Sunday, September 10, 2006

The Myth of "Catch-up Development"

The Myth Of 'Catch-Up Development'
By C. Douglas Lummis,Panos, January 1, 2000

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It was in 1949 that Harry S. Truman, in the speech celebrating his inauguration to the United States presidency, announced a massive new program to "develop the underdeveloped countries." By investing in these countries, and by offering them technical and economic aid, they would be enabled to advance toward "ultimate prosperity."

The idea was unprecedented. Even the expression "underdeveloped countries" was new: it was virtually unknown as a technical term in economics before Truman's speech. Of course what investment and aid would achieve, and did achieve, was the "mass mobilisation" of the world's peoples into the western-dominated capitalist economy. Why this should be expected to raise the world's poor to the economic level of the world's rich, when capitalism had always been known to widen the gap between the rich and the poor, was not explained by Truman.

Despite its manifest implausibility, the idea has dominated thinking about international economics for half a century. Say "development" and virtually anyone will imagine a process through which the poor countries "catch up" with the rich ones. But when we read statistics that the gap between the rich and poor countries continues to widen, or that (for example) death by starvation today is equivalent to 300 jumbo jet crashes per day, we tend to think, "development isn't working," rather than "this is how development works."

This "economic development" has had a half-century to work, and its catastrophic results lay before us. As we approach the end of the century perhaps this is a good time to review some of the reasons why "catching up through capitalist development" has always been, and must be, an impossible dream.

First, consider the statistics. According to the World Bank's 1988 World Development Report, the per capita Gross National Product for the 20 richest countries was $12,960 for 1986, with an annual average growth rate (1965-86) of 2.3 per cent. A simple calculation gives a yearly increase in per capita income of $298.08. The per capita GNP for the poorest 33 countries in that year was $270, with an annual growth rate of 3.1 per cent. The same calculation gives a one-year increase in per capita income of $8.37. For these countries to equal the $298.08 increase of the rich countries would require an annual growth rate of 110.4 per cent.

Of course, if the poor countries maintain a higher growth rate than the rich countries for a very long time, theoretically they can eventually catch up. How long would that take?

Supposing the growth figures in the World Development Report remain unchanged, we can calculate that the poor countries will achieve the 1986 income level of the rich countries in 127 years. But they still will not have caught up, for the rich countries will have developed further themselves. At these rates, the poor countries will actually overtake the rich countries in half a millennium, 497 years to be exact. At that time the world per capita income will be $1,049 billion per year.

But in fact the growth rate for the poorest countries excluding India and China (it was mostly China's reported growth rate of five per cent and vast population that skewed the figures) is less than that of the rich countries, which means they will catch up never. And many of them have negative growth rates. Such statistical games are useful in helping us to see how fanci-ful is the idea of "catching up" (a billion dollar income for every-one on earth - what would it mean?). But such a projection is also misleading in that it is not rooted in the reality of international economics.

The world economic system is designed to transfer wealth from the poor countries to the rich countries. A big part of the "economic wealth" of the rich countries is wealth imported from the poor countries. From where could wealth be imported to create the same condition for all?
The world economic system generates inequality, and it runs on inequality. So while we may fantasize a world of equal billionaires in half a millennium, it is not something that will occur under the rules of this game. It is rather like imagining a casino in which the customers' winnings are equal to the house take. The game is not designed to do that.

Then there is the environmental aspect. Presumably overtaking the rich would mean not simply having as much money as they do, but also being able to consume as much energy as they do. It has been estimated that for the present world population to live at the energy consumption level of the city of Los Angeles it would require five earths. The statistic is dubious, but it could be off by two or three earths either way and amounts to the same thing: it is not going to happen. (And it is important to remember that these consumption levels have not produced economic equality, or eliminated poverty, in Los Angeles either: there are fabulously rich and desperately poor people in that city.)

The division into rich and poor, then, is an axiom built into the phenomenon of "rich." It is fraud to hold up the image of the world's rich as a condition potentially available to all. Yet this is precisely what the myth of "catching up" does. It pretends to offer to all a form of affluence that presupposes the relative poverty of some. It idealizes the lives of people who do less than their share of the world's work (because others do more); consume more than their share of the world's goods (because others consume less; and whose lives are made pleasant by the services of people less affluent than themselves.

But "rich" is not of course the only form of wealth. There are other forms that can be shared. But these forms of wealth depend more on collective political decisions than on economic processes. The expression "commonwealth" is, after all, a translation into English of the Latin res publica, public thing, i.e. republic. Common wealth may take its physical expression in such things as public roads, bridges, libraries, parks, schools, churches, temples, or works of art that enrich the lives of all. It may take the form of commons: shared agricultural land, forests or fisheries. It may take the form of shared ceremonies, feast days, festivals, dances, public entertainments. It is perfectly possible for a community to put its emphasis on its common wealth, and at the same time to cultivate a taste for private moderation. Such choices are political, if by political we mean the fundamental decision-making in a community as to how its goods are distributed.

None of the above is meant to suggest that inequality is not a problem in the world - it is to suggest that it's not so much an economic problem as a political one, and its solution is not development, but justice. It is hoped that the above thoughts can help to remind us of the proper social location of the problem of economic inequality. The problem of the problem of inequality lies not in poverty, but in excess. "The problem of the world's poor," defined more accurately, turns out to be "the problem of the world's rich."

The ideology of economic development has taught the world's majority to feel shame at their traditionally moderate consumption habits; by revealing it for the fraud that it is, perhaps we can teach the world's minority to see the shame and vulgarity of their overconsumption habits, and the double vulgarity of standing on other people's backs to maintain those habits. Aristotle once wisely wrote:

The greatest crimes are committed not for the sake of necessities but for the sake of superfluities. Men do not become tyrants in order to avoid exposure to the cold.

C. Douglas Lummis teaches political theory at Tsuda College in Tokyo. He is the author of Radical Democracy (Cornell, 1996)


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