ADAM SMITH laid the foundation for understanding the role of infrastructure in The Wealth of Nations (1776). His very first chapter deals with the gains to productivity from a division of labor. But what limits the division of labor is the size of the market. As transportation systems improve, the size of the market expands, and through the greater specialization of labor, productivity and standard of living both rise.
HOWEVER, some would argue that the goal is NOT a higher standard of living, but greater self-sufficiency. Gandhi, for example, opposed international trade, fearing that the system was rigged against India, which exported cheap raw materials and was forced to import expensive British manufactures. Instead, Gandhi led the country toward self-sufficiency, by having each community do for itself. Another advocate of this is E.F. Schumacher in, Small is Beautiful, in which he argues that a greater division of labor leads to alienation among workers. Since joy in work is a Buddhist goal, too much division of labor is not to be desired, even if monetary income is lower.
AFTER FIFTY YEARS of socialism and self-sufficiency, India since 1991 has been moving to open its economy to market mechanisms. Self-sufficiency, while desirable for many political reasons, imposed too heavy an economic burden on the hundreds of millions of desperately poor in that country.
WHILE COWS ARE SACRED, oxen are utilized extensively for transportation and plowing. Consequently, ox are a valuable piece of capital equipment. However, imagine the road crowded with people, buses, trucks, cars, and ox-drawn carts, each one fighting for roadway! It creates a transportation nightmare. To go 100 miles might take a whole day by car or truck, given the congested roads. This photograph was shot from a bus in southern India in the spring of 1991.