Arun Maira: When will modern economies learn to value human beings?
Live MintAccounting conventions require that capital is accounted for in the balance sheet of the enterprise, and expenditures and incomes in the profit-and-loss account. When human effort is no longer required—in a business downturn, for example—for the enterprise to produce what it is expected to, or when humans are substitutable by less costly machines, good business management suggests that human beings should be laid off to reduce costs. Frederick Winslow Taylor applied this principle systematically to develop a model of ‘scientific management.’ He broke down complex work processes into simple repetitive tasks assembled in long production chains. Douglass McGregor at MIT’s Sloan School of Management contrasted two paradigms of management in the 1960s: ‘Theory X and Theory Y.’ Theory X presumes workers are lazy and must be managed with carrots and sticks. Gandhi recommended small ‘human scale’ enterprises and larger enterprises composed of cooperatives of smaller ones, in which ownership and power remains with the people who create value.
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