For Poor Nations, Productivity Begins on the Farm

hen discussing countries that have undergone astonishing economic transformations -- as, most notably, China has over the past few decades -- observers usually credit success to industrialization. After all, that’s the visible consequence of rapid growth: Where sleepy fishing villages once lay, ports and factories and high-speed rail networks spring up. The people who lived in those villages are in turn far more productive, working in those factories and shipping goods to the rest of the world through those ports. Moving up the productivity scale from farm to factory -- that’s the key to growth, right? As it happens, the crucial breakthrough may not take place in cities at all, but on farms. If emerging nations like India want to replicate China’s success, they first have to improve their agricultural productivity. In theory, we’ve known this for awhile -- at least since the birth of the world’s first industrial nation. Centuries of rising agricultural productivity preceded and fueled the explosion of smokestacks and steamships in 19th century Britain. Economists still aren’t certain what caused this “agricultural revolution.” Was it the consolidation of landholdings? Or the development of crop rotation? Or, perhaps, turnips?Whatever the case, most historians agree that the steady growth in British agricultural productivity till 1850 -- it tripled over a few centuries -- permitted workers to leave their fields and caused the build-up of surpluses that allowed for investment. Excess labor and capital came together to power the first industrial nation.