Economic Dualism

Economic dualism refers to the existence of a developed sector side by side with an under developed or undeveloped sector. We will come across the co-existence of sophistication and primitive characteristics in every walk of life. For example, in the urban areas, one will find the use of modem technology in the production field as well as households, while in the rural areas, the age old, antiquated techniques will be used in the production as well as in households. This dualism retards economic growth. That is, the subsistence sector in the rural areas will pull down whatever little economic progress is achieved with the developed and modem sector. Further in the urban areas, one can come across the existence of dualism, in every activity. For instance there will be modern, technologically sophisticated industries existing side by side with industries with labor intensive and poor technology. There will be high wage executives existing with poorly paid slum dwellers. Firms with international collaboration producing ultra modem products will be found along with the domestic firms using inferior technology. In the rural areas also the dualism can be found. We can find the co-existence of farms with vast expansive areas using modern production technology along with small farms where such technologies can never even be dreamt of. The bigger farms will be using trained and skilled laborers whereas the small farms will mostly be depending on the family labor and untrained, semi-skilled labor  While the capital investment by the big farms will be several times higher than those of the small farms, the rural indebtedness will be found more with the small farms than the large farms. The marketing strength, holding power, storage facilities, processing facilities, bargaining power, etc., will all be very much different between large farms and small farms. From the above explanation, it could be understood that every effort to develop the economy should be designed so as to make it applicable to both the modern sector as well as the undeveloped one. Hence, the overall growth will be more determined by the contributions of the undeveloped sector.