Cheap labour everywhere is fantastic… as long as you’re the employer and not the employee. Basically, what you’re describing is Europe in the 19th century. The question is : how long could such a system hold before the poor majority revolts ? But perhaps that idea is a Western idiosyncrasy and alien to many Indians.
I think there’re a few reasons for this from my time being born and brought up here:
First, India is very much a hierarchical society. People don’t vote for politicians if they appear too “cheap” , a sense of overarching status convinces a lot of people to vote for them. Anecdotal evidence but Ex-Delhi’s chief minister got slapped twice(some people threw ink on him) because he came in as a common man—evidently a bunch of people didn’t respect his power— now he started being aloof and wielding his power , and the slaps stopped happening, although he did get arrested and lost the election afterwards but that’s a different story.
Second, the media is very much pro establishment, due to various financial factors the government has outsized indirect control over the media, via ED (law enforcement raids) , funding political adverts to preferential news outlets, only giving interviews to sycophants or scripted pundits(it has been exposed live before on accident). Dissent is heavily suppressed, corruption is quite normalized or outside of overton window of “major issues”.
Third, India has a huge welfare state, Modi (and his surviving competitors) can be seen as one of the great welfarist in Indian history, despite being alleged “neoliberal” , around 800 million Indians get free food grains from the government, millions of woman get free effectively preferential UBI directly to their bank accounts. (Although the amount is small it’s often enough to get by, but there’re many woman only schemes) Ayushman bharat cover 500k rupees(direct conversion would be 6k$, PPP would be higher) per year-family for healthcare (although implementation is questionable).
Fourth, people have seen worse and the rate of growth is quite enchanting for the ones who have lived long enough. People went from having no TVs to smartphones(50-60% penetrations at the moment) in span of 2 generations (or equivalently having no electricity to being electrified). Although the growth is disparate , having a blooming private sector which works is better than dysfunctional government services for the people who can afford it. Corruption runs rampant in government.
A lot of opposition politicians now want to change that by having 60% reservation based on caste in private sector. Effectively getting more of the bureaucracy (if it wasn’t too much already due to historical laws and socialist past) into the private sector. I mean it’s controversial, hopefully merit based systems remain in private sector (Obviously I would be on the losing end of it, if it ever happens so take it with a grain of salt).
Fifth, majority of workforce is still in agriculture, I remember bringing this up, if there’s an economic crash, the small Indian farmers who’re self sustaining on agriculture may not be that effected by it. Wages mean less if you don’t have any to begin with. It’s how in early europe they had a flood of people from rural areas despite the urban graveyards and lower life expectancy caused by higher population density. (and India has it better with modern healthcare)
Gandhi championed self sustenance, he spinned his own clothes that became a political symbol against outsourcing of labour from for then comparatively much more manual industries to Britain. Although opinions vary many people saw(still see) this as a form of colonialisation, the act of buying our raw produce, making expensive products and selling it back.
There might be more reasons which don’t come to my mind but it’s 5:30 AM IST , so it’s probable that I have covered most of them. (Also writing this comment was a bad decision on my time)
If the overall economy remains dominated by underdeveloped subsistence agriculture, and wages for cheap labor in cities still far exceed those of serfs, then people will not harbor significant discontent over low urban wages.
Should wages rise, enterprises would incur losses by being unable to afford their employees, ultimately leading to worker unemployment. Therefore, during such periods demanding higher rates of accumulation for industrial development, neither the government, the bourgeoisie, nor the laborers have any reason to pursue reforms.
The “Gen-Z Riots” have hit a slew of countries, successfully overthrowing governments in Bangladesh and Sti Lanka, which are culturally linked to India having been joined to it in the “recent”™️ past.
In fact, except for Madagascar, the most successful revolts have been on India’s borders.
I agree that cheap labour isn’t great for the majority. Another thing I kept thinking to myself is how labor is too cheap in India. For example when I saw people farming without a tractor using a cow instead. Why revolt instead of asking for a higher salary or quit? Conditions in India seem to be improving pretty rapidly.
The phenomenon you observed as far more to do with the tiny plot sizes in most of rural India than it had to do with the cost of labor.
Many/most farmers have farms sized such that they are, if not as bad as mere subsistence, unable to justify the efficiency gains of mechanization. This is not true in other parts of India, like the western states of Punjab and Haryana, where farms are larger and just about every farmer has a tractor. There are some cooperatives where multiple smallholders coordinate to share larger machines like combine harvesters which none but the very largest farmers can justify purchasing for personal use.
Optimal economic policy (in terms of total yield and efficiency) is heavily in favor of consolidating plots to allow economies of scale. This is politically untenable in much of India, hence your observation. However, it isn’t a universal state of affairs, and many other fruits of industrialization are better adopted.
You can revolt in a sort of Soviet Revolution, just as you can organize a strike asking for a salary raise. However, merely asking individually for a higher salary or threatening to quit is only effective if there is a labor shortage or if you possess specific expertise. If you can be replaced within a day, you’re screwed. There is something Molochian about the low-wage trap. I can imagine a society with one god-emperor employer and the rest of the population collectively locked in a societal low-wage trap. Only cooperation can overcome this, but it is hard to do that in a soft way, not hurting anyone. A change can only appear net negative to the upper class. And also, maybe the god-emperor employer solution, or merely an oligarchy of god-emperors employers to keep competition in play, is the more effective model on a macro scale (thinkers close to the rationalist community, like Hanson, are highly critical of the Western liberal-democratic system and display some fascination with the macro-efficiency of more hierarchical and less egalitarian societies). There is probably a tradeof micro/macro. But micro scale definitely matters. There is no sense in a very effective and successful society where the vast majority individually suffers.
Cheap labour everywhere is fantastic… as long as you’re the employer and not the employee. Basically, what you’re describing is Europe in the 19th century. The question is : how long could such a system hold before the poor majority revolts ? But perhaps that idea is a Western idiosyncrasy and alien to many Indians.
I think there’re a few reasons for this from my time being born and brought up here:
First, India is very much a hierarchical society. People don’t vote for politicians if they appear too “cheap” , a sense of overarching status convinces a lot of people to vote for them. Anecdotal evidence but Ex-Delhi’s chief minister got slapped twice(some people threw ink on him) because he came in as a common man—evidently a bunch of people didn’t respect his power— now he started being aloof and wielding his power , and the slaps stopped happening, although he did get arrested and lost the election afterwards but that’s a different story.
Second, the media is very much pro establishment, due to various financial factors the government has outsized indirect control over the media, via ED (law enforcement raids) , funding political adverts to preferential news outlets, only giving interviews to sycophants or scripted pundits(it has been exposed live before on accident). Dissent is heavily suppressed, corruption is quite normalized or outside of overton window of “major issues”.
Third, India has a huge welfare state, Modi (and his surviving competitors) can be seen as one of the great welfarist in Indian history, despite being alleged “neoliberal” , around 800 million Indians get free food grains from the government, millions of woman get free effectively preferential UBI directly to their bank accounts. (Although the amount is small it’s often enough to get by, but there’re many woman only schemes) Ayushman bharat cover 500k rupees(direct conversion would be 6k$, PPP would be higher) per year-family for healthcare (although implementation is questionable).
Fourth, people have seen worse and the rate of growth is quite enchanting for the ones who have lived long enough. People went from having no TVs to smartphones(50-60% penetrations at the moment) in span of 2 generations (or equivalently having no electricity to being electrified). Although the growth is disparate , having a blooming private sector which works is better than dysfunctional government services for the people who can afford it. Corruption runs rampant in government.
A lot of opposition politicians now want to change that by having 60% reservation based on caste in private sector. Effectively getting more of the bureaucracy (if it wasn’t too much already due to historical laws and socialist past) into the private sector. I mean it’s controversial, hopefully merit based systems remain in private sector (Obviously I would be on the losing end of it, if it ever happens so take it with a grain of salt).
Fifth, majority of workforce is still in agriculture, I remember bringing this up, if there’s an economic crash, the small Indian farmers who’re self sustaining on agriculture may not be that effected by it. Wages mean less if you don’t have any to begin with. It’s how in early europe they had a flood of people from rural areas despite the urban graveyards and lower life expectancy caused by higher population density. (and India has it better with modern healthcare)
Gandhi championed self sustenance, he spinned his own clothes that became a political symbol against outsourcing of labour from for then comparatively much more manual industries to Britain. Although opinions vary many people saw(still see) this as a form of colonialisation, the act of buying our raw produce, making expensive products and selling it back.
There might be more reasons which don’t come to my mind but it’s 5:30 AM IST , so it’s probable that I have covered most of them. (Also writing this comment was a bad decision on my time)
If the overall economy remains dominated by underdeveloped subsistence agriculture, and wages for cheap labor in cities still far exceed those of serfs, then people will not harbor significant discontent over low urban wages.
Should wages rise, enterprises would incur losses by being unable to afford their employees, ultimately leading to worker unemployment. Therefore, during such periods demanding higher rates of accumulation for industrial development, neither the government, the bourgeoisie, nor the laborers have any reason to pursue reforms.
The “Gen-Z Riots” have hit a slew of countries, successfully overthrowing governments in Bangladesh and Sti Lanka, which are culturally linked to India having been joined to it in the “recent”™️ past.
In fact, except for Madagascar, the most successful revolts have been on India’s borders.
I agree that cheap labour isn’t great for the majority. Another thing I kept thinking to myself is how labor is too cheap in India. For example when I saw people farming without a tractor using a cow instead. Why revolt instead of asking for a higher salary or quit? Conditions in India seem to be improving pretty rapidly.
The phenomenon you observed as far more to do with the tiny plot sizes in most of rural India than it had to do with the cost of labor.
Many/most farmers have farms sized such that they are, if not as bad as mere subsistence, unable to justify the efficiency gains of mechanization. This is not true in other parts of India, like the western states of Punjab and Haryana, where farms are larger and just about every farmer has a tractor. There are some cooperatives where multiple smallholders coordinate to share larger machines like combine harvesters which none but the very largest farmers can justify purchasing for personal use.
Optimal economic policy (in terms of total yield and efficiency) is heavily in favor of consolidating plots to allow economies of scale. This is politically untenable in much of India, hence your observation. However, it isn’t a universal state of affairs, and many other fruits of industrialization are better adopted.
You can revolt in a sort of Soviet Revolution, just as you can organize a strike asking for a salary raise. However, merely asking individually for a higher salary or threatening to quit is only effective if there is a labor shortage or if you possess specific expertise. If you can be replaced within a day, you’re screwed. There is something Molochian about the low-wage trap. I can imagine a society with one god-emperor employer and the rest of the population collectively locked in a societal low-wage trap. Only cooperation can overcome this, but it is hard to do that in a soft way, not hurting anyone. A change can only appear net negative to the upper class. And also, maybe the god-emperor employer solution, or merely an oligarchy of god-emperors employers to keep competition in play, is the more effective model on a macro scale (thinkers close to the rationalist community, like Hanson, are highly critical of the Western liberal-democratic system and display some fascination with the macro-efficiency of more hierarchical and less egalitarian societies). There is probably a tradeof micro/macro. But micro scale definitely matters. There is no sense in a very effective and successful society where the vast majority individually suffers.