Saturday, July 2, 2011



Economic Organisation

Economic organisation is a design of human action by which goods are produced, distributed and consumed.

The Economists' Point of View

Economists define production as the process by which land, labour and capital are combined to produce articles needed for daily consumption, and the machines, components of machines and raw materials which are in turn required to produce the articles of daily consumption. Land refers literally to the land for agricultural activity or land on which a workshop or a factory needs to be erected.

Labour refers to the work that is put in by labourers. It is labour which rises machinery and raw materials to produce what the people in a society want. The machinery and raw materials refer to the capital that is required in production. Land, labour and capital are regarded as the important 'factors of production' and the behaviour of each of these factors needs to be studied in order to discover the laws of production.

Production and Social Factors

Case of the Mundas or the Kols who live in the forests of Ranchi district in Bihar. The mundas are now regarded as a Scheduled Tribe by the government of India. Till recently, they used to practice slash and burn agriculture, locally known as jara, they used to clear a patch of forest land by burning. They dug the

ground up, spread the ash left from burning and broadcast seeds. Every season the land used for cultivation earlier was left fallow and a new plot was prepared by the same procedure. This type of agriculture is now being discouraged by the government as it results in large scale deforestation. N.K. Bose, an anthropologist, has written about the land rights and social organisation among the Mundas. Originally the forests where the Mundas lived had belonged to them, but as the contact with the outsiders increased during the British rule, the lands came to be controlled by the British Government in India. Middle men, who did not belong to the tribes entered the picture. They were called the Khuntkattidars. Bose writes that Khuntkattidars are a class of landowners within the Munda villages who

exercised absolute rights over land. But they allowed individuals to cultivate the tracts of land they needed and reap the harvest. It is clear here that there were several gradations of rights over land. Some had only rights to cultivate and harvest, others had more superior rights. These rights define not only the relationship that members of the society have with each other, but the Khuntkattidars apparently derived considerable political powers from their superior rights in land.

Aspects of Land Rights

It Should be stated here that the above mentioned type of land rights among the Mundas got modified over the years as they came under the political control of local kings and later of the M~ghurlu lers, followed by the British. The Khuntkattidars now had to acknowledge the jagirdars and kings to whom they had to pay annual rents and tributes thereby restricting the Mundas rights and impoverishing them considerably.

Another example is the system of bonded labour that existed in many parts of India and has

continued to survive today despite specific laws which have been enacted to abolish this ingtitution. In Tehri Garhwal district of Uttaranchal, a labourer, usually belonging to the untouchable castes of Doms and Koltas borrows a small sum of money from a landowner in order to get married and subsequently becomes bonded to his landowner-moneylender. He has to work on the landowner's land till he repays his debt with interest which often takes a long time. Often, not only is he expected to work on the land, but his wife is expected to serve the master's household. It is reported that the landless labourers prefer to enter such bondage rather than remain free because in the former case they are assured of their daily food which is provided by the master, whereas the price of freedom may be deprivation of daily food.

Social Aspects of Production

Production involves producing so-me object that is considered to be valuable by society. The object that is considered valuable is called a product. A procudt has value in use and value in exchange. Value in use or use value, refers to the value that one derives from using a thing or object. Sometimes an object may have use value for some and not for others. For a nonsmoker, cigarettes and beedis have no use value but for smokers they have. Besides use value, goods must also possess exchange value, that is, people must consider the object, worth exchanging with other objects. Only when these two conditions are fulfilled can an abject or thing be regarded as a product.

Services and Production

Adam Smith, who is regarded as the father of modern economics, wrote in his book "Wealth of Nations" published in 1776 that only those who are engaged in the production of goods are productive. But in modern societies this criteria can’t be taken for the production because the services of scientists, researchers, policy makers are equally important in the calculation of production of goods.

Women and Production

Even when services are considered, some services are not included in the definition of production. Many economists point out that the method of calculation of a country's total production in a given year ignores the contribution of women. Women who work on a variety of domestic chores, right from helping their menfolk in agriculture to cooking, washing and nurturing children are treated as dependents, not workers. The statisticians ignore their services in adding to the total value of production because their services are unpaid. But the economists rightly paint out that statisticians, however, calculate the value of the amount of food grains produced by the farmers (generally male) for their own consumption. This practice shows the inherent bias against women in society. After all, women's work is not only valuable in itself but household work supports in an important way the entire economy of a country. By minding domestic chores, women release their menfolk for work in the various factories and farms and thus help contribute to a nation's production. This example dramatically bring out how a society's values define what is productive and what is nonproductive.

Technology and Production

The level of production in a society and the variety of goods and services available will depend on the kinds of tools and machines used. Knowledge of how to build machines and improve their performance

and the availability of trained technicians and engineers. These are the technological aspects of production.

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