De-Industrialisation: Alternative View

Author(s): Tirthankar Roy

Source: Economic and Political Weekly, Vol. 35, No. 17 (Apr. 22-28, 2000), pp. 1442-1447
Published by: Economic and Political Weekly
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 I Perspectives

De-industrialisation:
hand-tools began to compete with ma-
chinery, and lost.
- It is implied that this battle, which

Alternative View
occurred in the market-place, was forced
by Britain's commitment to free trade as
an engine of growth.
- Closer economic relationship with Brit-
'De-industrialisation' is an argument that British India, which started ain did create some modern industries in
India such as the textile mills, but this
with a large and well-developed manufacturing tradition, saw a
creative role of globalisation did not
decline in its traditional industry during the colonial period, and that
compensate for the destructive role. One
the modem industry which grew in its place did not compensatefor theof the reasons why modern industry did
loss in employment and income. This essay presents an alternative not grow enough is that, it was a kind
view, which suggests that traditional industry did not decline, that it of implant rather than an extension or
evolution out of traditional industry.
changed in organisation and character, and that these changes shaped
[for statements - classic and modern
the future course of Indian industrialisation.
- of decline of industry and the origins
of underdevelopment, see the discus-
TIRTHANKAR RoY sion in Chandra 1966: Chs II and III and
country. Possibly about 15-20 per cent of
its working population, or 15-20 millionBagchi 1976].
U ' TW e are familiar with the term 'de- To sum up, de-industrialisation means
persons were employed in industry at that
industrialisation'. In India, it is time. Important industries were spinninga decline in traditional industry that
an argument about the histori- and weaving, manufacture of leather and (a) derived from technological obsoles-
cal roots of underdevelopment. It is an leather goods, a range of metal work, cence; (b) was sustained by colonial
argument that British India, which started carpets and rugs, and so on. These indus-
policies; and (c) remained uncompensated.
with a large and well-developed manufac- The term makes an explicit contrast bet-
tries did not use machinery, and were not
turing tradition, saw a decline in its tra- organised in large-scale factories, nor ween Britain, which experienced 'indus-
ditional industry during the colonial pe- trialisation', and her major colony India,
regulated by any law. In fact, most of the
riod, and that the modern industry that production units were family-labour ori-which experienced de-industrialisation, at
grew in its place did not compensate for ented or 'households'. I call such acti- the same time and due to the same set of
the great loss in employment and income. causes, namely, trade and technological
vities 'traditional industry'. By contrast,
What happened to traditional industry, or any unit that used machinery andchange. the Britain too experienced a decline
the 'handicrafts', during the British rule large-scale factory, and was more orinless
its traditional industry, but modern
has been a lively topic of debate for regulated, can be called 'modem indus- industry played a compensatory role there.
In India, on the other hand, "foreign
economic historians,1 mainly because this try'. By this definition, modem industry
case is used to illustrate the adverse impact is obviously a product of the industrial
economic penetration intensified...ruin and
of colonialism on India. revolution, since machinery, regulation pauperisation of the artisans...arrested
This essay, presents an alternativeand the large factory are all relatively industrial development put sharp limits to
new inventions.
view, which suggests that traditional in- their... conversion into an industrial work-
dustry did not decline, that it changed inThe industrial revolution in the 19th ing class" [Joshi 1963].
organisation and character, and that these century deeply affected traditional indus- Before we go further, let us get a brief
changes shaped the future course of Indian try in India. Trade between India and the intellectual history of this concept. The
industrialisation. [for statements - classic
world increased dramatically, and modem idea had two distinct roots. The first is an
and modern - of decline of industry and industry in Britain began to compete with Indian nationalist tradition represented by
the origins of underdevelopment, see the R C Dutt, Dadabhai Naoroji and some-
traditional industry in India. In particular,
discussion in Chandra 1966: Chs II and III products of the mechanised textile indus- what later by Jawaharlal Nehru [Chandra
and Bagchi 1976]. The essay is divided try in Britain began to compete with 1966:ch II]. The second root is the Marxist
into three sections: I shall define de-indus- handmade yar and cloth in the Indian theories of imperialism.2 In the post-war
trialisation, criticise it, propose an alter- market. What was the net effect of this period, both these schools were revived
native thesis and discuss some wider 'globalisation'. in history, in development studies, and in
relevance of that alternative. 'De-industrialisation' is a theory thatIndian historiography. In this last schol-
suggests that the net effect was negative.arship, de-industrialisation became a part
I The theory consists of four propositions.of what can be called the left-nationalist
'De-industrialisation' Defined - Traditional industry declined in India.view of the impact of colonial rule on the
- It declined because of technologicalIndian economy. It has not only been the
At 1800, India had a significant pres-
ence in the world as a manufacturingobsolescence, that is, it declined becausemost popular worldview among historians

1442 Economic and Political Weekly April 22, 2000

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working in India, but has also become a and 1931. This result can be questioned cesses that came to be used increasingly
kind of unquestioned official ideology, in two ways. First, it is partly a spurious in the handloom industry were the effect,
and in that capacity has shaped the average result given rise to by census definitions. rather than the cause, of their survival [see,
Indian's sense of history in an overwhelm- Second, decline in industrial employment among others, Roy 1993].
ingly powerful way. can be, and I shall argue needs to be, To sum up the textile experience, it had
All these schools hold the perfectly explained by causes other than techno- two aspects: competition with modem
acceptable view that economic and politi- logical obsolescence. Finally, real in- industry as in spinning, and segmented
cal changes from the 18th century led to come in manufacturing increased be- markets between traditional and modem
decline in some activities and growth in tween 1900 and 1947. Rising incomes industry as in handloom weaving. Now,
some others. The left-nationalist view can surely cannot be called de-industriali- given that there are very few examples of
be defined in terms of two propositions: sation. Let us now look at these three sets the former case, it seems more acceptable
that the decline outweighed the growth;of evidence more closely. to believe that the latter represents the
and that both decline and growth derivedTextiles: Cotton spinning is such a cleargeneral industrial situation better. That is,
from such global factors as world trade and case of obsolescence in traditional indus- spinning was an exception, and the general
colonial strategies. try that the proponents of de-industriali- case was that modem and traditional in-
In more detail the story is as follows. Pre- sation tend to get obsessed with this one dustry did not compete, but served differ-
British rural India consisted of self-sus- example. However, spinning by hand isent markets and produced different goods.
taining egalitarian 'village communities',really the only example of a major tradi-I shall return to this point below.
producing their own subsistence. Britishtional industry in crisis. Handloom weav- Census employment statistics: There is an
rule, by its revenue policy, forced produc- ing too declined in the 19th century bothapparent problem in using census data to
tion for the market and, thus, broke upbecause of technological obsolescence and test de-industrialisation. Employment
these communities. Production for the because of the loss of a certain foreignstatistics begin from 1881 whereas the com-
market was not profitable enough, leading market. But it declined only partly. Not petition between Indian traditional indus-
to widespread rural indebtedness. Many only that, in the early 20th century, try and British modern industry began
peasants lost their land and turned into handloom cloth production and labourmuch before that date. Can it be said that
tenants or labourers. On the other hand, productivity was rising. Clearly, their de-industrialisation happened in the
the moneyed people who came to control market was a secure one, despite the factearly 19th century, and that it slowed
or own land were by nature averse that to the productivity per hour of a handloom
down from the late 19th century? So that
productive investment. The net result was was only about 15-20 per cent that of evena if the census shows no strong sign
stagnation along with increasing poverty power-driven loom. of de-industrialisation, that does not deny
and inequality. De-industrialisation addedWhy was handloom cloth being soldthat a decline occurred before the census
to rural poverty by pushing many former along with mill cloth, despite such anperiod?
artisans into agriculture [for two versions unbridgeable gap in productivity and costs Now, if de-industrialisation is defined
of production? Over time, the handlooms
of this story of increasing misery, different as a general process of technological
only in minor detail, see Patel 1952, and benefited from the availability of cheap obsolescence, such an assertion cannot be
Bagchi 1982: Section 4.4 and references machine-spun yam, and a number of other made. Technological obsolescence is an
to de-industrialisation]. improved tools, such as the 'fly-shuttle irreversible process. It does not make sense
loom' or new warping machines. But these to say that traditional industry failed to
II compete with machinery in 1850, but
changes do not explain their survival. For
Criticism machine yam constituted no advantage successfully competed with machinery
over the mills, which also used the same in 1900. If it became obsolete in 1850,
I shall now de-industrialisation by way yam, in fact more cheaply than did the it must become even more obsolete by
of criticising the evidence it is based upon. handlooms. And all the other innovations 1900, because the pace of technological
Three types of evidence tend to be cited together were incapable of bringing progress is always faster in the machinery-
for or against de-industrialisation. These handloom productivity anywhere near the using industry compared with the tool-
relate to (a) the textile industry, (b) indus- productivity of a power-driven loom. So,using ones.
trial employment, and (c) national income. how did the handloom survive? But in a rather special sense, such an
Let me, at the outset, state how of these The most acceptable answer to this assertion can be made. It is possible that
sets of data support or disprove de- question was suggested half-heartedlycertain
in sectors of traditional industry com-
industrialisation. Cotton spinning by hand peted with moder industry, whereas other
earlier studies on the textile industry, and
was a major industry that became extinct has been explored more fully in a recent sectors did not. It is also possible that the
in competition with British machine-made scholarship on textile history. The answerformer not only declined in competition
yam between roughly 1820 and 1880. This is market segmentation. Handlooms andwith moder industry, but the process of
is no doubt an important case of techno- decline was completed in the early 19th
mills had comparative advantages in dif-
logical obsolescence. On the other hand, ferent types of cloth. The cloths that the
century, before the census data begins. The
it is really the only significant case of handlooms were better able to make had spinning example weakly illustrates such
technological obsolescence, and one case mass demand. Within this market, long- a hypothesis. A considerable part of the
cannot be generalised into a theory of distance trade expanded in the British decline in hand-spinning had indeed hap-
industrial decline. Census statistics sug- period. As a result, there was capital
pened before the census began, whereas
gest an apparent fall in the share of manu- accumulation within the handloom indus- in the early 20th century we see a substan-
facturing in total workforce between 1881 try. In this view, the new tools and pro-tial stability in handloom weaving. But

Economic and Political Weekly April 22, 2000 1443

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this is true of textiles, is it true of industry force. Second, in the early censuses (es- Let us now consider the second critique
in general? Unlikely. In the early 19th pecially 1881 and 1891), the broad sectorof employment data, which does not dis-
century, Britain herself was semi- 'industry' often included occupations that pute a decline in employment, but ques-
industrialised. The only modern industry involved selling rather than making goods. tions what it means. Does decline ir
that counted in India's foreign trade was 'Makers' and 'sellers' could be separated employment mean technological obsoles-
textiles. Other than textiles, there are al- from the detailed occupational classes, butcence? Doubtful, because the correlation
most no examples of significant compe- not entirely. Therefore, they argued, the between industries that experienced em-
tition and technological obsolescence. broad classes manufacturing and trade ployment decline in the census period and
Textile was clearly an exception, and cannot should be seen jointly (at least for 1881- industries that experienced competition
be generalised into a story about industrial 1901) for making comparisons between from modern industry, appears to be weak.
decline in the early 19th century. Further- censuses. Third, the data on women work- As I said before, it is difficult to find a
more, in concrete terms we really know ers are not reliable mainly because women significant example of technological ob-
in household production units tended to solescence other than cotton spinning.
very little about the early 19th century to
be routinely and wrongly classified as Foreign trade statistics show that, exclud-
say whether traditional industry as a whole
declined in scale. 'workers'. Daniel Thorer proposed that ing a few types of textiles, the most im-
it is better to look only at the male work-portant Indian imports in the early 20th
Authors sympathetic to the left-national-
ist interpretation have not usually been force data, which became an accepted century were non-competitive imports,
nuanced about timing. Nor have they practice among economic historians after such articles as intermediate goods, ma-
been careful about the distinction betweenThorner's article. chinery, metals, railway construction
competing and non-competing sectors.When these three adjustments are done,materials, etc. Far from de-industrialising
Census data on aggregate employment employment statistics shows almost no India, these imports contributed to India,
have been used as the major and clinch- significant sectoral shift. Employment inthese imports contributed to India's
ing evidence supporting de-industriali- agriculture (including general labour) asindustrialisation. Rather little of Indian
sation. What do these data show? The a proportion of total employment increasedimports consisted of manufactured con-
censuses tell us that industrial employ- marginally from 74 to 76 per cent, and thatsumer goods, and what consumer goods
ment declined steadily and sharply, in be-
industry (manufacture-cum-trade) de-were imported (such as wines and spirits)
tween 1881 and 1931. It declined from clined from 18 to 15 per cent. A declineconsisted of new products for which there
about 20 million to 13-15 million, whilecertainly, but not a large one. was no Indian substitute. In other words,
at the same time, employment in agri-The basic finding of these pioneeringforeign competition and technological
culture increased from 71 to 100 million.works, that occupational structure showsobsolescence were an exception than the
The percentage of workers in agriculture little change during the British Indianrule. On the other hand, the fall in employ-
increased from 62 to 71, and that in in- censuses, has not been questioned. Havingment was a general phenomenon. Employ-
dustry declined from 18 to 9. The decline said that, the three adjustments may appearment declined in a number of industries
in industry was concentrated in small-scale somewhat drastic. The most controversial where no serious competition was in
industry, in units not officially classified perhaps is excluding women's data. In-existence (such as food products, dress and
as factories. Employment in registered deed, women's employment experiencetoilet, wood, ceramics, construction, etc).
factories, which included all of modern drives most of those statistical trends that We need to explain these declines in
industry, expanded from possibly less can be interpreted as de-industrialisation. employment, but we cannot do so by
that a hundred thousand in 1881 to 1.6 Women's participation in industry declined competitive imports.
million in 1931. Employment outside dramatically in the census period, and the A further doubt on de-industrilisation
these units, which consisted mainlyshare of of women in industrial employment arises from the argument, made by Krishna-
traditional industry, fell from about 20 declined
to steadily from about 40 per cent murty (1967) that a fall in industrial
12-14 million. in 1881 to 13 percent in 1971, after which employment can result from rising average
Does this suggest a big decline in tra-it began to increase slowly. If women's capital-intensity, and not from a general
ditional industry and a ruralisation of data are ignored, de-industrialisation decline in demand for manufactured goods.
employment? There are two sets of cri- weakens greatly. But should women's data How do we test this? If incomes in industry
tique suggesting that it does not. Thebe ignored? The Thorers seem to argue increased, even as employment fell, that
first questions the statistics, and thethat the earlier percentages were inflated could mean rising capital intensity. Let us
second questions the interpretation drawn by a reporting problem, which led to the see what the income data tell us.
from it. inclusion in the work-force of those pri- National income: Sivasubramonian (1965)
Daniel and Alice Thorner were the first marily employed in household duties and estimated what became the standard na-
and the most persuasive authors to argue marginally in commercial production. This tional income series for British India. This
along the former line [Thorer, D 1962; long decline was not purely a reporting series begins from 1900. These data sug-
Thomer, A 1962]. They suggested that problem. It tells an important story, which gest that total and per worker real income
these shifts in occupational structure were has nothing to do with de-industrialisation, in industry grew at significant rates (in the
probably spurious and arose from three and which we shall miss if we ignore range 1.5-2.0 per cent per year) between
problems with the census definitions. First, women's data altogether. I shall come to 1901 and 1931. On the basis of this find-
there was a category called 'general labour' this point later. Finally, while the Thorners' ing, several authors, J Krishnamurty and
in the early censuses, which almost cer-work modifies the scale of the decline in Deepak Lal (1988: 186) for example,
suggest that a decline in traditional indus-
tainly meant agricultural labour, and should traditional industry, it does not dispute that
be seen as part of the agricultural work- the decline happened. try did happen, but it was more than

1444 Economic and Political Weekly April 22, 2000

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compensated for by the growth of capital- growth within traditional industry. Wefull impact unfolding. This rise in long-
intensive modern industry within India. need an alternative theory to explain how distance trade had two types of effects:
Daniel Thorner himself reached more or employment can decline in traditional increased competition, and changes in in-
less the same conclusion based on his
industry and yet there can be rise in dustrial organisation.
productivity.
reading of the census data. In this view, Commercialisation increased competi-
what we see in census and income statis- tion within traditional industries. In tex-
Ill
tics is the beginning of a large-scale sub- tiles, leather, metal-work, etc, we see
stitution of labour by machinery withinCommercialisation Thesis numerous cases of small remote manufac-
India. turing traditions decaying from the late
But this is plainly unrealistic. Enter- There is an alternative, which starts from 19th century because either they were not
prises answering to Lal's description "fullytwo premises. First, traditional and mod- known for good quality products or were
fledged industrial, mechanised, and fac- ern industries were not competitive at located
all. too far from marketing and trans-
tory-based" engaged a tiny percentage of By and large, traditional industry made portation networks. At the same time a
industrial employment (4-6 per cent) in the labour-intensive consumer goods for few large agglomerations emerged, these
early 20th century. With such marginal which there was no mechanised alterna- became concentrations of production,
weight in employment, it is not credibletive available, or such alternatives weretrade, capital and labour. Artisans mi-
that modern industry could compensate not profitable because capital was rela- grated in increasing numbers. These
for the decline in traditional industry even tively costly in India. Secondly, tradi- migrations created or extended markets in
in income. Clearly, we need to look more tional industry changed not due to exter- labour and capital, and encouraged the
closely into the earning power of tradi- nal competition, but due to internal com- hiring of labour.
tional and small-scale industry itself. petition. Internal competition was an effect Industrial organisation changed in two
National income data shows strong signs of increasing market transactions. Asways. a First, long-distance trade had made
that in fact real incomes increased within result of internal competition, there was information and working capital essential
traditional industry as well. More surpris- a decline in less productive and less ef- resources, but these were scarce resources.
ingly, income per worker probably in- ficient organisations such as household
The small number of entrepreneurs who
creased at a faster rate in this sector than industry, and an expansion in more effi- had access to these resources expanded
in modern industry.3 Evidence of produc- cient and more productive organisations scale of business, could take closer
tivity increase is strong also in specific such as units employing wage labour. This control of the manufacturing process,
industries like handloom textiles, tanning, process led to a net contraction in employ- and sometimes make technological ex-
and metal work. In textiles, real value ment and yet a rise in total and average periments and improvements. Capitalists
added unquestionably increased, and in all income. I shall call this alternative story and labourers became more clearly distin-
of them, output indicators show growth 'commercialisation'. guishable. So did employer-employee re-
whereas employment indicators show stag- I shall now discuss commercialisation lationships. Second, competition among
nation or fall [Sivasubramonian 1997: in more detail. The raw material comes manufacturers led to increased speciali-
127-29; Roy 1999]. from recent research on traditional indus- sation and division of labour. There are
Now, neither a rise in total income, nor try [among others, Roy 1999]. I shall not two major examples of specialisation.
a rise in productivity, is consistent with describe this raw material, but only state Formerly, many rural artisans performed
decline in markets. Rise in income almost the major conclusions. agricultural labour on the side, such as
certainly means total output increased. The 60 years between the opening of tanners and coarse cotton weavers in
Why should supply increase if demand the Suez Canal (1869) and the great de- most regions. Such part-time industrial
was depressed? Rise in productivitypression (1929) were a period of rapid activity generally declined whereas
means somebody invested in better commercialisation in India. Long-distance specialised artisans survived. A second
methods and better organisation. Why trade expanded and regional markets in- example is the decline of household indus-
would anyone do that if the market fortegrated on an unprecedented scale due try in favour of small factories employing
traditional industry was doomed? So, ifto, mainly, three factors: foreign trade, wage labour. The family as a production
employment declined it cannot be becausemodern transport and communication, and unit had certain advantages, but it also had
of competition and shrinking markets.the definition of contract law and private disadvantages, such as it could not
There must be another reason. property rights. The effects, which were specialise enough, or could not be super-
quite dramatic, are well researched for vised closely enough.
To sum up, de-industrialisation explains
employment decline by technological agriculture. It is not so well-recognised It is this competitive decline of the family
that traditional industry was also trans- that explains the long downward trend in
obsolescence. But this is an unsatisfactory
explanation for three reasons, First, formed
de- by commercialisation. Production women's participation in industry. For
industrialisation misreads the evidence on
for subsistence, production under various women formerly used to work in industry
textiles, and generalises from only one types of non-market and barter distribu- mainly as members of the household. When
example, cotton spinning. Second, the tion arrangements such as 'jajmani', and the household declined .a: a unit of pro-
association between falls in employmentproduction for local, rural, periodic and duction, women workers exited industry,
and technological obsolescence is ratherother spot markets declined in favour of and were replaced by male hired labour.
weak, that is, there were several sectorsproduction on contract for distant mar- Women are returning now to the factory,
where employment fell but no significantkets. Such a process had begun before the not because the household is coming back,
competition happened. Third, it is in- 1860s, and it certainly continued beyond but for other factors that influence women's
consistent with productivity and income 1930, but the intervening period saw its participation in the factory.

Economic and Political Weekly April 22, 2000 1445

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 Both 'de-industrialisation' and There are three ways in which this al-A second example of continuity is that,
'commercialisation' theses agree that
ternative many small-scale labour-intensive indus
story matters to our views about
employment in traditional industry development de- and industrialisation. tries today have traditional roots. For
clined in colonial India. They disagree First, at on example, many powerloonm operators to
the level of theories of history,
the explanation. The former explains there is thea difference. We are looking day at were handloom weavers by ancestra
decline by competition between British India more from Adam Smith's
nations occupation. If we investigate the back
of unequal technological capability. point ofThisview, rather than the Marxian ground of today's powerloom capitalists
explanation should be rejected on two
viewpoint we find that then great-grandfathers o
that has ruled post-independence
grounds: (a) there is evidence of Indian historiography. Marx and the
produc- some made money in long-distance trad
tivity and income growth within MarxistsIndian
were too preoccupied with tech- in handloom cloth, or raw material, in th
traditional industry, which is not nological
consis-change. Smith, by contrast, was inter-war period. De-industrialisation can
tent with technological obsolescence; concerned and with markets, competition and not explain how this happened, the
(b) there are very few examplesefficiency. of indus- In this sense there is a shiftcommercialisation
in story can. To repeat a
tries in India where such external com- accent. point mentioned already, commerciali-
petition occurred. The alternative thesisSecond, the commercialisation story sation created segments of decline and
being proposed here is that, traditional suggests several areas of continuity be-
segments of growth. It is these segments
industry changed in organisation due tween to the past and the present. Theofpro- growth that form the major link between
increasing market exchange and resultant cesses have not finished happening. the Therepast and the present of Indian small-
internal competition. The decline are in three points of continuity. The first scaleisindustry.
employment followed from internal com- the overwhelming importance of labour- A third example of continuity is
intensive industry in employment.
petition. But, equally, as a result of inter- The
organisational change. Post-independence
nal competition, there emerged segments majority of manufacturing workerscensuses even suggest a continuous decline in
of growth and capital accumulation. The now work in small unregulated factories, household industry, and shift of employ-
commercialisation story, thus, explains use simple general purpose tools,ment and outa of families into tiny factories.
not a one-dimensional decay, but a duality great deal of manual skills. In that respectThe rate of employment growth in industry
in the experience of traditional industry. the past and the present are not different, since 1961 has been rather small, only
The net result was a positive one, and as they are not different because India's about 1.2 per cent per year. But in fact,
increasing productivity in this sector factor-endowment has changed relatively like in British India, this small growth rate
suggests. little in the long run. of industrial employment in independent

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1446 Economic and Political Weekly April 22, 2000

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India is an illusion, being the average industry deprived them of healthy
works done signly or with Alice Thorner on
between a negative growth of employment occupational structure, land reforms and
competition.When India returned to
rural development [Thorner and Thorner globalisation, predictably the industries that
in family enterprises, and a very high growth
1962; Thorner 1956] and on the peasantry
benefited the most from export opportunities
rate of employment in unregistered facto- were labour-intensive small-scale industries.
[Thorner 1987]. As students in the university,
ries. Our story shows that the shift from we read Thorner and appreciated his lucid But by then, what India had to offer the world
families to small factories did not begin style. Later as researchers we went back towas a small-scale manufacturing sector that
at 1947, but started long ago and due to had serious problems of accumulated
these writings for their ideas and arguments.
increasing competition within traditional For a research in the early 1980s these ideas
inefficiency.
industry. often struck as surprisingly non-ideological
Finally, the alternative story matters
and unconventional.
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Heston and Angus Maddison. But no alternative India, 1900-01 to 1946-47', PhD dissertation,
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the British rule ended.4 1'3 recommended that can upset this - result.
(1997): 'Revised
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[This is the text of the Ninth Daniel Thorner on traditional industry. Thorner, Alice (1962): 'The Secular Trend in the
Memorial Lecture of the Indian Statistical Institute, 4 How did local contexts matter? Population Indian Economy, 1881-1951', Economic
delivered at the Reserve Bank of India, Mumbai, growth is an example. A labour-intensive Weekly, 14(28-30), Special Number, July.
industrialisation can transform itself into aThorner, Daniel (1950): Investment in Empire:
on February 11, 2000. I am grateful to Alice
Thorner for her comments on the text of the capital-intensive industrialisation only when British Railway and Steam Shipping Enterprise
lecture, especially for pointing out an error in it. rates of growth in supply of labour begin in India 1825-1849, University of Pennsylvania
I wish to thank members of the audience for their to fall below those in demand for labour. Press, Philadelphia.
comments and questions, which led to revision In India, that turning point has been delayed - (1956): The Agrarian Prospect in India, Allied
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How did post-independence policies matter? - (1962): 'De-industrialisation' in India, 1881-
1 Daniel Thorner was a historian. He made a India after independence had the option 1931', - in Thorner and Thorner, op cit.
brief but influential contribution on the - (1987): 'Chayanov's Concept of Peasant
which Japan had exercised until a decade
theme of this essay [Thorner 1962; Thorner Economy' in T Shanin (ed) The Theory of
or two previously - of selecting a growth path
based on export of labour-intensive
and Thorner 1962]. One of his main interests Peasant Economy, Oxford University Press,
was the expansion of western European
manufactures. India's deliberate withdrawal Delhi.
Thorner, Daniel and Alice Thorner (1962): Land
from export-led growth deprived the small-
capitalism in Asia. He wrote the first major
study on the railways and steam shipping and Labour in India, Asia Publishing House,
scale industry of external markets. And the
in India [Thorner 1950], he is known for
Gandhian bias for protecting small-scale
New York.

Economic and Political Weekly April 22, 2000 1447

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