The agrarian barrier to industrial growth

Abstract

It is argued here that in transitional economies industrial growth depends not so much on the size of the agricultural surplus but rather on the rates of productivity growth and population growth in agriculture via their effects on the size of the home market for manufactures. In developing this argument estimates of the agricultural surplus and inter‐sectoral market shares in post‐restoration Japan and post‐independence India are compared. A typology of agrarian systems is then suggested based on how alternative systems influence productivity and population trends in agriculture. The typology is illustrated with historical comparisons from Europe, Japan and India.

Notes

Centre for Development Studies, Trivandrum and Yale University, Department of Economics, New Haven. This is a revised version of a paper originally read at the seminar on Marx, Schumpeter and Keynes at New Delhi in January 1984 and subsequently discussed at Erasmus University, Rotterdam; Institute of Social Studies, The Hague and Yale University, New Haven. I am grateful to the participants at these discussions and especially Ashok Nag, Shakti Padhi, Gustav Ranis, Ashwani Saith, Frances Stewart and Michael Tharakan for their comments on an earlier draft.