.

The argument hinges on the assumption that 'entrepreneurial ability' is a fixed and given quantity, and thus again betrays a purely static point of view. It is, of course, neither fixed nor given, being largely a function of the technology to be employed Men quite incapable of acting as entrepreneurs on the level of modern technology may nonetheless be fully capable of making a success of a small-scale enterprise set up on the basis of intermediate technology -- for reasons already explained above In fact, it seems to me, that the apparent shortage of entrepreneurs in many developing countries today is precisely the result of the 'negative demonstration effect' of a sophisticated technology infiltrated into an unsophisticated environment. The introduction of an appropriate, intermediate technology would not be likely to founder on any shortage of entrepreneurial ability. Nor would it diminish the supply of entrepreneurs for enterprises in the modem sector; on the contrary, by spreading familiarity with systematic, technical modes of production over the entire population it would undoubtedly help to increase the supply of the required talent.

Two further arguments have been advanced against the idea of intermediate technology -- that its products would require protection within the country and would be unsuitable for export. Both arguments are based on mere surmise. In fact a considerable number of design studies and costings, made for specific products in specific districts, have universally demonstrated that the products of an intelligently chosen intermediate technology could actually be cheaper than those of modern factories in the nearest big city. Whether or not such products could be exported is an open question: the unemployed are not contributing to exports now, and the primary task is to put them to work so that they will produce useful goods from local materials for local use,

Applicability of Intermediate Technology

The applicability of intermediate technology is, of course, not universal. There are products which are themselves the typical outcome of highly sophisticated modern industry and cannot be produced except by such an industry. These products, at the same time, are not normally an urgent need of the poor. What the poor need most of all is simple things -- budding materials, clothing, household goods, agricultural implements -- and a better return for their agricultural products. They also most urgently need in many places: trees, water, and crop storage facilities. Most agricultural populations would be helped immensely if they could themselves do the first stages of processing their products. All these are ideal fields for intermediate technology.

There are, however, also numerous applications of a more ambitious kind. I quote two examples from a recent report:

The first relates to the recent tendency (fostered by the policy of most African, Asian and Latin American governments of having oil refineries in their own territories, however small their markets) for international firms to design small petroleum refineries with low capital investment per unit of output and a low total capacity, say from 5,000 to 30,000 barrels daily, These units are as efficient and low-cost as the much bigger and more capital-intensive refineries corresponding to conventional design. The second example relates to "package plants" for ammonia production, also recently designed for small markets. According to some provisional data, the investment cost per ton in a "package plant" with a sixty-tons-a-day capacity may be about 30,000 dollars, whereas a conventionally designed unit, with a daily capacity of 100 tons (which is, for a conventional plant, very small) would require an investment of approximately 50,000 dollars per ton.5

The idea of intermediate technology does not imply simply a 'going back' in history to methods now out-dated although a systematic study of methods employed in the developed countries, say, a hundred years ago could indeed yield highly suggestive results. It is too often assumed that the achievement of western science, pure and applied, lies mainly in the apparatus and machinery that have been developed from it, and that a rejection of the apparatus and machinery would be tantamount to a rejection of science. This is an excessively superficial view. The real achievement lies in the accumulation of precise knowledge, and this knowledge can be applied in a great variety of ways, of which the current application in modern industry is only one. The development of an intermediate technology, therefore, means a genuine forward movement into new territory, where the enormous cost and complication o~ production methods for the sake of labour saving and job elimination is avoided and technology is made appropriate for labour surplus societies,

That the applicability of intermediate technology is extremely wide, even if not universal, will be obvious to anyone who takes the trouble to look for its actual applications today. Examples can be found in every developing country and, indeed, in the advanced countries as well. What. then is missing? It is simply that the brave and able practitioners of intermediate technology do not know of one another, do not support one another, and cannot be of assistance to those who want to follow a similar road but do not know how to get started. They exist, as it were, outside the mainstream of official and popular interest. 'The catalogue issued by the European or United States exporter of machinery is still the prime source of technical assistance"6 and the institutional arrangements for dispensing aid are generally such that there is an insurmountable bias in favour of large-scale projects on the level of the most modern technology.

If we could turn official and popular interest away from the grandiose projects and to the real needs of the poor, the battle could be won. A study of intermediate technologies as they exist today already would disclose that there is enough knowledge and experience to set everybody to work, and where there are gaps, new design studies could be made very quickly. Professor Gadgil, director of the Gokhale Institute of Politics and Economics at Poona, has outlined three possible approaches to the development of intermediate technology, as follows:

One approach may be to start with existing techniques in traditional industry and to utilise knowledge of advanced techniques to transform them suitably. Transformation implies retaining some elements in existing equipment, skills and procedures.... This process of improvement of traditional technology is extremely important, particularly for that part of the transition in which a holding operation for preventing added technological unemployment appears necessary... ,

Another approach would be to start from the end of the most advanced technology and to adapt and adjust so as to meet the requirements of the intermediate.... In some cases, the process would also involve adjustment to special local circumstances such as type of fuel or power available.

A third approach may be to conduct experimentation and research in a direct effort to establish intermediate technology. However, for this to be fruitfully undertaken it would be necessary to define, for the scientist and the technician, the limiting economic circumstances. These are chiefly the scale of operations aimed at and the relative costs of capital and labour and the scale of their inputs -- possible or desirable. Such direct effort at establishing intermediate technology would undoubtedly be conducted against the background of knowledge of advanced technology in the field. However, it could cover a much wider range of possibilities than the effort through the adjustment and adaptation approach.

Professor Gadgil goes on to plead that:

The main attention of the personnel on the applied side of National Laboratories, technical institutes and the large university departments must be concentrated on this work The advancement of advanced technology in every field is being adequately pursued in the developed countries; the special adaptations and adjustments required in India are not and are not likely to be given attention in any other country. They must, therefore, obtain the highest priority in our plans. Intermediate technology should become a national concern and not, as at present, a neglected field assigned to a small number of specialists, set apart.7

A similar plea might be made to supranational agencies which would be well-placed to collect, systematise, and develop the scattered knowledge and experience already existing in this vitally important field.

In summary we can conclude:

1. The 'dual economy' in the developing countries will remain for the foreseeable future. The modem sector will not be able to absorb the whole.

2. if the non-modern sector is not made the object of special development efforts, it will continue to disintegrate; this disintegration will continue to manifest itself in mass unemployment and mass migration into the metropolitan areas; and this will poison economic life in the modern sector as well.

3. The poor can be helped to help themselves, but only by making available to them a technology that recognises the economic boundaries and Limitations of poverty -- an inter- mediate technology.

4. Action programmes on a national and supranational basis are needed to develop intermediate technologies suitable for the promotion of full employment in developing countries.

1. "A Plan for Full Employment in the Developing Countries" by Gabriel Ardant, in International Labour Review, 1963

2. "Wages and Employment in the Labor-Surplus Economy" by L. G. Reynolds, in American Economic Review, 1965

3. Indutrialisation in Developing Countriess, edited by Ronald Robinson (Cambridge University Overseas Studies Committee, Cambridge, 1965)

4. Ibid.

5. Ibid., quoted from "Notes on Latin American Industrial Development" by Nufio F. de Figueiredo

6. Ibid.

7. "Technologies Appropriate for the Total Development Plan" by D. R. Gadgil, in Appropriate Technologies for Indian Industry (SIET Institute, Hyderabad, India, 1964)

Two Million Villages

First published in Britain and the World in the Seventies: A Collection of Fabian Essays, edited by George Cunningham, published by George Weidenfeld & Nicolson Ltd., London, 1970.

The results of the second development decade will be no better than those of the first unless there is a conscious and determined shift of emphasis from foods to people. Indeed, without such a shift the results of aid will become increasingly destructive.

If we talk of promoting development, what have we in mind -- goods or people? If it is people -- which particular people? Who are they? Where are they? Why do they need help? If they cannot get on without help, what, precisely, is the help they need? How do we communicate with them? Concern with people raises countless questions like these. Goods, on the other hand, do not raise so many questions. Particularly when econometricians and statisticians deal with them, goods even cease to be anything identifiable, and become GNP, imports, exports, savings, investment, infrastructure, or what not. Impressive models can be built out of these abstractions, and it is a rarity for them to leave any room for actual people. Of course, 'populations' may figure in them, but as nothing more than a mere quantity to be used as a divisor after the dividend, i.e. the quantity of available goods, has been determined. The model then shows that 'development' that is, the growth of the dividend, is held back and frustrated if the divisor grows as well.

It is much easier to deal with goods than with people -- if only because goods have no minds of their own and raise no problems of communication. When !he emphasis is on people, communications problems become paramount. Why are the helpers and who are those to be helped? The helpers, by and large, are rich, educated (in a somewhat specialised sense), and town-based. Those who most need help are poor, uneducated, and rurally based. This means that three tremendous gulfs separate the former from the latter: the gulf between rich and poor; the gulf between educated and uneducated; and the gulf between city-men and country-folk, which includes that between industry and agriculture. The first problem of development aid is bow to bridge these three gulfs. A great effort of imagination, study, and compassion is needed to do so. The methods of production, the patterns of consumption, the systems of ideas and of values that suit relatively affluent and educated city people are unlikely to suit poor, semi-illiterate peasants. Poor peasants cannot suddenly acquire the outlook and habits of sophisticated city people. If the people cannot adapt themselves to the methods, then the methods must be adapted to the people. This is the whole crux of the matter.

There are, moreover, many features of the rich man's economy which are so questionable in themselves and, in any case, so inappropriate for poor communities that successful adaptation of the people to these features would spell ruin. If the nature of change is such that nothing is left for the fathers to teach their sons, or for the sons to accept from their fathers, family life collapses. The life, work, and happiness of all societies depend on certain 'psychological structures' which are infinitely precious and highly vulnerable. Social cohesion, co-operation, mutual respect and above all self-respect, courage in the face of adversity, and the ability to bear hardship -- all this and much else disintegrates and disappears when these 'psychological structures' are gravely damaged. A man is destroyed by the inner conviction of uselessness. No amount of economic growth can compensate for such losses -- though this may be an idle reflection, since economic growth is normally inhibited by them.

None of these awesome problems figure noticeably in the cosy theories of most of our development economists. The failure of the first development decade is attributed simply to an insufficiency of aid appropriations or, worse still, to certain alleged defects inherent in the societies and populations of the developing countries. A study of the current literature could lead one to suppose that the decisive question was whether aid was dispensed multilaterally or bilaterally, or that an improvement in the terms of trade for primary commodities, a removal of trade barriers, guarantees for private investors, or the effective introduction of birth control, were the only things that really mattered.

Now, I am far from suggesting that any of these items are irrelevant, but they do not seem to go to the heart of the matter, and there is in any case precious little constructive action flowing from the innumerable discussions which concentrate on them. The heart of the matter, as I see it, is the stark fact that world poverty is primarily a problem of two million villages, and thus a problem of two thousand million villagers. The solution cannot be found in the cities of the Door countries. Unless life in the hinterland can be made tolerable, the problem of world poverty is in- soluble and will inevitably get worse.

All important insights are missed if we continue to think of development mainly in quantitative terms and in those vast abstractions -- like GNP, investment, savings, etc. -- which have their usefulness in the study of developed countries but have virtually no relevance to development problems as such. (Nor did they play the slightest part in the actual development of the rich countries!) Aid can be considered successful only if it helps to mobilise the labour-power of the masses in the receiving country and raises productivity without 'saving' labour. The common criterion of success, namely the growth of GNP, is utterly misleading and, in fact, must of necessity lead to phenomena which can only be de- scribed as neocolonialism.

I hesitate to use this term because it has a nasty sound and appears to imply a deliberate intention on the part of the aid- givers. Is there such an intention? On the whole, I think, there is not. But this makes the problem greater instead of smaller. Unintentional neo-colonialism is far more insidious and infinitely more difficult to combat than neo-colonialism intentionally pursued. It results from the mere drift of things, supported by the best intentions. Methods of production, standards of consumption, criteria of success or failure, systems of values. and behaviour patterns establish themselves in poor countries which, being (doubtfully) appropriate only to conditions of affluence already achieved, fix the poor countries ever more inescapably in a condition of utter dependence on the rich. The most obvious example and symptom is increasing indebtedness. This is widely recognised, and well- meaning people draw the simple conclusion that grants are better than loans, and cheap loans better than dear ones. True enough. But increasing indebtedness is not the most serious matter. After all, if a debtor cannot pay he ceases to pay -- a risk the creditor must always have had in mind.

Far more serious is the dependence created when a poor country fails for the production and consumption patterns of the rich. A textile mill I recently visited in Africa provides a telling example. The manager showed me with considerable pride that his factory was at the highest technological level to be found anywhere in the world Why was it so highly automated? 'Because.' he said, 'African labour, unused to industrial work, would make mistakes, whereas automated machinery does not make mistakes. The quality standards demanded today.' he explained, 'are such that my product must be perfect to be able to find a market.' He summed up his policy by saying: 'Surely, my task is to eliminate the human factor.' Nor is this all. Because of inappropriate quality standards, all his equipment had to be imported from the most advanced countries; the sophisticated equipment demanded that all higher management and maintenance personnel had to be imported. Even the raw materials had to be imported because the locally grown cotton was too short for top quality yarn and the postulated standards demanded the use of a high percentage of man-made fibres. This is not an untypical case. Anyone who has taken the trouble to look systematically at actual 'development' projects -- instead of merely studying development plans and econometric models -- knows of countless such cases: soap factories producing luxury soap by such sensitive processes that only highly refined materials can be used, which must be imported at high prices while the local raw materials are exported at low prices; food-processing plants; packing stations; motorisation, and so on -- all on the rich man's pattern. In many cases, local fruit goes to waste because the consumer allegedly demands quality standards which relate solely to eye-appeal and can be met only by fruit imported from Australia or California where the application of an immense science and a fantastic technology ensures that every apple is of the same size and without the slightest visible blemish. The examples could be multiplied without end. Poor countries slip -- and are pushed -- into the adaptation of production methods and consumption standards which destroy the possibilities of self-reliance and self-help. The results are unintentional neo-colonialism and hopelessness for the poor.

How, then, is it possible to help these two million villages? First, the quantitative aspect. If we take the total of western aid after eliminating certain items which have nothing to do with development, and divide it by the number of people living in the developing countries, we arrive at a per-head figure of rather less than Pounds 2 a year. Considered as an income supplement, this is, of course, negligible and derisory. Many people therefore plead that the rich countries ought to make a much bigger financial effort -- and it would be perverse to refuse to support this plea, But what is it that one could reasonably expect to achieve? A per-head figure of Pounds 3 a year, or Pounds 4 a year? As a subsidy, a sort of 'public assistance' payment, even Pounds 4 a year is hardly less derisory than the present figure.

To illustrate the problem further, we may consider the case of a small group of developing countries which receive supplementary income on a truly magnificent scale -- the oil producing countries of the Middle East, Libya, and Venezuela. Their tax and royalty income from the oil companies in 1968 reached Pounds 2,349 million, or roughly Pounds 50 per head of their populations. Is this input of funds producing healthy and stable societies, contented populations, the progressive elimination of rural poverty, a flourishing agriculture, and widespread industrialisation? In spite of some very limited successes, the answer is certainly no. Money alone does not do the trick. The quantitative aspect is quite secondary to the qualitative aspect. If the policy is wrong, money will not make it right; and if the policy is right, money may not, in fact, present an unduly difficult problem.

Let us turn then to the qualitative aspect. If we have learnt anything from the last ten or twenty years of development effort. it is that the problem presents an enormous intellectual challenge. The aid-givers -- rich, educated, town-based -- know how to do things in their own way: but do they know how to assist self-help among two million villages, 'among two thousand million villagers -- poor, uneducated, country-based? They know how to do a few big things in big towns; but do they know how to do thousands of small things in rural areas? They know how to do things with lots of capital: but do they know how to do them with lots of labour -- initially untrained labour at that?

On the whole, they do not know; but there are many experienced people who do know, each of them in their own limited field of experience. In other words, the necessary knowledge, by and large, exists; but it does not exist in an organised, readily accessible form. It is scattered, unsystematic, unorganised and no doubt also incomplete.

The best aid to give is intellectual aid, a gift of useful knowledge. A gift of knowledge is infinitely preferable to a gift of material things. There are many reasons for this. Nothing becomes truly 'one's own' except on the basis of some genuine effort or sacrifice. A gift of material goods can be appropriated by the recipient without effort or sacrifice; it therefore rarely becomes 'his own' and is all too frequently and easily treated as a mere windfall. A gift of intellectual goods, a gift of knowledge, is a very different matter. Without a genuine effort of appropriation on the part of the recipient there is no gift. To appropriate the gift and to make it one's own is the same thing, and 'neither moth nor rust doth corrupt'. The gift of material goods makes people dependent, but the gift of knowledge makes them free -provided it is the right kind of knowledge, of course. The gift of knowledge also has far more lasting effects and is far more closely relevant to the concept of 'development'. Give a man a fish, as the saying goes, and you are helping him a little bit for a very short while; teach him the art of fishing, and he can help himself all his life. On a higher level: supply him with fishing tackle; this will cost you a good deal of money, and the result remains doubtful; but even if fruitful, the man's continuing livelihood will still be dependent upon you for replacements. But teach him to make his own fishing tackle and you have helped him to become not only self-supporting, but also self-reliant and independent.

This, then, should become the ever-increasing preoccupation of aid programmes -- to make men self-reliant and independent by the generous supply of the appropriate intellectual gifts, gifts of relevant knowledge on the methods of self-help. This approach, incidentally, also has the advantage of being relatively cheap, that is to say, of making money go a very long way. For Pounds 100 you may be able to equip one man with certain means Of production; but for the same money you may well be able to teach a hundred men to equip themselves. Perhaps a little 'pump-priming' by way of material goods will in some cases be helpful to speed the process; but this would be purely incidental and secondary, and if the goods are rightly chosen. those who need them can probably pay

A fundamental reorientation of aid in the direction I advocate would require only a marginal reallocation of funds. If Britain is currently giving aid to the tune of about Pounds 250 million a year, the diversion of merely one per cent of this sum to the organisation and mobilisation of 'gifts of knowledge' would, I am certain, change all prospects and open a new and much more hopeful era in the history of 'development'. One per cent, after all, is about E2t million -- a sum of money which would go a very, very long way for this purpose if intelligently employed. And it might make the other ninety-nine per cent immensely more fruitful,

Once we see the task of aid as primarily one of supplying relevant knowledge, experience, know-how, etc. -- that is to say, intellectual rather than material goods -- it is clear that the present organisation of the overseas development effort is far from adequate. This is natural as long as the main task is seen as one of making funds available for a variety of needs and projects proposed by the recipient country, the availability of the knowledge factor being more or less taken for granted. What I am saying is simply that this availability cannot be taken for granted, that it is precisely this knowledge factor which is conspicuously lacking, that this is the gap, the 'missing link', in the whole enterprise. I am not saying that no knowledge is currently being supplied: this would be ridiculous. No, there is a plentiful flow of know-how, but it is based on the implicit assumption that what is good for the rich must obviously be good for the poor. As I have argued above, this assumption is wrong, or at least only very partially right and preponderantly wrong.

So we get back to our two million villages and have to see how we can make relevant knowledge available to them. To do so, we must first possess this knowledge ourselves. Before we can talk about giving aid, we must have something to give. We do not have thousands of poverty-stricken villages in our country; so what do we know about effective methods of self-help in such circumstances? The beginning of wisdom is the admission of one's own lack of knowledge. As long as we think we know, when in fact we do not, we shall continue to go to the poor and demonstrate to them all the marvellous things they could do if they were already rich. This has been the main failure of aid to date.

But we do know something about the organisation and systematisation of knowledge and experience: we do have facilities to do almost any job, provided only that we clearly understand what it is. If the job is, for instance, to assemble an effective guide to methods and materials for low-cost building in tropical countries, and, with the aid of such a guide. to train local builders in developing countries in the appropriate technologies and methodologies, there is no doubt we can do this, or -- to say the least -- that we can immediately take the steps which will enable us to do this in two or three years' time. Similarly, if we clearly understand that one of the basic needs in many developing countries is water, and that millions of villagers would benefit enormously from the availability of systematic knowledge on low-cost, self-help methods of water-storage, protection, transport, and so on -- if this is clearly understood and brought into focus, there is no doubt that we have the ability and resources to assemble, organise and communicate the required information,

As I have said already, poor people have relatively simple needs, and it is primarily with regard to their basic requirements and activities that they want assistance. If they were not capable of self-help and self-reliance, they would not survive today. But their own methods are all too frequently too primitive, too inefficient and ineffective; these methods require up-grading by the input of new knowledge, new to them, but not altogether new to every- body. It is quite wrong to assume that poor people are generally unwilling to change; but the proposed change must stand in some organic relationship to what they are doing already, and they are rightly suspicious of, and resistant to, radical changes proposed by town-based and office-bound innovators who approach them in the spirit of: 'You just get out of my way and I shall show you how useless you are and how splendidly the job can be done with a lot of foreign money and outlandish equipment.'

Because the needs of poor people are relatively simple, the range of studies to be undertaken is fairly limited. It is a perfectly manageable task to tackle systematically. but it requires a different organisational set-up from what we have at present (a set-up primarily geared to the disbursement of funds). At present, the development effort is mainly carried on by government officials, both in the donor and in the recipient country; in other words, by administrators. They are not. by training and experience, either entrepreneurs or innovators, nor do they possess specific technical knowledge of productive processes, commercial requirements, or communication problems. Assuredly, they have an essential role to play, and one could not -- and would not -- attempt to proceed without them. But they can do nothing by themselves alone. They must be closely associated with other social groups, with people in industry and commerce, who are trained in the 'discipline of viability' -- if they cannot pay their wages on Friday$ they are out! -- and with professional people, academics, research workers, journalists, educators, and so on, who have time, facilities, ability, and inclination to think, write, and communicate. Development work is far too difficult to be done successfully by any one of these three groups working in isolation. Both in the donor countries and in the recipient countries it is necessary to achieve what I call the A-B-C combination, where A stands for administrators; B stands for businessmen; and C stands for communicators -that is intellectual workers, professionals of various descriptions. It is only when the A-B-C combination is effectively achieved that a real impact on the appallingly difficult problems of development can be made.

In the rich countries, there are thousands of able people in all these walks of life who would like to be involved and make a contribution to the fight against world poverty, a contribution that goes beyond forking out a bit of money; but there are not many outlets for them. And in the poor countries, the educated people, a highly privileged minority, all too often follow the fashions set by the rich societies -- another aspect of unintentional neocolonialism -- and attend to any problem except those directly concerned with the poverty of their fellow-countrymen. They need to be given strong guidance and inspiration to deal with the urgent problems of their own societies.

The mobilisation of relevant knowledge to help the poor to help themselves, through the mobilisation of the willing helpers who exist everywhere, both here and overseas, and the tying together of these helpers in 'A-B-C-Groups', is a task that requires some money, but not very much. As I said, a mere one per cent of the British aid programme would be enough -- more than enough -- to give such an approach all the financial strength it could possibly require for quite a long time to come. There is therefore no question of turning the aid programmes upside down or inside out. It is the thinking that has to be changed and also the method of operating. It is not enough merely to have a new policy: new methods of organisation are required, because the policy is in the implementation

To implement the approach here advocated, action groups need to be formed not only in the donor countries but also, and this is most important, in the developing countries themselves. These action groups, on the A-B-C pattern. should ideally be outside the government machine, in other words they should be non- government voluntary agencies. They may well be set up by voluntary agencies already engaged in development work.

There are many such agencies, both religious and secular, with large numbers of workers at the 'grass roots level', and they have not been slow in recognising that 'intermediate technology' is precisely what they have been trying to practise in numerous in- stances, but that they are lacking any organised technical backing to this end. Conferences have been held in many countries to discuss their common problems, and it has become ever more apparent that even the most self-sacrificing efforts of the voluntary workers cannot bear proper fruit unless there is a systematic organisation of knowledge and an equally systematic organisation of communications -- in other words, unless there is something that might be called an 'intellectual infrastructure'. Attempts are being made to create such an infrastructure, and they should receive the fullest support from governments and from the voluntary fund-raising organisations. At least four main functions have to be fulfilled:

The function of communications -- to enable each field worker or group of field workers to know what other work is going on in the geographical or 'functional' territory in which they are engaged, so as to facilitate the direct exchange of information.

The function of information brokerage -- to assemble on a systematic basis and to disseminate relevant information on appropriate technologies for developing countries, particularly on low-cost methods relating to building, water and power, crop- storage and processing, small-scale manufacturing, health ser- vices, transportation and so forth. Here the essence of the matter is not to hold all the information in one centre but to hold 'information on information' or 'know-how on know- how'.

The function of 'feed-back', that is to sag', the transmission of technical problems from the field workers in developing countries to those places in the advanced countries where suitable facilities for their solution exist.

The function of creating and co-ordinating 'sub-structures'. that is to say, action groups and verification centres in the developing countries themselves.

These are matters which can be fully clarified only by trial and error. In all this one does not have to begin from scratch -- a great deal exists already, but it now wants to be pulled together and systematically developed. The future success of development aid will depend on the organisation and communication of the right kind of knowledge -- a task that is manageable, definite, and wholly within the available resources.

Why is it so difficult for the rich to help the poor? The all- pervading disease of the modern world is the total imbalance between city and countryside, an imbalance in terms of wealth. power, culture, attraction, and hope. The former has become over-extended and the latter has atrophied. The city has become the universal magnet, while rural life has lost its savour. Yet it remains an unalterable truth that, just as a sound mind depends on a sound body, so the health of the cities depends on the health of the rural areas. The cities, with all their wealth, are merely secondary producers, while primary production, the precondition of all economic life, takes place in the countryside. The prevailing lack of balance, based on the age-old exploitation of countryman and raw material producer, today threatens all countries through- out the world, the rich even more than the poor. To restore a proper balance between city and rural life is perhaps the greatest task in front of modern man. It is not simply-a matter of raising agricultural yields so as to avoid world hunger. There is no answer to the evils of mass unemployment and mass migration into cities, unless the whole level of rural life can be raised, and this requires the development of an agro-industrial culture, so that each district. each community, can offer a colourful variety of occupations to its members.

The crucial task of this decade, therefore, is to make the development effort appropriate and thereby more effective, so that it will reach down to the heartland of world poverty, to two million villages. If the disintegration of rural life continues, there is no way out -- no matter how much money is being spent. But if the rural people of the developing countries are helped to help them- selves, I have no doubt that a genuine development will ensue, without vast shanty towns and misery belts around every big city and without the cruel frustrations of bloody revolution. The task is formidable indeed, but the resources that are waiting to be mobilised are also formidable.

Economic development is something much wider and deeper than economics, let alone econometrics. Its roots lie outside the economic sphere, in education, organisation, discipline and, beyond that, in political independence and a national consciousness of self-reliance. It cannot be 'produced' by skilful grafting operations carried out by foreign technicians or an indigenous elite that has lost contact with the ordinary people. It can succeed only if it is carried forward as a broad, popular 'movement of reconstruction' with primary emphasis on the full utilisation of the drive, enthusiasm, intelligence, and labour power of everyone. Success cannot be obtained by some form of magic produced by scientists, technicians, or economic planners. It can come only through a process of growth involving the education, organisation, and discipline of the whole population. Anything less than this must end in failure.

The Problem of Unemployment in India

A talk to the India Development Group in London

A talk given to the India Development Group, London, 1971.

When speaking of unemployment I mean the non-utilisation or gross under-utilisation of available labour. We may think of a productivity scale that extends from zero, i.e. the productivity of a totally unemployed person, to 100 per cent, i.e. the productivity of a fully and most effectively occupied person. The crucial question for any poor society is how to move up on this scale. When considering productivity in any society it is not sufficient to take account only of those who are employed or self-employed and to leave out of the reckoning all those who are unemployed and whose productivity therefore is zero.

Economic development is primarily a question of getting more work done. For this, there are four essential conditions. First, there must be motivation; second, there must be some know-how; third, there must be some capital; and fourth, there must be an outlet: additional output requires additional markets.

As far as the motivation is concerned, there is little to be said from the outside. If people do not want to better themselves, they are best left alone -this should be the first principle of aid. Insiders may take a different view, and they also carry different responsibilities. For the aid-giver, there are always enough people who do wish to better themselves, but they do not know how to do it. So we come to the question of know-how. If there are millions of people who want to better themselves but do not know how to do it, who is going to show them? Consider the size of the problem in India. We are not talking about a few thousands or a few millions, but rather about a few hundred millions of people. The size of the problem puts it beyond any kind of little amelioration, any little reform, improvement, or inducement, and makes it a matter of basic political philosophy. The whole matter can be summed up in the question: what is education for? I think it was the Chinese. before World War II, who calculated that it took the work of thirty peasants to keep one man or woman at a university. If that person at the university took a five-year course, by the time he had finished he would have consumed 150 peasant-work-years. How can this be justified? Who has the right to appropriate 150 years of peasant work to keep one person at university for five years, and what do the peasants get back for it? These questions lead us to the parting of the ways: is education to be a 'passport to privilege' or is it something which people take upon themselves almost like a monastic vow, a sacred obligation to serve the people? The first road takes the educated young person into a fashionable district of Bombay, where a lot of other highly educated people have already gone and where he can join a mutual admiration society, a 'trade union of the privileged', to see to it that his privileges are not eroded by the great masses of his contemporaries who have not been educated. This is one way. The other way would be embarked upon in a different spirit and would lead to a different destination. It would take him back to the people who, after all, directly or indirectly, had paid for his education by 150 peasant-work-years: having consumed the fruits of their work, he would feel in honour bound to return something to them.

The problem is not new. Leo Tolstoy referred to it when he wrote: 'I sit on a man's back, choking him, and making him carry me, and yet assure myself and others that I am very sorry for him and wish to ease his lot by any means possible, except getting off his back.' So this is the first question I suggest we have to face. Can we establish an ideology, or whatever you like to call it, which insists that the educated have taken upon themselves an obligation and have not simply acquired a 'passport to privilege'? This ideology is of course well supported by all the higher teachings of mankind. As a Christian, I may be permitted to quote from St Luke: 'Much will be expected of the man to whom much has been given. More will be asked of him because he was entrusted with more.' It is you might well say, an elementary matter of justice.

If this ideology does not prevail, if it is taken for granted that education is a passport to privilege then the content of education will not primarily be something to serve the people, but something to serve ourselves, the educated. The privileged minority will wish to be educated in a manner that sets them apart and will inevitably learn and teach the wrong things, that is to say, things that do set them apart, with a contempt for manual labour, a contempt for primary production, a contempt for rural life, etc., etc. Unless virtually all educated people see themselves as servants of their country -- and that means after all as servants of the common people -there cannot possibly be enough leadership and enough communication of know-how to solve this problem of unemployment or unproductive employment in the half million villages of India. It is a matter of 500 million people. For helping people to help themselves you need at ]east two persons to look after 100 and that means an obligation to raise ten million helpers, that is, the whole educated population of India. Now you may say this is impossible, but if it is, it is not so because of any laws of the universe, but because of a certain inbred, ingrained selfishness on the part of the people who are quite prepared to receive and not prepared to give. As a matter of fact, there is evidence that this problem is not insoluble; but it can be solved only at the political level.

Now let me turn to the third factor, after motivation and after, know-how, the factor I have called capital, which is of course closely related to the matter of know-how. According to my estimates there is in India an immediate need for something like fifty million new jobs. If we agree that people cannot do productive work unless they have some capital -- in the form of equipment and also of working capital -- the question arises: how much capital can you afford to establish one new job? If it costs Pounds 10 to establish a job you need Pounds 500 million for fifty million jobs. If it costs Pounds 100 to establish a job you need Pounds 5,000 million, and if it cost Pounds 5,000 per job, which is what it might cost in Britain and the USA, to set up fifty million jobs you require Pounds 250,000 million.

The national income of the country we are talking about, of India, is about f15.000 million a year, So the first question is how much can we offer for each job, and the second question, how much time have we to do it in. Let us say we want fifty million jobs in ten years. What proportion of national income (which I identify as about Pounds 15,000 million) can one reasonably expect to be available for the establishment of this capital fund for job creation? I would say, without going into any details, you are lucky if you can make it five per cent. Therefore, if you have five per cent of Pounds 15,000 million for ten years you have a total of Pounds 7,5000 million for the establishment of jobs. If you want fifty million jobs in those ten years, you can afford to spend an average of Pounds 150 per workplace. At that level of capital investment per workplace, in other words, you could afford to set up five million workplaces a year. Let us assume, however, that you say: 'No. Pounds 150 is too mean; it will not buy more than a set of tools; we want Pounds 1,500 per workplace', then you cannot have five million new jobs a year but only half a million. And if you say: 'Only the best is good enough; we want all to be little Americans right away, and that means Pounds 5,000 per workplace', then you cannot have half a million new jobs a year, let alone five million, but only about 170,000. Now, you have no doubt noticed already that I have simplified this matter very much because, in the ten years with investment in jobs, you would have an increase in the national income; but I have also left out the increase in the population, and I would suggest that these two factors cancel one another in their effect on my calculation.

It follows, I suggest, that the biggest single collective decision that any country in the position of India has to take is the choice of technology. I am not laying down the law of what ought to be. I am simply saying that these are the hard facts of life. A lot of things you can argue against, but you cannot argue against arithmetic. So you can have a few jobs at a high level of capitalisation or you can have many jobs at a relatively low level of capitalisation.

Now, all this of course links up with the other factors I have mentioned, with education, motivation, and know-how. In India there are about fifty million pupils in primary schools; almost fifteen million in secondary schools: and roughly one and a half million in institutions of higher learning. To maintain an educational machine on this kind of scale would of course be pointless unless at the end of the pipeline there was something for them to do. with a chance to apply their knowledge. If there is not, the whole thing is nothing but a ghastly burden. This rough picture of the educational effort suffices to show that one really does have to think in terms of five million new jobs a year and not in terms of a few hundred thousand jobs.

Now, until quite recently, that is to say, some fifty to seventy years ago, the way we did things was, by present standards, quite primitive. In this connection, I should like to refer to Chapter II of John Kenneth Galbraith's The New Industrial Estate.' It contains a fascinating report on the Ford Motor Company. The Ford Motor Company was set up on 16 June 1903, with an authorised capital of $150,000 of which $100,000 were issued but only $28,500 were paid for in cash, So the total cash which went into this enterprise was of the order of $30,000. They set up in June 1903 and the first car to reach the market appeared in October 1903, that is to say, after four months. The employment in 1903, of course, was small -- 125 people, and the capital investment per workplace was somewhat below $100. That was in 1903. If we now move sixty years forward, to 1963, we find that the Ford Motor Company decided to produce a new model, the Mustang. The preparation required three and a half years. Engineering and styling costs were $9 million: the costs of tooling up for this new model were $50 million. Meanwhile the assets employed by the Company were $6.000 million which works out at almost Pounds l0,000 per person employed, about a hundred times as much as sixty years earlier.

Galbraith draws certain conclusions from all this which are worth studying. They describe what happened over these sixty years. The first is that a vastly increased span of time now separates the beginning of an enterprise from the completion of the job. The first Ford car, from the beginning of the work to its appearance on the market, took four months, while a mere change of model now takes four years. Second, a vast increase in capital committed to production. investment per unit of output in the original Ford factory was infinitesimal; material and parts were there only brie8y; no expensive specialists gave them attention; only elementary machines were used to assemble them into a car; it helped that the frame of the car could be lifted by only two men. Third, in those sixty years, a vast increase of inflexibility. Galbraith comments: 'Had Ford and his associates (in 1903) decided at any point to shift from gasoline to steam power, the machine shop could have accommodated itself to the change in a few hours.' If they now try to change even one screw, it takes that many months. Fourth, increasingly specialised manpower, not only on the machinery, but also on the planning, the foreseeing of the future in the uttermost detail. Fifth, a vastly different type of organisation to integrate all these numerous specialists, none of whom can do anything more than just one small task inside the complicated whole. 'So complex, indeed. will be the job for organising specialists that there will be specialists of organisation. More even than machinery, massive and complex business organisations are being tangible manifestations of advanced technology.' Finally, the necessity for long-range planning, which. I can assure you, is a highly sophisticated job, and also highly frustrating. Galbraith comments: 'In the early days of Ford, the future was very near at hand. Only days elapsed between the commitment of machinery and materials to production and their appearance as a car. If the future is near at hand, it can be assumed to be very much like the present', and the planning and forecasting is not very difficult;

Now what is the upshot of all this? The upshot is that the more sophisticated the technology, the greater in general will be the foregoing requirements. When the simple things of life, which is all I am concerned with, are produced by ever more sophisticated processes, then the need to meet these six requirements moves ever more beyond the capacity of any poor society. As far as simple products are concerned -- food, clothing, shelter and culture -- the greatest danger is that people should automatically assume that only the 1963 model is relevant and not the 1903 model; because the 1963 way of doing things is inaccessible to the poor, as it presupposes great wealth. Now, without wishing to be rude to my academic friends, I should say that this point is almost universally overlooked by them. The question of how much you can afford for each workplace when you need millions of them is hardly ever raised. To fulfil the requirements that have arisen over the last fifty or sixty years in fact involves a quantum jump, Everything was quite continuous in human history till about the beginning of this century; but in the last half-century there has been a quantum jump, the sort of jump as with the capitalisation of Ford, from $30,000 to $6,000 million,

In a developing country it is difficult enough to get Henry Fords, at the 1903 level. To get Henry super-Fords, to move from practically nowhere on to the 1963 level, is virtually impossible. No-one can start at this level. This means that no-one can do anything at this level unless he is already established, is already operating at that level. This is absolutely crucial for our understanding of the modem world. At this level no creations are possible, only extensions, and this means that the poor are more dependent on the rich than ever before in human history, if they are wedded to that level. They can only be gap-fillers for the rich, for instance, where low wages enable them to produce cheaply this and that trifle. People ferret around and say: 'Here, in this or that poor country, wages are so low that we can get some part of a watch. or of a carburettor, produced more cheaply than in Britain. So let it be produced in Hong Kong or in Taiwan or wherever it might be.' The role of the poor is to be gap-fillers in the requirements of the rich. It follows that at this level of technology it is impossible to attain either full employment or independence. The choice of technology is the most important of all choices.

It is a strange fact that some people say that there are no technological choices. I read an article by a well-known economist from the USA who asserts that there is only one way of producing any particular commodity: the way of 1971. Had these commodities never been produced before? The basic things of life have been needed and produced since Adam left Paradise. He says that the only machinery that can be procured is the very latest. Now that is a different point and it may well be that the only machinery that can be procured easily is the latest. It is true that at any one time there is only one kind of machinery that tends to dominate the market and this creates the impression as if we had no choice and as if the amount of capital in a society determined the amount of employment it could have. Of course this is absurd. The author whom I am quoting also knows that it is absurd, and he then corrects himself and points to examples of Japan, Korea, Taiwan, etc., where people achieve a high level of employment and production with very modest capital equipment.

The importance of technological choice is gradually entering the consciousness of economists and development planners. There are four stages. The first stage has been laughter and scornful rejection of anyone who talked about this. The second stage has now been reached and people give lip service to it, but no action follows and the drift continues. The third stage would be active work in the mobilisation of the knowledge of this technological choice; and the fourth stage will then be the practical application. It is a long road but I do not wish to hide the fact that there are political possibilities of going straight to the fourth stage. If there is a political ideology that sees development as being about people, then one can immediately employ the ingenuity of hundreds of millions of people and go straight to the fourth stage. There are indeed some countries which are going straight to the fourth stage.

However, it is not for me to talk politics. If it is now being increasingly understood that this technological choice is of absolutely pivotal importance, how can we get from stage two to stage three, namely from just giving lip service to actually doing work? To my knowledge this work is being done systematically only by one organisation, the Intermediate Technology Development Group (ITDG). I do not deny that some work is also being done on a commercial basis, but not systematically. ITDG set itself the task to find out what are the technological choices. I will only give one example out of the many activities of this purely private group. Take foundry work and woodworking, metal and wood being the two basic raw materials of industry. Now, what are the alternative technologies that can be employed, arranged in the order of capital intensity from the most primitive, when people work with the simplest tools, to the most complicated? This is shown in what we call an industrial profile, and these industrial profiles are supported by instruction manuals at each level of technology and by a directory of equipment with addresses where it can be obtained,

The only criticism that can be levelled against this activity is that it is too little and too late. It is not good enough that in this crucial matter one should be satisfied with one little group of private enthusiasts doing this work. There ought to be dozens of solid, well-endowed organisations in the world doing it. The task is so great that even some overlapping would not matter. In any case, I should hope that this work will be taken up on a really substantial scale in India, and I am delighted to see that already some beginnings have been made.

I shall now turn to the fourth factor, namely markets. There is, of course, a very real problem here, because poverty means that markets are small and there is very little free purchasing power. All the purchasing power that exists already, is, as it were, be- spoken, and if I start a new production of, say, sandals or shoes in a poor area, my fellow-sufferers in the area will not have any money to buy the shoes when I have made them. Production is sometimes easier to start than it is to find markets, and then, of course, we get very quickly the advice to produce for export, because exports are mainly for the rich countries and their purchasing power is plentiful But if I start from nothing in a rural area, how could I hope to be competitive in the world market?

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.

1. The New Industrial State by John Kenneth Gal-braith (Penguin Books Ltd., in association with Hamish Hamilton, Ltd., London, 1967)