Small Is Beautiful: A Study of Economics as if People Mattered (22 page)

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.'

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" 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"

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.

Thirteen

Two Million Villages

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.