Economics full employment in agricultural countries

Some years back when this Book was being contemplated, the domination of Keynesian theory was still strong. It was supposed that the 'accepted' devices for full employment were equally valid in almost all contexts. It was not sufficiently realised that the relevant theory had been largely inferred from and was mainly applicable to countries with diversified and well-integrated structures of production. It was, in other words, felt that these devices would effect large-scale transformation of the structure and trends in production of under-developed countries; whereas, in truth, this large-scale transformation had first to be effected by other means before full employment theory could be considered applicable. The latter is now more or less commonly accepted fact.

So also is the view point in favour of incorporating Industry in general development. It is a point of view that may have required much proving a couple of decades back.

An aspect of this subject, however, remained a matter of con troversy for a longer time. It was the effectiveness or otherwise of the normal machinery of 'private commitments' in working the change. There was a theoretical error in assuming that the history of development of the advanced countries could provide the answers to the problems of executing the change in agricultural countries. It was not fully granted that the context of depressed countries developing in the midst of far advanced ones is poles apart from the nineteenth century context of dynamic national States forging ahead amidst positively stagnant economies. But the role of the State as a participant in economic development is more clearly understood now, although on the degree of participation there is still much disagreement.

Attempts to show the irrelevance of full employment theory have appeared sporadically, as foot notes and passing observations in articles or books. Some articles and books on the subject of under-developed areas have, by the emphasis placed on structural change, shown the secondary importance of accepted full employment theory for these countries. Similar discussion has been evident in regard to industrialisation in backward countries. In regard to the necessity for the State to assume a more intimate role in development than formerly there has been more direct literature.

The purpose in Parts I and II of this Book has been to bring together, critically, the relevant arguments that may have appeared at various times and contexts; to supplement, where other lite rature has not already covered the points; and, thus, to set down the theoretical foundations on which the current general acceptance of the three points, referred to, are based.

In Parts III and IV the appropriate economic policies, internal and international, dictated by the foregoing are considered with special reference to India and Ceylon (more particularly the latter). The economics here is largely one of change and how to effect that change. A Study in the Economics of Transition could well be a sub-title to the Book.