Economic Development: Theories and Historical Conditions

The development is “a historically produced discourse”, produced massive impoverishment and underdevelopment, exploitation and oppression. Although many countries are concerned with improvement of economical situation in countries of Africa, Asia and Latin America, this policy only deteriorated situation with the passing of time. In fact, developed countries improve their economic situation exploiting resources of underdeveloped countries convincing that their actions are high intentions. As the history demonstrates rich countries become richer and poor countries cannot solve their economic problems.

This historically established situation is impossible to change. Economic situation is formed during the whole history that is why the development is considered to be “a historically produced discourse”. Underdeveloped countries are not able to catch up with the developed countries whose development is historically predetermined. Underdeveloped countries will always be backward as far as this situation is profitable for developed countries and it is the sense of the world economy when there are both developed and underdeveloped countries. Developed countries have wealth and advanced economy at the expense of underdeveloped countries. Whatever the researchers try to do to improve the situation in underdeveloped countries and get rid of the world poverty, history is impossible to change.

The development as a historically produced discourse helps to explain the causes of considering so many countries as underdeveloped ones. Representations of Africa, Asia and Latin America are considered to be the countries of the Third World by Western developed countries. The model of Western economic development has been imposed to the countries of the Third World and has made them believe that their economy is underdeveloped and that their level of life is quite low. They are considered underdeveloped as the heirs of illustrated genealogy of Western conceptions. The discourse of unequal distribution of power in the world has been caused by “the colonialist move”. The countries of the Third World which were colonies in their past are in fact still subordinated to their countries-owners. Having been colonies, they had undeveloped economy and poor way of life. These countries lived under the rule of other countries and did not even think over their personal government. Countries which owned colonies persuaded them that their government was useful for colonies and they could not govern themselves on their lands. Colonial discourse is like an apparatus which turns on the recognition and disavowal of racial, cultural and historical differences. This discourse successfully produced a regime of government over the countries of the Third World. The forms of objectivity fostered by the colonial discourse made people recognize themselves as developed and underdeveloped ones.

Although, some countries organize different projects to help underdeveloped countries to fight with poverty, they are not able to solve the problem which is historically conditioned on the one hand and is quite profitable for developed countries on the other hand. Let us have a closer look at such economic intervention in African countries. Chad-Cameroon Pipeline Project was believed to improve the economic situation in these underdeveloped African countries supporting them with new places of work and money which help to improve the economy of these poor countries. As for the new working places, it has been clarified that this project needs not so many work force and vacant working places are for the skilled workers who do not live in Africa. As for the profit for the country, according to the income of 2008 the total oil sales were amounted to $4,4 billion and Cameroon’s share was only $20 million. This money is not enough to compensate all the damages caused by the project.

It has been found out later that this project is not advantageous for Cameroon and Chad. This project has caused a lot of environmental and social problems but these problems don’t bother Americans who make millions from this project. Both Cameroons and Chadians don’t benefit from this project as it has been promised by the organizers. Otherwise, this project has made the level of living much worse as far as the reef abundant with fish was constructed and people were deprived of their main source of income as far as 80% of the villagers depend on fishing. More than that, this pipeline contaminates the local flora and fauna. As the result, the pipeline completely impoverished the village despite many advantages promised at the beginning of the construction. This project was built under the slogan “Alleviate Poverty” which didn’t justify hopes of the local citizens. People observe the typical situation when rich countries become richer using the resources of the poor ones and the poor countries become poorer pinning their hopes on high missions of developed countries in vain.

Such typical economic interventions in underdeveloped countries are explained by the dependency theories. These theories are based on the structuralist paradigm. They argue that the distribution of wealth and resources are unequal at the world market. The problems of underdeveloped countries may be explained in the context of their relationship to the developed ones. The main idea is that the developed countries are always on the top of their development whether it is economy, science, politics or trade. The underdeveloped countries serve the role of periphery depending on the center providing transaction capitalism. At the same time historically developed countries are obliged by their development to the periphery or underdeveloped countries which supplied them with resources and cheap working force. It is very convenient to have such underdeveloped countries under control. The developed countries do all possible to hide their true intentions when they help such countries. The poverty of the countries of the Third World is profitable for the Western countries. The main reason of it is the current system, capitalism and its main motive, profit seeking.

Singer Perbish states that the main blunder of the developing countries is that they export primary products. Primary products are cheaper than the manufacturing goods made of them. This is the main reason of economic decline of developing countries. As the result, developing countries sell cheap primary products and have to buy expensive manufacturing goods produced in other countries. In fact, developing countries are not able to produce manufacturing goods on their lands because of the poorly developed science and technology. Foreign investments allow to remove the economy from the periphery to the center. The export of primary exports, the import of manufactures and dependent industrialization make the developing countries dependent on the developed ones. This dependency is difficult to stop as far as the developing countries are not able to develop themselves. The high foreign exchange is another root for dependency in these countries. Multinational corporations make the economic situation in developing countries worse. Their intensive technologies aggravate countries’ unemployment and increases consumerism which is impossible to support with the countries’ resources. All these factors increase the level of dependency of developing countries on developed ones. The dependency theories are the basis of capitalism.

Even if the developed countries try to help poor ones providing them extra profits, this help is temporary. The whole alternation of economic systems of the countries of the Third World is necessary to improve their situation and to fight with poverty. The development of science and technology is an essential condition of the economic development. As far as to develop technology in developing countries is quite expensive and unprofitable, nobody ventures to turn this historically established structure of the world economy.

To understand development as a discourse, it is necessary to observe not only details but the whole system of relations with its strategies, concepts and objects. The most important thing is who sets the rules of the game. Development was and continues to be the predetermined factor which treated nations and cultures as poor concepts which may be move up and down during the historical progress. Many researches consider economic theories to be dead because there is no sense to change something which has been historically predetermined and impossible to change. The poverty of developing countries and the wealth of the dominant ones should be taken as it is. It is impossible to get rid of poverty all over the world. Those who are rich become richer and those who are poor become poorer.

Many researchers consider Western economy to be the dominant one in the world market. In fact, Western models of development are imposed on the other countries. Capitalism has become the main goal of many countries. The development of the economy in European history is one of the most fundamental chapters in the history of modernity.The notions of economy, market and production are historical contingencies. The Western economy is considered to be a production system. Economy is a cultural production, a way of producing human subjects and social orders of a certain kind. The economy had to be given expression by a proper science. This science was called political economy which emerged in the eighteenth century. According to Smith, Ricardo and Marx political economy is connected with the notions of production and labor. Economics is a discourse that constructs a particular picture of the economy. Any model of the construction of the world is debatable and subjective. Different models of economy were appropriated, suppressed or overlooked. The critique of the economics as a culture should be distinguished from McCloskey’s economics as rhetoric.

Certain historical conditions and circumstances changed the notion of economy during the last centuries. There are a lot of different approaches to the notion of economics. Nevertheless, all these approaches aim at the solving the problem of the poverty and promoting economic development of all countries. According to the classical theory, economy would reach a point at which wages would rise above the subsistence minimum thus squeezing profits down to the point where the investment would stop, wages would drop again, technological progress would make labor more productive and growth would resume. According to Ricardo, the main problem of the modern economy is the laws that regulate the distribution of rents, profits and wages. In this model the labor is the basis of all value. This theory was extruded by Jevons’ aims of economy as the satisfaction of our needs and maximizing comfort and pleasure.

There are a lot of theories of economic development. They may be differentiated as classical, structuralist, neoclassical and dependency theories. The classical theorists are Adam Smith, Rostow and Lewis. Adam Smith considers the increase of stock capital and improving of labor force to be the main sources of economic development. Rostow argues that it is possible to transform some leading sectors in economy which propel the economy forward. Structuralist or Keynesian theorists consider economic development as the transformation of the structure of the production following the demands and make more productive use of technology. According to the neoclassical theories, the capital accumulation plays the crucial role in the economic development. The dependency theories treat the world economy as the markets which depend on each other in commodities, capital and labor power and the transference of resources from the dependent countries to the dominant ones. It is the main reason which hampers the economic development of the countries of the Third World and promotes the development of the USA.

There are different concepts of development namely economic growth, human development, capabilities and liberation. These main four concepts refer to the development of the country. If one of these concepts is absent, the country become dependable on other developed countries. Economic growth is identified with the general income per citizen. Development is connected not only with economic growth, it presupposes certain improvements in life and social changes. It consists of qualitative and quantitative changes in economic situation. Quantitative means the raise of income and qualitative presupposes the improvement of technologies. More than that economic development must be initiated and sustained. Sustainable development includes the guarantee that future generations will not live in worse conditions caused by environmental degradation. As the result, development must be on the way from “the traditional to the modern one”, paying attention to the environmental protection, scientific development, rational thoughts and actions.

Economic growth of the country should result in human development. It is not only increase of people’s incomes but the worthy level of life. For example, the life span in Sri Lanka is 80 with GNP 380$ per capita while in Brazil the life span is 65 but GNP per capita is $1640 and Oman has 6730$ per capita with life span of 54. People should be put in the center of the development. A well-developed country guarantees a high level of life consisting of qualified medical care and life conditions. Entitlements and capabilities are also an integral part of the development. People in developed countries should have rights and responsibilities. More than that, everyone should have a chance to realize his/her talents and capabilities that is why country should supply the citizens with highly-paid working places.

Development is the process guaranteeing the liberties to the citizens. All individuals should be liberated from exploitation, oppression of all forms, unjust class structures, unfair distribution of income, political exploiters, cultural alienation and other forms of discrimination and suppression. When the policy of the country takes into account all concepts of development, it is considered to be the developed country. If the country wants to improve the economic situation, this conceptualization of development is the model which should be oriented to.

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BusinessEssay. "Economic Development: Theories and Historical Conditions." December 12, 2022.