The communist leader of the Indian state of West Bengal, Buddhadev Bhattacharjee, is quoted by the New York Times as declaring that “Globalization is a must.” More meaningfully, he succeeds in implementing some policies that encourage firms such as Mitsubishi and I.B.M. to invest in West Bengal.
The Communist Party of India will play a leading roll in the coalition being formed by Sonia Gandhi. And while pragmatic communists are better than dogmatic communists, the understanding of economics that even pragmatic communists (such as Mr. Bhattacharjee) express is scant. One troubling notion is the idea that India can develop an even-more-thriving modern commercial and industrial economy and immunize its rural economy from market pressures that attract resources from fields and flocks into factories and commercial enterprises.
According to the Times, “Seventy percent of India’s one billion people still live in the countryside and rely on agriculture for their livelihood.” This fact means that the division of labor in India remains only vestigial. It is sad.
One vital key to economic growth is the expansion and deepening of the division of labor, which results in an ever-shrinking portion of the population working to supply basic needs such as food. The growth of new industries and opportunities requires that resources – especially the ultimate resource, human creativity – be released from agriculture and made available for new industries and commercial enterprises.
It is a fantasy that India (or any less-developed country) can progress economically in the teeth of policies aimed at keeping its agricultural sector from shrinking significantly.
Mr. Bhattacharjee insists that “Poverty is not our goal.” I believe him. But if Indians are to enjoy more economic prosperity, most of the resources now consumed in agriculture must be released for industry and commerce.