Political economy of labour and development in Kerala

Kerala is well-known for its achievements in the sphere of social developme nt that includes a rapid and high level mobilisation and organisation of wo rkers regardless of location and sectoral occupation. However, such a proce ss of social development without a commensurate transformation of the produ ctive sectors has presented Kerala with some major dilemmas. This paper the refore takes a critical look at the political economy of labour and develop ment by examining the roles of labour unions, state, and capital. The three dilemmas relate to (i) technological choice in the face of high and rising labour costs in labour-intensive activities for maximising long-term growt h and employment, (ii) mismatch between labour-supply and labour demand as a result of changing job expectations of the younger generation in a techno logically stagnant economy, and (iii) lack of new investment despite growin g loanable funds and declining resistance to technological change. The fail ure of labour unions to agree to productivity improvements through technolo gical changes and increasingly resorting to 'closed shop' strategies has be en particularly emphasised.