152 Contemporary Theories oi Development Chapter Summary The European capitalist system expanded from the fifteenth' century and slowly reconstructed the non-European societies it contacted. The colonial episode can be taken to have structural, institutional and cultural legacies which continue to shape the thought and action of the present. The ways in which the non-European world was understood by European traders, missionaries, settlers and so on varied. In the period of the Enlightenment non-Europeans are taken to represent innocence and we have ideas of the noble savage. However, as the European empires expand the imagery shifts and we have ideas of uncivilized savages. In the period of formal colonialism the European ruling elites adopt a posture of taking responsibility for civilizing the less advanced peoples and this modulates into an early acknowledgement of a responsibility to organize development for eventual inde- " pendence. The colonial powers adopted different schemes and most advanced slowly until the Second World War undermined the Euro- * < pean empires and ushered in the phase of decolonization. ' -J mm Overview of Early Post-war Theories of Development / In the years following the Second World War a series of factors occa-n ' sioned the production of a theory of economic growth which was applicable to the Third World. The crucial factors included political 4 pressure flowing from the desire of the USA to order the post-war ti World, the interests of capitalist business in maintaining access to the <■ "territories of the Third World, nationalist developmentalism amongst _ replacement elites and the example of the Marshall Plan in Europe. h However, in time, as the role of the USA within the post-war global +-,šysteth increased, the early material of growth theory was superseded jíl toy ;the( more robust formulations of modernization theory. h$\\ 154 Contemporary Theories or Develop Background to Growth Theory It is possible to identify four elements in the background to growth theory: (a) the intellectual influence of the work of the economist John Maynard. Keynes; (b) the political agendaof the USA "äs it moves tďT position óf dominance in the short twentietrTcentury;1 (c) the Marshall Aid programme and the reconstruction of Western Europe; and (d) the demands ot hátíSrľ alist developmentalism which was the ideology of the emergent new nations (see figure 10). The Keynesian revolution There are three general elements in the overall Keynesian revolution in economic theorizing which came to underpin intellectually the prospenn of the post-Second World War period.2 The first was the inter-war expen ence of the Great Depression which was an event which could not happe n according to orthodox neo-classical economics which insisted that if the ; marketplace was left to its own devices then all would be well in the loni» ;run. The second element was the impact upon intellectual and political opinion of the apparent success of the planned economy of the USSR. In the inter-war period the USSR embarked upon a series of large-scale economic development projects whose success was in marked contrast to the failures of economic liberalism in the West. And the third element was the radical overhaul of technical economic argument effected by Keynes. ,--. In the 1930s the economic orthodoxy rested upon the work of the equi-' [librium theorists, men such as W. S. Jevons, Alfred Marshall, Leon Walras j.' j and Vilfredo Pareto who argued that the free market left to its own devices !■; j would spontaneously order society in such a fashion as to maximize human k' Ĺ well-being.3 Against the sanguine view of the orthodoxy, Keynes showed that it was possible for economies to go into depression equilibrium wheic the various factors of production were not used to achieve optimum economic configurations. And the question of theory and policy thereafter concern the precise conditions which will ensure full employment. The answers made to the question by Keynes opened the way for a new idei of the role of the government in managing the economy. In general, the laissez-faire scheme had been attacked on three points: (a) the persistence of unemployment; (b) the misuse of available resources; and (c) the trend towards monopoly firms within the economy. The alternative Keynesian view suggested that if the level of total expenditure falls below that which is necessary to sustain full employment, then the shortfall should 1 E. Hobsbawm 1994 Age of Extremes: The Short Twentieth Century, 1914-1991, Lon don, Michael Joseph. 2 See ibid. chs. 3, 9. 3 C. Napoleoni 1972 Economic Thought of the Twentieth Century, London, Martin Robertson. Figure 10 Growth theory Keynesian revolution/ European Recovery Programme Political agenda of USA Nationalist developmentalism QipcnrVEs TO 1PLAN GROWTH {TO llCAlPinrUlLATE UN T1HDIE1D) WOIRILID THE HHSTOMCA1L EX1PEMIENCE OF THE EHEST) 't , «t -:tť J ' m i» be made up by government spending. The proposal rests in turn on the notions of deficit financing and the multiplier. Keyneš ärgüed~that gov- • eminent borrowing to finance expenditures was justified as each unit of j expenditure would have its beneficial effect multiplied as economic activity i in general was encouraged and eventually the higher levels of economic activity would generate higher tax returns and the government's deficit could be removed and debts repaid. Overall, the role for the government is sharply altered in line with revisions to the established conception of the market. It is clear that the establishment of the first centrally planned economy in 156 Contemporary Theories of Development jthe USSR and the Great Depression of the 1930s had a profound impact (upon the work of Kgyn£S_who thereafter managed to plot a middle course through the alternatives of anarchic laissez-faire market capitalism ancTthe authoritarian state intervention of the Second World of official socialism.4 Keynes establishes three key policy^analytic points in the light of the experi-ence of economic depression and the state planning of the USSR and the sc are the notions of depression equilibrium, deficit finance and the multipliLi Overall, the Keynesian analysis makes clear that state planning to secure full employment is compatible with the political concerns of liberalism lor the freedom of the individual. With Keynes the economic orthodoxy v\ is very sharply overhauled,5 resulting in a style of government regulation tli u was taken to have tamed the system's periodic crises.6 The political agenda of the USA The initial set of political factors which gave shape to the subsequent , efforts to make use of Keynesian work in guiding policy with regard to Cfl development revolve around the determination of the USA to order the { post-war world in a fashion acceptable to the demands of international !j business, in particular its US-based components. A crucial concern was lor access to those territories which had been protected behind colonial picf- t ■" erence systems within trading blocs in order to construct a liberal global /trading system. i It has been argued that three issues dominated US thinking in the period \ 1943-5: 'First was the . . . disintegration of the pre-war social systems and the growth of revolutionary movements and political upheaval everywhere in the world. Next was the problem of the Soviet Union. .. Finally there was the issue of Great Britain, invariably set in the context of the future of the world economy and its present and future relationship to the US'.' Once the Americans became involved in the war they began to establish i ~Jltj series of economic war aims. This task fell to the Department'of State under ^v "•' Cordell Hull, a disciple of President Woodrow Wilson's laissez-faire liberalism and a man marked (as was Keynes) by the experience of the Great I Depression. Hull's conclusions in respect of ordering the global system' ^ y centred on the pursuit of an open international trading system centred on »rgj£ 'S* the USA. ,-;: Ijjg^ The two major elements in US thinking were finance and trade. Thesis- -f^3ö| jŕ^ cussion of finance was initiated in 1942 with a British submission prepared ^^gf ^" 4 See R. V. Eagly ed. 1968 Events, Ideology and Economic Theory, Detroit, Wayne Štíte >c|j " University Press. '-•. , '^r, 5 See J. Robinson 1962 Economic Philosophy, Harmondsworth, Penguin; P. Ormeioa *^ ^ 1994 The Death of Economics, London, Faber. '■_ í^j'" 6 Hobsbawm 1994 op. cit. ch. 9. ' V- ^Sl'1 7 G. Kolko 1968 The Politics of War: US Foreign Policy 1943-45, New York, Vintage, (lj|||í? e»/ v& • * Decolonization, Cold War and Modernization Theory 157 . by Keynes which envisaged the growth of world trade with an interna--^ tional fund to smooth over budget deficits and channel investment money into development projects. The USA replied to the proposal with the White Plan (named after Harry White, a senior member of the US Treasury) and debate thereafter revolved around the control of the proposed institutions and the ground-rules of their operation. The debate continued until the'] Bretton Woods conference of July 1944 and the final compromise estab- ( lished the US view of the post-war world economy as one run by business í on business principles. The Bretton Woods conference led to the establish-^) ment of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD, or World Bank). A little later a body to regulate trading was proposed which was to have been known as the International Trade Organization (ÍTO) but this was not successful and eventually the GATT (General Agreement on Tariffs and Trade) was ^established.8 These institutions were thereafter the key vehicles in ordering the economic, social and political development of the First World in the post-war period, and they were the starting point for work in respect o£ Third World development. The general way in which the USA was later tö approach matters of development is also clear and critics have argued, that America's 'foreign policy at the end of World War Two necessitated the! ability and desire to employ loans, credits and investments everywhere to] create a world economic order to its own desires'.9 V The European Recovery Plan The interventionist nature of US policy at this time means that the European Recovery Programme encapsulates a wealth of tensions^ At the outset it is quite clear that 'the most dramatic . . . contribution tp-récovery wás.the 'announcement in the summer of 1947 ... of the so called Marshall Plan\10 The^aid programme provided a source of credit to W,ar^3amaged Europe) which allowed the reconstruction to begin. Yet the justification of the pro-J gramme in the USA focused on the fear of communism. A contemporary .commentator remarked that self-interest 'rather than charity inspired the , ;ERP!n and went on to record that 'frightened by the onward movement of "communism ... the American people rallied to the support of the Marshall ľ! 11.., Americans realised also that economic recovery in Western Europe ■> See A, Harrison 1967 The Framework of Economic Activity, London, Macmillan, 1' ', pp. 82-6, for a discussion of these Keynesian-inspired institutions. See also, for more u t Hied discussions, W. M. Scammel 1980 The International Economy Since 1945, London, cmillan, ch. 2. On this matter, the recent 1994 completion of the GATT Uruguay Round n !rks a further advance towards the original goals. ' Kolko 1968 op. cit. p. 624. J" M. M Postan 1967 An Economic History of Western Europe 1945-1964, London, J «men, p. 14. i>i Harris 1948 The European Recovery Programme, London, Harper and Row, p. 3. 158 Contemporary Theories of Development would rebound favourably on the American economy'.12 The mixture of political and economic concerns is quite clear and they informed the overall approach of the USA to the recovery of Europe. The major formal political event of the period was the promulgation of the Truman Doctrine in March 1947. The essence of the doctrine was that political change not agreed by the USA was to be blocked and in this 'Truman spoke for the bulk of American conservatives and allied himself with reaction around the globe'.13 The implementation of the Marshall Plan within Europe was informed by this political stance and the powers were used to discourage social reform. An American critic noted that 'the effect of our economic intervention in Europe has been not only to oust communists from the governments but to put the socialists out or decrease their influence'.14 In terms of the economics, and apart from the business of self-interest, what is novel is that 'the Truman Doctrine contained a concept of international aid based on the need to promote a suitable rate of growth in the receiving countries, a prototype thus of modern development aid'.15 That growth could be described theoretically and actually promoted as a matter of policy were intellectual and policy analytic novelties. Paul Streeten suggests that it was the dramatic recovery of Europe's economy that lent ; credence to the notion that deliberate intervention in an economic system ' to raise its level of activity was possible.16 Nationalist developmentalism The intellectual mainstream of development theory derives from the historical episode of the dissolution of the mainly European system of formal colonial territories. At this particular time a series of factors came together, including the logic of the capitalist system, available theory and nationalist T irhetoric. Any review of the historical expansion of the capitalist system -jreveals a system-requirement of access to various territories for resources, Itrade and markets. In the colonial period this access was secured via the ', machineries of the colonial regime. With the collapse of the colonial system !a replacement political form was needed. The available idea was that of , the nationstate, which was part and parcel of the nationalists' ideology of s" independence and taken for granted within contemporary social theory. It" is clear that other political forms were available in principle and one could cite UN trusteeship, continued linkages with the relevant colonial power and„^ 12 Ibid. 13 D. F. Flemming 1961 The Cold War and Its Origins, New York, Doubleday, p. 447, On the Cold War see also M. Walker 1993 The Cold War and the Making of the Modem World, London, Fourth Estate. 14 Ibid. p. 501. 15 G. Zeylstra 1977 Aid or Development, Leiden, A. W. Sijthoff, p. 31. ,! * r n c ■.„,».•„„ 1Q79 Thp frontiers of Development Studies, London, Macmillan, ch. 16- Decolonization, Cold War and Modernization Theory 159 m various returns to the pre-colonial situation. However, none of these were acceptable to the aspirant power-holders within the countries which were forming within the territories of the dissolving colonial territories. The. rhetoric of nationalist developmentalism which had been used by local leaders in pursuit of independence affirmed the model of independent nationstatehood which was to be the vehicle of the achievement not merely v^ of political freedom for the elite but also growth and welfare for the masses. .^ \ It is clear that for the new replacement elites in the Third World a set of [ demands coincide: the demands of the global capitalist system, the demands of their own people which flow from the rhetoric deployed by nationalists in their pursuit of independence, and the intellectual demands of available theory. The goal of the pursuit of effective nationstatehood is embraced by the new elite. On this view, ruling elites will face the complex task of build- „ ing new nationstates. They must rapidly engender sentiments of political \ and cultural coherence because citizens must live the experience of mem- " ' bership of a single nation, a single community. The elite must secure polit- ,E V ical and social stability and in place of colonial arrangements there must "„"■I be new patterns of authority and new political mechanisms to absorb and 1'' - resolve inter-group conflicts. Finally, the new elite must pursue economic ., " development as this is the base line of claims to legitimacy. ;r ,VI The Logic of Authoritative Intervention . ' Out of the melange of theoretical possibility, political and economic neces-L - , sity, successful European examples and the demands of nationalist devel-„"^ opmentahsm the theorists of development created an intellectually coherent .j C and politically relevant scheme. An approach to analysing complex change '/;'l was produced which was both prospective in orientation and practical in í * intention, [t was essentially an ideology of authoritative intervention ori-//f-ented to national development. The theory involved claims in respect of the ř^iwr fundamental nature of economic growth, the effective role of state planning %.r,T' and the rationale of aid transfers. '•3 * r?-- ,, Authoritative intervention í, .Sfeľf^j' Intervention in a social system might be understood as deliberate action '' ' y whose objective is to bring about a particular change in some set of circum-ifl^'i''stances and thereby achieve a preferred state of affairs. There are three 1 basic aspects of this approach: (a) the supposition that there is something » to be acted upon, an object; (b) the expectation that it will respond and do X, So in a predictable fashion; and (c) the idea that the intervention is accom-,* pushed by an actor in a precise manner according to a clear set of expecta--, tions; that is, authoritatively and not randomly or accidentally. - It is clear that for the intervention to be successful it must be a know-?H#í i Ing lntervention that is in the right place, at the right time and of the right 160 Contemporary Theories ot uevelupmcm 21 H. Jones Nelson, p. 44. 22 Ibid. p. 53 kind. It is clear that authoritative intervention demands a descriptive general theory of the social world. This intellectual strategy can be called policy science and the term designates the assumed product of mainstream social science such that in response to the question 'why have a social science' the answer is given that 'it will enable humankind to control their social «t^ environment'.17 An analytical strategy centred on authoritative intervention V-N requires a legitimating intellectual core, and thereafter it needs organizin«; and implementing. I Growth theory, development planning and aid In the early work on Third World development, intervention was legitim- .' ated by being based upon economic growth theory, and these were in turn extensions made to the work of Keynes. Roy Harrod18 'established grov»th , economics as a going concern on the foundations of Keynes' saving inv£ st ment theory'.19 Harrod's famous essay20 focuses on 'the necessary condi tions for equilibrium between aggregate saving and investment in a dynamic economy'.21 The basic proposition is that Ga=s/v, where 'Ga' is the actml rate of growth of national income, 's' is the marginal propensity to sa\e, and V is the marginal capital-output ratio. This fundamental relation c in ^'< define a growth path if it is linked to a statement of the entrepreneur's estimations of future trends. The notion of warranted growth ('Gw') is *) introduced to fulfill the Keynesian role of the entrepreneur. The entrepn n- ~, "*-eur invests and investment today depends upon estimation of tomorrow's possibilities. If the investor is to be reassured that the reading of the economy is correct, then Ga will have to be equal to Gw. In addition to Ga and Gw, Harrod has 'Gn' which is the natural rate of growth flowing from gru'n rises in population where more people imply more production. If all these are put together we have the first major conclusion to issue from Harrod's work: 'If,_by. coincidence the actual rate of grqwth^quallcd the warranted rate, which itself equalled the rate of growth of the labour ,. force, then steady growth at full employment would occur'.22 The sec- ,** ond conclusion Harrod makes is that such a state of affairs isunlikely to ". _, come about and even if it did it would be unstable. In the notation of the .;»*& economists what has to happen for there to be steady growth of the system ir'* is that Ga=Gw=Gn. If the equation has the determinants of the various ele- tr, ments inserted then the problem becomes clear. The elements that deTermine $yp 1 «ŕ 17 B. Fay 1975 Social Theory and Political Practice, London, Allen and Unwin, p. ľ 18 The American economist E. D. Domar independently offered similar ideas. "*.£ 19 K. Kurihara 1968 'The Dynamic Impact of History on Keynesian Theory' in Eaqlv "V--op. cit. p. 137. i<* 20 R. Harrod 1939 'An Essay in Dynamic Theory', Economic Journal, 49. j 21 H. Tones 1975 An Introduction to Modern Theories of Economic Growth, London. -^ "V the three growth rates are independently^ set_..and_only_an_accident; will bring them into the_relation_demanded by steady growth at full employment. This is the fKřštHarrod Problem'/and is a step towards his aim of showing that the system"tends to stagnate. Apart from the inherent pessimism, this view clearly places a huge burden upon planning agencies ior when they intervene they do so in__a_system that is not disposed to assist them. The ^Second Harrod Problem' Jig the probleirT^fstebility. If Ga diverges fronTüv^TtTiirrwithin limits it is likely to carry on doing so. Once the growth path is lost the rational corrective behaviour of the entrepreneur is such that things get worse not better. Overall, three things are clear: 'the possibility of steady growth at full employment... the improbability of steady growth at full employment. .. the instability' of the warranted rate of growth'.23 < Harrod's work does identify a long-term^stable. growth pathJmtLSuggests that it would be difficult to find and difficult to follow. In an economic theory underpinning an approach to development predicated upon the notion of authoritative intervention, the pessimism came to be seen as rather awkward. However, Harrod's work was widely used and remained service-' able in its legitimating role. As ah approach within development studies the j tneory of growth was elaborated from the 1940s to the mid-1950s _when it was absorbed into modernization theory. ' r~Having looked at the legitimation of intervention it is appropriate to turn 3 to its .organization; that is, to ideas of planning. The conceptual relation is jn outline straightforward but the notion of planned intervention has been i contentious throughout the short twentieth century. The familiar debate - aFout economic planning begins with the Austrian economist Ludwig von Mises who reacted against the rise of arguments for socialism and the ' example of the USSR and argued in the 1920s that a planned economy ' could not work rationally. The gist of his argument was that if^the job of * a*1, economic system jvas to allocate scarce resources between_competing , ends then this required indices of scarcity which had to be established by allowing the free markeFtodetermine^ prices. An economy with no free market could not provide any index of scarcity and therefore could~hot _ rationally allocate scarce resources. Unfortunately for von Mises it was ' possible to answer his argument by manipulating the formal machineries of neo-classical economics so as to abolish the need for a market-to determine indices of scarcity. And throughout the 1920s and 1930s debate centred on ~ whether, and if so how, the theoretical possibility of planning could_ actually be translated into practice. It is not necessary to pursue the detail of these 7 debates""ľsTfor our purposes; it is enough to note that when in the post- , Second World War period a demand arose for a planning system the notion \ was already well known.24 í' It was real-world changes that called planning machineries into being. A r 23 Ibid. p. 59. "24 See Napoleoni 1972 op. cit. . _ J ■^Jí contributory factor in the rise of the preoccupation with growth was the reconstruction of capitalism that was evident in the 1920s and 1930s, specifically the emergence of monopoly forms of enterprises and a recasting of the relationship of state and industry. It can be said that there was nothing new about the partnership between capital and state but what was novel was its respectability.25 The changes were evident in the 1930s and were extensively developed in the wartime period. When it came to dismantling war economies the legislative, institutional and psychological requirements of a Keynesian-managed economy were already in place. In brief, the work of Keynes legitimated a reworking of the public view of the relationship of state and industry.26 The implementation of intervention takes a series of forms and they ha\ e typically revolved around aid programmes. We can understand aid generic ally to be piecemeal interventions in the system having the aim of contriv ing a preferred state of affairs. Aid can take the form of single projects, si ts of related projects, programmes, emergency one-off exercises, and so on Two early sources of interest in aid-giving can be identified. In the first, 0n Lew's. see G. Meier and D. Seers eds. 1984 Pioneers in Development, Oxford Sfňí'J'* university Press. ■*j." "iLi" \ n ^n'ted Nations 1951 Measures for the Economic Development of Underdeveloped 'Ä Countnes, p. 9. „r^,-. 3i ibid. i'1 'i •-!.' 164 Contemporary Theories or i-/cvciwjjxucm argument here rests upon the analogy of the government of the UDCs facing development and the governments of the DCs Facing depression. Thirdly, they treat technical matters. In this case domestic saving is discussed and a tacit definition of their assumed goal is offered. In DCs thu observe a ten per cent of national income rate of capital formation, where is in the UDCs this_rate_is_ojy^_jjve per_cent. A key problem is thus how to raise the rate of capital formation. In their fourth point, where they treat the notion of planning, it is I made clear that the role of the expert is crucial. They consider neo-classicil | economics adequate at the micro level when precise data are available, but j inadequate at the macro structural level when precise data are not reatlilv ' available. The authors suggest that it is not possible to offer any gencial rules governing economic planning: 'those who are responsible must soik themselves in the facts of each particular case and must then use their best judgement as to what will be the most desirable directions of movement' 2 This is one of the most optimistic sections of the report and the world of laissez-faire is left far behind - indeed the authors call for carte blanche for the economic planners. In the fifth point, the authors turn to look at terms of trade. On this the\ affirm a loose internationalism that is in accord with the style expected of a UN study and, more relevantly, it fits in with the views of the USA on the proper development of post-war trade. Finally, in point six, they tackle the matter of external sources of capital, Here we see two points of interest. First, they answer the question of the 'extent to which capital is needed from abroad by seeking to indicate a | quantity. This, they grant, is difficult, but important. Then, secondly, with 'regard to the government's-role as provider of infrastructure, they say 'we jdo not suggest that aid should be_ given unconditionally... This would not 'be wise. Each grant should be linked to a „specific^ function, and there should be international verification that the funds are used only föFthe purposes for which they have been granted'.33 Thus aid is targetedjind monitored according to wise prescriptions. This is what we would expect to find. It is the practical expression of a policy science, and it is also entirely typical of the mode of argument of UN specialist commissions with their concern to establish what J. K. Galbraith will later generic ally tag as 'institutional truths' which are the sets of semi-formal ideas to whichjirgan- izations give assent and which express political-bureaucratic compromises amongst competing groups. ' Unlimited supplies of labour The essay Economic Development ivith Unlimited Supplies of Labour, pub" ^sä lished in 1954, marked an explicit recovery of the legacy of the classical _ j*g '-.' '"** 32 Ibid. p. 50. 33 Ibid. p. 85. :> , i*J,i «if. ■* f >,H» .„73 'A' -' 'r t: i$ ľ *fr K 1- •V fr »A- k*. ""OS"' 1^ ** ••tu pŕs ťtjar b. s. Aň ■ ■Utŕ r ťV \ «J*i ItPeĺ* f** '%> X K' m-y * JwgWp ms: »H» «■r- 4* 4-1 political-economists of the nineteenth century with its central concern for t'ie conditions of long-run growth. Lewis looked at the nature of. the typical underdeveloped country and identified two sectors: the one was capitalistic and the other traditional. The_business^ of economic development cóuldí be theoretically described in terms of the relationship of the two sectors over itiine. In this dualistic model the capitalist sector is dynamic and reinvests t lie profits it generates and thereby acts to move the social system forward whereas the traditional system of subsistence agriculture does not generate »ínvestable profits but acts only to sustain its current condition. The expan-sic n of the capitalist sector can proceed on the basis of drawing injlabour, from the subsistence sector and this will allow long-run growth. The pro-uss of long-nin^growth will continue in this fashion until the surpluskbour oj^ the traditional _sector has all Běěřf äHšórbeH. At this point the modern sector will both dominate the economy and be seif-sustaining.34 J ft should be pointed out that the work of Lewis^acted to reintroduce many of the concerns for long-term growth andits sectoral or class impact which were typical of classical political-economics.35 It is also clear that Lewis had correctly seen that the business of analysing the economies of the. underdeveloped countries demanded analytical machineries which were quite! different from the machineries available within the framework of the neoclassical economics of self-regulating markets.36 Economic growth Lewis worked on the 1951 UN report which was one of the earliest attempts to make-sense of the matter of Third World development. However, we can pursue the matter of the export of Keynesa little further, in_a_rnore academic context by looking at Lewis's The Theory of Economic Growth which was published in 1955 and whicTr^ffěrs älnoré theoreticarstätemenFöf hiš position. Lewis declares in the book's preface that he is not presenting original ideas but offering a framework for studying economic development. The level of enquiry is general. Lewis identifies three proximate causes of growth and_deyelopment. These are, first, the 'effort to economise', which Lewis uses to characterize the DCs. Included within !t or as illustrations of it we find listed: experimentation; risk-taking; mobility; and specialization. We can, take this as fairly straightforwardly descriptive of the industrial capitalist- world and it is liable to criticisms of oversimplification, aggregation and value-bias. The second.proximate cause is.the increase of knowledge ^aitd its.application. It would seem that this point can be taken as a simple " See Nl. P. Todarao 1982 Economics for the Developing World, London, Longman, pr-209-11: W. J. Barber 1967 A History of Economic Thought, Harmondsworth, Penguin, Pr> 107-15. 1 i he subsequent more descriptive notions of dualism came to be heavily criticized; see iBrobkfield 1975 Interdependent Development, London, Methuen, ch. 3.