multiple models of industrialization - iit...
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Multiple Models of Industrialization
How to balance Economy, Culture & Politics?
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Classic Liberalism: Adam Smith (17231790)
● Freedom of market from feudal constraints
● State must guarantee education, army and justice
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Adam Smith● “An Inquiry into the Nature and Causes of the Wealth
of Nations” (1776)● “Invisible hand” will maintain balance.● Monopolies destroy balance.● Moral basis for the market.● Cooperation and mutual sympathy are part of self
interest.
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Early Socialism:Robert Owen (17711858)
● Mill at New Lanark, Scotland● Campus & housing for workers● Education for children● Cooperative shop for workers● Motivation through social relationships
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Anarchist: PierreJoseph Proudhon (18091865)
● Opposed centralization of power
● Opposed reliance on the state
● Selfhelp and cooperatives
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Anarchists: Proudhon (contd.)● Develop rules and systems to prevent centralization of
power in organizations● Criticism of the belief in individual ownership (private
property)● Proposes ways of overcoming contradictons of
capitalism as well as bureaucracy● Attractive forms of employment will automatically draw
support● No need of violent revolution
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Marxists● Without capturing the state cooperatives cannot
succeed● Revolutionary party (vanguard of the proletariat) is
needed.● Becomes a powerful stream amongst socialism by end
of 19th century
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Centralized Socialism: Communism● Union of Soviet Socialist Republics (USSR)● Command economy● Bureaucratization of entire society● Great successes – food, housing, medical care● Very high levels of production● Loss of freedom to dissent● Gradual decline in productivity
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Late 19th century liberalism● Greater role for state● Market to be guided by ethical and moral
considerations● T.H. Green● Early 20th century: John Maynard Keynes
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Major types of marketsociety relationships
● Oligopolic capitalism (crony capitalism)● Libertarian capitalism● Centralised capitalism● Centralised (state) socialism ● Decentralised (libertarian) socialism● Market socialism
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Centralized control
Decentralized control
Marketbased Culture & Societybased
Major Poles
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Changing LiberalismThe New Deal: USA in the 1930s
● Regulatory bodies for the stock market● Greater interventions by financial institutions● Unemployment benefits● Minimum wages● Limits on hours of work, etc.● Because of internal processes and also in response to
the threat posed by the USSR
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Twentieth Century Liberalism: Welfare State (1950s onwards)
● Housing benefits● Medical care● Education● Bureaucratization and its problems● Increasing criticism since 1970s, but not much actual
decrease in welfare services
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Return of Free Market: the NeoLiberals
● Friedrich Hayek● Ludwig von Mises● Free market is best way of communication of needs of
society● Great popularity in 1990s● Press for reduced regulations on large industry● Motivate through economic returns
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Return of Decentralized Cultural and Political factors
● Decline of statecentred socialism● Alternatives to centralized bureaucracies● Anarchism & Mutualism● Environmental critique● Religious critique
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ALTERNATIVE ORGANIZATIONS
THE CO-OPERATIVEe.g. the Israeli Kibbutz
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How to design a better organization?
What values?What structure?
What rules?What roles?
What procedures?
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Rochedale Principles of Cooperation●Voluntary and open membership●Democratic member control●Member economic participation●Autonomy and independence●Education, training and information●Cooperation among cooperatives●Concern for community
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An Anarchist Example:The Kibbutz of Israel
● Collectively owned organization● Around 2000, 2.5% of population of Israel lived in a
Kibbutz, but produced 33% of its agricultural products and 6.3% of its manufactured products
● Set up farms and later small industries● Former prime ministers like Golda Meir and David Ben
Gurion lived in a kibbutz.
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Kibbutz● “From each according to ability and to each according
to need.”● All income of kibbutz goes to a common pool. Personal
allowances are given.● All major decisions made through meetings and
democratic processes.● Rotation of work. Emphasis on equality.● Motivation through culture and nationalism. ● Children reared collectively.
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NACHSON
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Decline of Kibbutz● Tended to be secular, got into political conflicts with
religious groups in Israel● Unwise borrowing in 1970s, leading to huge debts● Many children chose to leave the kibbutz for various
reasons
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Return of Kibbutz● Renewed cultural energy● More flexible work assignments● From each according to preference and to each
according to need● Greater hiring of labour from outside kibbutz● Children now raised primarily by family● Greater disparity in personal allowances
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Cooperatives in India● Important element of freedom struggle● Gujarat Cooperative Milk Marketing Federation
Limited, owned by 2.4 million farmers in Gujarat, owners of AMUL brand
● Institute of Rural Management, Ahmedabad (IRMA)● Pradan, Cooperative Development Foundation, etc.● Cooperative housing societies
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Cooperatives in India● Problem of infiltration and seizure by local elites – 66 –
75% cooperatives in India have this problem● 25 – 33 % do well.● Hutatma Ahir Sugar Cooperative, Sangli Maharashtra,
has the highest productivity amongst ALL sugar mills in India
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Environmental / Technological Alternatives
READING:E.F. Schumacher's “Toward a Human-Scale
Technology”
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The Big Question● What is Good Work?● This is fundamentally a moral question● We have the capacity to do both good as well as evil.
How to choose?
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Basic problems with industrial society● Draws upon our mental energies too much, distracting
us from more important questions● Consumerism and advertising emphasize greed,
avarice, envy and egotism. However, all cultures agree that these are values that should be discouraged.
● Our personality gets stunted, no longer with any ideals of truth, beauty or goodness
● Autocratic methods of management
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The Good in Industrial Society● Good must be seen in moral, not material terms● Industrial Society has increased freedom
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Worldly failures of industrial society● Disrupted organic relations● Depleted nonrenewable resources● Degraded our mental and intellectual resources while
these are exactly what our society needs the most● Breeds violence
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The answers● Technology has values embedded in it● Reaffirm human values and build technologies which
embed human values
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Present Trends in Technology● Bigger● More capitalintensive● More complex● More violent
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Direction of Solutions● Develop a human scale technology● Make things smaller● Less capital intensive● Simpler● Less violent
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The Gandhian Approach
Moral Directions for Industry
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Reading (not compulsory)
M.K. Gandhi (1909) “Hind Swaraj”
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Central Questions:● What kind of industrialization is a better
industrialization?● How to apply this question in the present day situation?
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BASIC PRINCIPLES● Must focus on Prem and Ahimsa● There exists enormous unhappiness and oppression● Selfrule – control of one's passions by one's mind● Swaraj does not come simply with the leaving of the
British
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Basic Principles for Industrialization● Moderation and temperance● Satya or truthfulness● Justice – freedom from possessiveness and greed● Courage
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Practical Steps● “My life is my message”● Encourage village industries, avoid centralization● Use labourintensive technologies, avoid
mechanization● Develop social trusteeship, not ownership● e.g. Khadi, village handicrafts, etc.
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Weaknesses of Gandhi's Approach● Unimaginatively applied● Did not grasp possibilities of new technologies● Relied on older mode of production
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Exercise
Try to think of two examples from your field of specialization which can further an
industrialization driven by the value of compassion (and not violence)?