Economics Or Political Economy?
Pachter, Henry
THE STAGES OF ECONOMIC GROWTH, by W. W. Rostow. A NonCommunist Manifesto, Cambridge University Press. A pretentious title leads to a pretentious foreword, which leads to a very unpretentious...
...The problem is precisely the opposite: whether the underdeveloped countries can achieve maturity in less than sixty years without imposing on their populations the horrors which were characteristic of early capitalism and of primitive accumulation in Soviet Russia...
...What is this assertion if not one horn of the dilemma which Rostow says faces a nation at "maturity": to proceed to mass consumption, or to go to war...
...That was the choice before nations that reached maturity in the 19th century...
...This even was natural for nations whose take-off had been sponsored or guided by feudal classes, such as imperial Germany and Japan...
...Then, he says, a free decision will be possible: Shall the improved resources be used to enslave other nations, or to increase consumption...
...Transition from one stage to the next, however, is not equally well determined for all five stages...
...If the major decision is to be a political one, it is difficult to see why so much trouble has been taken to define five stages of economic development...
...The faster he wishes to increase the national capital, the rarer will be the chances for trade unions or any self-governing agency to share in decision-making...
...Post-colonial governments must be prepared to transfer income from parasitic to productive classes, and the latter must be ready either to borrow or to plow back the profits...
...vestments...
...Marx speaks of economy as "the anatomy of society," which Rostow transforms into the statement that individuals are "motivated" by self-interest...
...Rostow's contribution to our better understanding of this latter factor consists in calling it "social overhead," and he maintains a generous silence on non-Marxists like Sombart and Marxists Iike Hilferding who had studied the role of railways and public works in the formation of capital...
...What this means I am not quite sure, since Russia's "take-off" took place fifty years after the American and the "parallel" does not appear until the curve has been considerably manipulated...
...Professor Rostow neither answers nor even asks this question...
...Lenin said—after Hilferding and Hobson—that capitalism cannot distribute its profits and therefore will become parasitic and belligerent...
...Lenin maintained that capitalism must reach a certain stage where it tends to become parasitic, monopolistic, imperialistic and militaristic...
...RosTow's ECONOMIC analysis of growth begins by dividing world economic history into two unequal parts—preNewtonian and modern...
...The "take-off" is said to have occurred in England around 1800, in France thirty to sixty years later, in Germany and the United States again fifteen years later, in Russia around 1900, in India and China only recently...
...Now the ten fingers suffice to figure that, with so many nations having "taken off," there will be few left to be enslaved, and hence all nations, including their dictatorial governments, should find it easy to make their option for mass consumption, democracy and peace...
...Instead, he shifts the discussion to the later stage of "maturity" when a country's major industries have availed themselves of modern technology...
...It is all the more surprising that both in its historical and in its analytical aspect the farm revolution should have received less than a fair treatment...
...National planning will be dictatorial because neither property nor democracy stimulates growth at the desirable rate, which will be even higher because of the dictators' pride...
...Extremely complex * He is now an adviser to Senator Kennedy...
...Only by ignoring this can Rostow claim world-shaking discoveries like the role of national welfare as illustrated by English factory inspection—of all things the reports from which Das Kapital quotes about fifty pages...
...Looking around for a broader area of maneuver, Rostow* hopes to find grounds for more optimism...
...an influx of foreign capital, on the other hand, may increase consumption without producing a "take-off...
...Rostow fears that the Soviet bureacracy, risen to power by promoting an extraordinary rate of investment in the war industries, also might not be ready to abandon its methods and habits...
...planners of aid to underdeveloped countries now call "infrastructure"— roads, dams, canals and similar great works which usually can be undertaken only by the state...
...Finally, to make his outlook shine more hopefully than it does, Professor Rostow has to resort to a very cheap device: he compares his own optimistic view, which is based on man's moral freedom, with the deterministic views of Marx and Lenin, which allow for no salvation...
...Once this view is accepted, we may proudly point to the last 250 years when industry learned to increase at will the supply of certain goods by applying science to the production process...
...This law is so stringent that the rates of productivity increase for the United States and for Russia produce "remarkably similar" curves over a period of ninety years...
...All this is not very enlightening...
...at any rate, it must be a "positive, sustained and selfreinforcing response...
...Anyway, the import of Rostow's "discovery" seems to be that an almost purely capitalistic economy and a sequence of highly traditional and Communist societies produce the same result...
...Rostow would mind if a sentence were taken from a political pamphlet he wrote at the age of 29 and subjected to textual analysis in criticism of economic theories he later expounded in a ponderous volume...
...If Professor Rostow thinks he discovered the role of power, he should not be defending property but theft...
...He then analyzes the capitalistic relations for 22 more chapters, only at the end to destroy any false notions: in the famous chapter on "primitive accumulation" he again speaks of people and power...
...Where industrialization began under the auspices of a middle class, chances of a democratic development soon appeared...
...For that purpose, he breaks down the process of economic growth into five stages: traditional, preparatory, take-off, maturity, and mass consumption...
...Or who analyzed the mechanics of power which drove Napoleon and Bismarck to war...
...It seems that class analysis still yields realistic descriptions of actuality...
...Western capitalistic societies emerged with the creation of an independent farming class, a condition which is not fulfilled in the new countries...
...All this is of extreme importance for the late-coming nations, and Rostow has many interesting things to say about their chances to provide capital for these public works...
...The differential of development which, according to Rostow's analysis, was more than a minor cause for both World Wars I and II, still supplies a necessary condition for the penetration of Soviet imperialism into underdeveloped areas, and hence for Soviet encouragement of the nationalist agitation in the new nations...
...Even where this reviewer would like to agree with the author, he fails to see how the argument leads to the conclusion...
...In the new countries, instead, "national revolutions" are carried out by army officers and commissars in the absence of a strong middle class, while the workers have no democratic traditions at all but offer the aspect of a mob cheering a national leader...
...Consumption need not increase during this period...
...I certainly wish this were true—but it is not even the right question...
...I AM SORRY to be severe with a man who has his own merit, but each man must be measured with the yardstick he applies to others...
...Having found Marx "unsatisfactory," he does not claim to do any better but frankly and strongly emphasizes that his five "stages of growth are an arbitrary and limited way of looking at the sequence of modern history...
...Soon the question before the Soviet planners will not be the alternative of "guns or butter," but the possibility of having both...
...As an educated, intelligent man and a teacher of economic history, Professor Rostow knows of course that Marx is not speaking of "man" but of capitalistic man...
...Failure to understand the class structure of the new society results in bewilderment over the third condition for industrialism's "take-off" nationalism...
...The question of war and peace, therefore, is not simply "a choice for men," but hinges on the rivalry of power among big and small nations, on the socialpolitical systems which narrow the choices for the politicians, and also on certain economic determinants...
...Moreover, the whole assumption of an "option at maturity" is tenuous...
...Rostow's method of refuting Marx—who apparently still needs to be refuted after a hundred years, an honor none of his contemporaries shares—is on the level of the Freudrefuters who have heard someone say that Freud "derives everything" from sex...
...Democracy hinges, not on their ultimate ability to satisfy the politicized masses, but on their present ability to appease them...
...Rostow names two economic and one political achievement which introduced or facilitated the industrial revolution: first the increase in the productivity of 'farming, with farm products being converted into industrial in...
...How right were the classics in calling their science "political economy"I...
...Imperial Germany on the eve of World War I spent 4 per cent of its national income on arms altogether— a sum that hardly would have made a difference if "distributed" —whereas present-day Russia assigns 20 per cent of the national income to the defense industries and to the conquest of foreign markets...
...In Rostow's analysis of the political conditions for modern industry it never becomes quite clear whether a favorable or an unfavorable environment offers the better stimulus for the right kind of response...
...To promote industrialization under these undemocratic conditions, the leader must provide strong emotional incentives...
...Foreign aid must find a propitious climate to become fertile...
...Marxist literature is full of examples for the assumption that the emergence of modern capitalism as a civilization depended on the emergence of the modern state...
...Marx the economist analyzes abstract relations of values as whose protagonists people appear—but then, at the end of Chapter I in Das Kapital, he knocks the economists down by saying that all this is a fetishistic, alienated, reified appearance and we really should talk about people...
...The researches of social and economic historians notwithstanding, Rostow calls all these societies static...
...IN THE PAST, steep differentials between highly developed and less developed countries tempted nations to choose "guns" rather than "butter...
...Since Marx only deals with classes, there simply is no such statement in his entire work...
...Yet this is what he does to Marx...
...A pretentious title leads to a pretentious foreword, which leads to a very unpretentious introduction in which the author disclaims what he is doing...
...not of a real person with psychological motives but of an "ideal type...
...It therefore is not true that the new countries can procure the necessary investment rates only under the feverish impulse of a dictatorship...
...This, however, seems to be the point of Rostow's theory: were the young or "underdeveloped" nations to follow a strictly determined pattern of development, most of them might stand little chance to make democratic choices or to avoid falling into the Soviet orbit...
...But the less he can satisfy the masses, the more he must give them glory...
...He quotes from the Communist Manifesto, e.g., the terse, polemical sentence that "capitalism left no other nexus between man and man than naked self-interest," and, displaying his superiority over Marx, proceeds to the triumphant summation at the end of his book: "In [my theory] man is viewed as a more complex unit...
...rearrangements must take place in a "traditional" society before it is ready for the "take-off," and these conditions are different in each country...
...Until 1933 he was right, and our present mass consumption is based on the war industries...
...On the other hand, Professor Rostow, who claims to start out from a more comprehensive "perception" of man, fails to spell out the most elementary political conditions of economic growth, and his "five stages" unfortunately are nothing but a pedantic schematism which helps little in understanding the process of growth...
...There is not one straight word in this sentence...
...You pays your dollar and you takes your choice...
...designed to dramatize not merely the uniformities . . . but also . . . the uniqueness of each nation's experience...
...Nor does Rostow's charge against Marxism-Leninism seem to be more than a diversion from his basic agreement...
...IN MARXIST LANGUAGE, the condition for a genuine "take-off" into modern industrialism is a "bourgeois revolution...
...second the large-scale development of basic facilities which U.N...
...It's that simple, q.e.d...
...On the other hand, once having "taken off," all societies reach maturity after sixty years...
...Athenian mercantile capitalism, Roman finance capitalism, Elizabethan predatory capitalism: all that disappears in the preNewtonian night where all cats are black, together with the manorial system of the Middle Ages, the slaveworking plantation economy of the Roman Empire, the state- or priestdirected slavery of antiquity, the great works of public enterprise in the East...
...Now Rostow not only suppresses all this, but with a sleightofhand also perverts the topic under discussion...
...Wasn't it precisely Marx who waxed so indignant over the conflict between puritan ethics and business ethics...
...An entire literature has been written about the conditions which made that possible: the division of labor, a new attitude toward work, a spirit of enterprise, a calculating attitude toward things and people...
...nor can he possibly not know the numerous writings in which Marx has called for the liberation of the whole man—der Mensch als Gattungs wesen—from the capitalist chrysalis...
...Or does Professor Rostow pretend not to understand the meaning of Marx's method of abstraction...
...But it is clear that the political and social structure determines different production goals in different countries...
...But he piously hopes that an option for peace would benefit the Soviet Union, since unlike the first half of this century, the nuclear age forbids newly emerging nations to try for world dominion...
...All this is discussed on the basis of an extremely thin idea—that dividing the process of economic growth into five periods will provide a clue of policy—and reasoned with a distressing lack of coherence...
Vol. 7 • September 1960 • No. 4
