Sachs (2009)
Sachs (2009)
Sachs (2009)
Ignacy Sachs
Revisiting Development in
the Twenty-First Century
Ignacy Sachs is an honorary professor at the Ecole des Hautes Etudes en Sciences
Sociales, Paris, France.
5
6 international journal of political economy
This is not to say that the idea of development was born at that date.
Development can be traced back to the illuminist concept of progress.
Condorcet’s plea to overcome the social inequalities between states and
within states keeps all its relevance even today and Rousseau’s blueprint
for a constitution for Corsica prefigures Samir Amin’s writings on delink-
ing (Arnin 1986; Rousseau 2000).
Important debates avant la lettre on development occurred in many
places throughout the nineteenth century. To mention a few examples, the
Russian Narodniki (populists) produced a vast body of literature of great
significance to the understanding of peasant societies and economies,
which strongly influenced the fundamental work of Chayanov (Chayanov
1986; Walicki 1969). The United Nations University sponsored research
on the Japanese roots of the Meiji Restoration (Nagai and Umita, 1985).
In India, development theory had several forerunners in the last quarter
of the nineteenth and the beginning of twentieth century, with such
outstanding authors as D. Naoroji, M.G. Ranade, G. Gokhale, R.C.
Dutt and especially Mohandas Gandhi (Chandra 1965; Gopalakrishnan
1959). In Brazil, Mexico, and Chile, the early debates on development,
often conducted in parliament, centered on free trade versus protection-
ism and industrialization (Bastos 1952; Herzog 1947; Sunkel and Paz
fall 2009 7
1970). However, the early history of the idea of development still awaits
an in-depth study.3
Development as Ideology
One may say that these three key concepts were largely consensual
insofar as they were shared by both sides of what was to soon become the
iron curtain. The fundamental divergences between the two competing
systems concerned the ways and means of their implementation.
For the young UN, development soon appeared to be a priority. The
fifteen-year span between 1945 and 1960 was marked by an unprecedented
acceleration of history: India gained its independence in 1947, the Chinese
communists installed their government in Beijing in 1949, the first confer-
ence of Afro-Asian solidarity met in Bandung in 1955, the foundation of
the nonalignment movement was laid, the Suez canal was nationalized in
1956, 1959 saw the coming to power in Cuba of Fidel Castro, and 1960
became known as the year of decolonization in many African countries.
At the same time, the rivalry between the capitalist world and the Soviet
bloc and their competition for the third world’s souls unfolded into a cold
war. Development proved one of the very few subjects on which the UN
could seek some cooperation between the two blocs.
It is no wonder that development studies became high priority in the
work of different UN bodies. An important stream of publications emerged
8 international journal of political economy
tion. Yet the relations between the two major socialist powers were marred
by a growing competition that led to political conflict, undermining the
coherence within the anticapitalist bloc.
In economic terms, the postwar period was marked by rapid growth
both in the Soviet Union and in East European people’s democracies.
Difficulties started later on, as the system proved unable to shift from
extensive, employment-led to intensive, innovation-led growth. This is
irrespective of the notorious difficulties in agriculture that followed the
disastrous collectivization in the Soviet Union carried out in the 1930s
and the complications arising from bureaucratic planning. In the absence
of a free press and democratic practices, planners were deprived of
feedback from society.13
Even more important, real socialism failed to produce an alternative
to the Western patterns of consumption and lifestyles, thus reducing
the competition between socialism and capitalism to rates of economic
growth and socialism’s claims that it would eventually overtake the West
in global wealth while providing a more equitable distribution of income.
Automobiles were allowed to become the symbol of social status, even
though the socialist countries lagged far behind the West in automobile
manufacturing.
The main setbacks proved, however, to be political. Despite the
destanilization launched in 1956 at the twentieth congress of the Com-
munist Party of the Soviet Union (CPSU), the Soviet army crushed the
Hungarian uprising in the same year and recidivated in Czechoslovakia
in 1968, putting an abrupt end to the promising experiment of “socialism
with a human face.” Poland escaped the same fate in 1956 only because
it happened not to have borders with Western countries.
The Soviet intervention in Hungary had a negative impact on the
image of the real socialism in the West, partly offset by the proximity
of the twentieth congress of the CPSU and the announcement of the
destanilization, as well as by the auspicious changes that occurred at
the same time in Poland.
This was no longer the case in 1968. The shock produced by the inva-
sion of Czechoslovakia shattered whatever credibility real socialism still
enjoyed in the West. In a sense, it marked the beginning of its agony,
which, despite the belated reforms attempted by Mikhail Gorbachev,
culminated in the fall of the Berlin Wall in 1989 and the implosion of
the Soviet Union not long afterward.
At any rate, after the Soviet intervention in Prague, real socialism
fall 2009 11
panicked in the face of neoliberal hegemony and went much too far in
their acceptance of market economy. The formula employed by the erst-
while French prime minister Lionel Jospin—“yes to the market economy,
no to the market society”—is an oxymoron. Mere compensatory social
policies will not do in the absence of a more stringent regulation of the
economy—even more so as social democrats retreat from their previous
positions on a highly progressive taxation of income. In Britain, the New
Left, which came to power in 1997, has not managed to reverse the sad
heritage of the Thatcher era. Poverty doubled under Thatcher but did
not regress under the government of Tony Blair. Even more important,
social democrats in power in several European countries did not succeed
in preventing the liberal drift of the European Union.
Finally, the neoliberal counterreform proved a major obstacle to the
implementation of environmentally sound policies. These require proac-
tive states and more regulation, but the thrust of the counterreform acts
in the opposite direction.
Where Do We Stand?
We are thus sitting on the ruins of several failed paradigms: the real
socialism, the reformed golden age capitalism, the neoliberal market
fundamentalism, the Washington consensus, and, last but not least, social
democracy.
Paradoxically, one may draw a positive conclusion from this dismal
situation: we are condemned to invent new paradigms for the twenty-first
century. This is not an invitation to unbridled voluntarism but rather a plea
in favor of responsible voluntarism, which brings us back to the historical
record of development/misdevelopment in different countries.
As mentioned above, by opposition to three-win development, misdevel-
opment may be defined as a socially perverse and environmentally disrup-
tive economic growth. In between, we have two intermediary situations:
socially benign, yet environmentally disruptive growth and environmen-
tally benign, yet socially perverse growth. The fifth category, character-
ized by negative growth, may be termed “dedevelopment,” regression, or
involution. I submit that these five categories offer a suitable framework
to analyze the historical trajectories of different countries against the
background of a globally distressing picture of rapid and sustained growth,
technical progress, and modernization, going hand in hand with the ag-
gravation of the social predicament and environmental disruption.
fall 2009 13
Notes
1. One may recall in this connection that the official name of the World Bank
is International Bank for Reconstruction and Development.
2. To the best of my knowledge, the detailed history of this group is still to be
written. It counted with the collaboration of many economists who gained notoriety
after the war, such as the Hungarians N. Kaldor, T. Balogh, K. Polanyi, T. Scitovsky,
the already mentioned M. Kalecki and W. Malinowski among the Poles, Austrian,
and German refugees K. Mandelbaum and H. Singer. For an overview on the subject,
see Arndt (1989).
3. Other intriguing episodes are Muhammad Ali’s attempts at economic reform
in Egypt, Sun Yat-sen’s ideological roots, Ataturk’s revolution in Turkey, the last
chapter of the “prehistory” of the idea of development being the already mentioned
discussions held in Eastern Europe between the two world wars. Manoilescu’s (1929)
book on the theory of protectionism and international exchanges was translated in
several languages and had a big impact in Latin America. See Love (1996).
4. A polemic opposing left- and right-wing Keynesians soon emerged, as the
former advocated public investment in housing and social infrastructures whereas
the latter pushed military expenditure.
5. For a brief analysis of eurocentrism, see Sachs (1966), 1976). For a more
recent treatment of the subject, see, inter alia, Goody (2006).
6. Gunnar Myrdal (1968) made an important contribution to development stud-
fall 2009 17
ies through his early books, then as the secretary of the UN European Commission,
and finally through the three volumes of Asian Drama.
7. See Sachs (2004a, 2004b). This is not to say that other dimensions of develop-
ment should be ignored. In particular, as rightly observed by Celso Furtado (1984),
insofar as development implies some invention, it is a tributary of culture. Cultural mod-
els of time used to offer a convenient entry point for studying lifestyles and, therefore,
patterns of demand (see Sachs 1980b: 80–95). Moreover, the very concept of natural
resource is culturally conditioned by our knowledge of nature and technologies.
8. Marglin and Schor (1990) and Fourastié (1979). Fourastié’s book starts with
the description of two contrasting villages in terms of development. The author
then explains that this is his native village at two points of time, before and after
the glorious 1930s.
9. That is, the then prevailing system in the Soviet Union, the East European
people’s democracies, China, Vietnam, and Cuba.
10. Planning was even advocated by the United States. When President John F.
Kennedy launched the Alliance for Progress to counter the influence of the Cuban
revolution in Latin America, he encouraged the Latin American governments to
present development plans and to go ahead with land reforms!
11. As incongruous as it may seem today, the idea of confiscatory income tax
rates for higher income brackets was quite popular among the New Dealers in the
United States and widely accepted by social democrats.
12. The former corresponds to what occurred in the golden age of capitalism; the
latter may happen if we continue to indulge into jobless growth while improving
our environmental performance.
13. The situation was not the same in all countries of the bloc. Poland differed sig-
nificantly from the Soviet Union and most other countries insofar as most of its land
remained in the hands of individual peasants. Poland and Hungary pioneered much
more sophisticated planning methods than those prevailing in the Soviet Union.
14. United Nations (2005). According to Blond (2008), the wealthiest 1 percent
in the United States increased its share of national income by 78 percent between
1979 and 2004, whereas 80 percent of the population suffered a decrease in their
income share of 15 percent. This meant a wealth transfer from the large majority to
a tiny minority estimated by the author at $664 billion.
15. China followed a different path, combining ruthless capitalism with an au-
thoritarian regime that did not give up its socialist rhetoric. The country achieved
phenomenal growth rates, unknown in history, but is paying a very high social and
environmental price for it. It is difficult to foresee how this chimera (in the literal
sense of the word) will perform in the future. Marie-Claire Bergère (2007: 369)
concludes her well-documented book by summing up the performance of the Chinese
regime as efficient, freed from ideological constraints, and without any consideration
for the suffering of a majority of its population, yet, succeeding well in combin-
ing the will of power with the imperatives of growth. According to the author, this
experience, extremely difficult to replicate, is nevertheless likely to continue in the
foreseeable future in China.
16. See Latouche (1995, 2004). An institute of economic and social studies for
sustainable degrowth is based in Saint-Etienne, France.
17. In Louis-Joseph Lebret’s words, “Une civilisation de l’être dans le partage
équitable de l’avoir.” See Lebret (1967).
18 international journal of political economy
18. Faivret (1978) in collaboration with J.L. Missika, D. Wolton, and the Con-
fédération française démocratique du travail (CFDT). See also Le Cercle des
économistes and E. Orsenna (2008: 134).
19. The concept of mixed economy was theorized by Kalecki (1993: 45–60) and
Shigeto Tsuru (1997).
20. The influential report of the Dag Hammerskjöld Foundation (1975) listed the
logic of needs, as opposed to the logic of market, as one of the pillars of another
development. Reconciling them in practice is not easy. The question was raised in
Indian studies on watershed management; Shekhar Singh proposes to keep out-of-
market drinking water for the riparian populations as well as water needed to sustain
the river’s ecosystem. See Prasad (2003).
21. Globalizing rather than globalized, the process is still wide open and may
lead to diverse configurations and different patterns of gains and losses distribution
among the industrialized and developing countries.
22. Meaning by this that the only relevant levers of economic activity are to be
sought at the global and local levels.
23. In the past decades, a new stakeholder entered on the scene: the organized
civil society. It should be given an important role as a partner in the negotiation of
development strategies but not treated as a substitute for the developmental state, as
some would like, on account of the multiplicity and heterogeneity of the nongovern-
mental organizations (NGOs). The Union of International Associations lists no fewer
than 135,000 NGOs. See Union of International Associations (2006/2007).
24. I have dealt at length with the subject; see, in particular, Sachs (1980a, 1987,
2000a). See also Sagasti (1979).
25. We have entered (at last!) the age of expensive energy, which should make it
easier to design strategies based on energy sobriety and efficiency and the gradual
substitution of fossil by renewable energies.
26. Notwithstanding a recent UNFPA report (2007), which sees in rural urban
migrations the only road to progress, there are serious reasons to challenge this stance.
Development will not result from dumping the refugees from the countryside into
shantytowns. As Mike Davis rightly observed, this might be the way of building the
worst of all possible worlds. See Davis (2006).
27. For instance, the range of land reforms goes from outright expropriation without
any compensation to buying land from landholders, paying them the market price.
28. The size of countries differentiates their development strategies. Brazil, Rus-
sia, India, and China (BRIC) belong to the group of giant countries also known as
“monster states” (G. Kennan) or “whales” (R. Macedo). In fact, one ought to dis-
tinguish two subspecies of whales: Brazil and Russia still have an open agricultural
frontier, which is not the case in India and China.
References
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