India now has a progressive manufacturing policy, let’s create 100 million jobs by 2025

The sputtering of growth of India’s manufacturing sector and GDP is worrying. It is imperative that manufacturing advance full throttle to create jobs and sustain growth of our GDP. India’s policymakers must create 100 million additional jobs in manufacturing by 2025. History provides them some lessons.

In 1902, a London newspaper complained, “The average citizen wakes in the morning at the sound of an American alarum clock; rises from his New England sheets, and shaves with his New York soap, and Yankee safety razor.

He pulls on a pair of Boston boots over his socks from West Carolina, fastens his Connecticut braces – rushes out, catches an electric tram made in New York, to Shepherds Bush, where he gets into a Yankee elevator, which takes him on an American-fitted railway to the city. At his office, of course, everything is American…”

American industry had surged. The worry was that British consumers were creating jobs for American workers. A hundred years later, there are complaints in the US that while Americans need jobs, American consumers are creating jobs for Chinese workers.

Tough that is what free trade is supposed to be about: let those who can produce best, produce for the rest, US policymakers complain that China does not play fairly by global trade rules.

Clyde Prestowitz, who was director of former US President Ronald Reagan’s task force against unfair trade, points out in a recent article in the Financial Times that, contrary to the theory of open trade they espouse publicly, the actual ‘theory-in-use’ of policymakers in most countries continues to be to make (or break) trade rules to support the growth of their domestic manufacturing. He picks on China, of course.

In fact, the growth of US industries in the latter half of the 19th century, resulting in their global success as illustrated in the London paper, coincided with the period when the US was the most protectionist country in the world.

Paul Bairoch records the histories of various countries’ economic and trade policies in Economics and World History: Myths and Paradoxes. He says, “The most interesting period is that of the years 1870-92, those of theGreat Depression that affected the European continent in its most liberal period.

In those years, the US was increasing its protectionism and went through a period of very rapid growth… Therefore, the best 20 years of American growth took place in a period when its trade policy was protectionist while that of the US’ major competitors was liberal.”

Bairoch says that proponents of free trade don’t know or don’t tell the whole story. He traces the history of economic growth of European countries in the 19th century.(curtsey: economic times)

Rupesh Yatesh Dalal
Head Research Department
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