Small Is Beautiful: A Study of Economics as if People Mattered (20 page)

Until recently, the development experts rarely referred to the dual economy and its twin evils of mass unemployment and mass migration into cities. When they did so, they merely deplored them and treated them as transitional. Meanwhile, it has become widely recognised that time alone will not be the healer. On the contrary, the dual economy, unless consciously counteracted, produces what I have called a 'process of mutual poisoning', whereby successful industrial development in the cities destroys the economic structure of the hinterland, and the hinterland takes its revenge by mass migration into the cities, poisoning them and making them utterly unmanageable. Forward estimates made by the World Health Organisation and by experts like Kingsley Davies predict cities of twenty, forty, and even sixty million in- habitants, a prospect of 'immiseration' for multitudes of people that beggars the imagination,

Is there an alternative? That the developing countries cannot do without a modern sector, particularly where they are in direct contact with the rich countries, is hardly open to doubt. What needs to be questioned is the implicit assumption that the modern sector can be expanded to absorb virtually the entire population and that this can be done fairly quickly. The ruling philosophy of development over the last twenty years has been: 'What is best for the rich must be best for the poor.' This belief has been carried to truly astonishing lengths, as can be seen by inspecting the list of developing countries in which the Americans and their allies and in some cases also the Russians have found it necessary and wise to establish 'peaceful' nuclear reactors - Taiwan, South Korea, Philippines, Vietnam. Thailand, Indonesia, Iran, Turkey. Portugal, Venezuela - all of them countries whose overwhelming problems are agriculture and the rejuvenation of rural life, since the great majority of their poverty-stricken peoples Live in rural areas.

The starting point of all our considerations is poverty, or rather, a degree of poverty which means misery, and degrades and stultifies the human person: and our first task is to recognise and understand the boundaries and limitations which this degree of poverty imposes. Again, our crudely materialistic philosophy makes us liable to see only 'the material opportunities' (to use the words of the White Paper which I have already quoted) and to overlook the immaterial factors. Among the causes of poverty, I am sure, the material factors are entirely secondary - such things as a lack of natural wealth, or a lack of capital, or an insufficiency of infrastructure. The primary causes of extreme poverty are immaterial, they lie in certain deficiencies in education, organisation, and discipline.

Development does not start with goods; it starts with people and their education, organisation, and discipline. Without these three, all resources remain latent, untapped potential. There are prosperous societies with but the scantiest basis of natural wealth. and we have had plenty of opportunity to observe the primacy of the invisible factors after the war. Every country, no matter how devastated, which had a high level of education. organisation, and discipline, produced an 'economic miracle'. In fact these were miracles only for people whose attention is focused on the tip of the iceberg. The tip had been smashed to pieces, but the base, which is education, organisation, and discipline, was still there.

Here, then. lies the central problem of development. If the primary causes of poverty are deficiencies in these three respects, then the alleviation of poverty depends primarily on the removal of these deficiencies. Here lies the reason why development cannot be an act of creation. why it cannot be ordered, bought, comprehensively planned: why it requires a process of evolution. Education does not 'jump'; it is a gradual process of great subtlety.

Organisation does not 'jump'; it must gradually evolve to fit changing circumstances. And much the same goes for discipline. All three must evolve step by step, and the foremost task of development policy must be to speed this evolution. All three must become the property not merely of a tiny minority, but of the whole society.

If aid is given to introduce certain new economic activities, these will be beneficial and viable only if they can be sustained by the already existing educational level of fairly broad groups of people, and they will be truly valuable only if they promote and spread advances in education, organisation, and discipline. There can be a process of stretching - never a process of jumping. If new economic activities are introduced which depend on special education, special organisation, and special discipline, such as are in no way inherent in the recipient society, the activity will not promote healthy development but will be more likely to hinder it. It will remain a foreign body that cannot be integrated and will further exacerbate the problems of the dual economy.

It follows from this that development is not primarily a problem for economists, least of all for economists whose expertise is founded on a crudely materialist philosophy. No doubt, economists of whatever philosophical persuasion have their usefulness at certain stages of development and for strictly circumscribed technical jobs, but only if the general guidelines of a development policy to involve the entire population are already firmly established.

The new thinking that is required for aid and development will be different from the old because it will take poverty seriously. It will not go on mechanically, saying: 'What is good for the rich must also be good for the poor.' It will care for people - from a severely practical point of view. Why care for people? Because people are the primary and ultimate source of any wealth whatsoever. If they are left out, if they are pushed around by self-styled experts and high-handed planners, then nothing can ever yield real fruit.

The following chapter is a slightly shortened version of a paper prepared in 1965 for a Conference on the Application of Science and Technology to the Development of Latin America, organised by UNESCO in Santiago, Chile.

At that time, discussions on economic development almost invariably tended to take technology simply as 'given', the question was how to transfer the given technology to those not yet in possession of it. The latest was obviously the best, and the idea that it might not serve the urgent needs of developing countries because it failed to fit into the actual conditions and limitations of poverty, was treated with ridicule. However, the paper became the basis on which the Intermediate Technology Development Group was set up in London.

Twelve

Social and Economic Problems Calling

for the Development of Intermediate Technology

In many places in the world today the poor are getting poorer while the rich are getting richer, and the established processes of foreign aid and development planning appear to be unable to overcome this tendency. In fact, they often seem to promote it, for it is always easier to help those who can help themselves than to help the helpless. Nearly all the so-called developing countries have a modern sector where the patterns of living and working are similar to those of the developed countries, but they also have a non-modern sector, accounting for the vast majority of the total population, where the patterns of living and working are not only profoundly unsatisfactory but also in a process of accelerating decay.

I am concerned here exclusively with the problem of helping the people in the non-modern sector. This does not imply the suggestion that constructive work in the modern sector should be discontinued, and there can be no doubt that it will continue in any case. But it does imply the conviction that all successes in the modern sector are likely to be illusory unless there is also a healthy growth - or at least a healthy condition of stability - among the very great numbers of people today whose life is characterised not only by dire poverty but also by hopelessness,

THE NEED FOR INTERMEDIATE TECHNOLOGY

The Condition of the Poor

What is the typical condition of the poor in most of the so-called developing countries? Their work opportunities are so restricted that they cannot work their way out of misery. They are underemployed or totally unemployed, and when they do find occasional work their productivity is exceedingly low. Some of them have land, but often too little. Many have no land and no prospect of ever getting any. They are underemployed or totally unemployed, and then drift into the big cities. But there is no work for them in the big cities either and, of course, no housing. All the same, they flock into the cities because the chances of finding some work appear to be greater there than in the villages where they are nil.

The open and disguised unemployment in the rural areas is often thought to be due entirely to population growth, and` no doubt this is an important contributory factor. But those who hold this view still have to explain why additional people cannot do additional work. It is said that they cannot work because they lack 'capital'. But what is 'capital'? It is the product of human work. The lack of capital can explain a low level of productivity, but it cannot explain a lack of work opportunities.

The fact remains, however, that great numbers of people do not work or work only intermittently, and that they are therefore poor and helpless and often desperate enough to leave the village to search for some kind of existence in the big city. Rural unemployment produces mass-migration into cities, leading to a rate of urban growth which would tax the resources of even the richest societies. Rural unemployment becomes urban unemployment.

Help to Those who Need it Most

The problem may therefore be stated quite simply thus: what can be done to bring health to economic life outside the big cities, in the small towns and villages which still contain - in most cases - eighty to ninety per cent of the total population? As long as the development effort is concentrated mainly on the big cities, where it is easiest to establish new industries, to staff them with managers and men, and to find finance and markets to keep them going, the competition from these industries will further disrupt and destroy non-agricultural production in the rest of the country, will cause additional unemployment outside, and will further accelerate the migration of destitute people into towns that cannot absorb them. The process of mutual poisoning'

will not be halted.

It is necessary, therefore, that at least an important part of the development effort should by-pass big cities and be directly concerned with the creation of an agro-industrial structure' in the rural and small-town areas. In this connection it is necessary to emphasise that the primary need is workplaces, literally millions of workplaces. No-one, of course, would suggest that output-per- man is unimportant but the primary consideration cannot be to maximise output per man, it must be to maximise work opportunities for the unemployed and underemployed For a poor man the chance to work is the greatest of all needs, and even poorly paid and relatively unproductive work is better than idleness. 'Coverage must come before perfection', to use the words of Mr Gabriel Ardant.'

'It is important that there should be enough work for all because that is the only way to eliminate anti-productive reflexes and create a new state of mind - that of a country where labour has become precious and must be put to the best possible use.

In other words, the economic calculus which measures success in terms of output or income, without consideration of the number of jobs, is quite inappropriate in the conditions here under consideration, for it implies a static approach to the problem of development. The dynamic approach pays heed to the needs and reactions of people: their first need is to start work of some kind that brings some reward, however small; it is only when they experience that their time and labour is of value that they can become interested in making it more valuable. It is therefore more important that everybody should produce something than that a few people should each produce a great deal, and this remains true even if in some exceptional cases the total output under the former arrangement should be smaller than it would be under the latter arrangement It will not remain smaller, because this is a dynamic situation capable of generating growth.

An unemployed man is a desperate man and he is practically forced into migration. This is another justification for the assertion that the provision of work opportunities is the primary need and should be the primary objective of economic planning. Without it, the drift of people into the large cities cannot be mitigated, let alone halted.

The Nature of the Task

The task, then, is to bring into existence millions of new workplaces in the rural areas and small towns. That modern industry, as it has arisen in the developed countries, cannot possibly fulfil this task should be perfectly obvious. It has arisen in societies which are rich in capital and short of labour and therefore cannot possibly be appropriate for societies short of capital and rich in labour. Puerto Rico furnishes a good illustration of the point, To quote from a recent study:

'Development of modern factory-style manufacturing makes only a limited contribution to employment. The Puerto Rican development programme has been unusually vigorous and successful; but from 1952-62 the average increase of employment in EDA-sponsored plants was about 5,000 a year.

With present labour force participation rates, and in the absence of net emigration to the mainland, annual additions to the Puerto Rican labour force would be of the order of 40,000 ...

'Within manufacturing, there should be imaginative exploration of small-scale, more decentralised, more labour-using forms of organisation such as have persisted in the Japanese economy to the present day and have contributed materially to its vigorous growth.

Equally powerful illustrations could be drawn from many other countries, notably India and Turkey, where highly ambitious five- year plans regularly show a greater volume of unemployment at the end of the five-year period that at the beginning, even assuming that the plan is fully implemented.

The real task may be formulated in four propositions: First, that workplaces have to be created in the areas where the people are living now, and not primarily in metropolitan areas into which they tend to migrate.