The inclusion of peoples into productive work always remains in the middle of agenda since societies form any governing institution, be it primitive village societies, city-state, monarchy, feudalism or the modern state. Though, the agenda of inclusion remained to change to the people’s centric and growth-centric. This chapter is divided into three sections 1) when growth was considered end product and man as only mean to achieve growth 2,) growth considered mean and man as the end and 3) explaining inclusive growth. The timeline is carved not as watertight compartment but by analysis of literature available on inclusion. The first section is about when inclusion agenda remained growth-centric though socialistic, and welfare ideas gathered around man’s centric but only partially and were camouflaged by growth-centric paradigm. It was only after 1970 when man’s centric growth was recognized, and growth was considered as a mean to serve man is explained in the second section. It is not to say that the pursuance of growth ignored and individual attention remained on human but with the development of human growth remain an exclusive factor which ensures to fulfill the objectives of human development. The third section is about the explanation of inclusive growth regarding debates, definitions, and methodology of inclusive growth.
Genesis of Inclusion (Man as a Mean and Growth as an end)
Since earlier period, especially when monarchy, feudalism or any other form of collective institution of regulation setup, peoples were expected to contribute to the treasury on large basis productively and sometimes even king, feudal lord or in European ancient state Churches, distribute land and seeds to its citizens to grow the crop and in return they charge heavy portion of produce in return. Peoples’ participation in productive work is considered pivotal for the growth of the state throughout the ages’ especially in the monarchy and in some established kingdom where collective efforts were at prominence to meet expensive operations or some big project which is to be built on the surplus created by the productive labor of that kingdom. This is mentioned in Kautilya’s Arathsastra that Artha (Finance) and Danda (punishments) were the major pillars of the state.
The working population, i.e., the majority of them were farmer and artisan, were regarded as a productive asset and surplus generated by them was accounted major portion of the treasury of the state. And even a barren land located in the kingdom is suggested to be populated with productive population, especially some low casts (who are referred Shudra or untouchables) and some time to meet out expensive exploration and aggression, the unseasonal crop is suggested to be cultivated by farmers (Kautilya Zarathushtra, (ed.) Rangarajan, 1987). Though peoples’ participation in productive works was not considered from the welfare of the people but the welfare of the state and aristocracy of the state.
Economic description of people’s participation in productive work can be traced since the Mercantilism which offers a comparatively systematic thought on economic matters. The views of mercantilists vary on various matters, but regarding productive population at large basis, all mercantilists share the similar thought of large and hard-working population. Not only would a sizeable, industrious population provide an abundance of soldiers and sailors ready to fight for the glory and the wealth of nation, but also it would keep labor supply high and wages therefore low (Bruce, 2000, p. 19 and Peukert, 2012 pp. 93-121). The same views on the productive population at large basis are expressed by Physiocrats also as their focus was mainly on agriculture, large and productive population (Lluis Argemí d’Abadal pp.137-159).
On productive population and broad-based growth the views of classical economist of which Adam Smith a prominent figure expressed the same views that working population and division of labor can tremendously contribute to the nation’s wealth (Smith, 1999). Though Malthus views on population and its produce were passive but enhancing the produce by skilling the labor is ostensibly linked with productive population and broad-based growth (Bruce, 2000). The views of economic thinker till the rise of socialist thought were not only simmering around the productivity, productive population and broad-based engagement of populations in productive activities but also minimal government (minimal government was combined with market fundamentalism) of which Mill was ardent supporter and absence of production with a human face. Industrial revolution shattered agrarian-village-handicraft economy with the advent of large factories. Around these factories sprang up crowded slums, where vice, crime, disease, hunger, and misery were a way of life (Beer, 1940).
On the backdrop of this discontent was developing against capitalist and industrialist and gradually gave away to the rise of socialist thought which put a human face on production (Helg Peukert, 2012 pp. 323-369). The socialist thoughts started from utopian socialist Henri Comte de Saint-Simon to state socialism and ultimately gave way to Marxian Socialism. The shared and pro-poor growth version of inclusive growth can be traced from the socialist thinkers who put the labor in the middle of the productivity and attached great value to the labor productivity.
Socialist legacy of trade unions, decent and well-paid work, work for all continues even today and the agenda of inclusive growth that is broad-based, shared, and pro-poor growth is refined and a mixture of ideas of various economic thinkers. The later sway in the realm of shared growth came with the welfare economist, Vilfredo Pareto assumed its propagator, though his ideas were shaped around market fundamentalism and perfect competition, the maximum welfare was expected through market allocation, and this confers the idea of shared growth. The second sway in shared growth with state intervention is perceived from the ideas of A.C. Pigou. Beside Pareto, his analysis was based on partial equilibrium, and by that, a divergence between private and social costs was devised. By this, it was found that the marginal utility of money diminishes as more is acquired, Pigou asserted that greater equality of income under certain conditions could increase economic welfare (Pigou, 1932).
These ideas even today shape the policies of the state to compensate the individuals of market shocks and those who left behind. The later period in economic regulation was occupied by free-market champions and the economic problems, manifestly poverty, inequality unemployment and deprivation was considered to be addressed by the free market. In sharp contrast with the old paradigm, the new one proclaimed that economic development was too important to be left in the hands of government planners and bureaucrats.
Development policy, therefore, had to focus on freeing and enabling markets to ―get prices right (Williamson, 1989 and Nancy et al. 2010 p.8). The ideas behind free market economy are credited to the Washington Consensus which eventually grown to the trickle down at the time of Ronald Reagon regime. The spillover of Washington Consensus and trickle down mechanism also applied in India visibly in pursuance of economic reforms. So-called Consensus and trickle down failure broaden the chasm between the haves and have not. Till then the idea for assessment of human Development was earthen, and efforts to form a crude measure of human development measure were started.
Developmental Inclusion (Growth as a Mean and Man as an End)
In 1990 a team led by Mahbub ul Haq in consultation with Gustav Ranis, Amartya K. Sen, Paul Street, Meghnad Desai and many others with United Nation Development Programme (UNDP) came out with Human Development Index (HDI) to measure the development on three basic dimensions which peoples value the most, namely healthy life, knowledge and a good life.
Since then a report on human development is published every year. The HDI report itself is a document which testimony the change in philosophy and measures to include left out into the mainstream. Earlier thoughts in HDI focused on capability, real freedom enjoyed by the peoples and exclusive treatment of the growth. Gradually in later periods, a paradigm shift to the equality, the inclusion of women and shared growth. In recent reports, inclusive growth is thrust area with formulating an employment-led growth strategy, enhancing financial inclusion and investing in human development. As for as India is concerned on the policy front, it more or less kept a tune with a Western thought on economic policy and kept changing its policy stance as per mainstream worldviews.