Capital Formation
For capital formation it is essential
that a part of production be saved from immediate consumption and be
used for further production, in future. Thus capital can be formed
only by restraint on consumption. This is the basis of capital
formation to which Karl Marx refers to as "surplus value"
in his treatise. In the capitalist system the industrialist creates
capital with the help of this surplus value. In a socialist system,
the state undertakes this task. In both the systems, the entire
production is not distributed among the workers. If production is
carried on through centralized large-scale industries, the sacrifice
on the part of the worker in creating the capital is not given due
recognition. The advantage in decentralization is in the fact that
the workers has a sense of direct participation in the management of
this surplus value or capital. Machine is the most common from of
capital. Machine was created in order to reduce the content of
physical labor in production and to increase the productivity of the
worker. Machine, therefore, is an assistant of the worker and not
his competitor. However, where the human labor came to be considered
as a commodity to be purchased with money, the machine became the
competitor of the human being. The principal drawback of the
capitalist view point in the fact that by making the machine a
competitor of human labor and thereby displacing and competitor of
human labor and thereby displacing and subjecting human being to
privations the very purpose of creating machine has been defied.
Machine cannot be blamed for this. It is the fault of the economic
and social system which cannot distinguish between the object and
the instrument. We shall have to take into account the limitations
on usefulness of machines and decide on its field of application.
From this point of view to import the machinery from Western
countries, where shortage of manpower was the guiding factor in the
design of machines would be a serious mistake. The merits of machine
are, not independent of time and place. Machines are a product of
the modern science but not its representatives. Scientific knowledge
is not a monopoly of any particular country. But its application has
to take into account the particular condition of each country and
its requirements. Our machines must not only, by tailored for our
specific economic means, but also must, at least, avoid conflict
with our socio-political and cultural objectives, if not support
them.
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