Theories of Development
MARXIAN THEORY
Karl Marx contribution to the theory is unique because he considered not only economic prerequisites for growth but also social consequences
He believed that the process of socialism was not gradual or evolutionary as assumed by the orders theory as it was characterized by conflict of inter between classes in the society.
He saw struggle as an engine of social change and development as
-class struggle between the capitalist class and the workers.
-The collapse of the capitalist system as the capitalist find investment unprofitable due to the ultimate fall of wages to the subsistence level.
According to Marx, every society has a class structure consisting of the propertied and the non-propertied class - the labourers.
The propertied, i.e. the capitalists own the means of production while the workers own nothing but their labour power which has to be sold in exchange for a wage. Wages are used in the purchase of life's necessities so that the level of total consumption.
The process of capitalist growth led to the lowering of wages and to greater substitution of labour for capital.
The displaced workers went up the "industrial reserve army" of the unemployed thereby depressing demand. The process of capitalist growth eventually come to a grinding halt when wages reach the subsistence level of investment
The result is a class struggle in which the capitalist class is defeated and replaced by the idea socialist society in which every individual gives according to his abilities and receives according to his needs. Marx was by all means a utopian philosopher. Although history has proved Marx wrong, he made an important contribution by suggesting that a development process, which neglects the problems of poverty, inequality and unemployment, is doomed to fail.
Weaknesses/critics have referred to him as a prophet of doom for the capitalist system.
It ignores real issues -he’s analysis is based on the theory of surplus value for which uses absolute rather than real prices.
His materialistic interpretation of history is inadequate and one sided as history is molded by many fax economic factors should be considered.
The whole Marxian analysis is built on the theory of surplus value. In the real world we are considered price over value.
He pointed out that technological progress leads to unemployment and the strength of the industrial reserve army is an exaggerated view
His view of increasing misery of laborers in capitalist societies is absurd because in reality real wages of workers continue to grow.
Marx failed to visualize that technological innovations may lead to capital savings
Marx failed to understand flexibility in capitalism.
DEPENDENCY THEORY
Developed in 1950 by Director of Commission of Latin America ,Raul Prebisch
The dependency theory states that "the less developed countries (LDCs) are dependent on the developed countries (DCs). This dependence is the main cause for the underdevelopment centi the former. Dependence is a conditioning situation in which the economies of one group ountrie conditioned by the development and expansion of others. This means that while first; NPs at countries may advance through self-impulsion, dependent economies can only reflect the expansion of the dominant countries which may have positive or neomina effects on their immediate development. (Dos Santos, 1971).
According to dependency economists, the whole world is divided between two sets of countries: developed countries (DCs) and less developed countries (LDCs) The former is in the centre (Western Europe, Britain and the USA) and the latter are in the periphery (backward countries of Asia, Africa and Latin America. The dependent countries have low per capita GNPs and rely heavily on the export of a single commodity for foreign exchange earnings.
Frank many countries in the peripherytraces the process of development in three ways have I been incorporated into the world economy in three ways since
the early days of colonialism.
as capitalist incorporated into the world economy
as meta satellites chain as surplus is generated at the center
Both DC and LDC are a result of a world capitalist system
Jhihan has identified dimensions of dependence as
Historical and International process
Foreign capital
Technology dependence
Trade and unequal exchange
Dualism
Strength of the Dependency theory
The dependency thinkers have tended to favour industrialisation and to note the positive aspects of capitalism in raising the productive capacities of dependent economies. However, unlike the modernisation theory they are inward looking terms of the sources of capital so as to avoid the exploitative nature of interna capital in order to build capacity for self-reliance.
By advocating for the severing or cutting of the 'umbilical cord' i.e. development connects the poor nations to their supposed masters, the dependency theon drawing attention to the significance of planned development or other alter development approach from the so called modernisation with a view to cementing sustenance and thus building capacity for choice in external matters.
Other dependency theorists advocate mutual cooperation among LDCs in the form of regional economic cooperation and international commodity agreements. Particular, suggests a new development strategy for peripheral countries based of following: (a) a self-reliant development strategy based on one's own resource: collective self-reliance strategy based on mutual cooperation and economic integrated of LDCs; and "the demand for a New International Economic Order based on transfer of technologies to LDCs, the control of natural resources by LDCs, hi prices for raw materials of LDCs, and access to the markets of DCs for the manufac of LDCs.
Self-reliant development strategy based on one's resources, the dependency theory was laying the foundation for poor countries to exploit and benefit from their own natural resources. It also drew attention to the significance of a balanced approach to the development which led to the dispersal development projects to rural areas and enhanced government drive, to mode agriculture.
Weaknesses
1. Oversimplification of Underdevelopment:
Homogenization of LDCs: The theory assumes all developing countries are at the same stage, ignoring diverse levels of development and internal variations within them. Comparing Brazil and Tanzania highlights this flaw.
Neglect of Internal Factors: Overemphasis on external exploitation overshadows internal issues like corruption, poor governance, and inefficient resource management.
2. Inaccurate View of Capitalism:
Capitalism as Sole Culprit: It doesn't acknowledge instances where capitalism has contributed to development in some LDCs. Kenya's example is often cited in this regard.
Overlooking Internal Dynamics: Focus on external forces neglects the agency of individuals and communities within developing countries.
3. Methodological Limitations:
Macro Focus: The focus on the global system limits analysis of specific local contexts and internal factors.
Rigid Assumptions: Assumptions about production roles (raw materials vs. finished goods) don't always hold true in the real world.
Power Dynamics: The theory may oversimplify the power struggle between nationalist capitalists and compradors.
4. Policy Implications:
Limited Practical Guidance: The broad focus on the global system makes it difficult to derive specific, actionable policies at the national level.
In essence:
Dependency Theory provides a valuable framework for understanding the historical and systemic factors that contribute to underdevelopment. However, its limitations, such as oversimplification, neglect of internal factors, and rigid assumptions, require critical evaluation and a more nuanced approach to analyzing development challenges.
Comments