Today a friend sent me this: http://www.tinytechindia.com/engineer.htm. Have a read. In brief it says:
"Present industrial progress is associated with exploitation, disparity, unemployment, poverty, centralization, urbanization, pollution, displacement of innocent poor people and wars. ..
"Every type of greed has no end. .. not only small is beautiful and small is possible, but also small is inevitable in every industrial field… Various giant evils seen in the present society are associated with giant industries. IF INDUSTRIES ARE DECENTRALIZED TO TINY SCALE, MAGNITUDE OF THE EVILS ALSO WILL BE REDUCED TO TINY SCALE. … tiny cottage industries are naturally the most viable units and they can successfully compete giant industries."
These arguments are based on Schumacher's Small is Beautiful. Now, before I go further let me digress a bit and admit that in Phase 2 of the two year training at the Academy (LBSNAA - its website seems to be down so I've referred its Fecebook page) in 1984, my initial philosophical views, strongly influenced by liberals like Ayn Rand and Voltaire, were considerably weakened by the environment I found there. As a result, in an extensive research essay penned for the LBSNAA and submitted to the outstanding bureaucrat Gokul Patnaik, I compared Schumacher with Ayn Rand's Capitalism: the Unknown Ideal – and concluded that Small is Beautiful provides a better solution to the world's problems than Ayn Rand does!
Such was the atmosphere at the Academy that if you were an economics illiterate and a science specialist (as I was), then the tenor of conversations at the Academy, including a heavy dose of Bunker and Aruna Roy soon made you a semi-socialist! This tenor, of soft socialism and utter mental confusion, pervades the civil services in India even today, despite most senior officers having been sent for advanced education to the world's top universities, and many of them having studied economics as part of this education (Of course, merely studying economics doesn't clarify the fundamentals of freedom, either! At least half the economists of the world are totally confused about fundamentals).
Thus, each time I have proposed reforms to a few senior bureaucrats over the past 11 years, I sense how their socialist (or rather, confused) frameworks prevent them from taking these ideas further.
In the meanwhile Gokul Patnaik (who didn't quite support this socialist mindset) left the IAS and made an excellent career for himself in the private sector. I believe he is a person of calibre enough to be India's Prime Minister and should urgently consider joining the Freedom Team! Others who had become clearer in their minds about India's problems, like Atindra Sen, left the civil services as well (he now works as Director General at Bombay Chamber of Comerce), thus increasing the average density of socialists in the civil services of India!
While a lot of good friends from the civil services have by now shifted their mindset quite a bit, they still remain deeply confused. They will need to INTERNALISE the concept of freedom in order to "de-confuse" themselves! But that, somehow, may be too late for some of them. I even doubt whether Hayek is available at LBSNAA, or my own book, BFN, for that matter. Till today, the civil services remains sheltered from good sense.
This was not so at one time. Malthus (yes, the famous Malthus) was one of the first economics professors of the Academy. He joined when it moved from Fort William College in Madras (started in 1800) to Haileybury College in England in 1805 and worked for 29 years till his death. Adam Smith's work was one of the foremost economics texts taught to India's civil servants at that time. But by 1982-84 when I learnt there, Adam Smith was no longer popular.
By 1994 – when I taught at the Academy for a few months – some of these old ideas were returning, but I had not really specialised in economics and needed to learn a lot more so I went off for a PhD and never returned. I do hope that my work will be used to teach the young civil servants. That would be really nice: to teach once again, while sitting here in Melbourne.
Anyway, back to the main topic. Many years ago I wrote the foundational piece that forms the basis for the appendix on appropriate technology in BFN. This material was first published in The Boss in Nepal many years ago, but now sits in isolation in the Online Notes. It shows why the arguments of Small is Beautiful are deeply flawed.
Technology is, by definition, labour-saving. By enabling us to do many more things in the time available to us, technology—embodied in the latest discoveries and inventions, in the latest machines and software, and in the latest management tools—multiplies our labour, improves the quality of our life, and increases our life span by helping us to fight disease and ill-health. Its direct economic effect is usually seen through lower costs and a greater opportunity set for all of us. For instance, in the USA it costs twenty times less in real terms to produce a bushel of wheat today than its cost 150 years ago. According to Ayn Rand, machines are the frozen form of human intelligence.
“The machine, the frozen form of a living intelligence, is the power that expands the potential of your life by raising the productivity of your time.” “When you work in a modern factory, you are paid, not only for your labour, but for all the productive genius which has made that factory possible”
This does not necessarily imply that the use of the latest technology is ‘optimal’ for each situation. Factors such as costs, and convenience (or benefits), will always come into play. As discussed in chapter 6, appropriate technology is usually one of the following two things:
a) technology that upgrades tools used by farmers or manual workers; or
b) technology that is deliberately dumbed down to make it labour-intensive.
1. Technology that upgrades tools used by farmers or manual workers
This can be thought of a form of innovation. In the case of private citizen efforts in this direction, namely, to upgrade an existing technology by a notch, we can say that the most labour-saving technology chosen by self-interested individuals facing a limited budget is optimal, and hence appropriate. If technology of all vintages is freely available in the marketplace, then all individual decisions made in the marketplace of technology are optimal and thus appropriate, making the term appropriate technology tautological, trivially representing free choice. The key is that so long as a government does not spend our money in its invention or promotion, we have nothing to fear. Unfortunately, this is not the case in India where significant tax payer funds have been spent in the fruitless search for such innovation. I will talk of my experiences with the modified handloom some other day, about how this utterly useless invention destroyed significant public money under my charge as Project Director of the District Rural Development Agency in Dhubri.
2. Technology that is deliberately dumbed down to make it labour-intensive
We should be deeply concerned about this version of appropriate technology. In particular, deliberate effort to not use good technology is a sure way to destroy the country’s wealth. It could be argued that for subsidy-based poverty alleviation programmes, or for public goods such as roads, the choice of appropriate technology may not be self-evident. If an Indian bureaucrat has to choose between hand-made road (labour-intensive) and machine-made road, which one should he choose? And in what sense is a bureaucrat ‘free to choose’? Some observations, first.
• First, as in the case of private goods, factors such as costs and benefits will enter the picture. In this instance, a simple cost-benefit analysis would show that a road built with high-quality machines is built quicker, as well as being more durable, thus needing fewer repairs. A higher quality of road can also permits larger trucks to ply and enable traffic to move faster and safely, thus providing significant gains to the society. The higher level of initial investment will be recovered by the tax payer quickly through the sum of these direct and indirect benefits.
• Over and above the obvious calculus of costs, important factors such as human dignity and worker safety must be taken into account. Using manual labour for tasks such as collection of garbage in cities without proper equipment, cleaning public drains, breaking large stones into gravel, and carrying bricks up bamboo scaffolds is inherently unsafe. Considerations of safety would also favour the machine-made road. Since socialist over-population has made unskilled labour cheap in India, we don’t treat such labourers as citizens deserving due regard. Casual workers hired afresh each day by government contractors are treated little better than slaves. Little heed is paid to their safety and little is heard of the injuries, disease, and subsequent lay-offs due to the negligence of government contractors, Only when tens of them are crushed to death to we open our eyes, but then quickly move on. We must also put an end to our rituals which sacrifice the lives of thousands of poor citizens at the altar of our Temples of Low Standards.
• Machines demand—indeed, compel—the development of skills both to handle the machines and to build cheaper and better local versions in India. Vocational education can only make sense if the government—the major supplier of infrastructure—insists that its contractors should always employ trained technicians fully empowered with the best tools in the world. If all we want is socialist, hand-made, roads, why do we operate vocational training institutions in the first place?
Societies that set incentives for the early adoption of the best technology—even if it may appear to be more expensive initially—enjoy the greatest innovation and hence the fastest growth in wealth, since technology forces the entire society to become intellectually shaper and competitive. Unskilled people are motivated to upgrade their skills and knowledge quickly. Competitive societies overtake, even overwhelm, others in the export markets since they have learnt to create lower costs and better product quality.
These observations tell us that governments must use the best possible technology in its projects. Japan did not become a great competitor to the West on the foundation of khadi and pot-holed roads. This would be, in the end, a cultural shift for India—a signal that quality is valued in society more than quantity.
Under the reformed model suggested in this book, when any bureaucrat faces local political pressures to provide jobs through hand-made roads, the bureaucrat would be able to split the problem into two: (a) the problem of transportation and (b) the problem of poverty. For the first of these, factors such as cost-benefit, human dignity, safety and standardisation of quality should be considered. For the second, the solutions must necessarily be redistributive—in particular, the negative income tax. Combining these two objectives into a muddle-headed policy will lead neither to wealth generation nor the elimination of poverty. A society must produce the most it can, through the application of the best, or optimal, technology, and then redistribute whatever it wishes to, using a one-off consideration of poverty.
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