First published in New Society, 4 March 1971.
Transcribed by Chris Harman.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
The economic development of backward countries became a problem in western analysis only after the second world war, some time after it had emerged as a problem in practice. Until then the future seemed well taken care of: capitalism would reach into the outermost bounds of the earth in search of raw materials and trade outlets. It would sap the self-sufficiency of the local economies wherever it went, and would draw them into systematic contact with the world market.
On occasion, it would be bloody, and civilized men guarding the uncertain marches between purposive violence and brutality might be shamed. But they would not denounce the system for that alone, for the mission it was pursuing with its boots was a civilizing one, absolutely in the canon of the classical political economists, relatively in Marx. It was bringing to the entire world the benign influence of capitalism’s superior productivity and leading mankind to a common heritage.
These civilized men were wrong, and by the mid to late ‘forties they were said to be wrong, not only by the marxist and other subcultures of political criticism, but by the main body of academic economists concerned with development.
The capitalist system certainly grew, but not always – not, for instance, during the two world wars and the intervening depression. It did wrench the backward countries into alignment with the world market, but it also stopped them from fully entering it.
The cheap materials that poured out of the modern mining and plantation enclaves in backward countries did encourage further specialization downstream – in the capitalist heartlands. The demand for equipment, skills and services for use in these enclaves did the same upstream – again, ‘at home,’ not in the host environment. The size of investment, the scale of operation, the experience of social control, all swelled where capitalism was already a going concern.
But everywhere else, indigenous society subsided into increasing agriculturalization and unemployment, a loss of skills and productivity – a spiral of growing backwardness and poverty. Growing futility, too, since the invasion of capitalism had both destroyed the backward countries’ social and economic integration, and raised the price of entry into the new system beyond their immediate reach.
So, by the end of the ‘forties, the academic mainstream had turned interventionist, almost to a man. Academics prescribed, planned, travelled tirelessly, in the cause of policy. They advised governments to harness to domestic ‘take-off’ the development impulses leaking abroad; they pressed for large initial efforts and therefore for state planning and state enterprise; they masterminded a protracted war on the theory and practice of economic liberalism.
They were not agreed on everything. They quarrelled about the extent to which the backward countries could, or should, be protected in the initial stages of their development; the place for foreign capital; the best use of aid; the relative merits of state and private enterprise. More recently a cocky neo-liberal minority has struck out alone, impressed by the seemingly irrepressible growth of world trade and the obvious failure of their colleagues.
But, by and large, the postwar orthodoxy has survived. For each country, it goes, there is a pattern of production that would both employ its people, and be reasonably efficient in world terms; governments should create that pattern, alone or with outside help. It is the optimistic, interventionist orthodoxy, enshrined in McNamara’s World Bank, which only last month denied promised funds to Gabon for not having exercised sufficient control over the foreign interests despoiling that country’s resources.
There is an eastern orthodoxy as well. It too has undergone change, although in an opposite direction. As it emerged from the intense Russian debate on industrialization in the mid-twenties, it totally opposed all thought of development through integration with the ruling system of production and trade. On the contrary, if Russia was to avoid military defeat or economic suffocation, or both, at the hands of that system, she would have to withdraw as far as possible from contact with it, exercise the strictest control over what little remained of foreign trade, and pour everything into a huge, broadbased industrialization. Implicit in the approach, although not expressed at the time, was the idea that the planned economy would ultimately prove its superiority by winning for Russian industry a place in the world system on Russian terms – that is, as part of an integrated, articulated and developed national economy.
Long before that stage was reached, however, the early orthodoxy had foundered. The eastern Europeans rose against its terrible cost in the mid-fifties and won a mite of freedom. A second round is being fought out now. Within Russia herself, the threat of economic rundown is impelling the government to open the country more and more to world trade, including trade with the backward countries. And the economists have been forced to rediscover, and commend, the advantages of an international division of labour – the ‘dynamic comparative advantage’ of western economics.
The new eastern orthodoxy on development is not like its western counterpart in all respects. It is more interventionist, more autarkist, more state-capitalist. It deals in longer time spans and larger scale. It is slightly less crippled by academic casuistry, and slightly more by political and social constraints. But it docs share the basic assumption of the major western school – that development is possible in the world we know: that there is something the backward countries themselves can do, with or without outside help, some trick of policy, that can shift the world pattern of production and distribution in their favour, so that they might be absorbed into it as whole societies.
The reality is harsher than that. The minimum cost of entry into the world market is growing every day. The resources from which to fund it in backward countries are not. The relative size of this critical minimum – made up of a minimum development effort (in investment, distribution, education, government, ideology and so on), and the minimum defence effort on which it is predicated – is the nub of the problem of underdevelopment. Take China, the plain man’s best example of a country that can ‘make it’; which has the resources, the discipline, the leadership – the everything – needed to impose its own amendments on the world; which has already made remarkable material progress since the communists took over.
China also makes nuclear weapons, and the missiles to deliver them. Abhorrent as these are from a socialist or simply humanitarian standpoint, they do make sense in terms of national interest and nationalist ideology, as well as in narrow military terms. Technologically, they are obviously an amazing achievement. But from the point of view of economic and social development they are a disaster.
The claim has not yet been made that Mao’s thoughts are especially effective in smashing atoms, so we can presume that China’s scientists, many of whom were trained abroad, use techniques similar to those used in the rest of the world, and need resources of a roughly similar order of magnitude. For example, it seems reasonable to suppose that they use as much electricity in the production of fissile material as the Americans used in their first gas diffusion plant at Oak Ridge, Tennessee – some 14-9 billion kilowatt hours a year or one quarter, to one half, of total Chinese electricity production in 1964 – depending on whether one accepts Russian or American figures. The Chinese might be using a like proportion of scientists, technicians and skilled workers; of scarce materials, services and components. Even if they are not, even if they enjoy all the advantages of late-coming, and do not have to pull skilled workers out of the armed forces, or empty their Treasury of silver, or requisition men and machines from other urgent uses, as the Americans did thirty years ago, they must still be diverting a huge proportion of their productive capacity from productive use.
This is not something they can afford to do. The critical minimum development effort is growing as violently as the military one. When Mao took power, a four to five million ton/year steel plant was exceptional, a one to two million ton/year plant large. Now the Japanese are setting a floor to viability at ten to twelve million tons a year. Of course, Chinese steel can be, and is, protected; and so is every single branch of Chinese production.
But the economy as a whole is not, and cannot be. Ultimately, it will have to prove its viability in competition with the rest of the world – economically, if possible, militarily if need be. Or collapse.
The scale of the effort needed makes it unlikely that the proof will be forthcoming. Given the alternative, it must be tried. So the Great Leap Forward is followed by the Cultural Revolution, and the Cultural Revolution will no doubt be followed by another gigantic social spasm, and that by another, as the ineluctable necessity to achieve a given initial size pushes the Chinese regime to the limit in gathering and deploying the economic surplus, and to even greater extremes in centralizing the political and social authority to make that possible. All this, while propounding devolution and mass involvement.
But there are limits beyond which they dare not step. Once the unity of the country and the continued coherence of the state are called into question, centralization must necessarily stop.
And if that happens before it can produce the critical minima, development itself becomes a dream. China’s fate is not an internal Chinese matter. Failure is bound to close the period in which a Russian-type state capitalist development could be thought feasible for backward countries, even if the more orthodox western variant was not; in which the bloody, treacherous forced march through autarkic industrialization could be thought to constitute progress in some restricted sense; in which the west could find it expedient to temper its savagery here and there, in order to offset the attraction of this ‘progress’.
Above all, failure means the end of a terrible illusion, held as fervently by many seeming revolutionaries as by members of the more orthodox schools: that economic development in backward countries is possible without revolution in the developed; that there is hope of a humane existence for the majority of mankind while the Russo-American system of conflict continues to generate its frightful military and economic pressure waves.
Real optimism hangs on the death of that illusion.
Last updated on 6.1.2009