Financial Daily from THE HINDU group of publications
Friday, Mar 05, 2004
Dilemma of technology versus jobs
However, in the 1990s, the President says, war has become economic. Rich nations are controlling the world market through their control of advanced technologies. Thus, he says, India will have to give special attention to technological development.
Dr Kalam believes that the living standards of the common man will improve from such technological developments: "It is the technological strength of the nation, which is the key to reach this developed status... Technological strengths are the key to creating more productive employment in an increasingly competitive market... "
The President is right in saying that we will have to acquire advanced technologies to become prosperous. But it is possible for advanced technologies and poverty to walk together. The prosperity of England in the eighteenth century was based on the advanced technology of the steam engine. Manchester and Lancashire were making machinery in a big way. England was known as the "workshop of the world".
But the conditions of the workers in England were pitiable at that time. Children of 10 were made to work 14-16 hours a day.
They were often whipped to maintain the speed of production; at many a factory they ate lunch with one hand while continuing to work the machines with the other.
Studies by veteran Gandhian, Dharampal, show that the condition of the Indian peasant was much better before the coming of advanced technologies such as canon, railways and electricity in the British period.
Indian farmers now have access to many advanced technologies such as Bt cotton seeds, harvesters, tractors and sprinklers. But the prices of agricultural produce have been declining and the conditions of farmers deteriorating. Small farmers are making ends meet by working in stone quarries or brick kilns. Advanced technologies are certainly the bedrock on which a prosperous nation is built, but not necessarily does the common man benefit from them.
In fact, they seem inversely proportionate. Advanced technologies, such as the harvester, mean that work done earlier by 200 farmers is now done by a handful of men. This leads to lower demand of labour and correspondingly low wages. Data from the Planning Commission show that the rate of employment growth has declined in the last few years.
Advanced technologies also lead to high levels of production and profits. The availability of capital in the economy rises which leads to lower interest rates. Countries like Japan have been having near-zero interest rates for the past decade or so. It, therefore, becomes profitable for businessman to use more capital and less labour in the choice of technologies.
This tendency of advanced technologies is anti-labour. Then how does one explain the high wages in the industrial countries? This has to be understood in terms of the opposite short- and long-term effects of new technologies. Advanced technologies lead to greater demand for specific types of skilled labour in the short run. The industrial countries have been able to generate a stream of new technologies in the last 300 years. They have been able to generate a new technology before the high wages due to the earlier advanced technology decline.
This stream of short-run movements toward high wages has overshadowed the long-term tendency toward low wages. Patent laws have strengthened these high wages of the industrial countries.
What will happen if the street-corner Maruti mechanic was prevented from plying his trade? The wages of the mechanics working in the repair shops of authorised dealers would rise. But that would also be a reflection of the low wages of the street-corner mechanic. Similarly, the high wages of the industrial countries are, to a large extent, but a reflection of the low wages of the workers in the developing countries.
The primary impact of advanced technologies on labour is negative. But this primary tendency has been suppressed in the industrial countries due to continuous innovation of new technologies and the technology rents extracted from patent laws. These have enabled them to maintain high wages in their countries.
But this is simultaneously a reflection of the low wages in the developing countries. The high wages of the industrial countries, therefore, cannot be replicated in the developing countries.The harvesters have scarcely benefited the poor farmers. India does need advanced technologies. They are essential for its prosperity.
But the sharing of the fruits of high technologies will not come spontaneously. Specific pro-poor restrictions will have to be put into place.
For example, the adoption of advanced technology tubewells may lead to higher demand for labour due to an increase in the area under cultivation.
If, simultaneously, the harvester is prohibited then those jobs will not be eaten away and the common man will be benefited.
A pro-common man technology policy is required along with the adoption and indigenous development of advanced technologies.
(The author is a New Delhi-based freelance writer. He can be contacted at firstname.lastname@example.org)
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