by Prabhat Patnaik
CAPITALISM’S discourse on “development” which has become quite influential all over the third world in the neo-liberal period proceeds as follows: (i) “development” must consist in shifting the work-force from the traditional (petty production) sector which is overcrowded with low labour productivity, and hence constitutes a repository of poverty, to the modern (capitalist) sector which has much higher labour productivity. (ii) For this shift to occur, the modern (capitalist sector) must be allowed to grow as rapidly as possible, for which all impediments to capital accumulation must be removed. (iii) Even if, in the process of the modern (capitalist) sector’s growth, some petty producers are displaced, such as for instance owing to the acquisition of land from peasant agriculture for building factories, then that can only be a transitional problem and should not be a matter of much concern, since the entire work-force from the petty production sector will eventually get absorbed into the capitalist sector anyway. Hence preventing the growth of the capitalist sector in the name of protecting the petty production sector constitutes a retrograde step; it may be necessitated for “political” or “populist” considerations but it lacks any economic rationale.Read More »