|CERES No. 070 - July - August 1979 (FAO Ceres, 1979, 50 p.)|
Avoiding violent revolution
by David Kaplan
Economic Planning and Social Justice in Developing Counties, by Ozay Mehmet Croom Helm, London, 1978 (282 p.), £8.95
The central proposition that this book seeks to elucidate and defend is that "regular economic planning is an effective, non-violent alternative path to development with social justice."
In this regard, the first section outlines the processes of economic planning in the postwar period in the LDCs and shows how and why equity objectives - increasing employment and equality - were ignored, in favour of exclusive concern with raising GNP. The author contends that such economic planning was principally a consequence of the power of the elites in LDCs and, in section two, presents five case studies designed to underline this hypothesis and to demonstrate that economic planning which fosters inequality necessarily ultimately produces political instability. The case studies are of Malaysia, Liberia, Pakistan, Brazil and Uganda. The third section addresses the questions of what the objectives of planning should be, how efficiency and equity objectives can be married, and how this might be linked to current proposals for a reformation of the international economy. Separate chapters show what egalitarian planning would entail with respect to employment, education and rural development.
The book is, on the whole, simply and well written. Given the author's professedly "pragmatic approach," it is relatively free of technical jargon. At the same time, it is generally well documented. As a result, it summarizes a lot of material and yet is accessible to the non-specialist. In addition, it may well be useful, particularly the first section, as a teaching aid primarily at an undergraduate level.
A worsening of the plight
However, the significance of the book as a contribution to the development debate, and particularly the key issues of how efficiency and equity should, and more important can, be married, is far more problematical.
In the first section, we are given a comprehensive, but now widely acknowledged, summary of the deficiencies of postwar planning in the LDCs. The author is quite correct to point to the unworldly nature of the neoclassical macroeconomic models then in vogue, their preoccupation with GNP, i.e., efficiency, and the fact that where GNP did increase, this did not result in a trickle-down of economic benefits but, on the contrary, was highly correlated with increasing inequality and unemployment, and hence a worsening of the plight of the broad masses of the population. The evidence from the performance of the LDCs in the so-called development decade of the 1960s is convincing, and it was the same evidence that persuaded development practitioners, several years ago, that the goals of development had to be reconceptualized so as to emphasize explicitly equity criteria. Hence the formulations of, for example, the World Employment Programme and later basic needs. Mehmet's critique advances little beyond what has already been stated in these reformulations, and indeed far earlier by, for example, Dudley Seers.
Similarly, the author's assertion that equity criteria were ignored "mainly because of the elite management of planning and economic policy in the LDCs" would find wide acceptance today. However, the term elite is never defined and is used as referring to any privileged group, without any attempt to ascertain what constitutes the basis of such privilege. The case studies utilized to demonstrate this hypothesis, while for the most part competently executed, add little to our understanding of how these elites are able to perpetuate their privilege and therefore what would constitute effective action designed to undermine this privilege - a precondition for institutionalizing a planning process based on equity and mass participation.
The experiences of those LDCs that have undergone a socialist revolution are not considered. There is only a passing reference to Cuba, and it is simply asserted that the Cuban revolution is "not exportable." Instead, revolution is equated with violence and violence necessarily entails social costs. The author holds up the example of Uganda, as illustrating to the elites that "glaring socio-economic disparities and inequalities ... are bound to lead to a catastrophe sooner or later, and that their elimination constitutes the surest preventive strategy."
Some novel suggestions
Here we come to the nub of the problem. It is quite an easy task to outline what would constitute an egalitarian plan; it is far more difficult to specify the mechanism by which such a plan might be put into operation. In the absence of revolution, the elites will continue to have the power to obstruct any egalitarian planning process. Is it not Utopian to expect the privileged elite to acquiesce in a planning process that would reduce their share of the national income?
Firstly, the elites may be persuaded that more equal income distribution is their only rational choice, since redistribution is a necessary condition for the avoidance of violent revolution. Secondly, the elites may be persuaded to allow a relative reduction in their incomes if the absolute level is increasing or at least remaining stable. (Of course, this is only possible where there is growth in GNP. Paradoxically, growth now becomes a precondition for redistribution.) Thirdly, international pressure could result in aid flows and trade concessions being dependent on movement toward income equality. All this to be buttressed by political reforms designed to ensure participation of the masses in the formulation and implementation of the plans - planning from the bottom up.
Concerning international pressure, the author introduces some novel suggestions. Firstly, he argues that greater equality in the LDCs should be an integral part of the NIEO negotiations; secondly, that aid could be doubled by instituting a 5-percent levy on multinational exports from the LDCs to the industrialized countries; and, finally, that multilateral agency personnel should function outside of LDC political structures and that this will enhance their ability to ensure that aid and planning are independent of the elites. But, again, there is an uncomfortable Utopian ring about these proposals. They rest upon presumptions that the industrialized countries favour redistribution policies in the LDCs and are willing to incur the displeasure of the elites to achieve this; that the multinationals would not pass on the incidence of the levy to the LDCs, and that the UN agencies are, indeed, politically neutral.
In development, today, there is broad agreement as to the desired direction and what policies, if followed, would take us some way along the road of greater equity. The book merely restates, albeit in very readable fashion, what is already widely accepted. With respect to surmounting the obstacles along the way, like much of current writing on development, it unfortunately substitutes Utopian recommendations for serious and detailed analysis.
To reduce dependence
by Guillermo M. Almeyra
"La dialectique de la dndance - Analyse des relations nomiques et financis internationales" by Andriano. Presses Universitaires de France, Collection "Economique d'aujourd'hui," Paris, 1977 (420 p.)
This book deals with a series of fundamental problems: the relations among the various developed countries, between these and dependent countries, and also among the latter; the regional organizations; unequal terms of trade; the relationship among trade factors; international aid and economic specialization; the Lomgreements; multinationals; the recycling of oil wealth; CMEA (previously COMECOM); the role of non-capitalist
Guillermo M. Almeyra is an Argentine journalist and a contributing editor to cores, countries and of their aid. In passing, the author discusses the main theories (the Keynesian theory, Marxism, neoclassicism) in the field of economics, and confronts exaggerations of the dependence theory. He writes, furthermore, with unusual clarity.
The structure of the book reveals an able Cartesian, who happens to be a French professor. His style is elegant, his manner of thinking incisive. The tables are concise, and perfect foils to the pages preceding them. The book is divided into sections, at the end of each of which the author draws his conclusions; to each chapter a bibliography is appended. There is no proliferation of footnotes and quotations; everything has been done to smooth the path of the reader. The subject is so vast and ambitious that it could well have led to over generalization, or aridness.
And, as if this were not enough, the book is also a thesis. Tiano ends his work with a quotation from Sunkel: "The alternative to dependence is not independence, nor still less, autarchy; it is a reduction in dependence." He holds, in fact, that the dependence of developing countries cannot be eliminated by means of formal independence. It is impossible to break with world markets; however, it is possible to use the contradictions and weaknesses of capitalism in the developed countries to diminish dependence progressively. In his ideas on how this can be accomplished, and in the line of action he proposes to his countrymen, Tiano subscribes to a policy that opposes both economic nationalism and the hegemony of the American multinationals; this school of thought seeks to endow Europe, by means of austerity and the reform of capitalism, with a new world role.
Learning from multinationals
Tiano holds that dependence is not characterized by foreign relations; it is unconnected with the purchase of patents, and with technological backwardness, nor has it to do with the need for foreign personnel or with external debts. According to him, the behaviour of multinationals is not very different from that of many national firms or enterprises in the developing countries. He refutes the idea of "breaking with the world market" as simplistic, and warns against too great a reliance on the national nature of enterprises, or on the role of the state in combating multinationalism and dependence. He also opposes excessive identification of all progress (agrarian reform, imposed by latent or acknowledged social mobility) with the interests and conscious plans of a bloc, supposedly without contradictions, formed by the dependent bourgeoisie and imperialism.
Tiano hold the problem from a dynamic viewpoint, within the framework of the different nations' unequal development. He proposes that we learn from the multinationals, in order to be able to do without them, that staff be trained by means of public technical assistance, and that greater importance be given to production units. Incursions can be made into world markets, using the commercial outlets of the multinationals; he advocates the use of foreign aid, freeing national surpluses for other priorities. According to him, with dependence, "the weakness of the stronger associate lies in his need to make profits, and that he must sacrifice the longterm future to the present, or to the medium-term future." It would be difficult to do justice to the many analyses and examples he gives. We might mention, however, that Tiano generally favours Emmanuel's explanation of unequal terms of trade, adding, however, that it is not sufficient to study differences in sales prices, and that in the analysis of terms of trade, cost prices and sales volume must be taken into consideration. He supports the idea (very much opposed by the Marxists) of "utility," though he acknowledges that "it is not operational." Here, he says, when people speak of the need for twice the amount of rice to buy a locomotive, it must be remembered that today a locomotive has a tonnage that is ten times greater, and that it no longer has a speed of 30 km/h, while rice has deteriorated because of the use of chemicals (it is forgotten that previously the best rice was sold in order to buy the best locomotives, just as is happening today. Hence the factors are still perfectly comparable ,while rice is also "more useful" in the case of industrialized countries, with their newly acquired dietary habits).
Lastly, it is to be regretted that there was not an analysis of international monetary policy (purposely omitted), of the problem of armaments, nor of population transformation. The author might also have developed further his interesting section dealing with aid by "socialist" countries to dependent countries, and on unequal terms of trade among CMEA countries, as well as those between the latter and developing countries.