6 - A Global Win–Win Model for Development

Summary

Indian Economics’ global development plan in the long run was universal industrialisation and free trade. The widely accepted plan for development in the nineteenth century was broadly based on David Ricardo’s comparative advantage model, which prescribed industrialisation for western Europe and condemned the rest of the world to producing raw materials. This international division of labour, argued Mahadev Govind Ranade, would not, like the model theorised, bring Indians the highest level of progress. Indian Economics envisaged a positive-sum game of global development where an industrialised Asia would not outcompete the already industrialised western Europe. Industrialisation in India would bring higher standards of living and increase global aggregate demand, leading people to buy more goods from Britain and other industrialised countries. Universal industrialisation would, argued the Indian economists, be win–win for the world economy.