Translated from Urdu “Ilm-Ul-Iqtisad”
The entrepreneurship of a nation depends upon its efficiency in using land, labour, and capital with profitable methods, no matter whether the cultivation of land has reached the point of diminishing marginal returns or not. The skillfulness of the labourer, intelligence, development of the art of agriculture, labour management, utilizing capital with more farsightedness in new profitable ways, and with the help of other similar causes, the production of wealth develops to the highest level. Here arises an important economic question: if the production of wealth depends upon the strength of land, labour, and capital, then what is the reason that a nation cannot produce so much wealth as is equal to its resources for production? Or, in other words, no matter how strong the resources for production are, the production of wealth is less than the resources, implying that wealth is not produced to the extent that it should have been. What is the cause of this disagreement?
The answer to this question is impossible without studying all parts of economics. During the discussion on the consumption or utilization of wealth, you have learned that at times the utilization of wealth might cause an extreme level of damage to a nation’s strength of capital and labour. Similarly, during the discussion on the distribution of wealth, you will come to know that at certain times, wealth gets distributed among its producers in such an illogical way that some people suffer from a permanent loss. According to the same hypothesis, in the chapter on the exchange, the reasons for this phenomenon will be discussed, including why at times the production of wealth stops or why the business of handicrafts does not flourish, due to which the wealth produced during previous years gets consumed. Therefore, a satisfactory answer to the above-mentioned question cannot be provided until we study all the parts of economics minutely. Here, we want to discuss those causes that are hurdles in the way of the production of wealth. As we have already stated, one cause of this phenomenon is that the fertility of the land is prone to decrease with the passage of time. (Provided a man does not compete with the law of diminishing marginal returns with his intellect.) However, besides this, there are other causes, which we will discuss herein as follows:
1. Labour and capital are non-transferable to some extent. In all civilized nations, both labour and capital attain specific shapes, so if we want to change them from one shape to another, there would arise different types of problems. For example, if the businessperson spent lakhs of rupees on nails, how is it possible for him to transform his huge capital into some other form without expenditure and other losses? Or for a handicraftsman who learned a particular trade with hard work and monetary expenditure, how is it possible for him to leave that profession for some other profession to earn his livelihood?
2. Using labour and capital without any fear of the future. If these two resources are not used with far-sightedness, then an evident difference in the powers of their production will be felt. It is possible that after the death of the owner of a factory, his heir, due to errors and inexperience, may not act with far-sightedness, and in this way, due to his mismanagement, there will be a considerable decrease in the production powers of the resources. As you know, in the present times, due to the requisites of the needs, in all the civilized countries, the management of labour and capital is in the hands of a particular class, which is known as the “bourgeoise. The existence of this class is as important for the management of capital and labour as is the existence of a supreme commander necessary for an army. As adherence to the principles of division of labour increases, the existence of a bourgeois becomes necessary not only for putting management, labour, and handicraft on profitable lines but also for establishing efficient management among the labourers. Who other than the owner can better decide what to produce and at which price to sell it? Therefore, the workmanship of the present world tends to fall gradually into the hands of a particular class.
Some economists opine that in the system of producing wealth, the existence of a bourgeoisie is not important. According to these economists, their existence gives birth to unnecessary rivalry among the workers. The consequences of which are detrimental to producing wealth. They have suggested various ways to remove this hurdle. One of the suggestions is that workers in the same trade may work with common capital. There is no doubt that such cooperation is beneficial in various aspects. For example, if the process comes into action:
1. The quantity of wealth that, in the present economic conditions, goes into the pockets of the bourgeoisie will come under the control of the proletariat
2. The proletariat will become sovereign in all respects and will produce whatever shape of wealth he wants.
3. In the current situation of civilization, sometimes it happens that workers insist on higher wages from the owners, and if they do not get the demanded wages, they stop working any further. But if this method is brought into action, such things will never happen. Because the group from which protests are expected will disappear from the scene,
4. The workers will be motivated to practice austerity and will work wholeheartedly. Practically, this cooperation will manifest in two ways:
First: that shape wherein the workers will work in a particular branch of business to earn income.
Second, that shape wherein a worker will utilize his wealth with the grace of his existence For example, some workers will collectively open a provisional store and take an oath among themselves that they will purchase the necessities of their lives from this shop at a nominal profit. One advantage of this method will be that they will get necessary goods comparatively cheaper. Besides, after subtracting the expenses of the shop, the annual profit will be divided among all the workers according to the percentage of their share. In the former situation, there cannot be any significant hope of success because the workers will not exhibit the business intelligence that is particularly present among the factory owners. Most among them only know how to work collectively and are bereft of the commercial spirit, with the help of which the factory owner gauges the fluctuations of the business with a glimpse of observation. However, there can be hope for success in the future. particularly in Hindustan, where there is a dire need for such unity.
Third, after this brief diversion, we ought to know that the third obstacle to the production of wealth is natural calamities, which destroy wealth. For example, the destruction of ships due to wind storms, other accidents, outbreaks of fire, etc.
In this chapter, research on one more issue is necessary. You know that in different countries, the quantity of wealth produced is different. Even if we study the history of a country, we will come to know that in different time periods, the production of wealth in this country has remained different. Sometimes two countries are on the same level of culture and civilization, and their other circumstances are also almost the same; even then, the above-mentioned contradiction exists. Pondering over this issue gives rise to two important questions:
1. What are the causes due to which such contradictions arise?
2. Under which economic principles do these causes work?
Production of wealth is a complex process that can have ordinarily three ranks:
1. That labour is used to take control over a material commodity. For example, cutting down trees in a forest
2. That labour is used to bring transformation to a natural commodity and make it useful for human use. For example, making tables from wood.
3. That labour is used to transport the commodities from one place to another.
It is evident that in countries where labour is used in comparatively favourable conditions or where the number of workers or the performance of their labour is higher, the process of producing wealth will be very result-oriented. Comparing different countries, we come to know that:
1. In some countries, conditions for labour are comparatively more favourable. For example, due to her generosity, nature has bestowed some countries with vast coal mines and, in some other countries, hidden the treasures of beneficial metals under the surface of the earth. According to the same theory, in some countries, various items grow naturally, whereas in other countries they are obtained only after very hard work. However, it must be remembered that such benefits do not remain homogeneous. During the period of the Mughals, in addition to other benefits, one benefit of the rivers was that business and other relations were established with their help. Currently, all these tasks are undertaken with the help of the railroads. Moreover, it should also be remembered that we can only benefit from nature’s limited treasures when we have their knowledge. Along with the development of culture and civilization, the hidden properties of material commodities and the concealed secrets of the earth are being discovered daily, and humans are tremendously benefiting from them. The nations that do not have such knowledge are necessarily far behind those that do. Take the example of minerals. The nations that do not know how to discover minerals will have no benefit from them, even if the earth of their country is full of hidden treasures of minerals.
2. In some countries, the number of workers happens to be large, which affects the process of producing wealth. In our Hindustan, the number of workers is very large. We have only a lack of capital; otherwise, we would not have been lagging so much behind other nations in the production of wealth. In addition to scarcity, workers of different nations have inherently unhealthy habits that are against the principles of health. In somewhere, water and clean air cannot be made available; at other places, there are such physical causes that affect the quality of workmanship. According to the same theory, in addition to the difference in physical strength, the workers of different places have differences in skill, intellect, and farsightedness. Some nations are naturally smart and agile as compared to other nations, and some are naturally lazy and comfort-hungry. To do away with such defects is the duty of reformers and educators.
3. Ordinarily, there is a contradiction regarding the motivations of labour. By nature, humans aspire for wealth. This natural urge is the biggest motivation for labour. However, sometimes other motivations prove to be more important and stop the human urge for wealth from affecting human life in totality. In some religions, contempt for wealth is an important principle, which will necessarily affect the sincere followers of these religions. Ordinarily, the eastern nations are so fatalist that they do not think much about their future, and trusting God, they prefer to remain idle. Here, an objection can be raised that the urge for wealth can be motivation up to a certain level because the real purpose of labour is to fulfill one’s needs. When all the needs are fulfilled, this motivation cannot act. The answer to this question is that when man fulfills his necessities, new needs naturally arise. For example, one wants to decorate their house and provide them with other comfortable items of life. The desire to taste the hobbies of knowledge and literature also comes under the same umbrella. These are the secondary motivations that affect different nations at different levels of culture and civilization. Similarly, after having fulfilled his personal needs, every man naturally thinks about leaving something behind for his posterity, which is one more motivation for labour.
4. The moral circumstances of workers in different nations are different. The most important quality in a worker is that he must be honest. He must not be lazy and must have control over the non-profitable instincts of his nature. To the extent to which he is God-fearing and honest and is concerned about defraying his duty, the national wealth will increase to that level. Lazy and comfort-craving workers are detrimental to their country and nation. Because their existence decreases the national wealth day in and day out. The most important duty of education and training is to cultivate honesty, agility, fear of doomsday, and other important qualities in the public, and they must develop a firm belief that the benefit of the entire nation and the benefit of a particular person in the nation are not two different things but are related to each other. And the worker who complies with his animal instincts and damages his physical and spiritual strengths not only victimizes himself but also harms his nation.
5. The efficiency of the workers’ labour varies in different countries. And in most countries, resources have been adopted to increase the efficiency of labour and to utilize capital with more farsightedness. Somewhere, socialism is in vogue, and in other places, cooperative methods (which have been discussed earlier) are used. And in some places, other types of business unions are formed. In our Hindustan, socialistic methods (collective capital) are in vogue. And there is no doubt that this method is very beneficial for those countries where the quantity of capital in toto is lower. If a man starts a business with Rs 100, he will have no expectation of profit; however, if 100 men with Rs 100 each start a business, there will be a high expectation of profit. These causes of difference are present in different countries, but their effect gets vitiated due to the action of other causes.
We have replied to our first question. Now we want to know under which economic law the above-mentioned causes of difference work. There is no doubt that among these causes, some, for example, Cause No. 1, the action of which is not subordinate to any law, but the action of some other causes is subordinate to laws. For example, the number of workers and the action of their related causes are subordinate to the law of population. According to the same theory, the action of the efficiency of labour, etc., is under the effective domain of the law of capital. Economists have discovered three laws in this regard, which will be discussed in a series.
Ilm-ul-Iqtisad
Baab-4 “Kisi Qom Ki Qabiliyat Paidaish-I-Dowlat Kay Lihaz Say”
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