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5. Alternative development for Africa and the third world
Inequality in income distribution the centre
and periphery1
The alternative: popular national
development, social and political democracy, delinking3
Obstacles to popular national, autocentric
and delinked development
Notes
As the Third World is a heterogeneous entity, any general statements run the risk of exaggeration. It might, however, be said that the common social inequalities are sadly striking, or scandalous, and that the practice of democracy of the most basic kind is the exception rather than the rule. In the current orthodoxy, social inequality and the absence of democracy are the way out of poverty. Capital accumulation is necessarily accompanied in its early stages by impoverishment of the peasantry and wretchedness for the worker. Later, as the rural surplus is absorbed, the labour movement will gradually impose better material conditions and political democracy. Arthur Lewis's well-known thesis of the dualities of societies in transition to development, and that of the Latin American 'desarrollismo' school of the 1950s, are in conformity with this.
The thesis assumes that the external factor (integration in the worldwide economic system) is fundamentally 'favourable' in the sense that it offers this 'development' opportunity. The latter will be grasped more or less quickly in accordance with the internal conditions characteristic of the various societies of the Third World and that these conditions are decisive.
In fact, contrary to this orthodox view, the world expansion of capitalism is accompanied by increasing inequality in social distribution at the periphery, whereas at the centre of the system it does create conditions for lesser social inequality (and a broad stability in distribution, as the foundation for a democratic consensus). As the bourgeoisie in the periphery are unable to control the process of local accumulation, which thereby remains a process of constant 'adjustment' to the constraints of worldwide accumulation, the plan of construction of a bourgeois national state is not only handicapped by a fundamentally unfavourable external factor, but also totally impossible. The peripheral state is therefore necessarily despotic by virtue of its weakness. In order to survive it is obliged to avoid conflict with the dominant imperialist forces and tries to improve its international position at the expense of more vulnerable peripheral partners.
The conclusion that must be drawn is that social and political democracy and the international solidarity of peoples demands that we abandon the myth of the 'national bourgeoisie' and replace the 'rational bourgeois' plan with a 'national and popular' plan. Democracy and social progress are inseparable and this is the price we must pay.
Inequality in income distribution the centre and periphery1
Empirical research on income distribution shows that unequal income distribution is more pronounced at the periphery of the capitalist world system than in its advanced centres. The main reason is that labour productivity is considerably more unequally distributed from one sector to another at the periphery. The distribution of value added per worker from one sector to another is relatively closely grouped around the mean in the OECD countries, but very unequally distributed in the countries of the Third World. This is an illustration of the fact that the law of value operates at the level of the world capitalist system and not at the level of its national components. It is striking to see that the distribution of Lorenz curves is not at all a chance one.2 In fact the curves of all the developed capitalist countries are grouped together in a narrow band. By contrast the distributions in all the countries of the contemporary Third World are considerably more differentiated. Two approximate medians for each of the two bands correspond to the following:
25% of the population receive 10% of the income in the centre and 5% in the periphery;
50% of the population receive 25% of the income in the centre and 10% in the periphery;
75% of the population receive 50% of the income in the centre and 33% in the periphery.
The rough congruence of the Lorenz curves for the developed countries suggests that, as we know to be so, the Western societies are very close to each other today in their daily reality. The position of different countries within the band of the Lorenz curves for the countries of the centre suggests that improvements in distribution are tied to the existence of powerful Social-Democratic forces, but that this improvement is extremely limited in its real amplitude. The most advanced Social-Democratic countries, Sweden and those of northern Europe are to be found near the minimal inequality curve; the liberal countries (United States) and the less developed ones (of southern Mediterranean Europe) are near the maximal inequality curve.
The distribution of curves of Third World countries can at first seem disconcerting. There is no visible correlation between the degree of inequality on the one hand and, on the other, such variables as GDP per capita, the degree of urbanization, and the level of industrialization. A closer examination will however make some sense out of this distribution.
As regards the distribution of income in the capitalist centres, it is sufficient to make three theoretical hypotheses to find the median of the band of Lorenz curves for the OECD countries: (1) a division of wages and profits of the order of 60-40: (2) prices paid to the labour force distributed around the average value of labour power, such that the ratio of the lower to the upper quartile of wages is I to 4: (3) the existence of a certain number of small and medium-size businesses and other activities (such as the liberal professions - so that wage workers constitute 80% of the total population and that the average individual income of members of these other social groups is to be found in the middle and higher sectors of the distribution.
As regards the societies of peripheral capitalism, we initially find a good approximation of the curve illustrating distribution of agricultural income (which corresponds to the median representative of the real situations in South and South-East Asia, the Arab world and Latin America) by assuming: (a) the antecedent of a rural class society that leases at the disposal of the peasantry only about half of their production (b) the expropriation of the surplus in the form of land rent by large landowners, and later after agrarian reform by rich peasants: (c) a 'natural' inequality of productivity of land in a range of 1 to 2 (d) an increase of rural density and constitution of a surplus labour reserve of the order of one third of rural labour force.
In a second stage the urban economy comes into the picture. In the capitalist sector, which employs half at most of the active urban population, there is: (i) a higher level of surplus-value resulting in a division between wages and profits of 40 60 instead of 60 40; (ii)a hierarchy of wages that is sharper(1-6 instead of 1-4), but persons in the 'informal' sector, which employs more or less the other half of the active urban population, receive income of the order of magnitude of that of the poorest quartile of the capitalist sector.
We then combine the two curves, taking into account: (I) the proportion of urban to rural population, which varies from one country to another; and (2) the marked gap between urban and rural net product per capita, when this product is measured in prices and current income, as it is in the statistics of the real contemporary economy. This gap is always of the order of 1 to 3, that is to say, the product per capita is three times higher in the urban economy than it is in the rural economy. The result thus obtained, that is, the curve constructed on the basis of simple elements combined together, is interesting: we find the median of the actual distributions in the contemporary Third World.
The question that arises is whether this situation is 'transitory', that is, whether the distribution that corresponds to it and that describes it is evolving towards the model of developed countries. In other words, is there a historical tendency of the movement of distribution, linked to the movement in capital accumulation? On this we note three differing kinds of response as follows:
(1) There is no historical tendency for this movement. In other words, the distribution is only the empirical result of various economic and social facts whose movements, convergent or divergent, are autonomous. One can give this proposition a 'Marxist' form by formulating it as distribution depending on class struggles in all their national complexity (for example, the alliance of the bourgeoisie and peasantry, social democracy) and international complexity (imperialism and the position occupied in the international division of labour, and so on). The capitalist system would be capable of adapting itself to all these diverse situations.
(2) There is a historical tendency operating in the direction of a progressive reduction of inequality. The situation of the contemporary periphery is simply that of a transition towards capitalist development that has not yet been completed.
(3) There is a historical tendency of immiseration and of growing inequality. It remains to be analysed why this should be so (resulting from what predominant force that cannot be counteracted by opposing forces) and at what level it is so (at the level of each capitalist state separately, at the level of the totality of developed or underdeveloped countries, or even at the level of the world economy including both the centre and the periphery).
We know quite well the concrete history of the accumulation in the developed capitalist centres. Over and above local variations, one plausible generalization may be formulated along the following lines. The peasant revolution, which in those areas marked the beginning of the era of capital, reduced inequality in the countryside wherever it was radical. This reduction came at the expense of the 'feudal sectors' but at the same time it impoverished a minority of poor peasants who were pushed into the cities. The wage worker initially received a low level of wages determined by the income of the poor peasants. This level tended to rise after a period of stagnation at this level (or even a deterioration) when the expulsion of the landless peasants slowed down. From then on (about 1860?) workers' wages end the real income of 'middle' peasants tended to rise in a parallel fashion, in conjunction with the rise of productivity. There was even a tendency towards equality between average wages and peasant income, although this tendency is not necessarily observable at each state of the accumulation process (this depending on the structures of the alliance of hegemonic classes). At the late stage of capital, there is perhaps a 'social-democratic' tendency to reduce inequality, but this latter operates in conjunction within imperialism. A favourable position in the international division of labour favours social redistribution. Still one cannot generalize, since the comparative evolutions of Sweden and the United States, for example, are quite different.
One is thus led willy-nilly to an inability to pursue this analysis on the centres in isolation: one has to place this evolution within the framework of the world system. Our thesis here is that the stability of distribution at the centre in the contemporary era does not exclude, but rather supposes, a much more unequal distribution at the periphery. The realization of value at the level of the system as a whole requires this complementary opposition of structures. One is thus led to the unavoidable question: what is the trend of the movement of distribution in the peripheries? There can be no doubt that the trend is in the direction of the increase of inequality, at least in the course of the past century (1 880 - 1 980).
In other words, the idea of progress by stages that is reproduced with only a lag in time is obviously an idea attractive for its simplicity, but nonetheless false. The idea, therefore, that the presently developed countries offer the image of what the underdeveloped countries will be tomorrow, despite the fact that four centuries of capitalist history and particularly the past century give it the lie, remains quite alive.
In the logic of this vision of 'stages', the question of inequality in distribution is considered a question of relative quantity only, without qualitative significance. But it is not a question merely of greater inequality. The latter leads to putting into operation and developing a productive system that is qualitatively different from what it is in central capitalism.
If, in fact, one allocates different resources (unskilled labour and skilled labour, capital) to the final consumers (the different strata of the population according to their income, which they receive directly and indirectly through investments and public expenditures), one discovers:
• at the centre the different resources are allocated to the consumption of each stratum in proportions that are more or less the same as the share of consumption of each of these strata;
• at the periphery, on the other hand, the scarce resources are allocated to the consumption of the richest strata in proportions that are greater than the proportion of their consumption in total consumption. This 'distortion' of distribution to the benefit of higher strata is all the stronger since distribution is unequal.
The productive apparatus of the countries of the periphery is thus not the reproduction of that of the centre at an earlier stage of its evolution. These apparatuses differ qualitatively. That is the meaning of inequality in the international division of labour. These differences explain the fact that while the Lorenz curve for the centre is stable (or perhaps moves towards less inequality), at the periphery it moves the other way towards greater inequality. The distortion in distribution is a condition of enlarged reproduction, of accumulation on a world scale.
In this sense. Marx's thesis concerning immiseration is perfectly visible on the world scale. If distribution tends to be more and more unequal at the periphery, whose population constitutes the majority of the world system, and stable at the centre, it obviously evolves towards greater inequality at the global level. Is not the fact that immiseration is manifested at the world level but not at the level of the centre yet further proof that the law of value operates at the global level and not at that of individual, isolated, capitalist formations? But immiseration operates at the periphery not only by means of the increase of the rate of surplus value but also by way of the indirect extraction of surplus labour in non-capitalist forms whether they are long-established or newly-created.
The alternative: popular national development, social and political democracy, delinking3
The worldwide expansion of capitalism is therefore by its nature doubly polarizing: from the origin of capitalism four centuries ago to our own day the polarization between centres and peripheries has been and is inherent in the system; within the peripheral societies social polarization is increasing. The dual contradiction, the main aspect of the contradictions of capitalism, is insurmountable within the framework of the world system. Integration in the world system - the 'external factor' - is not only an unfavourable factor in itself, but is becoming increasingly so.
The belated attempts at crystallization of the bourgeois national state have been and continue to be bound to fail and, through compradorization, doomed to perpetuate polarization in the new forms corresponding to the system's overall development.
The polarization is to blame for the socially and politically intolerable regimes at the periphery of the system. Socially intolerable as they are based on the impoverishment and exclusion of the broad masses. Politically intolerable in the past in the sense that the introduction of the system required colonial domination: and intolerable in the present and future in the sense that pursuit of local development within a prospect of further worldwide expansion requires the newly independent state to remain despotic. Hence democracy is not the 'rule', but an exception, always vulnerable and appearing intermittently in the impasse of capitalist development. Contrary to the 'optimistic' thesis of development by stages, whereby the social suffering and despotism would gradually be overcome by capitalist expansion, such expansion constantly reproduces them.
In these circumstances, capitalism has put on the agenda its supersession from the starting point of a 'revolt of the periphery'. In this sense the 'socialist revolutions' - all produced in the peripheries and semi-peripheries of the system (Russia, China, and so on) - and the national liberation movements are the main features of the most essential change in our modern world. Together, these struggles - actually or potentially inaugurate the 'poet-capitalist' aye.
Instead of contrasting agriculture and industry in a metaphysical and absolute way, consideration should first be given to their place in the conceptualization and practice of the 'modernization' theory and then how they can work within a national and popular outlook. The agricultural revolution requires industrialization but not on the lines so far envisaged for Africa and the Third World.
Over the 1980s, deterioration of the economic and social system throughout the Third World (and particularly in the vast majority of African countries) leads increasingly to a challenge to the dogmas of the theory and practice of conventional development policies. The subject of an alternative option of 'autocentric' development has thus become unexpectedly popular. The use of this term by various people in various contexts (or even in extremely vague terms) makes it worth providing a preliminary definition of the concept before considering how it operates in the conditions of Africa today.
The first formulation we proposed of this concept dates back to 1957 and says literally:
Whereas in the model of autocentric accumulation external relations are subject to the logic and imperatives of internal accumulation, in the model of extraverted development, it is on the contrary external relations that determine almost entirely the rate and character of internal accumulation.
This concise formula remains our definition of the issue, but warrants some clarification. The contrast between the autocentric model and the extraverted model was not deduced from an a priori abstract theory or from an ideological whim. It was the conclusion from a comparative historical analysis. Three kinds of historical experience were considered: a) the development of the countries and regions of developed capitalism in all its historical breadth, from the mercantilist epoch to our own time; b) development of the regions of underdeveloped capitalism in the same historical breadth; c) contemporary socialist development.
The theory of accumulation on an explicitly world scale argues that the history of (capitalist) development from its origin (about the 16th century) to our own time is not one of juxtaposition of 'national' developments, with the 'latecomers' retreading the path of their predecessors, but of a world system divided into driving centres and driven and dominated peripheries shaped by the centres. The whole (the world economic system or 'world economy') is logically superior to its parts ('local economies') and not the sum of them. It can logically be deduced that development (other than peripheral dominated growth) for the 'South' would henceforth entail a 'rupture' with the logic of worldwide accumulation and could not form part of it.
In the centres, development has been autocentric from the beginning, but never autarkic; very much the reverse. The centres, by subjecting the peripheries to the demands of their accumulation, have accelerated that accumulation. The hegemonic centres (Great Britain from 1763 to 1870, the United States from 1944 to 1970) preached the ideology of economic freedom, in the forms appropriate to the system of the time: free trade for the Pax Britannica and free enterprise for the Pax Americana. The non-hegemonic centres never accepted submission to the consequences of this ideology. They preached and above all practiced various forms of protectionism (in the broad sense of the term) necessary for them to avoid their peripheralization; they thus often succeeded in accelerating their autocentric development and even in challenging the hegemonies. This protectionism (with regard to the hegemonic centres) was not synonymous with autarky but on the contrary with aggressive outreach to the peripheries.
The socialist countries as 'less advanced' countries have all not only adopted the principle of autocentric development (subjecting external relations to internal accumulation) but have also virtually moved into a quasi-autarkic phase, one imposed by the world system rather than desired by themselves. If the USSR and China are nowadays more willing to entertain the international division of labour it does not mean that these countries have renounced the principle of autocentric development.
The Third World is part of the world capitalist system but with the status of periphery. It has never practiced an autocentric strategy, but at best under some circumstances begun to challenge some aspects of the extraverted peripheral strategy. It has also sometimes benefited from a relaxation of central control, during wars and crises; and it is interesting to note that it is often in these periods that autocentric development does begin, only to be destroyed in the subsequent phase. In extreme cases, during the liberation wars, the bush fighters being obliged to a de facto autarky, have pushed the changes bringing autocentric basic development further than anywhere else in the Third World. Such slogans as 'self-reliance', 'standing on one's own feet', which clearly have a political sense, have been born out of the popular movement for national liberation, not by chance.
As a schematic of the contrast between the autocentric model and the extraverted model we proposed to identify four sectors: 1. Production of the means of production; 2. Production of mass consumer goods; 3. Luxury production and consumption; 4. Exports. We defined the autocentric model as one governed mainly by an articulation of sectors 1 and 2, and the extraverted model as determined mainly by the articulation of sectors 4 and 3. The model leads to a major conclusion. In the autocentric model the rewards for labour (wages and peasant income) must necessarily increase at the rate of progress in productivity. By comparison, in the extraverted model, the rewards for labour may be disconnected from growth in productivity.
That conclusion has its political side in the following: (i) development for a Third World country cannot be achieved by the adjustment of its economy to the demands of the international division of labour, but on the contrary by delinking this economy from that logic; (ii) this delinking is a necessary (but not sufficient) condition for an autocentric development that remains impossible if it is not popular (that is, if the benefits of increased productivity are not immediately passed on to the broad masses); (iii) in comparison, growth whose benefits are intended mainly for a minority is not only possible on the basis of extraverted development (but not possible always and everywhere) but also calls for such development, more effective for this purpose than an autocentric model.
For the Third World, therefore, autocentric development is synonymous with national and popular development. The preceding arguments have, we hope, pointed to certain ambiguities of expression. The concept of national and popular autocentric development should not be trivialized and treated either as a series of 'protectionist measures', or autarky. No more should it be confused with 'dependence'. It is true that peripheral economies are dependent, in the sense that the rates and forms of their growth are governed by those of the centres (whereas the converse is not true). But the difference between the two concepts (of periphery and dependence) is clear as soon as we consider the case of non-peripheral dependent economies: Canada for instance, where national capital holds only a subordinate position, dominated by United States capital, but where the growth in labour incomes is parallel with that of productivity. Canada is more of a province of the United States than anything else (and as it is not in fact a province, it is to some extent a dependent state). The dynamic of its accumulation (through the articulation of sectors 1 and 2) is similar to that of California or Alabama, and not of Haiti or Brazil.
The alternative option of autocentric, national and popular development is not only possible, in Africa and elsewhere, in the sense that there is no overwhelming 'technical' obstacle making it impossible (the obstacle is always social), it is even objectively necessary, in the sense that a persistent rejection of this option means remaining in a trap.
The autocentric national and popular strategy depends primarily on the principle of the most equitable income distribution possible, especially between the countryside and the town, between the modern, more highly productive sectors and the backward sectors. The extra output on labour incomes that have been equalized is a surplus that, if it is national and is retained for accumulation, will ensure marked growth, and a parallel and equal advance in popular consumption. The structure of demand thus generated allows priority to basic needs and directs the productive system towards their satisfaction.
It should be appreciated that a schema of growth of this kind cannot be the result of the operation of the laws of the market on the basis of the world system's pricing. A decision to regulate rewards of labour on an egalitarian basis determined by average rural productivity (equality in the cereal 'ration' for the town and the countryside, a narrow range of urban wages not modelled on that of the West), to nationalize the surplus, to ensure its centralization and redistribution in the context of the country, all these are political decisions implying taking the system of economic options away from 'project analysis' end 'profitability', the sacrosanct principles of technocratic economics.
Without attempting a misleading description of the precise details of the steps to be taken to implement a development schema of this kind, we might say:
a) It entails not only declaring priority for agriculture, but putting it into effect. This means that other activities where productivity is superior should not occasion income distribution higher than that in agriculture. Otherwise demand is such that satisfaction of the needs expressed by the more privileged will absorb most of what is available for accumulation, and agriculture will be sacrificed. Clearly, in this case the peasants, learning from their experience, will resist the 'progress' offered them, as they know that its benefits will not come back to them. At worst, priority for 'food crops', unless overall policies are revised appropriately, will mean production of cheap food (as a burden on the peasants) to sustain conditions favourable to maintaining a supply of cheap manpower (to the detriment therefore of the urban workers and sole benefit of capital, particularly through the mechanism of the international division of labour, foreign capital),
b) It entails that industrialization be conceived primarily as a support to progress in agricultural productivity: production of appropriate inputs (fertilizers, tools, for example), infrastructural work (irrigation, transport and so on), packaging and processing of products, among others. It also entails that this industry satisfy the non-food consumption needs of rural and urban workers, on as egalitarian a basis as possible and, that on the basis of this demand, an integrated chain of intermediate and machine tool industry is established to provide for efficient manufacturing production of consumer goods. It goes without saying that this national industry cannot be foregone in favour of imports. The latter have to be paid for with exports, and the comparative advantages are those resulting from the world system prices and incomes, in contradiction with the political coherence sketched above. Importation must be reduced to the minimum at each stage and not offset by a high level of exports,
c) It entails national and popular forms of social organization of production: peasant control over agricultural projects, genuine co-operatives (that are not the means of exaction on the peasants through administrative frameworks depriving the peasant of control over production), machinery for collective negotiation of agricultural prices, national control over industry, a national wages policy, redistribution of sources of finance over the country, and so forth. It is hard to see any role for the multinationals in this schema, except to supply very occasionally and under strict national control some 'recipe' for production or organization,
d) It entails a relation to technology other than simple 'transfer'. It means, in fact, providing scope for inventiveness, not for motives of cultural nationalism, but merely because the available techniques, especially the advanced one, are not neutral in regard to the kind of product, the quality of the demand to be satisfied (Western models), the prices and incomes structure that governs the viability of these techniques, and so on,
e) It entails limited external relations radically different from those flowing from the alternative industrialization strategies of import substitution or export promotion. Import substitution is based on existing demand, within an income distribution structure of very pronounced inequality; plus regard on this basis for the principles of profitability (with arguments for 'modest protection for infant industries' in a brief transitional period). It therefore encourages imports of intermediate goods (as the industrial part is not integrated) and sophisticated producer goods (as the demand to be satisfied in competition with imports imitates the Western consumer model and is capital intensive). It therefore remains extraverted By contrast, autocentric national and popular industry is not established in the light of existing demand: it creates demand by satisfying the people's needs (incomes policy) and the intermediate and related needs. The continued importation is to bridge gaps in the range of these related needs, gradually reducing their relative importance (but not necessarily their absolute volume). It therefore subjects external relations to the logic of internal accumulation and thereby warrants its description. As for export industry, it is by definition extraverted All the more so as in the effort to compete with the industry of the advanced countries on their own ground it must resort to massive importation of advanced technology. This explains why the NlCs, which are the most advanced in this direction, are also the most heavily indebted: export industry does not relieve the external balance of payments (contrary to the argument in its favour made by the World Bank), but worsens it,
f) It entails the establishment of a national structure of interdependence between prices and sources of finance that is in conflict with the very principles of micro-economic profitability. In fact the autocentric industry, in order to meet popular needs, must accept the juxtaposition of highly unequal production units - modern industries, semi-mechanized manufactures, crafts factories. The unity of labour rewards and prices will lead to unequal surpluses. These must be redistributed to avoid the polarization of progress in the modern units; and on the contrary to finance the gradual modernization of the backward sectors with the surplus from the modern sectors. This is scarcely possible on a substantial scale without broad public ownership: the national private enterprise and a fortiori the subsidiary of the multinational will not agree to distance themselves from profitability to this extent. As we know, they have behaved in a totally opposite manner, and by destroying uncompetitive crafts have made unemployment worse and deprived the population of a useful product.
This schema shows that a surplus broadly sufficient to finance development is possible even in a 'poor' country. Obviously there are other sides to the issue, related to the size of the country, its natural resources potential, and so on, that have not been discussed here. The argument for an 'open door' rests on three considerations: (1) the need for a massive appeal for foreign capital and imported technology; (2) the comparative advantage of specialization; and (3) the question of size (for example, natural resources, markets). The first argument neglects the price to be paid for this importation of capital and technology, and encourages laziness. The second argument is based on a thesis of comparative advantage that ignores the concept of the unequal international division of labour, and hence the transfers of value inherent in the system of world prices. Only the third argument contains a vestige of truth.