Theory of Technical dualism
- 1. TECHNICAL DUALISM Sr.Sindhu P.J (Sr.Sharin CTC)
- 2. Prof. Higgins has propounded the concept of technical dualism. 1. Meaning of technological dualism: "The use of different production functions in the advance sector and in the traditional sectors of UDCs". The existence of such dualism has increased the problem of structural or technological unemployment in the industrial sector and disguised unemployment in the rural sector.
- 3. Higgins theory of technological dualism incorporates the factor proportion problem as discussed by K.S. Eckaus, which is related to limited productive employment opportunities found in the two sectors of a UDCs because of market imperfections, different factor endowments and different production functions.
- 4. 1. Characteristic of the dual sector: A. Features of the traditional sector: 1. Agriculture, cottage and small industries including handicrafts are the principal occupation of this sector. 2.Different techniques and different combinations of labour and capital are often employed in this sector .Thus ,technical coefficient of production is highly variable in the sector. 3. compare to capital, labour is often more intensely utilized in the process of production. That is, the process of production is dominated by the labour intensive technique of production
- 5. 1.This sector includes industries, plantations, transport and related activities as its principle occupations. 2. There is a limited scope of technical substitutability of factors of production. accordingly, technical coefficient of production remains generally fixed. 3. Compare to labour, more of capital is utilised. Thus, the process of productions is dominated by capital intensive technique of production. 4. Besides labour and financial capital, developed land also constitutes a major resource of productions in this sector.
- 6. 3.Explanation of technical dualism 1. Differences in factor-endowment, difference in the availability of capital and labour is one of the two fundamental basis of technical dualism. The traditional sector of the dual economies is generally characterised by the abundance of labour but also shortage of capital. So,production techniques are often labour intensive in the sector. In contrast, in the modern sector, more of capital compared to labour is generally observed. Thus, almost 2distinct techniques of production are found to exist across two different sectors of dual economies.
- 7. 2. Difference in production function – Difference in production function is the second fundamental basis of technical dualism. While there are fixed coefficients of production function in the modern sector, these are often variable in the traditional sector. Higgins analysis this duality in the context of ‘factor proportions.’
- 8. Technological dualism suggest that the existence of vast unemployment in less developed economies is not due to the lack of effective demand but owing to the resource constraint as well as technological backwardness. The reason for technological dualism in UDCs are mainly due to different production function and different resource endowment
- 9. Merit of the Theory Higgins concept of technological dualism is undoubtedly more realistic. The Higgins theory was very clearly explains how unemployment as well as under employment emerge in less developed countries owing to the process of industrialisation and technical progress. The solution of unemployment problem lies in accelerating the process of domestic capitals formation.
- 10. CRITICAL EVALUATION Higgins theory is not free from criticism. Following observation may be noted in this regard- 1. The theory explains the emergence of underemployment in the traditional sector of developing economies, but does not offer any solution thereof. 2. The theory is based on a questionable assumption that the technical coefficient of production is fixed in the modern sector of the underdeveloped economies. A little degree of elasticity cannot be ruled in any production function.
- 11. Continued……. (iii) Factor Prices do not entirely depend upon Factor Endowment (iv) Ignoring the Institutional Factors (v) Ignoring the Use of Labour Absorbing Techniques (vi) Size and Nature of Disguised Unemployment is not Assessed
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