Just curious if anyone at VM has an answer to this question: can the 16% of GDP contributed by agriculture be increased or is that maxed out?
So, India wants/needs industrial jobs for its teeming millions.
So does China.
So does Brazil.
So does the EU …. and so does the USA.
Obviously everyone wants industrial jobs.
But think about it. Who is going to buy all the crap that these industrial jobs put out and where will the resources come to make the physical products????
Is the world to be hyped up on consumerism?
And will the resources (metals, energy) miraculously appear when all indications are that we are at the end of cheap energy, etc.?
I really think the bigger problem is that robots are going to be doing all of this in another generation. India missed its chance to get rich by manufacturing for export.
“Is the world to be hyped up on consumerism?”
You’re one of the first people I’ve read anywhere who alludes to the fundamental flaw in an economy 70% of which is consumer-driven, while that same economy strains under 50% who are relieved of taxes altogether, old people and poor people who are gobbling up the taxes paid by the 50% who do pay taxes, would fail utterly if the old and the poor were charged to save as much as they can, and a political class that refuses steadfastly engage with the facts and the implications of those facts.
YES the world is to hyped up on consumerism. I am so sick of people who own lots of toys like tv’s, iphones, boats, motorcycles, ATV’s, SUV’s etc. That consumerism is some kind evil force.
Sorry but no one is going to tell me that I have to give up my consumerism and I want unlimited consumer choice aandthe lowest price possible.
I measure the quality of my life by the toys I own and the recreational opportunities that they provide me.
That is how most people measure their quality of life. I’m not an industrial worker, my life is not attached to manufacturing and I want chep products.
If American labor can’t mmeetmy consumer demands I will buy from a country that can.
WRM, has rise of new generation of chief ministers (Modi, Kumar, Singh, Dikshit, et al) helped or harmed situation you are describing? Also, are regional ministers in line with proposed developments or enmeshed in India’s doldrums (Rupee devaluation, market decline, etc.)? The question may be what’s the right way forward for India (Sen – Bhagwati debate)?
Poor government and corrupt government always destroy a country (or a city if you are Chicago or Detroit). Argentina is the current prime example, but India is coming up on the outside.
I don’t disagree that the problems of India are of world-historical importance. But it is premature to say that Syria is of less importance, since there is a chance that that our bombing there will lead to a wider war, possibly even one between Russia and the United States.
The relative merits of these stories may be as you say but that is no reason to burp up facts not in evidence. It is far from clear that Assad launched this attack. Certainly he has not benefited from it. Who has? His antagonists; or a certain faction of his antagonists who are far from monolithic. There is strong circumstantial evidence that the Saudis and Putin collude, using the ‘rebels’ on the ground as stalking horses. Whatever. Death, death and yet more death are the prescription whenever Muslim struggles against Muslim. I favor inconclusive strikes on Assad merely to prevent his final victory. Let them kill each other unhindered and Allah will sort it out.
You missed one more key thing, which (alsmakes it the trifecta — a ban on the importation of gold. Raising import taxes on gold did not halt the run on the rupee, and to protect the rupee’s relation to the dollar (that’s about oil imports) the government have decided to prohibit gold imports entirely. People are already finding work-arounds, most of which involve smuggling and even more corruption.
As an agronomist who farms for his living I’ll also add that Indian agriculture is not competitive on world markets due to scale-inefficiency issues. But making that agriculture more productive and efficient (use of GMOs, for example) would leave hundreds of millions of smallholders with no options.
The political implications of that particular dénouement (also faced by China, BTW) are absolutely horrifying. So, yes, getting agriculture above 16% of GDP is technically possible. At present, however, what they’d have to do to make that happen would be political — and perhaps national — suicide.
You missed one more key thing, which makes it the trifecta: the recent ban on the importation of gold. Raising import taxes on gold did not halt the run on the rupee, and to protect the rupee’s relation to the dollar (that’s about oil imports) the government have decided to prohibit gold imports entirely. People are already finding work-arounds, most of which involve smuggling and even more corruption.
If conditions in India are similar to those in many other developing economies, much of the land discussed in the article is actually owned by no one, which is in all likelihood why the law written during the Raj is still in effect. Many of the smallholders probably hold their property by dint of squatting, and hold no title to it, and have likely never paid any taxes on it. Those small farms are part of the shadow economies described by Desoto in The Mystery of Capital. The real problem for many of these developing economies is how to bring their shadow economies out into the light–the legitimate economy. If one were to apply the logic of the Coarse Theorem to this problem, one would probably come up with a solution very similar to the law written during the Raj. Their best bet would be a reform based on this law, rather than an attempt to re-invent the wheel.
In the early 1990s the Indian economy was in such bad shape that India had less than a month of foreign exchange reserves and was in a position that it would not be able to import oil, gold or anything else. In desperation the Indian government ended the Industrial Raj and began a period of rapid industrial growth that lifted a group of people about the size of the US population out of poverty into world standard middle class quality of life.
A few years ago, the Indian Government started to reimpose the regulations that had strangled Indian industrial development from independence until the 1990s. Amazingly enough, the Indian economy is slowing down and rates of growth have fallen dramatically.
I suppose India could return to the economic freedom that allowed the Indian economy to rival China in its rate of growth and moving people out of poverty for almost twenty years but the special pleaders and cronies are unlikely to allow their fingers to be pried off the levers of government.
What can America do about local Indian corruption? We can’t even stop our own.
We have a couple of laws on the books, with names like “Corrupt Foreign Practices Act (1977)” that try to limit US businesses involvement with politicians like that.
If one were to be cynical about it, you might consider that our politicians aren’t benefiting directly from said corruption, so it’s more likely we’ll enforce those laws.
Brilliant analysis, as usual here. India has “Land infrastructure problems” and needs to build one million miles of roads in the next five years. The useless bureaucracy in India use “the price paid to farmers as a revenue source that… supports local government and… lines the pockets of local officials.” Bureaucrats are thieves who promote abortion, the caste system and exploitation of the lower class. The solution is for local Indians to get online, read VM, and expose corruption in social media.
It looks like India is getting increasingly desperate. Not only have they banned gold imports, but they are beginning to raid the temples and may soon start confiscating their Citizens gold.
WRM need not worry. The wheels are coming off China’s economy too. It’s just that autocracies have bigger closets where they can hide a larger number of skeletons. When they tumble out and the dust settles, one will find these two uppity Asian nations cut down to size. Asian balance of power will be maintained.
Can’t think of a single thing LESS important than Syria. It’s a looney-tunes caracature of a country governed my a madman. Of utterly no importance.
I do not actually favor using any weapons at all against civilians, providing they are being fairly peaceful. I am even more opposed to war with a government whose country and doings are of no apparent importance to anyone else.
Sure Saudi and Iran have stooges in Syria, thats how politics works. And to a limited degree, Iran is stooge for Russia and China while Saudi is a stooge for the USA to some extent also.
ALL of the states over there are obaminations. So what. You got nomadic manhood “respect” as the culture, hardly anything as the resource base – oil just is not that big a deal, does not even count really – and extreme erhnic diversity – these places can never become nations. States maybe, but not nations.
Surprising how few have observed that the quality of life and wealth of a nation is inversely proportional to the population (and political power of those) “living on the land.” South Korea is finishing moving the last third of its rural population into yet-another-rebuild of its city infrastructure. China is doing it by force. The U.S. did more than a half-century ago. Mexico is not Cuba or another socialist heaven because they’ve exported a third of their poorest rural population to the U.S.
Granted, it’s too much to expect the elites to sing the praises of agribusiness – highly mechanized and productive agriculture and its real benefits (in increasing health, disposable income, returning less productive land to other uses, lowering aggregate energy use and pollution per soul nourished, fewer maimed children, etc.)
But … India has no oil…