OPINION> Columnists
It's good to go back to basics
By Ashis Chakrabarti (China Daily)
Updated: 2008-11-28 07:46

Going back to basics is always a good strategy, in economics as in other things in life. As the world grapples with the economic gloom, a silver lining seems to be on the horizon on two fronts. The focus - particularly in China, but in other parts of the world as well - is back on agriculture and jobs.

For far too long, agriculture has got the short shrift. In the mad rush for maximizing profits, farming and farmers were pushed to the periphery of economic growth models.

In many countries, especially developing ones, the story of agriculture presented the same despairing pictures. There never was enough capital invested in farming to make it a modern economic activity.

What the farmers grew with their limited resources did not fetch them decent prices. Distress sales of farm produce were a common story in most of these countries.

True, the migration of farmers to urban areas to build cities and industries has happened throughout history as much as it has been at the heart of China's economic miracle. But this had a flip side and that showed most dramatically in the decline of agriculture.

Actually, China started a course correction long before the current global economic crisis. Its program to build the "new socialist countryside" predates the crisis by several years.

But what makes the task far more significant is the new rural reform unveiled in October.

To me, this is a stimulus whose long-term economic potential far outweighs the importance of the stimulus packages that countries are offering in order to fend off dangers of a recession.

The big message may not have quite trickled down to the farmers on the fields as yet, as I found on a recent visit to a village about two hours' drive from Chongqing. But whatever little they have learnt about the reform so far seemed to be breathing new life to farmers' own ideas of re-discovering the economic possibilities of farming. That clearly is a good sign, though concrete ideas about the reform are yet to take shape.

The question of food security, in China as elsewhere, is too important to be overlooked in the quest for quick and high profits. But what is just as important is the issue of jobs and living standards for people in the villages.

Like the neglect of agriculture, the issue of jobs too had long become almost a footnote to the economic story. Especially since market and share prices became the new divinity. Everything else - jobs, people and wages - could be sacrificed at the altar of these false gods. As if human beings had no real place in this market-only world.

Think of the buzzwords of the so-called corporate universe - takeovers, mergers, outsourcing, downsizing, et al. The big idea was to make it smaller and smaller for workers - and bigger and bigger for profits and top executives.

We have been told the leaner the companies are the more profits they take. The bottomline always is workers and wages are the first casualty of every new profit-pushing move. At the first hint of a quarterly fall in profit, layoffs and wage cuts are the first remedial steps.

In a seminal study of downsizing in the US, three prominent American economists - William Baumol, Alan Blinder and Edward Wolff - discovered the "dirty little secret of downsizing". They claimed the so-called panacea of downsizing did not add "one iota of growth" in productivity.

Nobody would argue that bloated companies and government organizations did not need restructuring. But the capitalist economic story everywhere was getting dehumanized, with profits not only replacing but actually crushing people.

It would be a real turnaround if economy once again means real people who, through their labor in the fields and the factories, create it.

A real recovery would be one where economic growth gets a human face again.

E-mail: ashis@chinadaily.com.cn