But What About the Underdeveloped Countries?
Eckstein, George
IN HIS REVIEW of Milovan Djilas' New Class, [ DISSENT, Fall 1957] Norman Thomas necessarily had to stress the general and very powerful job of debunking which this book has performed. But...
...YET THERE IS TODAY no economic necessity for such autarchic procedure...
...Clearly a task that can only be done centrally by the government which, in the absence of substantial domestic private capital, will have to run or control the larger and most vital projects...
...This leads to Fallacy No...
...5: A totally planned economy controlled from on top is necessarily a superior and more productive form of industrial organization...
...But there is one problem touched upon by Djilas which merits further discussion for the simple reason that it is fast becoming a central problem for the new nations of Asia and Africa: the problem of industrialization in undeveloped countries...
...but to some extent it also stemmed from the tightness of the capital market in recent years...
...But that is another story...
...But various economic aims will obtain, even in today's tight money market, the needed cooperation from among the competing industrialized countries without jeopardizing national independence, except insofar as it will involve a freer exchange of goods, people and ideas...
...This idea is a leftover from the period of open imperialism when the economic exchange between industrialized countries and raw-material (undeveloped) countries led to the latter's exploitation...
...These brief notes can no more than hint at some aspects of the problem, with Djilas, whose own experience was shaped in an underdeveloped country, serving as a useful witness...
...U.S...
...Relaxations in the field of consumer goods are no more than temporary concessions in order to maintain this power...
...If it really were, it would not have to be maintained by force over an unwilling farm population (it has been the first institution to collapse wherever the pressure was relaxed: in the German-occupied parts of Russia during the war, in Poland and Hungary since "October") . Again the main rea sons for its imposition were not economic, but political: to establish full control over a sector of the economy and of the population which had maintained partial independence...
...The un- or underdeveloped nations of Asia and Africa and, let us add, Latin America, cannot afford the wastefulness of the Communist system, or for that matter, the quite different capitalist variety which is born of abundance...
...1: "Communism is the socialism of the underdeveloped countries...
...So far they have been lagging behind in both...
...This is the reverse of our own myth of "private enterprise") . Since heavy industry and armaments tied down such a large part of the available social product, the Russians had to impose a detailed production program for all sectors of the economy, with a central agency determining everything down to minute details, Overcentralized planning, together with the lack of control from below...
...91...
...and the lattter dispose of a sufficient reservoir of capital which could ease the former's path toward industrialization...
...It has not yet received enough attention, perhaps because it does not lie in the natural path of Western radical thought...
...Today, however, the undeveloped and underdeveloped countries not only can profit from past experience in economic development, but they have access to the technical and economic know-how of the industrialized countries...
...The adaptation even of its purely technical methods to countries with different traditions and a different social framework is of course not possible without profound social changes...
...More people, at a higher material standard of living, may live less happily, and spiritually poorer than before...
...But to realize how far we have come, one has only to observe how quickly even our present State Department has disavowed the quixotic directive of the parting ICA administrator, attempting to reserve our foreign economic aid to "private enterprise...
...The "Dictatorship of the Proletariat" is the misnomer for an economic and political system in which the State (identical with the Party) owns all the means of production and tightly controls investment, production and distribution of goods...
...Fallacy No 4: Collectivization is a higher and more productive form of agricultural production...
...Except for the verbiage, this "Communism" (which appears "classless" only when seen from the commanding heights of the dictatorial leadership) has nothing in common with the humanitarian communism of Marx...
...of course being the prime source) . This flow of capital has been turned on and off and distributed rather capriciously...
...A so cial reorganization is only needed inso far as the old setup cannot accommo date itself to these changes (feudalism, dwarfsized plots) ; in the case of small and medium-sized farms, cooperatives are usually the answer, together with public ly run experimental stations and labs...
...Fallacy No...
...IN CONTRAST to earlier industrial revolutions, they must (because of the urgency) and they can (thanks to the availability of previous experience) set up overall plans of priorities, negotiate for the needed assistance in capital and technical know-how, and direct the general flow of investments, private and public...
...But the successful movements for national independence in Asia and Africa have by and large put a stop to this condition...
...and after a rough initial period led to the availability of cheap consumer goods...
...Expressed differently: the political system lowers the productivity so that the total economic cake is smaller than the technical facilities would permit...
...2: The dictatorial methods and the low living standard are but temporary evils made inevitable by the need for rapid industrialization...
...Fallacy No...
...As Djilas, and more recently Stefan Dedijer in his sensational article in the September Bulletin of the Atomic Scientists point out, this wastefulness goes on even in those sectors like ;atomic energy, in which the dictatorial regime has achieved seemingly impressive results thanks to a huge concentration of effort and investment...
...All these considerations ignore of course the much more fundamental question of human values: industrial development may very well destroy, together with a lot of poverty and disease, some of the spiritual and moral achievements in regard to which our industrial civilization is clearly the "underdeveloped" one...
...To be sure, this era is by no means completely over...
...The "original accumulation" of the 18th and 19th century had to start from scratch...
...And insofar as a saturation point for these investments seems to have been reached, the increased availability of funds, and with it the increased competition among the major industrial nations, may be expected to counteract some of the political reluctance...
...A not inconsiderable amount of this capital has been made available, partly thru private investment, partly thru various govern 89 mental channels (the U.S...
...This has been largely due to political considerations of various kinds...
...True also, in any agrarian country beginning to industrialize, unskilled labor and part of the capital has to be drawn from the agrarian sector...
...True, within a national economy, at any given rate of productivity there is only so much social product, and if too much goes into consumption, not enough of it is left for investment in new facilities...
...But here the differences begin: the industrialization of the early 1800's started in light industry (textiles, etc...
...There is a grain of plausibility in this argument which makes it the favorite line of reasoning used by apologists of the Russian system when driven into a corner...
...agriculture has, especially since the 1930's, continuously increased its total production, with an ever-decreasing farm population...
...3: Economic aid is only available at the cost of national independence...
...On the contrary, as Djilas aptly points out, the flow of investment into armaments and heavy industry is even now increasing (from 53.3 per cent of total investment in 1954 to 60 per cent in 1955) . The reason for this is not cconomic, but political: the Communist rulers, the New Class, have deliberately built their economy as an autarchic system, with a huge military apparatus, in order to preserve their own power...
...This, of course, would be suicide for Russia's "New Class...
...If Socialism today can be loosely defined as a movement in an advanced industrial society toward a more just distribution of riches combined with democratic control of basic industries, Communism today, stripped of its "Marxist" verbiage, is mainly the form in which the agrarian countries of Eastern Europe and parts of Asia have begun to industrialize...
...it has been clearly insufficient for such pivotal nations as India and Indonesia...
...and to obtain slave labor...
...They correspond to the child labor and other forms of exploitation which accompanied the "original accumulation" of British and other Western capitalism...
...Consequently, they are faced with the task of simultaneously developing their industry and agriculture at a pace that outruns their population growth...
...Private investment is still too much concentrated in mining and oil, and any foreign aid or loan will imply some form of supervision of its use...
...But while it has to be adapted to these various conditions, especially in the densely populated areas in Asia, it can certainly show ways to the urgently needed increase in agricultural productivity...
...Fallacy No...
...But it does not stand up on closer scrutiny...
...hence the increasing stress upon birth control...
...nor can it be even approximately determined to what extent corruption, black or gray markets and open or tolerated private trading relieve the rigidity of the system...
...The economic factors which make for increase in agricultural productivity are of a different nature: scientific research and dissemination of its results, improved machinery, organization of markets...
...Russia's industrialization was from the start directed toward armaments and heavy industry, and thus never in a position to release an increasing part of the economic cake for consumption...
...Their situation is complicated by problems neither the Russian nor the early European industrial revolution ever had to face...
...premiums against initiative...
...emphasis on quantitative norms without regard to quality— all these factors combined to create im 90 measurable waste of manpower, materials and energy...
...This aim was achieved at the cost of hun dreds of thousands if not millions of lives of able-bodied people and at the cost of a reduction in per capita farm produc tion which even today has in many sec tors not reached the pre-1914 Russian standard—an economic irrationality if ever there was one...
...Naturally, the waste defies measurement...
...The same time lag that permits them to draw on the experience of the industrially developed countries, showers them too, with the benefits of modern medical science and hygiene...
Vol. 5 • January 1958 • No. 1
