© Tori M Saneda 2005-2008
Development
Post-WWII = changed world
-colonial empires collapsing
-differing social ideologies emerging = advent of Cold War
-re-organization into the 3 worlds
- 1st world: capitalist western world (the West & Japan)
- 2nd world: communist soviet blocs (Socialists)
- 3rd world: poor, non-Europeans (former colonies)
-what to do w/all these new nations
1949 – Harry S. Truman – influential speech – many see as ushering in “development”
“We must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas. The old imperialism – exploitation for foreign profit has no place in our plans. What we envision is a program of development based on the concepts of democratic fair dealing.”
A Mexican intellectual – Gustavo Esteva – remarked that 2 billion people b/c underdeveloped that day (Jan. 20, 1949) – they ceased to be what they had been and b/c what the minority in power believed them to be
-“Modern” b/c the ultimate goal of the Western world for other “underdeveloped” countries
-believed that the underdeveloped countries were at earlier stage on a universal path to “modern” society (can there be a definitive modern society when the concept of what constitutes modern is always changing – changes defined by the western world – always keeps the underdeveloped nations underdeveloped and in perpetual “catch-up” mode
-straight out of 18th century philosophy – in anthropology called Unilinealism
- theoretical position abandoned for its inadequacies in explaining human societies
- developed out of Darwin’s evolutionary theory but ignored the branching aspects of Darwin’s theory
- unilineal evolutionists (Morgan, Tyler) proposed that all human societies move in a linear progression through the same stages – from simple (inferior) to complex (superior)
- savagery – barbarism - civilization
Ideology totally ignored role of colonies in European and later US development – development has never been a national phenomenon – it has ALWAYS HAD INTERNATIONAL DIMENSIONS
-kind of forced to ignore b/c post-WWII development couldn’t mimic colonial period development – Why not?
- Impossible to replicate European expansion by exploiting resources and labor of other societies – world b/c too savvy for that to happen
-Instead – new development linked to internal national economic growth
-Also began to change peoples understanding of social life – b/c economic in nature
Two ingredients to Development:
1)nation state
2)economic change
Nation state = territorially defined political system based on a govt/citizen relationship that emerged in 19th century
-arbitrary territories
- US/Canada/Mexico
- Kenya/Tanzania (Masai)
- Nigeria (incorp Huasa, Igbo, Yoruba and Fulani)
Important—b/c growth not seen a local or individual level but national
Economic growth = economic transformation using a universal standard for development
-UN in 1945 declared goal of econ growth = rise in standard of living – measured by material well-being as evidenced by commercial output of goods & services (GNP, health, life expectancy and literacy)
-Development assoc w/market system based on private property & sustained investment
-Traditional lifeways viewed as impediment to development b/c wealth often community-based not individually-based
So, there are some BIG assumptions in earliest development models:
1)model works any where: universally applied w/o regard to specific cultural patterns (UNDERDIFFERENTIATION)
2)non-monetary system are “backward”
3)common destiny of society = modernization/monetization = common good arise out of pursuit of individual self-interest
4)living standards can be quantified w/monetary index
After WWII there was a huge global concern – how to stabilize the world economy
-during 1930s depression = 65% drop in international trade – continued to drop during WWII
-how could this stabilization occur AND how could economic stimulus be administered to NICs (newly independent countries)
Enter the UN, the Marshall Plan and the Bretton Woods Institutions
UN chartered in 1945 with 51 countries as original members
-the UN and its family of organizations work:
- to promote respect for human rights,
- protect the environment,
- fight disease,
- foster development
- and reduce poverty
-kind of oversees progress and works to foster cooperation among nations
Marshall Plan and Bretton Woods Institutions were established to specifically finance the rebuilding of the world’s economy
-spearheaded by US
Marshall Plan:
-June, 5, 1947 -Secretary of State George C. Marshall gave commencement address at Harvard University
-stressed the need for a US led aid program that would guarantee substantial, long-term funds for war-torn European nations
-received strong public and congressional report – resulting in passage of ERP – Economic Recovery Plan
-bilateral initiative (agreement b/t 2 countries) – countries receiving aid had to match the amount
- funds used to buy American imports
- counterpart funds used to stabilize internal financial problems
-goal to change way Europe did business
- move Europe away from war-time planning
- move Europe to straight-forward market economy encompassing ALL of Europe incl. Germany
- stabilize economy (sooth discontented pops and rekindle economic growth)
- more subtle goal = halt spread of communism thru gaining allegiance of countries by promoting economic growth thru US financial aid
-Marshall Plan sent billions of $$ to European states and Japan
- Restored trade
- Stabilized prices
- Helped to production levels
- Stemmed European self-reliance
- Huge trade deficit w/US (import much/export little)
- Gave US access to former protected European colonies = raw materials
-By 1953 – US transferred 41.3 billion to 1st World economies & 3 billion to 3rd World economies
Once communism contained and world economy bolstered by American dollars - move to multilateral arrangement =
Bretton Woods System
Idea for international banking system integral part of plan to reconstruct world economy
July 1944 – Bretton Woods, NH – conference of 44 financial ministers
-US encouraged foundation of the “twin sisters” – World Bank and IMF
World Bank
-focused on making loans to governments in order to rebuild railroads, highways, bridges, ports and other "infrastructure
-after initial focus on western Europe the World Bank shifted its lending toward the third world.
IMF
-established to stabilize national currency exchange
WB & IMF aimed to create a world economy where “the peoples of every nation [would] be able to realize their potentialities in peace…and enjoy…the fruits of material progress on an earth infinitely blessed with natural riches…”
Bretton Woods organizations functions were to:
1)stabilize national finances and revitalize internationl trade
2)underwrite economic growth by funding 3rd world imports and 1st world infrastructural technologies
3)expand 3rd world primary exports to earn foreign currency for purchasing 1st world exports
Does this sound familiar?– very similar to colonial division of labor
-dominated by 5 biggest share holders – all 1st world nations
-in mid-1990s 10 richest industrial states controlled 52% of vote – 4% of vote in control of 45 African states
-president of bank customarily American (managing director of IMF = European)
-bank only funds approved projects
- generally “productive investments” – energy and export AG instead of social investments, e.g., edu, health svcs, etc.)
-IMF – conditionality agreements – applicants must have economic policies that meet certain criteria – other intl banks and lenders have adopted these same criteria --> so 3rd world development priorities are tailored toward 1st world criteria
- Stimulates western-scale industrialization (power generation, transportation, commercial AG)
- Trains 3rd world officials in theory & practice of development as understood in 1st world
Why was all this control deemed necessary?
3rd world = vital source of raw materials and minerals – if controlled by different political-economic vision (i.e., socialism) – survival of 1st world at stake
Walt Rostow (development economist) – 1956
“The location, natural resources and populations of the underdeveloped areas are such that, should they become effectively attached to the Communist bloc, the US would become the second power in the world…in short, our military security and our way of life as well as the fate of Western Europe and Japan are at stake in the evolution of underdeveloped areas.”