Agriculture and Development

Atanu Dey provides a tutorial on the role of agriculture in development, and why agriculture needs to become more productive so labour can get freed up for manufacturing and services:

For India to develop, there is no way other than moving away from agriculture. By that I don’t mean that we give up agriculture or reduce our production. I only mean that instead of 66 percent of our labor force being in agriculture, we have to steadily reduce that to something like 10 or 20 percent at most in the medium term and to single digit percentages in the long term. When labor does make that transition, then the released labor has to be absorbed in manufacturing and services sectors. This is a natural progression, come to think of it.

Natural because first we need food. Then we need non-food stuff such as clothes and shelter and vehicles and roads and books and computers and shoes and ships and sealing wax etc. All that stuff has to be manufactured. Once we have food and manufactured stuff, we need services such as education and dentistry and dancing and musicals and movies and psychiatry and what nots. This entire edifice is built upon the agricultural sector because without it producing food, no manufacturing nor services would occur. Of course, if we got super good in manufacturing, we could export that and buy food. Or if we got super good in services (BPO or what have you), we could export that and buy food and manufactures. The trouble is that India has a very huge population. And therefore if we ever specialize (that is do only one thing), then we would be forced to produce in such great quantities to export the stuff that the world price of that (food, manufactures, services) will crash and we will not be able to survive.

The bottom line is this: A large economy has to be largely self-sufficient. It has to produce food, manufactures, and services domestically and it has to consume most of what it produces domestically as well. Only small economies can afford to specialize and survive through trade.

Cialdini on Influence

[via CapitalIdeasOnline and Yuvaraj] Robert Cialdini has a book on “Influence: The Psychology of Persuasion” which is a must-read. This interview from 1999 lays out his key ideas: “I really want to talk about a practice of influence. How it is that one person can arrange more successfully to get another person to say yes to a request. And I realize that the way to do that was to go beyond my university environment, where I currently work, and get into the world where the influence wars are being fought all around us, everyday. And it seemed to me that there were professions and practitioners within those professions whose business it is, after all, to get others to yes to them. Whose business, whose economic livelihood depends on the success of the strategies they use to influence others in their direction.” The six strategies discussed by Cialdini are: Scarcity, Likeability, Social Proof, Reciprocation, Authority, and Commitment and Consistency.