Equality, the Third World and Economic Delusion, by P.T. Bauer, Cambridge, Mass.: Harvard University Press, 1981, 293 pp., $17.50.
The Third World Calamity, by Brian May, Boston: Routledge and Kegan Paul, 1981, 272 pp., $19.95.
When one is involved in profit-making enterprises in the Third World (that is, enterprises that work) one develops a distinct dislike, if not contempt, for the opinions of development-oriented academics and their usually specious, irrelevant, obtuse, and misleading theories. But this does not apply to Peter Bauer.
Development of the underdeveloped countries ought to be the great boom industry of the upcoming decades. As Bauer so clearly recognizes in Equality, the Third World and Economic Delusion, however, as long as development remains a prerogative of government and is equally prey to the not-dissimilar machinations of the bureaucracies of large Western corporations, the opportunities in the Third World will continue to go abegging.
Bauer reflects on the futility of today's situation by applying straightforward, practical analysis drawn from a historical overview of what has stimulated or hindered development in the past and by relating that analysis to the current plight of the Third World. Basically, Bauer makes three points.
First, he argues that government policies are the major inhibitors of development. Here he could have been even more forthright. It makes little difference whether government is socialist or capitalist; the nomenclature is incidental. The real issue is how far government intrudes by telling people what they must do and how they must do it and, for any who succeed, by exacting penalties through taxes and regulation. Furthermore, those governments espousing a Marxist-cum-statist approach are not necessarily under the aegis of well-meaning idealists pursuing impractical theories. For example, President Nyerere of Tanzania proclaims socialism, but implementation is secondary to the psychological buttressing that socialism gives him as a ready-made formula for controlling and molding the "masses," while exalting the leader as history's midwife. Such a process allows persons in government to avoid actually thinking about such mundane matters as growing a better crop of peanuts and selling them at a profit.
The second point Bauer underlines is that wealth, large or small, has to be produced by one or more individuals joining their ideas and their labor with inanimate objects. Bauer debunks academic theorists, the media, "progressive" politicians, and churchmen who reject this notion. With the abnegation of this concept it is understandable, but not forgivable, that these individuals should be consumed by guilt: that the North should have so much while the South (today's collation substituting for specifics) should have so little. When analysis is undertaken with a sense of guilt, it is unlikely to reach anything but guilt-ridden and guilt-directed conclusions.
Bauer, however, free of guilt, can assert that "incomes, including those of the relatively prosperous or owners of property, are not taken from other people. Normally they are produced by their recipients and the resources they own; they are not misappropriated from others; they do not deprive other people of what they have had or might have had." To the guilt-ridden, such a statement is preposterous. Only "redistribution" can satisfy their personal trauma and, in their minds, expiate the "haves."
Bauer's third point, and his most important one, concerns the proper use of capital in the development process. Says Bauer, "Much of capital formation is not a precondition of material advance but its concomitant." He further asserts that "much public spending [in the Third World] routinely termed investment has nothing to do with capital formation." The critical factor is that capital per se is not the prerequisite but the accompaniment to the proper conceptual, material, and human construct that provides the opportunity for humans to create and enjoy greater wealth. Would that governments, banks, and corporations might understand!
President Reagan has just announced a large infusion of capital into the Caribbean Basin to "stabilize the region." If the appropriate constructs are not there, the opposite is just as likely to ensue and thus aid those forces the president hopes to thwart. The folly about which Bauer writes thus continues. He concludes, "The exposure of economics to political influences and to intellectual fashion is likely to ensure the persistence of its confused state, in which there will continue to flourish side by side genuine advances of knowledge, meretricious displays of technique, and crude lapses which acquire a life of their own."
Brian May's book is very different from Bauer's. It focuses on ancient attitudes and how these attitudes have shaped the present, if not the future. May claims that the Third World is stagnant. This alleged condition, he asserts, arises from an ingrained condition born of a mixture of intrinsic psychological, anthropological, and possibly biochemical components. The nature of this condition, May contends, cuts off its subjects from the rationality, inquisitiveness, and skills that have given the West the methodologies of economic growth.
In presenting this idea, May has amassed much supporting evidence, and he takes the reader on a fascinating exploration of many human riddles. His conclusion is gloomy: "The possibility of psychic differences between societies—perhaps of biochemical origin," presages disaster for the Third World in that they are, thus, inherently denied the capacity for economic growth. Further disaster lurks for all of us should various members of the Third World obtain a nuclear capability, May opines.
May makes other equally sweeping claims. Quoting a book by an Indian who labels India "a corrupt society," May remarks that this is "a description that may be applied without substantial error to the entire Third World, including the communist part of it."
One has to pause before this generalization. Corruption is indeed widespread in the Third World. It is simply not true, however, that the charge may be applied universally to these countries. Nor is corruption unique to the Third World. Similarly, when we look at man-inspired disasters, as May does, we find that most of these belong to the West. We can point to the two world wars, Lenin's and Stalin's prescriptions that induced famine, liquidation, and the Gulag. Furthermore, Marxism, which has wracked so much of the Third World, is a European construct. Or we might remember Hitler's holocaust and the overarching European idea of a technologically based totalitarianism. And finally, to date the only nation to use nuclear weapons against other humans has been the planet's most economically advanced nation.
The main problem with May's book is, first, its time frame and, second, its terminology, especially his tautological use of the phrase Third World. Regarding time, human societies have never moved economically at the same rate. They have always moved in echelon, not in a straight line. So it is now. Some societies are stagnating, some are in a state of decay and may collapse, and some are economically dynamic. We should also be careful of assuming that even this configuration is fixed: that time stops. Perhaps the single greatest characteristic of the Third World today is movement much of which is directly contrary to the stagnation May describes. It could be that it is the West that is stagnating, especially European Russia and its satellites, Western Europe, and the United States east of the Mississippi.
Persuaded by 37 years as a part-time resident of both East and Southeast Asia, I contend that the economic fulcrum of the planet has already decisively shifted. It once lay between the East Coast of the United States and the West Coast of Europe. Today, it lies between the sunbelt of the United States and Japan. More significantly, the fulcrum is moving perceptibly toward East Asia. Indeed, if a significant proportion of East Asia—notably, Siberia, China, and Vietnam—could rid itself of the ideas inherent in European Marxism, the world could witness an economic explosion that would dwarf the Japanese "miracle."
One must also question other contentions that May makes. As one who works daily with Thai peasants, I must note that it is simply not true that the peasant "conceives of himself…destined to be poor and engaged in a battle for survival…attributed by some Thais to Karma." Neither does this "ensure his docility." The Thai peasant is anything but that. If one can generalize at all, one sees among Thai peasants not docility, but energy, assertiveness, acquisitiveness, and a great deal of violence.
The problem with May's book is an old one, that of deriving the particular from the general. This is always difficult but never more so than in times of transition—toward both positive and negative ends. Such movement is more pertinent to the Third World than is stagnation. Within that enormous differential called the Third World, there are many actors who, in a relative sense, are burgeoning while the West itself may have begun the slide toward stagnation.
Ronald Nairn has worked in the Third World for many years and is the author of Wealth of Nations in Crisis.
This article originally appeared in print under the headline "Third World Shackles: Political or Cultural?".