By Jomo KS (ed.), London and New Delhi: Zed Books and Tulika Books, 2005; pp. 234 (hb). ISBN 1842776444. The Origins of Development Economics. How Schools of Economic Thought Have Addressed Development, by Jomo KS and Erik S. Reinert (eds.), New Delhi: Tulika Books/Sephis, 2006; pp. 165 (pb). ISBN 8189487159. Reviewed by Stefan Andreasson, Queen's University Belfast. ©Stefan Andreasson, 2008
Jomo has successfully edited two balanced and well-rounded volumes (one with Reinert) of considerable interest to scholars of development and African politics alike. Both volumes chart the evolution of development economics. The Pioneers of Development Economics focuses on continuities in schools of economic thought from the Renaissance onward whereas The Origins of Development Economics explains how particular individuals, some economists with a recognised and central role in the field (e.g., Friedrich List and Raúl Prebisch) and others more marginal (William Petty), have produced the diverse body of scholarship – an intellectual heritage based on insights from a range of disciplines – on which development economists, and scholars of development more generally, draw today. Both volumes essentially aim to reorient the scope of economics proper by placing the question of development – how less developed societies may achieve the same transition that produced developed, industrialised societies in the past – at the heart of the discipline.
This ‘Other Canon’ stands in contrast to the abstract, theoretical approach of classical economics based on controversial a priori assumptions regarding competition, information and equilibrium. Rejecting the ‘total fixation on their own previous work’ that characterises contemporary, orthodox (neo-classical) eco-nomic thought (The Pioneers, p. vii), the editors emphasise a longer and broader view on economic thinking and scholarship. A main purpose of The Origins is to ‘demonstrate the continuity in thinking on economic development’ from the pre-Smithian era to post-World War Two development economics (p. vii).
The Origins begins with an outline of broad historical approaches to development. Chapters on ‘Mercantilism’ (E. & S. Reinert) and ‘the Italian Tradition in Political Economy’ (S. Reinert) trace the development of economics as praxis to the Renaissance and to concerns about how to produce national development (Tudor England), avoid economic failure (Spain) and reverse semi-peripheralisa-tion in declining Italian city states. A chapter on ‘German Economics’, including the historical school (E. Reinert) suggests a largely coherent tradition of thought from the seventeenth century until the World War Two. A chapter on ‘Capitalist Transformation’ (Khan) critiques the narrow classical economic emphasis on institutions such as stable property rights of whatever kind (i.e. it does not matter what property is protected and for whom, as long as property is protected) in the transition of a small number of (East Asian) developing countries to developed country status, noting instead the importance of a broad set of social and institutional factors in producing state capacity to transform.
Methodologically sophisticated chapters on ‘Growth Theory’ (Ros) and ‘International Trade’ (Dutt) explain the role of theoretical debates on growth and trade for modern development economics. Ros argues that early development economics provides a better explanation for development than does the endogenous growth literature, and that early approaches are ‘more empirically promising’ than either old or new growth Tteory (p. 82). Dutt reviews contributions byRosenstein-Rodan, Nurkse, Lewis and Myrdal to trade theory and the implications thereof for developing countries. A chapter on {Latin American Structuralism and Dependency Theory} (Saad-Filho) outlines the key contributions (as well as important limitations) to the development literature by post-war structuralists and dependistas, notably the former's rejection of linear assumptions about development in orthodox theories of development and the latter's insistence on the impossibility of development under capitalism. Finally, ‘Development in the History of Economics’ (Szentes) outlines key contours of development economics and how it becomes a distinct field of study in the post-war era.
Relying on a standard criticism of classical economics as inevitably hampered by its abstractions and existence in a ‘ahistorical vacuum’, the authors contrast this dominant approach with the historically conscious and pragmatic approach of economic thought from the Italian tradition and the German school to structuralism, dependency theory and modern development economics. The main distinction between orthodox (neo/ classical) and heterodox (developmentoriented) schools of economic thought is defined in The Origins (p. vii) as the difference between social theory built on abstraction and deductive reasoning as in classical economics and that built from historical reality and inductive reasoning from the bottom up, as in the approaches from which (heterodox) modern development economics derive. Classical economics is a system of thought based on metaphors from physics, notably the enlightenment ‘mechanization of the world picture’ on which Smith's concept of the ‘invisible hand’ was based and the 1880s physics’ emphasis on equilibrium. Development economics rely on metaphors from biology, namely references to the human body that are present in economic writings from Greek and Roman times through the Renaissance and late nineteenth-century German economics and on ideas transplanted from Darwinian and Lamarckian evolution in the economic writings of Veblen and in Schumpeter's ‘evolutionary economics’ (p. ix).
The Pioneers charts a history of economic thought as it relates to development by focusing in each chapter on contributions to the field by a particular individual, economist or otherwise. A companion to The Origins, this volume provides additional historical context to the thematically organised, theoretically and conceptually rich, approach of the former. Why ‘Development Economics'? (P. Patnaik) introduces the book by thepurpose and central concerns of the field. Chapters on William Petty (Goodacre) and David Ricardo (U. Patnaik) emphasise the origins of economic thought in the historical experience of imperialism. Chapters on Friedrich List (Shafaeddin), Karl Marx (P. Patnaik), Vladimir Lenin (U. Patnaik),Alfred Marshall (Prendergast), Michal Kalecki (Ghosh), John Maynard Keynes (Toye), Keynes and Nicholas Kaldor (Kumar Bagchi), Karl Polanyi (Polanyi Levitt) and Alexander Gerschenkron (Chandrasekhar) highlight contributions to the field by scholars not normally identified as pioneers of development economics. Finally, chapters on Raúl Prebish and Arthur Lewis (Polanyi Levitt) and Hans Singer (Raffer) outline ‘principal heterodox economic implications’ of recognised pioneers of development economics (p. viii).
While the intellectual complexity and manifold nuance of the schools of thoughts overviewed in The Origins and the individual economists assessed in The Pioneers at times suggest that the classical/orthodox – development/het-erodox distinction can be overly crude, it nevertheless remains a useful distinction for the reader who wishes to understand fundamental intellectual conflicts in the history of economics and how these debates have shaped the field of development economics as it exists today. Economic scholarship derived from classical economic thought remains based on abstraction and controversial a priori assumptions, to its detriment when attempting answers to empirical questions regarding development in a world of states and regions in which historical processes have produced radically divergent socio-economic dynamics and developments. The heterodox school of economic thought, with its emphasis on historical record and empirical reality, remains at times excessively dependent on case-specific context, at the expense of being able to generalise findings beyond the cases and contexts in which they are initially found.
This trade-off between ‘broad’ vs. ‘deep’ understanding is an unavoidable feature of all approaches to development, and indeed to all scientific study of social phenomena. Therefore it is not very useful to suggest that one approach is superior to the other, although the implication in both of these volumes is clearly that the historical, heterodox approach is more useful to development economist wishing to understand the dilemmas faced by countries in the global south today. The most constructive way forward is not to disparage either approach, as being empirically ‘irrelevant’ (classical economics) or theoretically and methodologically unsophisticated (heterodox economics), but rather to make a strong case for the ability of each school of thought to provide a unique understanding of particular aspects of economics. A proper understanding of the strengths and limitations of each approach provides the aspiring development economics with the best equipped conceptual and theoretical ‘tool box’ for investigating the pressing economic and political puzzles of our day.