Agriculture Vs. Industry In De
To define development economics, as Michael P. Todaro defined it, that it is the efficient allocation of existing scarce productive resources. By this definition we can assume that it furnishes the assumption of a country succeeding to allocate its present resources efficiently would therefore start to develop; meaning that all other factors in the country would start to develop such as education, poverty levels decline, equal distribution of incomes...etc.. For a country to develop economically, allocate its resources, it should go on developing either agriculturally or industrially. In the 1950's, after Egypt turned to be a republic, there was the great development researches of Sir W. Arthur Lewis, the eminent English Economist, many economists suggested, as a world theory of development, to disregard agricultural development and directly move into industry. Assuming that if we concentrate on industry the agriculture sector would develop on its own, they called it the Lewis two-sector model. In the 1960's, Egypt adopted this policy and it failed to develop, while in India, which was similar in the economic status to Egypt, they disregarded this theory and succeeded in starting to develop rapidly by paying full attention to dev
Hence, the development of the agriculture sector depends on the industrial sector. In developing countries, capital, skilled labor and entrepreneurs are three factors that they will not be able to be consumed in both sectors. They can work for only one sector due to the scarcity of resources. If developed countries work on both sectors, but have slow development, then by time, skilled labor will move from agriculture to industry, deteriorating agriculture. As a result, developing countries, such as Egypt, must choose at early stages of development, and make wise choices. You choose according to the conditions under which the country operates. You identify the characteristics of both sectors, and see which is better. Unless you do this, you will have resource misallocation and will never achieve resource allocation efficiency. The Lewis theory of development stated that the more I industrialize the more my per capita income would increase and the higher the growth rate of my economy. Assuming that if I shift to industrial development the above mentioned consequences would cause the shift or increase in agriculture development; therefore, my whole economy would grow or develop. Lewis assumed a few assumptions with this theory: first, is that I would have an unlimited supply of labor, where he assumed that there will always be disguised unemployment in the agriculture firm, land. Accordingly, we can take this extra labor supply and hire in industry. This assumption was based on the theory that most farms have a marginal labor productivity equals zero due to family working together; therefore having disguised unemployment. Secondly, the average productivity of labor is constant, which would only be true if his first assumption is true. If a whole family works together in a farm then there will be an equal distribution of profit or share even though some might have not worked at all. This would only happen if I have disguised unemployment. Thirdly, is that a country must have efficient productive entrepreneurs, they can make profit. And finally, lewis assumed that the labor's increase in wages would not be consumed. To further explain Lewis's theory it would take years, but lets just illustrate each point as we go through its opposition. If we look at the world as if for the very first time through the eyes of an economist, we will be able to fully understand and appreciate the steps that each and every country must take in order to become fully-grown. Economic growth is the steady process of increasing productive capacity of the economy and hence increasing National Income. However, in time with good leadership and hard work, we will eventually proceed up the economic ladder. As for the persistent problems that we face at every turn we make, we must take them one at a time and explore their solutions. Developing countries as a start should totally think of developing agriculture, specially cou
Some common words found in the essay are:
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Approximate Word count = 1966
Approximate Pages = 8 (250 words per page double spaced)
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