4 INTRODUCTION 



my mind the most important difference between the 

 two types of industrial organization is this : in India 

 the labourer usually works on his own account ; in 

 Europe he is usually a hired man, working for an 

 employer. There are, of course, in each society some 

 workmen of the type which is characteristic of the 

 other. Thus, although in England the labourer usually 

 works for an employer, and receives wages irrespec- 

 tive of the price at which his employer sells the 

 product of his industry, yet there are a few examples 

 of the labourer working on his own account, such, 

 for instance, as the tinker and the cobbler, who are 

 survivors from an earlier industrial organization. 

 And in India there are some labourers who occupy 

 the same position as wage-earners in Europe. In all 

 Indian towns there is a considerable number of men 

 engaged in manual labour who receive daily or monthly 

 wages, but as the urban population is only a small 

 fraction of the total population, they are relatively 

 of small importance. In the villages also there are 

 almost always a few persons serving for wages. But 

 the great bulk of the labouring class of India are 

 men who work on their own account, and not for an 

 employer. In addition to supplying the labour neces- 

 sary for the production of wealth, they direct industry 

 and undertake the risks of production — that is to say, 

 they discharge the functions of the entrepreneur or 

 business manager in Europe. 



Many important consequences follow from this dis- 

 tribution of economic functions, and they are those 

 which most clearly differentiate the Indian from the 

 European organization of industry. To the student 

 this particular distribution of functions is important, 

 because it invalidates the application to India of most 

 of the current economic doctrines about the working 

 classes. Thus the rate of wages, which appears to 

 an American writer * the paramount question to the 

 vast majority of the people of civilized lands,' is a 



