Context-India has income crises. Incomes of people in the lower half of the pyramid are too low. The solutions proposed by economists like free up markets, improve productivity, and apply technology , must be re-examined when applied to human work.



  • Markets should be freed up for agriculture products so that farmers can get higher prices and freed up for labour to attract investments.
  • Without adequate incomes, people cannot be a good market for businesses and cause a slum in investment.
  • The purpose of freeing up markets for labour is to reduce the burden of wage costs on investors just when wages and the size of markets must be increased.
  • Human rights must prevail over economic considerations and they must not be put up for sale to the highest bidders which was the practice in slave markets , as they are not commodities.


  • It is the key to economic progress.
  • It is the ratio of input in denominator and an output in the numerator.
  • Economists generally use labour productivity ( number of people in the system (the country/ the economy) is the denominator, and the gross domestic product the people produce is the numerator or by dividing the total output of the enterprise by the numbers of workers employed)  as a universal measure of the productivity of an economy.


Companies can apply two broad strategies for improving their productivity-
  1. By increasing the total output of the factory while maintaining the number of workers. This may require adding more machines and technology to supplement the capacity of workers to increase total output and is a good strategy for capital rich enterprises and countries.
  2. Employers can enhance their workers’ skills and create a culture of continuous improvement in factory, whereby works and managers cooperate to improve the capability of their system and squeeze more output from limited capital resources. This is the strategy of ‘total quality management’.

The later one is used by Japanese companies reduced their costs and improved the quality of their products in the 1960s and 1970s, becoming the most competitive enterprises in the world. The Japanese companies had lifetime employment contracts with their workers. They invested in their workers and the workers- the companies’ ‘appreciating assets’-grew  their capabilities as well as contributed to the improvement of the total productivity of their enterprises.


  • Humans are the only ‘appreciating assets’ an enterprise has, which can improve their own abilities when treated with respect and provided environments to learn.
  • The companies use ‘Hire and Fire’ strategy to improve their productivity.
  • For capital-scarce and human resource-abundant countries, such as many developing countries, the correct ratio of productivity is output per unit of capital. This was the strategy of ‘Japan Inc.’ and E.F. Schumacher’s insight also.

Schumacher ,was  best known  for his idea ‘small is beautiful’. In his essay, ‘Industrialisation through intermediate technology’, published by the journal Resurgence in 1966, he wrote:” if we define the level of technology in terms of ‘equipment cost per work-place’,we can call the indigenous technology of a typical developing country a euro1-technology, while that of the modern west could be called a euro1,000-technology.He had warned there was a malaise brewing beneath the drive to ‘westernise’ and ‘technologise’ economies. The harsh lockdown of the economy in India to prevent the spread of COVID-19 caused the malaise to spill out for everyone to see.


  • A good job implies a contract between workers and society.
  • Workers provide economy with the products and services it needs and in return society and the economy must create conditions whereby workers are treated with dignity and can earn adequate incomes.
  • The economist Dani Rodrik, advocates reform that will induce firms to employ more numbers of less skilled workers.


The power to fix the rules of the game has become concentrated with wealthy investors and large multinational corporations. The power balance must shift. Small enterprises and workers must combine into large associations, in new forms, using technology, to tilt reform towards their needs and their rights.


  • The government to discharge its responsibility to create a good society for all citizens, and not only for investors, must regulate contract between those who engage people to do work for their enterprises, even in the gig economy (it is a free market system in which temporary positions are common and organizations contract with independent workers for short term engagements.).
  • To increase productivity of the firms, too often governments subsidise labour-replacing, capital-intensive technologies, rather than pushing innovation in socially more beneficial directions to augment rather than replace less skilled workers.
  • A turbo-charged, financial globalisation has made life very easy for migrant capital.

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