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ECH701 - Section 2 - June 2006

UKZN - Concepts and Methods in Economic History and Development


Studies
ECH701 (Honours) - 2006 Semester One, Term Two
Final Paper
Section 2

Lecturer: Professor David Moore


Student: James Mardall
Student #: 202520037
Due Date: 10th June 2006, 10h00

Section II: Development Studies

2. John Sender, in ‘Africa’s Economic Performance: Limitations of the


Current Consensus’, Journal of Economic Perspectives, 13, 3 (Summer
1999), pp. 89-114*, argues that there are two ways of looking at
African development (aside from the neo-classical ‘Washington
Consensus’ way, which he seems to reject). He writes that there is the
‘people-friendly’ view arguing there is always a way to promote
capitalist development with a ‘human face’ and that “we will always
and everywhere be able voluntarily to opt for the motherhood of
egalitarian welfarism, along with the apple pie of dynamic capitalist
accumulation” (p. 109). On the other hand he evokes the idea of
‘tragic optimism’, which acknowledges the oppression, blood, dirt,
misery and degradation of capitalist development but also that its
complexity and unevenness results in decreasing mortality rates,
rising average ages, and new means of communication and
organisation. He claims that the latter way of thinking is much clearer
about the means of intervention to promote organised “political
support that might be capable of provoking progressive policy
changes”, as opposed to ‘people-friendly’ moral exhortation.

Discuss Sender’s dichotomy in the light of the course readings, and

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The Social Science of ‘Third World’ Development: A Tragic


Dichotomy between ‘Friendship’ and ‘Optimism’?

Contents:

1.) ‘Third World’ Development 1

2.) Pathway to a Post-Washington Consensus: 2

3.) The ‘People Friendly’ Development Approach 4

4.) The ‘Tragically Optimistic’ Development Approach 4

5.) Effects on Social Science Research in the ‘Third World’, of ‘people


friendly’ vs. ‘tragically optimistic’ approaches to Development 5

6.) Conclusion 7

7.) References and Bibliography 9

“…The art of money getting seems to be chiefly conversant about


trade, and the business of it to be able to tell where the greatest
profits can be made, being the means of procuring abundance of
wealth and possessions: and thus wealth is very often supposed to
consist in the quantity of money which anyone possesses, as this is the
medium by which all trade is conducted and a fortune made, others
again regard it as of no value, as being of none by nature, but
arbitrarily made so by compact; so that if those who use it should alter
their sentiments, it would be worth nothing, as being of no service for
any necessary purpose. Besides, he who abounds in money often
wants necessary food; and it is impossible to say that any person is in
good circumstances when with all his possessions he may perish with
hunger… For which reasons others endeavour to procure other riches
and other property, and rightly, for there are other riches and property

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in nature; and these are the proper objects of economy…” 1. (Aristotle,


384 – 322 B.C.)

1
(Aristotle, (1912); Book 1. pp 16-17)

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“Two nations may exchange according to the law of profit in such a


way that both gain, but one is always defrauded: From the possibility
that profit may be less than surplus value, hence that capital [may]
exchange profitably without realising itself in the strict sense, it follows
that not only individual capitalists, but also nations may continually
exchange with one another, may even continually repeat the
exchange on an ever-expanding scale, without for that reason
necessarily gaining in equal degrees. One of the nations may
continually appropriate for itself a part of the surplus labour of the
other, giving back nothing for it in the exchange… “ 2. (Marx, 1818 –
1883 A.D.)

1.) ‘Third World’ Development

In the ‘Third World’ and particularly in Africa, development has historically


led to the consolidation and abuse of power (political and/or economic) within and
between the ‘First’ and ‘Third’ World (particularly African) institutions/countries
concerned. This has occurred as development money transforms into economic
domination, political control and the threat of the application of armed sanction in
order to preserve the position and relationship of the ‘comprador administrations’
3
or ‘petty Bourgeoisie’ in both the ‘First’ and ‘Third’ World countries concerned 4.
Therefore, according to Easterly and Levine in Sender, from a First world
perspective, “The World Bank’s econometricians and economists do not dissent.
They highlight “ethnic fractionalism,” “traditional ways of thinking” and a “crisis of
capability,” arguing that Africa’s economic history since 1960 is “reflected in
painful human scars” and that “it fits the classic definition of tragedy: potential
unfulfilled, with disastrous consequences”” 5.
Since the collapse of socialism however, as an alternate development
paradigm, capitalism has unashamedly leapt to the fore on the world development
stage, led from the front by institutions like the World Bank. There are various
Marxist responses to this particular state of events, captured for example by;
Kay’s dictum, Franks’ dependency argument and Wallerstein’s 6
criticisms
(amongst others), which variously blame capitalism for the evils committed and
2
(Marx, (1973); Notebook VII, pp 872)
3
(Leftwich, (2005); pp 577)
4
(Moore, (2004); pp 88)
5
(Sender, (1999); pp 90)
6
(Brenner, (1977); pp 29-30)

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omitted by the World Bank’s econometricians in the previous quote above 7. These
arguments run counter to the views expressed by Rostow’s capitalist ‘take-off’
model for sustained economic growth 8, which laid the foundation for the World
Banks subsequent developmental involvement in the ‘Third World’.
As Sender suggests in his paper, “Africa’s Economic Performance:
Limitations of the Current Consensus”. The development linkages between the
‘first’ and the ‘third’ worlds are characteristically complex and the danger of
focussing too narrowly, on either a solely capitalist or Marxist critique, means that
much of the socio-economic complexities of these linkages are not appreciated. In
order to highlight some of these complexities, Sender focuses on the new
economic developmental agenda of the World Bank, termed the ‘post-Washington’
consensus. With regard to this ‘post-Washington consensus’, Sender identifies a
predominant philosophical ‘dichotomy’ in developmental thinking, which he terms
on the one hand, a ‘people friendly’ approach and on the other, a ‘tragically
optimistic’ approach’ 9.
This paper therefore, seeks to discuss the way in which one or the other of
these approaches, could impact on social science research into development in
the ‘third world’. It will do so by initially providing a brief historical account of the
‘post-Washington consensus’ from which Sender draws many of his arguments,
followed by a discussion of the ‘people friendly’ and ‘tragically optimistic’
development approaches. After which it will attempt an analysis of the possible
impact of these approaches on social science research.

2.) Pathway to a Post-Washington Consensus:

‘Washington’ institutions (since the Bretton woods agreement)10, have


consistently stuck to the belief that the ‘third’ world, and in particular Africa,
represented what Sender refers to as a developmental ‘tragedy’. The tragedy, it
was argued, stemmed from obstructive ‘third’ world governance structures,
impeding the operation of what should have been a healthy ‘free market’ system.
This obstruction was seen as the reason for the perceived high levels of poverty,
unemployment and economic stagnation in the ‘third’ world 11
. The consensus
reached by these Washington led institutions (i.e. the International Monetary Fund

7
(Foster-Carter, (1978); pp 49)
8
(Rostow, (Undated))
9
(Sender, (1999); pp 90)
10
(Leys .C, (1996), pp 6)
11
(Sender, (1999); pp 101)

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(IMF) and The World Bank), was to apply a series of conditional loan agreements to
further developmental or financial assistance offered to the ‘third’ world. As a
result of these conditional loan agreements, or ‘structural adjustments’, there was
a subsequent reduction in the numbers of bureaucrats in African countries, a
situation Sender argues, that led to a brain drain of talent from Africa 12
.
Therefore, according to Leftwich, although ‘third’ world government involvement
in the development process was seen as essential, they were encouraged by the
World Bank not to interfere in their functioning markets 13
. With respect to this
institutional governance manipulation, achieved by ‘development’ of the ‘third’
world and the Washington consensus. Wallerstein comments in Brenner, “It is the
social achievement of the modern world… to have invented the technology that
makes it possible to increase the flow of the surplus from the lower to the upper
strata… periphery to the centre… majority to the minority, by eliminating the
‘waste’ of too cumbersome a political structure” 14
.
Supposedly recognising that the ‘Washington consensus’ had led to a
number of unintended structural consequences. The ‘post-Washington’ consensus
was defined by its architect in chief at the World Bank, Joseph Stiglitz as, “An
Agenda for Development for the Twenty-First Century”, where, “The Bank itself
recognizes its capacity to influence policy [and] it now emphasizes its central task
as providing the “knowledge” to devise development strategies” 15
. Whether or
not this was in fact an admission of any kind of failing on the part of the World
Bank, or indicative of a real ideological shift, is a moot point. Supposedly, a new
consensus, it still called for the governments of the ‘third world’ to match their
‘capability’, and once again, rather than focus on hampering the operation of the
free market. Focus on the fundamentals such as, infrastructure, primary education
and health care etc. However, In attempting to measure the impacts of their ‘post-
Washington’ consensus development interventions. The World Bank, according to
Sender, is predominately influenced by its own analytical and empirical
instruments, and therefore accordingly somewhat blinkered in its views (an issue
that will be raised in section 5 of this paper) 16
. That being said, it is to this ‘post-
Washington’ consensus period, which Sender attributes the ‘people friendly’ and
‘tragically optimistic’ development approaches that are discussed in the following
two sections.

12
(Sender, (1999); pp 106)
13
(Leftwich, (2005); pp 580)
14
(Brenner, (1977); pp 56-57)
15
(Sender, (1999); pp 103)
16
(Sender, (1999); pp 103-108)

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3.) The ‘People Friendly’ Development Approach

According to Sender, the ‘people friendly’ development approach that


emanates from the post-Washington consensus, did so, because of the inclusion
by Stiglitz of development approaches external to the world bank championed by
the likes of Amartya Sen. As a committed champion of human rights, Sen
suggests, “There is something deeply attractive in the idea that every person
anywhere in the world, irrespective of citizenship or territorial legislation, has
some basic rights, which others should respect” 17
, something that the World Bank
was eager to be seen as doing, post-Washington consensus. Furthermore,
according to Sender, this approach is universally accepted amongst those in
development to be the most ideal option. It is also consistent with the
development approach of the likes of, Robert Chambers, which are primarily and
characteristically; people centred and driven, reflective, respectful, adaptive,
ahistorical, redistributive, moralistic and idealistic 18
. Suggesting a shift from a
hard-line expression of development toward a more ‘people-friendly’ approach,
hence the name. The approach is paradoxically described by Sender as, ‘capitalist
accumulation with a ‘human face’’, and an approach focussing on the attainment
of human ends, not on profits as an outcome. Where the ‘third’ world development
process, is not measured through economic growth alone, but rather that these
measures have a strong social focus. However, this approach is still both explicitly
and implicitly defined by a capitalist development framework. A further criticism
highlighted by Sender is that support for this approach by both ‘first’ and ‘third’
world politicians is somewhat lacking, and that appeals to ‘fairness’ and ‘morality’,
have not been enthusiastically embraced by either 19
.

4.) The ‘Tragically Optimistic’ Development Approach

In contrast to the ‘people friendly’ approach, although less popular with


those in the development field. Sender attributes real world complexity and
ambiguity to what he calls the tragically ‘optimistic approach’ to development. The
description for this approach is predominately attributed by Sender to the Marxist
school of thought, which recognises that the capitalist development paradigm has

17
(Sen, (2004), pp 315)
18
(Chambers. R, (2005))
19
(Sender, (1999))

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not historically occurred without, as Marx puts it, “… dragging individuals and
peoples through blood and dirt, through misery and degradation” 20
in the process
of capital accumulation and development. Therefore, this approach explicitly
assumes that the capitalist development process in the ‘third world’ (as in world
history), is; ‘uneven, unstable, crisis prone, oppressive and brutal’. A reality that
institutions like the World Bank are less likely to present as a marketing vehicle,
but, which more adequately describes the way in which ‘third world’ development
has until now progressed.

5.) Effects on Social Science Research in the ‘Third World’, of ‘people


friendly’ vs. ‘tragically optimistic’ approaches to Development

There are a number of ways in which the ‘people friendly’ and ‘tragically
optimistic’ approaches, ought to impact, on research into ‘third’ world
development by the social sciences. Broadly, in regard to these approaches being
rooted in the capitalist mode of production, and thereby to the capitalist path of
development. Firstly, as suggested by Foster-Carter , the capitalist mode of
21

production does not automatically imply that development within this mode alone
can and will automatically occur. On the contrary, he suggests that capitalist and
pre-capitalist forms, are likely to co-exist and even to ‘buttress’ one another. A
situation that in the case of the ‘third’ world and Africa in particular is highly likely
to occur, given the continent’s widespread rural reliance on pre-capitalist
agricultural subsistence. Secondly, although as suggested by Moore, a substantial
portion of the ‘third’ world seems to be currently positioned somewhere between
‘permanent’ and ‘accelerating’ primitive capitalist accumulation. These
states/stages of capitalist development are suggested to provide the ‘foundation’
for the economic relationship between the ‘first’ and ‘third’ worlds, allowing for
substantial flows of wealth from the ‘third’ to the ‘first’ 22
. Would it really be,
therefore, in the economic interest of the ‘first’ world, or the ‘compradors’ in the
‘third’ world, to shift the status quo by allowing social scientists to research this
relationship in the name of development? Thirdly, according to civil-society, the
capitalist mode of production is highly extractive and overly protective by nature,
especially in the case of mineral wealth in the ‘third’ world, particularly Africa. As a
20
(Sender, (1999); pp 109)
21
(Foster-Carter, (1978))
22
(Moore, (2004); pp 92)

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result, the capitalist mode of production encourages the exchange of precious


non-renewable local resources, for environmentally damaging externalities. It also
leads to the abuse of human rights, by those who stand to lose the most when this
dominant mode of production is in any way compromised or threatened (as in the
case of Nigerian oil interests and the activist Ken Saro-Wiwa) 23
.
However, both the ‘people friendly’ and ‘tragically optimistic’ approaches
seem to implicitly focus on capitalism, as the single ‘third’ world developmental
agenda, thus precluding, any potentially beneficial ideological alternate from ever
being discussed. It is apparent however, that capitalism is a mode of production
that is predominately focussed on a shortsighted drive to maximise natural
resource extraction by exploiting human labour in the process. And that its
predominant goal is to generate profits, which are inadequate to the task of
developing everybody sustainably. Perhaps therefore, the moral duty of social
scientists ought to be, that they focus their research more broadly on human
modes of production. And that they avoid the seduction, of dichotomising their
research approaches by focussing on either the ‘people friendly’ or the ‘tragically
optimistic’ capitalist approaches to development exclusively.
Furthermore, with respect to the ‘people friendly’ and ‘tragically optimistic’
approaches themselves, the way in which these approaches quantify and measure
developmental progress, by focussing on social vs. economic indicators for
instance, and assuming that these are universal. Will significantly affect
perceptions of development. As an illustration of this view, according to Sender,
“In short, there is some strong and internally consistent evidence of
improvements in human welfare, and especially female welfare, across much of
Africa. These improvements are most obvious when one compares recent data
with the fragmentary evidence on mortality, education and infrastructure for the
earlier decades of the twentieth century [consistent with the ‘people friendly’
approach]. The African picture appears, therefore, to be more complex than
suggested by the commonly quoted, standard macroeconomic indicators, such as
growth rates of GDP [consistent with the ‘tragic optimists approach]” 24
. As a result
of the dichotomy of these approaches, Leftwich argues that although the
development figures (poverty reduction, unemployment and GDP), for the ‘third’
world, during the 1990-2002 period, were not encouraging. The way in which
these figures were empirically analysed and collated is the subject of much debate
amongst social scientists. As he suggests, “In its search for parsimony and rigour,

23
(Butler & Hallowes, (2005))
24
(Sender, (1999); pp 94)

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the neoclassical orthodoxy [read tragic optimists] had simply failed to appreciate
‘the complex causal nature of the social world [read people friendly], assuming
that components and processes of the economy are the same across countries’”
25
.
Most importantly for Sender however, is the claim that ‘tragic optimists’ are
more likely to generate a ‘clearer idea’ of the interconnections between politics
and power, than the ‘people friendly’ approach. As a result, the social science
research in this regard is also more likely to substantiate an enabling environment
for the ‘free market’ in the ‘third’ world. Whereas the people friendly’ social
science research on the other hand, is more likely to encourage a more active and
increased role by ‘third’ world governance structures in the welfare of its people
and state enterprises. An approach that is not conducive to the aims and
aspirations of the ‘post-Washington’ consensus (which seeks to privatise and
minimise the role of ‘third’ world governance structures in the functioning of their
economies), and thereby, an approach that functions as moral window dressing for
institutions like the World Bank 26
.
6.) Conclusion

Firstly, it is evident that ‘third’ world development, as driven by the ‘first’


world, approximates the dominant ‘first’ world societal and economic paradigm,
namely democratic capitalism (or neo-liberalism) 27
. And that the dominant social
science research expression in this regard, is almost exclusively concerned with

examining this paradigm alone, and its developmental impact on the ‘third’ world .
Secondly, attempting to balance ones views of the complex social interactions
within development processes, by considering either a ‘people friendly’ or a
‘tragically optimistic’ development approach alone, while attempting social
science research. Represents a narrowing of focus that while enabling a more goal
directed research outcome. Also represents a limitation, in as far as understanding
the intersection of societal agents and their combined impacts on development is
concerned.
A key conclusion in this regard therefore, is that development research
would be better described/understood by considering a wider range of social
science disciplines. Which would as a matter of course include the combined
adoption of both the ‘people friendly’ and ‘tragically optimistic’ approaches.
Viewed within the larger understanding of a range of pre-capitalist and capitalist
25
(Leftwich, (2005); pp 588)
26
(Sender, (1999); pp 110)
27
As evidenced by the works submitted as references and bibliography to this paper.

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modes of production and not limited to a capitalist developmental expression in


the ‘third’ world alone.

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7.) References and Bibliography

Aristotle, (1912), “The Politics of Aristotle: Or A Treatise on Government”, Translated by


Ellis .W, London: J.M. Dent & Sons Limited.

Ahriweng-Obeng .F & McGowan .P, (1998), “South Africa in Africa”, Parts One and Two,
Journal of Contemporary African Studies, XVI (1 & 2), pp 5-38 & 165-196.

Baran .P, (Undated), “On the Political Economy of Backwardness”, Idem., pp 75-92.

Brenner .R, (1977), “The Origins of Capitalist Development: A Critique”, New Left Review,
No. 104’ (July – August 1977), pp 25-92.

Bundy .C, (Undated), “The Rise and Fall of the South African Peasantry: - The Herschel
Peasantry: A Case Study”, pp 146-165.

Butler .M & Hallowes .D, (2005), “The Groundwork Report 2005: Whose Energy Future? Big
Oil Against People in Africa”, Pietermaritzburg: Groundwork.

Chambers. R, (2005), ‘Ideas for Development’, Earthscan, U.K. & U.S.A.

Crankshaw .O, (1996), “Changes in the Racial Division of Labour in the Apartheid Era”,
Journal of Southern African Studies, XXI.

Cumings .B, (1984), “The Origins and Development of the Northeast Asian Political
Economy: Industrial Sectors, Product Cycles, and Political Consequences”,
International Organisation, Vol. 38, No. 1, (Winter 1984), pp 1-40.

Daniel .J & Lutchman .J, (Undated), “South Africa in Africa: Scrambling for Energy”, Sakhela
Buhlungu et al (eds), State of the Nation: South Africa 2005-2006, pp 484-509.

Fine .B & Rustomjeee .Z, (1992), “The Political Economy of South Africa in the Interwar
Period”, Social Dynamics, XVIII (2), pp 26-54.

Foster-Carter .A, (1978), “The Modes of Production Controversy”, New Left Review, No. 107,
(January – February 1978), pp 47-77.

Furguson .J, (1990), “Introduction: - The Anti-Politics Machine: Development Depoliticization


and Bureaucratic State Power in Lesotho”, Cambridge and Cape Town: Cambridge
University Press and David Phillips, pp 3-21.

Hobart Houghton .D, (Undated), “Economic Development 1865-1965”, Wilson and


Thompson (eds), Oxford History of South Africa, II, pp 1-49.

Kemp .T, (Undated), “South Africa: Gold, White Supremacy and Industrialisation”, Tom
Kemp (ed), Historical Patterns of Industrialisation, pp 177-190.

Leftwich .A, “Politics in Command: Development Studies and The Rediscovery of Social
Science”, New Political Economy, Vol 10, No. 4 (December 2005), pp 573-607.

Leys .C, (1996), “The Rise and Fall of Development Theory”, London, James Curry, pp 3-44.

Marx .K, (1973), “Grundrisse: Foundations of the Critique of Political Economy”, Translated
by Nicolaus .M, Harmondsworth: Penguin Books Ltd.

Moore D., (2004), “The Second Age of the Third World: From Primitive Accumulation to
Public Goods?”, Third World Quarterly, Vol. 25, No. 1, (February 2004), pp 87-109.

Moll .T, (1991), “Did the Apartheid Economy ‘Fail’?”, Journal of Southern African Studies,
XVII (2), pp 271-291.

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North .D, (Undated), “Structure and Change in Economic History”, pp 201-209.

Pollard .S, (1965), “Economic History – A Science of Society”, Past and Present, No. 30, pp
3-22.

Rostow .W.W, (Undated), “The Take-off into Self-Sustained Growth”, Agarwala and Singh
(eds), The Economics of Underdevelopment, pp 154-188.

Sen .A, (2004), “Elements of a Theory of Rights”, Philosophy and Public Affairs, Vol. 32, No.
4, (December 2004), pp 314-356.

Sender .J, (1999), “Africa’s Economic Performance: Limitations of the Current Consensus”,
Journal of Economic Perspectives, Vol. 13, No. 3 (Summer 1999), pp 89-114.

Simkins .C, (1981), “Agricultural Production in the African Reserves of South Africa”, Journal
of Southern African Studies, VII, pp 256-283.

Simmons .C, (Undated), “Economic Development and Economic History”, Ingram and
Simmons (eds), Development Studies and Colonial Policy, pp 1-99.

Wightman .D, (Undated), “Why Economic History?”, Susan Strange (ed), Paths to
International Political Economy, pp 23-32.

Wolpe. H, (Undated), “Capitalism and Cheap Labour: From Labour to Apartheid”, Wolpe
(ed), The Articulation of Modes of Production, pp 289-319.

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