Part 1

Principles of Balanced Economy Icon

January 31, 2022

Cities and states in the past lost their economic balance and declined after achieving the height of prosperity because of 3 reasons:

  1. If the city or state developed along a river and the river suddenly changed direction or dried up, its economy was adversely affected.

  2. If industries moved away from rural villages, the balance of the economy was also destroyed.

  3. If the educational system has defects, such as in the rural educational system and the social system

In order to build a sound economy;

  • 30-40% of the people in an area – neither more nor less – should depend directly on agriculture.
    • If the percentage is smaller, agriculture is neglected.
    • If the percentage is greater, there will be a heavy strain on agriculture.
  • 20% on agro-industries
  • 20% on agrico-industries
  • 10% on general trade and commerce
  • 10% on intellectual or white collar jobs

This is exactly what happened in Ráŕh, Bengal, India, China and Southeast Asia.

To solve this problem today a new socio-economic analysis is required.

  • Agriculture will have to be based on a scientific system.
  • Industry will also have to be organized in perfect adjustment with agriculture.

It is not proper under any circumstances if the percentage of the population depending directly on agriculture exceeds forty percent.

The destruction of rural industries have caused a majorirty of the population, formerly engaged in that sector, to move towards agriculture.

In India, village industries have been ruined, leading for the people who depended on these industries to turn towards agriculture.

While the percentage of traders has not increased much, the opportunities for further growth have decreased.

In addition, the number of white collar job seekers has increased, resulting in soaring unemployment. The sons of rural peasants who have had a little education are no longer willing to labour in the fields. They want to become so-called gentlemen thriving on the labour of others. They consider agricultural work inferior.

As a consequence, on the one hand there is a dearth of educated youths in agriculture, and on the other hand an increasing number of people from the ruined rural industries have moved towards agriculture.

In rural areas, the percentage of the population depending on agriculture has gone up to 70-80%. What an unbearable situation!

Non-agricultural industries are those which are not directly agrico-industries.

Examples of non-agricultural industries are:

  • steel plants
  • the brass industry
  • the metal industry
  • oil refineries
  • the salt industry
  • non-herbal pharmaceuticals)

Examples of agrico-industries are:

  • the production of picks, axes, spades and tractors

Examples of non-agrico-industries are:

  • flour mills
  • jute mills
  • oil mills
  • cloth mills
  • paper mills
  • herbal medicine factories

The percentage of people engaged in non-agricultural industries should be formed by reducing the percentage of people depending directly on agriculture, agrico-industries and agro-industries.

The percentage of people working in non-agricultural industries will have to be kept within 20-30% of the total population.

If the percentage of the population engaged in non-agricultural industries in a country is less than 20%, the country is industrially undeveloped.

The per capita income of the people cannot be very high.

The standard of living also cannot be very high because people’s purchasing capacity remains very limited.

Because of the low capacity for purchasing consumer goods, the import index always remains lower than the export index, or in other words the area has to remain a satellite of a developed country.

Consequently, the balance of power in the world is jeopardized and war is always possible.

If the percentage of people engaged in non-agricultural industries is kept within 20-30% percent of the population, this is the state of balanced socio-economic structure.

If the percentage goes beyond thirty percent, the area becomes industrially developed.

Then, the more this percentage increases above thirty percent, the more over-industrialized the area becomes. In order to procure agricultural produce, over-industrialized countries try to grab productive agricultural regions or countries and make them their satellites. These over-industrialized countries also find it necessary to keep industrially undeveloped countries within their control in order to use them as a market for their finished goods.

If they do not get a market to sell the consumer goods produced in their countries, they will suffer from economic depression and growing unemployment.

In this regard there is no difference between the communist and non-communist countries. They are equally aggressive in their approach. They desperately look for the kámadhenu. (Dhenu means “cow” and káma means “desire”. Kámadhenu is a mythological cow which gives as much milk as its master demands.) They want to keep it tied to the door, feeding it the minimum amount of fodder. They want the maximum output with the minimum investment. This is why there is so much war psychosis and sabre-rattling in the world today.

Efforts must be made so that each and every country of the world can enjoy socio-economic balance in both agriculture and industry, otherwise the socio-economic equilibrium of the world is bound to be destroyed.

The harmful internal consequences of over-industrialization not only affect the personal, social and national health of the people, they also precipitate gradual individual and collective psychic degeneration. A type of psychic epidemic may arise which can poison almost all expressions of life and destroy them. This may not happen today, but it will surely happen in the very near future.

Where the industrial system – the agro-industries, agrico- industries and non-agricultural industries – depends on outside labourers, it will lead to an extremely precarious situation.

The speed of psychic degeneration will rapidly increase, and people will face permanent scarcity of food. There will be little possibility of expanding the markets for their consumer goods. Rather, the existing markets will gradually contract.

As examples we may cite Howrah, Hooghly, 24 Parganas and Burdwan in West Bengal. Most of the manual labourers in these districts are outsiders, hence the local people will never experience a good standard of living. However industrially developed or over-industrialized these districts might become, they will be seriously affected by the harmful internal consequences of over-industrialization, and will never enjoy any of the benefits of industrialization.

This miserable picture can be seen every morning and evening in Howrah District.

On the other hand, there are many areas in India where 90% of the population is dependent on agriculture.

There is no industry in these areas. They are areas of surplus labour.

In a balanced socio-economic structure, there will be no such thing as surplus labour or deficit labour because such a condition will never be allowed to arise.

The agricultural system should be structured as an industry.

  • The prices of agricultural produce should be determined by considering basic factors such as:
    • agricultural income
    • expenses
    • necessities.

The follwing must not be forced to sell their crops at throw-away prices:

  • the potato-growers of Hooghly district
  • the rice-farmers of Burdwan and Birbhum
  • the jute peasants of Nadia district who need to pay off their debts

In a balanced economy there should be proper adjustment among:

  • agriculture
  • industry
  • commerce

For example, a fixed percentage of people should be engaged in agriculture, another fixed percentage in industry and some percentage in commerce. Otherwise there will be no equipoise or equilibrium in the socio-economic sphere of life.

Unfortunately no such adjustment exists in any country today.

Even in industrially advanced countries like Great Britain, there is no proper adjustment.

England is developed, but Scotland is backward.

Even among the counties of England, some are developed and some are backward.

Lancaster is highly developed Yorkshire is undeveloped. Sussex, Essex and Kent are not equally developed.

In Bengal, some districts are highly developed whereas other districts are backward.

The economic structure is not properly balanced. This causes the people to suffer.

Calcutta, Hooghly, Howrah, Burdwan and 24 Parganas are industrially developed. The neighbouring districts of Midnapore, Bankura, Birbhum and Murshidabad are backward.

So you must try to bring about an industrial revolution in Bengal and in India, in the same way that there was a French Revolution.

This industrial revolutiond does not depend on foreign raw materials. No country should depend on imported raw materials for development.

Indigenous raw materials must be used for this purpose.

Those who love society – those who love the people of their country and are keen to bring about their socio-economic elevation – must think in terms of an industrial revolution based on the raw materials available in their own socio-economic unit.

The districts of North Bengal – Coochbehar, Jalpaiguri, Darjeeling and West Dinajpur – can produce and supply enough raw materials for industrial development.

We must utilize the available raw materials. For example, Coochbehar district can supply jute and tobacco; Jalpaiguri district can supply pineapple fibres; and western Jalpaiguri district can supply jute fibres.

Malda has so much industrial potential. It can supply:

  • mango
  • textiles
  • silk
    • The Malda silk industry can successfully compete with Chinese and Japanese silk.
  • rice bran for producing edible rice bran oil
  • jute and maize to make paper.

Unfortunately, it, is the third poorest district in Bengal.

These things should be done without delay, and in a short span of time.

No industry in Bengal should depend on raw materials imported from outside.

You should:

  • bring about this revolution
  • collectively chalk out plans and programmes and demand such a revolution.

17 September 1987, Calcutta