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DST5CAD: Contemporary Approaches to Development

Reflective Essay. Student No.99001921
This reflective essay examines the development of human societies and of the rise capitalist market relations through a Marxist perception. It traces this historical materialist conception of human development into more modern Neo-Marxist Dependency and World Systems Theories. The role of Aid, international development institutions and their strategies are then placed in this capitalist economic context, implying questions such as 'who does international development really assist?'. Short headings have been left at the top of paragraphs to assist with the navigation of this piece and the topics it covers. Historical Materialism and Dialectical Thinking. Marx perceived that the development of human societies throughout history and into their modern day configurations, as primarily influenced and directed by changes occurring within the material or economic basis of these civilizations (Peet & Hartwick 2009, p. 148). He believed that with a rational historical perspective you could understand modern capitalist societies, its problems and future direction "as the outcome of an evolutionary process stretching back into the mists of time" (Leys 1996, p. 109) This perception of human development used dialectic thinking, which cyclically juxtaposed a thesis (known truth) with an antithesis (oppositional consequence) to formulate a synthesis, or likely outcome and future direction. Accordingly, development was caused by new more productive means of material production, which then induced new forms of organization and inherent contradictions, until the opposing forces of increased material productivity and the intensified contradictions they contained, became the vehicle for future societal transformation. This process continued as human societies developed, progressed and supersede the last, as "men make their own history....but under circumstances existing already, given and transmitted from the past" (Marx 1963, p.78). Development and the Creation of Classes. The first step of human development began with ability of humans to enhance their chances of survival through harnessing the productive potential of nature, accomplished with the use of tools (technology) and collective organization which enabling

2 agriculture and animal domestication (Peet & Hartwick 2009, p. 148). These means of production changed human relations and expanded the size of societies, which adapted and correspondingly developed social, political and re-distributional formations to support this material growth and its continuance (Peet & Hartwick 2009, p. 148). New divisions of labour and class formed between those that privately owned these means of production (primarily the land) and those who were compelled to labour and produce surplus in order to share in these benefits. This embryonic class division would widen with future material progressions which created greater abundance, but under more inequitable allocations of ownership, benefit and re-distribution (Peet & Hartwick 2009, p. 148). Commodities and their Three Inherent Values. Dramatic increases in production during the 15th century through to later industrialization determined the creation of markets, commodities and a monetary system, which facilitated an unequal means of exchange between classes, goods and labour. Commodities are goods produced for sale in markets and according to Marx held three intrinsic values, allowing them to be traded, generate profit, escalate reproduction and lubricate these unequal social relations between humans and their societies (Peet & Hartwick 2009, p. 149). 'Use Value' was analysed as "the qualities of the physical body of the object that satisfies human wants and needs" or its usefulness. 'Exchange Value' was conceptualized as the inflated monetary value assigned to a commodity when it entered the market place, allowing profit to be generated by its production and sale, and for differing commodities to be exchanged through the abstract of money. Lastly, Marx ascribed 'Value' to commodities as they contained within them the condensed or crystallized form of exploited human labour used to produce that commodity for profit, which when manipulated could generate even more for profit for those that owned production (Peet & Hartwick 2009, p. 150). Exploitation, Alienation and Unequal Exchange. The fact that surplus value (both exchange value and value) are social constructed and wrestled away from workers who do not receive the total worth from the fruits of their labour, was seen as amounting to their 'exploitation' by Marx (Peet & Hartwick 2009 p. 152). Capitalists multiply their profits by economizing the labour process and the exchange values of commodities. This system devalues the labour expended and needed

3 to produce commodities, while exaggerating the market worth of these finished products. Workers are compelled to buy and consume commodities created and priced by the same system that ensured their exploitation in the labour process. Workers become alienated from the commodities they produced for the profit of others and the true benefits of their labour when they exchange their labour for the abstract of money. Miraculously, money in capitalist systems has the ability to reproduce its value and generate profit simply from its exchange as invested capital, as "capital is money, capital is commodities... by virtue of it being value, it has acquired the occult ability to add value to itself" (Marx 1976, p. 145). The result of this system, is capitalists become richer as productivity increases, and the workers poorer and more dependent on these unequal exchanges for survival. The objectives of generating greater profits and containing of increasing social contradictions this system causes, expands into all areas and structures of power within its host society. Superstructures and False Consciousness. Organizational and political structures evolved and adapted to contain these contradictions at the core of capitalist societies, creating political structures and essentially persuading populations to 'volunteer' to cooperate with their normalized exploitation by elites (Peet & Hartwick 2009, p. 146). In the modern day, 'Superstructures' known as nation-states and the international framework that supports capitalist development, grew to legitimize, support and balance these contradictory economic forces and their social consequences. These modern superstructures fostered the 'false consciousness' of their populations to achieve these ends, personified in cultures based on consumption and governments paradoxically built around liberal ideological tenants of democracy, freedom and equal opportunity. Marx saw the economic basis of life as dominating all other spheres of life, as "the mode of production of material life determines the social, political and intellectual life process in general" (Marx 1970, p. 55). Through this prism our popular ideals, governments and international political units serve the sole role of protecting the economically dominant class, and containing social conflict caused by their material interests. International development strategies and 'assistance' to the developed world could similarly be perceived as a means to these ends.

4 Capitalism in its Global Setting. Marx perceived that capitalism's competitive nature of maximizing profit through increasing exploitation and the extraction of surplus from workers, would mean its reach and contradictions would intensify both within societies and transfuse between them. As within the inside of societies, these distributions would remain unequal until forced to change, as "development was a process of capital accumulation occurring unevenly in terms of class (the owning class became richer) and space (some countries became richer than others) (Peet & Hartwick 2009, p. 153). Capitalism's competitive demand for new resources, labour and consumption markets, shaped its current tendency towards expansive monopoly and global ubiquity. The quest for profit means "the need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe....nestle everywhere, settle everywhere, establish connections everywhere (Marx, 1955, p. 16). The expansion of capitalist relations between one nation and another or the bourgeoisie of the developed world and the proletariat of the other, is the platform from which Dependency theory establishes itself from. Dependency Theory. This division of the world into core (developed nations) and periphery (third world) is premised on the idea that the core nations have based their previous and continued development on actively underdeveloping the periphery third world (Peet & Hartwick 2009, p. 166). Colonialism and imperial conquest became the initial means of primitive capital accumulation which fuelled western industrialization, facilitated by capturing indigenous labour reservoirs and plundering resources from these less developed societies. This process transformed core nations into their current position of global dominance and impoverished these peripheral nations. This domination evolved into financial-industrial dependence, which geared these economies into supplying the resource demands of the core instead of supplying their own needs and independent means of economic growth (Dos Santos 1970, p. 231-236). The under development of peripheral nations into the present day is thus an essential part and consequence of the expansion of capitalism in its global setting, which has replicated the unequal conditions of exchange and exploitation present within the internal structures of capitalist societies (Dos Santos 1970, p. 231-236).

5 Modern Dependence and Technology. Modern dependency has been fostered through a reliance on cheap exports to these core countries, which stagnates peripheral rates of development and technological innovation (Dos Santos 1970, p. 231-236). Technological industrial dependence has been created by the monopolization and "international ownership of the regions most dynamic sectors [determining] multinational corporate control over technology, and huge payments of royalties, interests and profits" are funnelled away back to core nations (Peet & Hartwick 2009, p. 167). Genetically engineered and externally patented seed varieties are an example of this, which when used and introduced into the peripheral economies and industries, funnel revenues back to international seed companies and transform local agricultural practices and industries into dependence on such externally owned means of production. Peripheral nations must then generate their limited surpluses by means of externally owned intellectual property or through over exploiting the labour within their workforces. These trade arrangements ultimately mean that poor countries became poorer or their growth is limited and conditional to other nations and elites becoming richer (Peet & Hartwick 2009, p. 171). World Systems Theory. World Systems Theory builds upon this foundation of core and periphery nations and the ideas of cultivated dependency, but differs by breaking the world up into three interchanging economic zones of core, semi-peripheral and peripheral within the one interacting and transformative world system (Peet & Hartwick 2009 p. 173). Relations between these zones are exploitative and involve the flow of surplus value upwards from the peripheral to the semi-peripheral, or from both to the core. This external exploitation and unequal flows of capital and surplus help to reduce class tensions and conflict within the core. By draining cheap labour, resources and commodities at below western market value and then selling expensive consumer goods back to them, core nations foster unequal trade relationship that boost their own economies while keeping the peripheral and semi-peripheral economies static or in a state of dependent lethargy (Leys 1996, p. 112).

Problems with these Theories.

6 The role of multi-national non-territorially aligned companies in this process disturbs the clear distinctions between core nations and their developing prey. Also problematic for these theories is the recent economic and technological rise of nations such China, South Korea, and Singapore, but the great divergences in wealth and poverty amongst elites and workers in these countries are not represented in their escalating GDPs. Underdevelopment can also be caused by bad governance practices and corrupted socialist governments, while a number of nationalist, ethnic and cultural tensions can develop within societies and between them, to create conflicts far removed from those initiated by material inequalities and distributions. Commerce between nations also not always such a 'zero sum game', but its impacts on the developing world and their extremely poor populations are often of reinforcing minimal hegemonic growth and dependent economic dominion. Food Aid and its Benefits. International aid donations from developed nations to the under developed can also become a means by which conditional dependence and geo-political and economic influence is ascertained. According to Maxwell and Singer (1979, p. 225-47), food aid constitutes a large proportion of official development assistance from developed nations to the less developed and has a two sided nature. Its benefits can include reducing the pressure on peripheral states to concentrate primarily on sustenance resources and the food needs of their disadvantaged masses, while boosting employment through food for work programs. Storage, production centres and food prices can also be established and stabilized more easily without the constant demands of self reliant production and shortage. While these factors sound beneficial, food aid can also contains negative consequences and the questionable motivations of donor nations. The Negative Side of Food Aid. Food aid can adversely affect developing economies by creating disincentives for local agricultural industries by reducing food prices, destroying existing markets and drawing away existing labourers to food for work programs. Wages paid in food are also prone to even greater levels of unequal exchange and the impossibility of later exchange for other needed commodities. More centrally, food aid irregularly depends on developing nation surpluses and often does not address the true needs of developing nations "but rather the economic, political and military interests of donor countries...leading not to

7 greater self reliance but rather to greater dependency" (Maxwell and Singer 1979, p. 225-47). Donor nations like the US are selective with which geo-political recipients receive this aid, and often profit themselves from selling otherwise wasted surpluses, or by opening up consumption markets for the future export of their domestic commodities. Neo-Liberalism and the Dominance of Market Forces. The role and dominance of capitalism throughout the world has been amplified by the adoption of Neo-Liberalism, and its ideals of unfettered market forces, removing state intervention in economies, increasing trade deregulation and the creation of a unified global economy. Minimizing state intervention in national economies and control over public utilities has boosted the power of global capitalist forces, and ushered in the era of truly global transnational corporations (TNCs) whose allegiances lie primarily with profit (Leys 1996, p.115). International development institutions have not been immune to implementing these ideals of using international market forces as the 'cure all' to reverse underdevelopment. Institutions like the World Bank and IMF have championed trade liberalization and structural reform in developing countries as a remedy for under development, often with detrimental results. The World Bank and IMF as Free-Market Agents World Bank and IMF 'prescriptions' to induce development in underdeveloped countries often has the opposite effect of improving living conditions, alleviating poverty and inducing economic growth. By promoting the privatization of state industries and increasing avenues for Foreign Direct Investment (FDI) in infrastructure and industrial projects, new markets and avenues of ownership and exploitation are opened for Multinational companies. When desperate for external investment and any regular revenues from large scale taxation, these foreign owned investments are purchased at comparably 'rock bottom' prices and are often absent of the labour regulations present in other more developed nations. International development agencies thus often aid transnational companies and foreign entities to capitalize and compound on the existing disenfranchisement and inequalities created by capitalism in its global setting. WTO and TRIPS.

8 Not all development projects and humanitarian assistance programs can be equated with the sinister machinations of global capitalist objectives at work, by the centrality of providing assistance where this assistance also benefits or doesn't disadvantage the donor can not be ignored. The subsidized supply and restrictions on the independent production of pharmaceuticals in the developing world is an example of the balance between global economic objectives and the needs of the underdeveloped. The Western led World Trade Organization (WTO) adopted a clause to protect Trade Related Intellectual Property Rights (TRIPS) in 1994, which protected the unauthorized dissemination and reproduction of copyrighted and patented intellectual property. In 2001 this clause was reviewed after African countries became concerned when it was used to restrict their domestic reproduction of antiviral HIV drugs. Subsequent negotiation reinterpreted that TRIPS could not be activated against a country facing a national health crisis, and that these drugs could be imported in a generic plain packaging form, but not internally produced through a commercial or industrial policy. While concessions have been made in this regard to supplying drugs to address the health needs of developing countries, independent pharmaceutical production has been hampered by TRIPS, which further prioritizes the economic objectives of the global north and transnational companies over the health and well being of millions in the developing world. Although independent production is still restricted in developing countries, the gradual increased availability of cheaper drugs over the last decade is a sign that a middle ground can be found between profit and international developmental assistance. While Marxism and its extension into Dependency and World Systems theory may be justly accused of over simplifying the pluralized evolution and interrelations of human societies into hierarchical structures of material exploitation, but I believe there is still much we can learn from it and use to understand the world around us today. The role of nations and development organizations in development programs which seemingly benefit the wealthy as much or more than the poor, makes me wonder if some forms of development are simply methods of containing intensifying global contradictions, and co-opting the poor into further disenfranchisement. Capitalism's defining social relations of exploitation, competition and disparity have continued into the modern day under many new guises and structures, but whether these contradictions will grow to be

9 the catalyst for further transformation or simply the continuance of 'business as usual' is yet to be seen or properly answered.

Bibliography

10 Dos Santos, T 1970, 'The structure of dependence', The American Economic Review, vol. 60, no. 2, pp. 231-236. Leys, C 1996 The rise and fall of development theory, Indiana University Press, Bloomington. Marx, K 1970 A contribution to the critique of political economy, Progress Publishers, Moscow. Marx, K 1976 Capital: Volume 1, Penguin Books, London. Marx, K 1963 The eighteenth Brumaire of Louis Bonaparte: With explanatory notes, International Publishers, New York. Marx, K & Engels, F 1955 The communist manifesto, Appleton-Century-Crofts, New York. Maxwell, S & Singer, H 1979, 'Food aid to developing countries: A survey', World Development, vol. 7, pp. 225-47. Peet, R & Hartwick, E 2009 Theories of development: Contentions, arguments and alternatives, 2nd ed, Guilford Press, New York.