Friday, August 24, 2007

A Hard and Inconstant World

Time to make a change to the title of this page, perhaps? The Ramble is pretty well versed in self-deception (when I look in the mirror, I see a face that would put a young Paul Newman to shame), but this is indefensible, even for me. It’ll get worse before it gets better, too; I’m on holiday next month, and my Rambles may not come too frequently in that time.

Try to contain your depression, though - on the flip side, I’ve extended my stay here for a likely 12 months, so you’ve another year of infrequent mutterings to look forward to.

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One of the arguments that I’ve made repeatedly in the last couple of years has been that to really understand the process of development and how we might stimulate it in places like Malawi, we first need to fully engage with the historical realities that characterized development processes elsewhere. Not to replicate them, mind, but to learn from them. It sounds trite to say, but too few people in this field think this way. There is an increasing trend in development economics to look to and appropriate from sociology, political science and even, to some extent, anthropology. But the holistic study of past development processes is still relatively uncommon. Sure, all economists can cite the examples of South Korea and Taiwan; but how many of us can talk with authority on their evolving socio-political make-ups during the process of development? It’s near-impossible to understand the economic changes they underwent, the policies they followed and their success except against this context. The logic of these policies often translates to other countries, until you start to look at the social and political structure, the power relations they reflect. If you ignore these you may apply policies to no effect or worse.

And before this? Can we not learn from English development? From American development, and German development?

I bang on about this time and time again, but many disagree with the emphasis I put on such knowledge. The main objection they raise is simple. The world has changed, and it’s now a far harder place to develop than it ever has been before.

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It would be ironic if someone as concerned with the study of history as the Ramble is failed to recognise the fundamental truth in this. The world of the Industrial Revolution was profoundly different to that in which we live today. Equally, the context against which the East Asian Tiger economies expanded so rapidly is very different to the contemporary realities of Africa and South America.

Even a cursory examination supports this view. The global economic structure has changed enormously and at a growing pace over the last one hundred years. The extent, scope and ease of trade has changed beyond recognition. The means of production are more fluid than ever before; knowledge about trading conditions and economic potentialities are more extensive; access to foreign credit is greater. It is no longer the case that domestic entrepreneurs are best placed to expand and exploit opportunities for growth. This in turn has significant implications for the need to develop an indigenous capitalism (indeed, one can even question the need for one at all). Import substitution has worked, but only in some countries, and under specific conditions; and what’s more, its becoming harder – there’s more to substitute and consumer behaviours have changed just as much as producers in the new global economy.

Politically, too, the world is a very different place these days. The interactions of the economic superpowers with the developing world have changed enormously. Simple colonialism (if such a thing ever existed) is no longer a dominant form of interaction. However, it has been widely argued that through long term trends in primary commodity prices and the structure of the global capital markets (whose fluidity is not reflected in labour markets) the developed world has, if anything, increased its hold over the less developed; these economic changes increase the range of tools by which political influence can be established or maintained. What’s more, post-Cold War geopolitical priorities have changed the set of countries in which an economic vested interest is held, just as the Cold War was a divergence from previous geopolitical realities.

I could go on: the effects of globalized cultural influences on social values and behaviours in developing countries, and the further reaction this causes in Government is hardly insignificant. And I haven’t even mentioned one of the biggest changes of them all – the massive expansion and changing priorities of the aid ‘industry’, which has also had far-reaching effects on how we must understand the context in which we operate.

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So change all around. But how much does all of this affect my argument on the importance of history? Sorry if this is an anti-climax, but not much. Firstly, it’s easy to overstate the actual impact of some of these changes (in particular, those who extrapolate trends in commodity prices into a system of exploitation by nations wear thin on my patience). Secondly, and far more importantly, the merit of studying historical processes is not to replicate them chapter and verse, but to learn the key lessons; the most important of these is that the though context and detail changes from one case to another, the development of a viable capitalism is as much a socio-political phenomenon as an economic one. Capital accumulation is the constant, but it looks different in different places, and to effect it, a great deal must be understood about the time and place in which you’re operating in. The knowledge of historical example helps us see what in particular we need to know about.

It won’t give answers for today’s development puzzles but it helps us ask the right questions. That’s the first step.