Relative Productivity – Journey in India
By Zachary McClure
As I traveled through India I was shocked by the amount of manual labor being used here. I spoke with an educated Indian girl (29 y/o, Marketing Manager, Masters degree) on a train yesterday, and I mentioned how “No one in the US really farms.” And she asked – “They don’t have farms in the Midwest anymore?” – to which I had to explain that so much of the process was automated that very few people were able to create the output for so many. Only 1% of Americans claim farming as an occupation. She was still not able to understand and then said “Oh ya I bet at least 20% of Indian’s are farmers.” In fact the number is much higher. As we rolled through the Indian countryside you could see hundreds of people (mostly women) digging in the soil and tilling the earth by hand, without even shovels or hand tools.
Earlier in the day while driving through downtown Delhi, one of the world’s largest cities, there were 2 guys breaking a big boulder by hand. (I don’t know why there was a huge boulder by the side of the road, but there was. One guy was holding a metal stake down, and the other guy was swinging a big hammer repeatedly onto the snake. I asked my driver (who spoke no English, and this was after 70 straight hours together but who else was I supposed to make a comment too) – “What happens when (the guy swinging the hammer) misses?” Inevitably he will, it’s likely the guy holding the stake will break a finger or worse, and then they will probably just rotate another person in to hold the stake. There are just so many people in India that there is a near endless supply of labor to the point that a human life has actually been devalued, and at the very least the quality of every individual’s life is forsaken.
I started thinking about relative productivity, and if it would be more productive for those 2 guys to spend 10 years doing something else, save up enough money to buy a big roller / earth crusher that could flatten that rock in 5 seconds, would they actually be able to break more rocks over the course of 10 years and 1 week than if they spent 10 years hammering at boulders with a stake and a hammer, one at a time? But what else could they even do? And where would they ever get an idea like that anyway? Opportunities for small changes in productivity and investment to massive improve the quality of life for so many people are what is attracting visionary entrepreneurs to India. There are very few places in the world where a small investment in infrastructure can yield so much benefit to so many people. In the U.S. no one is breaking rocks by hand anymore (and certainly not in the 2nd largest city), so buying another earth mover really isn’t going to move the needle on quality of life or productivity of the country, whereas in India it can increase it’s productivity by an exponential amount.
There are amazing opportunities in India, but at the same time why would you spend $5m (that you don’t have) on a rock crusher when you can pay 40 people 40 cents a day. It is too hard for people on the ground in India to see the productivity opportunities available. What we need is more western entrepreneurs and humanitarian organizations with enough funding to actually initiate projects to come to India and make it happen. In the end it will be profitable for those investing, and it will yield humanitarian benefits beyond anything that can be done in the US. In my opinion you can find places all over India today that are in worse shape than New Orleans was the day after Katrina.
P.S. I also saw the Taj Mahal and loads of baby monkeys! It was amazing of course, but on my travels to countries like India I look for more meaningful takeaways.