On 17 September 1982, David Dubinsky died aged 90. An obituary in the New York Times described a life of commitment to the ILGWU, where he had served as President for more than three decades, from 1932 to 1966 (Raskin 1982). Born in what is now Belarus, at the age of 13 he was already working as a unionized baker and, during the failed Russian revolution of 1905, took inspiration from a mass rally for the Jewish Workers Union, or Bund. The next year, at the age of 14, he was elected its Assistant Secretary. And after several arrests for union-related activities, including attempts to organize strikes, he escaped from police custody while en route to Siberia. In 1911, he appeared in New York City. By 1932, the 5 feet 4 inches Dubinsky was running an American union: the ILGWU, which had been organized out of New York City's garment district. Buoyed by the jobbers’ agreement (JA) strategy, union membership soared under his leadership. His detractors, however, accused the Belarusian of supporting imperialism, undermining strikes, and ‘collaborating with manufacturers to fleece the consuming public’ (Weinstone 1946: 13). The end of Dubinsky's presidency coincided with the end of an era, as the jobbers’ strategy concluded, and globalization swept the garment sector out of New York City and London and into the Third World. As Chapter 2 details, in the early twentieth century, the ILGWU was forced to confront a new, vertically disintegrated business model, one that would become a commonplace across industrial capitalism and spread across the world. This system of outsourced production made direct negotiations with low-value employers very difficult, leading to a war of attrition.

On the face of things, it is the suppliers/producers who are responsible for the wages and working conditions of shop floor labour, since they are the ones who set wage policy and maintain the factories. But suppliers – however villainous or well-intentioned their owners may be – operate within the limits imposed on them by buyers through the value chain. And when buyers have high degree of monopsony power (DMP), they can demand a lot for very little, pushing down margins and giving labour much less to bargain for.

But the ILGWU's efforts were not entirely in vain.

Emerging economies in Asia have seen capital flows boom. Between the early 1980s and the mid-2000s, capital flows to emerging economies like Thailand and Malaysia grew by a multiple of 10. Yet as the regulatory environment and the financial architecture that it constructs have opened up to the global economy, frontier markets have also seen huge growth in flows. In Pakistan, for example, capital inflows have shot up by a multiple of 20 over those same years. However, this huge growth in flows has been accompanied by an increasing instability in those same flows. Starting to rise after 1988, capital flows to Pakistan became extremely volatile after 2000. Shifting rapidly from negative territory to spikes of US$8 and US$10 billion, capital flows have cut a figure of sharp peaks and troughs in the new millennium. This is typical of capital flows to frontier economies, which after 2010 not only exceeded those to emerging economies in GDP terms but were also accompanied by a marked rise in volatility (Rodrik 2015). These sorts of data are indicative of a dramatic ‘opening up’ of developing and frontier economies to a global financial economy, as well as of a distinct instability accompanying those flows.

Key to this predicament is the mode of monetary governance in the frontier context. By definition open to global markets and constituted by less ‘mature’ institutions than their emerging cousins, formal monetary management in frontier economies tends to track the inflation targeting norm set by the advanced economies with a regulatory regime sometimes called ‘inflation targeting lite’. Frontier markets have thus moved away – as reflected in their ‘investability’ – from previously dominant norms of the protected markets and direct monetary policy tools of earlier decades (such as setting exchange rates and prices), towards open markets and the indirect tools of market-driven monetary policy (that is, attempting to control inflation by setting the short-term interest rate). Yet the replication of advanced economy monetary policy is challenged by the complexity of the institutional context, both formal and informal, which is implied by the ‘frontier’ label.

Introduction

The agglomeration framework suggesting higher productivity gains in larger cities can be extended to argue that part of the productivity gains benefits workers in terms of higher wages (Duranton, 2016) compared to those in small towns. Higher economic growth originating from large cities is likely to have some percolation effect even when it is accompanied by a sizeable increase in inequality. Increased earnings may result in better living standards in terms of food as well as non-food consumption and also through enhanced investment in dwelling conditions and basic amenities. Thus size, productivity, and amenities all three can be in relationship. Also, in the size–productivity literature, infrastructure is seen to be a major driver of agglomeration economies. One may then argue further that infrastructure enhances the quality of living in large cities. Initially, government investment encourages concentration of activities which in turn motivates private investment and expands the city size further, unfolding simultaneity between investment and city size. Enhanced investments coming from the government, private sector, and households result in improved living standards including accessibility to various amenities. This would mean that deprivation defined in terms of the lack of access to assets, amenities, and quality housing would be in relationship with city size.

On the whole, the agglomeration economies in large cities are seen to benefit not only the business firms but also consumers. In large cities there are usually a number of labour recruitment centres (informal), and as new contacts develop, individuals tend to access more than one labour recruitment centre simultaneously, which in turn breaks the labour market segmentation and raises the number of options, leading to occupational diversification and upward income mobility (Mitra, 2010a, 2010b). Skilled workers are more likely to prefer megacities than the unskilled ones (Glaeser, Ponzetto, and Zou, 2016). Better connectivity, cheap transport system, and availability of alternative modes of transport help individuals commute faster, which does not restrict them to secure jobs in the neighbourhood of the place of residence. Further, labour exploitation in large cities is less as unions and various voluntary organizations in some form or the other safeguard the interest of the general public.

Conclusion. The use of game theory in the study of development.

Introduction

Electoral contests are usually viewed in terms of strategies for winning a plurality or majority of votes. These contests can also be waged at the stages of the choice of electoral system and delimitation of constituencies. The latter involves the choice of rules governing delimitation and the demarcation of constituencies under the rules, both of which are susceptible to political interference. The manipulation of demographic data with the objective of influencing delimitation is another possibility.

A stable constitution and an independent judiciary have meant that the basic structure of India's electoral system is very difficult to change. As a result, political manoeuvring has been restricted to delimitation and electoral contests. Interstate delimitation was frozen in the 1970s and will remain so until the first census taken after 2026. The extended suspension of the interstate delimitation, which was aimed at avoiding interstate conflicts, has shifted the locus of redistributive conflicts to sub-state levels of aggregation and opened up space for intercommunity and inter-district contests. The 2002 delimitation that was supposed to redistribute parliamentary and assembly constituencies within states and also redistribute seats between scheduled and non-scheduled communities on the basis of the 2001 Census faced strong opposition in the country's ethnogeographic periphery dominated by the Scheduled Tribes (STs) and religious minorities (Maps 1.2 and 7.4). In Assam, Arunachal Pradesh, Jammu and Kashmir, Jharkhand, Manipur and Nagaland, politically influential communities/ regions forced the postponement of the delimitation until after the first census taken after 2026. In Chhattisgarh, Meghalaya, Sikkim and Uttarakhand, the delimitation criteria had to be relaxed in favour of the indigenous communities. In all these cases, concessions were achieved through constitutional amendments, amendments to delimitation and other relevant legislation or through a departure from the prescribed guidelines at the time of demarcation of constituencies. It is also noteworthy that the government delayed the release of Post-Enumeration Survey (PES) for the 2001 Census ‘to avoid needless political controversies’ while delimitation was in progress (Bose 2008: 16). In other words, it feared that dissatisfied communities/administrative units could demand adjustments based on the errors identified by the PES. Indeed, some of the aggrieved communities demanded that the Delimitation Commission should adjust census population estimates using the PES data (CPO et al. 2003).

The sharp deterioration in monetary indicators in 2008 posed significant challenges for the SBP's management of the rupee. The SBP was forced to draw down reserves as the exchange rate depreciated sharply, fed by deterioration in the current account, sharp reversals in the capital account, and formidable speculative activity in foreign exchange markets. The high commodity prices that exacerbated the current account gap also pushed up inflation, which spiked at 25 per cent in August. These conditions characterised what has been termed Pakistan's own home-grown crisis of 2008 (ul Haque 2010).

These conditions were, however, far from monetarily catastrophic. Inflation did not come close to the classic definition of hyperinflation, which is defined as rises in prices of over 50 per cent per month (Cagan 1956). In fact, with ‘safe’ levels of inflation estimated at around a 10 or 12 per cent threshold for developing economies (in contrast to 2 or 3 per cent for advanced economies), double digit inflation in Pakistan is not in itself necessarily an economic problem. By early 2014, predictions of a firm recovery were materialising with stabilisation in the external payments position, appreciation in the rupee and considerable growth in reserves.

Yet this study identifies monetary practices amongst ordinary people that are characteristic of hyperinflation. The drop in deposits, the shift into ‘in kind’ stores of value and the expanded use of non-rupee units of account present monetary strategies that are fiercely discordant with the picture painted by monetary statistics. This opens up a set of questions about both the rupee’s governability under open markets and about the scope of the rupee's contestation amongst the local population. Taking these points together poses the possibility that in Pakistan's new economy, financial inclusion is being rejected by ordinary, generally poor households at the same time as its potential benefits for monetary governability are being increasingly recognised at the central bank. Might the push for financial inclusion in Pakistan be playing out more as a project to shore up the rupee than an attempt to bring poor households out of poverty?

New Money Practices in Pakistan

The discussion in Chapters 5 and 6 suggests that a series of money practices which counter risk attached to the liberalised rupee have become popular in the postliberalisation years.

Established in 1931, Arvind Mills, along with thousands of other producers, was born out of the demand for domestically produced fabric, part of Mahatma Gandhi's call for the boycott of imported fabric, or the ‘Swadeshi Movement’. Arvind emerged as the sole survivor among 85 textile mills that made their home in Ahmedabad three decades ago entirely as a consequence of their decision to transform from a multi-product company to primarily a denim manufacturer. Until 1987, all available denim in India was imported. That year, Arvind became the first mill in the country to produce denim, a key initiator and beneficiary of India's ‘denim revolution’.

Here, I explore the factors in India that led to the growth and concentration of denim, a less volatile section of the garment sector that due to limited seasonality and fashion-sensitivity valorize faster than others (like footwear and cotton commodity production). To understand this phenomenon, I look at the struggle at a denim warehouse owned by Bangalore-based Arvind Group (hereinafter ‘Arvind’). What we see is a transformation of relations in the sector between buyers and sellers, producers and consumers, and workers and bosses.

The case is but one demonstration of how the phase-out of the MFA brought with it an end to the regime of ‘comprador capital’ that had dominated Indian economic life from the early post-colonial days, allowing indigenous firms to piggyback on foreign corporations seeking access to cheap labour and raw materials. The post-MFA era has seen global competition weaken and the autonomy of smaller firms across the globe gradually removed altogether, leaving many to be absorbed into larger rivals, forced to merge, or simply vanish into the red. What remains, in a handful of countries, are a handful of mega mega-suppliers, powerful enough to corner the supply chains of specialized products and intensify supplier-end value capture. Meanwhile, large retailer/brand oligopolies simultaneously benefit from growing profits brought on by economies of scale and integration, while becoming gradually dependent on increasingly oligopolistic suppliers. Thus, the ‘buyer-driven’ character of the value chain gives way to a kind of ‘buyer–producer symbiosis’. In consequence, as we observe in the case of Arvind, labour's resistance adapts as well.

Development consists of prosperity and security. It results from the transformation of the economy – the great transformation – and the rise of the state.

An impossibility result. Development is impossible unless the means of violence rest in public hands.