Reflections on Economic Theory
The conclusions from our study are provided in Chapters 9 and 10. We begin, in this chapter, by reviewing various economic theories and hypotheses in the light of our experience of Palanpur. We shall suggest that certain of these theories, taken together, can explain much of what we found. On the other hand some important features are not easily explained and we shall point to possibilities for further theoretical research. We did not find that the village accorded with any single simple theory and we had to draw upon several models to explain its various features.
The next section provides a review of the structure of markets in Palanpur. We shall concentrate on the markets for labour, credit, fertilizer, irrigation, and outputs. Our conclusions on theories of the market for the services of land are postponed until § 9.3, where an issue of particular importance will be the interrelations between the various factor markets. We shall discuss in § 9.2 the behaviour of the agents in the village economy: their awareness of prices and productivities, their objectives, and their reaction to agricultural change.
In § 9.3 we shall be discussing certain aspects of tenancy in Palanpur. We shall appraise various theories of tenancy and since share tenancy is the dominant type of contract in Palanpur we shall pay particular attention to that form of tenure. Tenancy has featured prominently throughout this book and we have indicated our findings as they have occurred. We provide an over-all view of our results in this section. Uncertainty should be an important element of a discussion of many facets of agriculture and has entered at several points in our arguments. We shall devote § 9.4, however, exclusively to the ramifications of uncertainty for decisions and contracts. We shall concentrate, in particular, on the choice of the intensity of inputs.
In § 9.5 we shall draw together our conclusions from Palanpur for discussion of the relation between output per acre and size of holding in Indian agriculture. In Chapter 3 (§ 3.9) we drew attention to various claims which have been made concerning the 'Green Revolution', but we have not made this an explicit subject of study in our empirical work; certainly we have not devoted a particular section or chapter to it. Nonetheless, we have frequently made observations which bear on this issue and we provide a discussion of them in § 9.6. The concluding section will contain an over-all appraisal of the theoretical approach we have adopted and suggestions for further research.
The important markets in Palanpur were examined in Chapter 4. We should reiterate our statement at the beginning of that chapter that our use of the term 'market' is very general and all-embracing. We refer to the arrangements in