New York Times columnist and Nobel Laureate, Paul Krugman made an observation today about China that has resonance far beyond China. If taken as a guide for planning--which it is--then it upsets people around the world and has serious consequences for global development.
While discussing the economic crisis China faces that, he argues, will be disastrous for the world, Krugman mentions the development model China has followed and quotes “an old insight by the economist W. Arthur Lewis, who argued that countries in the early stages of economic development typically have a small modern sector alongside a large traditional sector containing huge amounts of ‘surplus labor’ — underemployed peasants making at best a marginal contribution to overall economic output.”
