The Origins of Economic Inequality Between Nations

A Critique of Western Theories on Development and Underdevelopment

Carlos Ramirez-Faria

• Publisher: Routledge
• Year: 2012
• ISBN:
  9781136855733
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

First published in 1991 this text provides an incisive analysis of theories concerning the origins of economic inequality between nations. Central to the author's investigation is the concept of underdevelopment, and a focus on successive Western 'systems of conceptualisation' of the relationship between the west and the rest of the world. The first part of the book concerns the Marx/Engels theory of the Asiatic mode of production, and the anti-Imperialist reaction against Eurocentrisim initiated by the theoretical synthesis of J. A. Hobson. This is followed by an examination of the post-World War II era, particularly the evolution of development studies and the differing versions of dependency theory.

The author concludes with an analysis of the most recent reactions against economic imperialism and dependency theory, and concludes with an assessment of their implications for the further economic development of today's Third World.

1 Cultural relativism, Eurocentrism and Marx's Asiatic mode of production

Perception of differences and Eurocentrism

Environment and despotism

During most of recorded history, humanity at any one time has been divided into a scattering of high cultures, which competed or warred on their frontiers or when probing the interstices between them by sea or by land, but which mostly kept to themselves in self-complacent if struggle-ridden isolation until the fifteenth century AD, when the overall pattern started to crack under the weight of European expansion. Nevertheless, up to the eighteenth century, Europe could not claim to be more than primus inter pares with a towering but subjective sense of its own superiority. This had changed dramatically by the middle of the nineteenth century: Europe by then could not only back its pretensions to superiority with a string of conquests stretching to the coast of China and the ramparts of Edo: it could and did arrogate to itself the condition of being the civilization par excellence. But for the ages before this happened, intercultural comparabilities seemed to overbear the relative advantages of any individual culture, and this led in the West to the relative prevalence of the perception of cultural differences and to a common general attitude of cultural relativism. It could be said then of hochkulturen in relation to each other that where there are no clear victors, there can hardly be loud boasting.

To explain the perceived differences, there arose in Classical Greece the environmental or climatic hypothesis, which obtained an ample predominance in the West until the advent of naked, self-justifying Eurocentrism, that is, the idea of the exceptionality and absolute superiority of Western civilization. The general environmental hypothesis traces social behaviour patterns and modes of thinking to the physical conditions in which people live, especially climate, soil and geography. A further, subordinate extension of this proposition contemplates the influence of the stars on human behaviour and constitutes the basic principle of astrology, which, however, is a mostly discredited branch of the theory. From this general point of view, the effects of the environment are pervasive: they extend to physical, intellectual and moral qualities, and, through this, affect politics, society and history. Environmental thinking of this sort is both materialistic and fatalistic, for it is grounded on the efficacy of the palpable: given one sort of climate, you obtain certain precise moral qualities, although there exists some ambiguity as to whether climate imprints them indelibly or coaxes them out from people circumstantially.

Again, no human community can escape the impact of its milieu and people are collectively determined by it, yet, for one thing, physical circumstances do not entirely cancel out individual free will, thus making moral judgement possible, and, for another, within the purview of this theory, it is often possible to modify that impact through wise choice in legislating. Although environmental theory stems from the historical occurrence of intercultural contacts and therefore is probably polygenetic, self-perpetuating and self-reinforcing, it is also true that the strands of the theory that classical Greece first spun and wove together have been influential, sometimes decisively, throughout the intellectual history of the West. In the writings of Montesquieu can be found both the most intricately deterministic statement of the environmental hypothesis, involving theorized effects of climate on human physiology (an idea that Montesquieu borrowed from the early eighteenth-century English writer J. Arbuthnot) and its most forthright limitation through the agency of human design, although it is not humanity freely shaping and modelling itself but observing and using the effects of the environment to its own ends. Human beings cannot, in his view, make themselves. They can, however, legislate for their own good against the vices that nature cossets in them.

Perception of differences, however, was in no way incompatible with what for lack of a better designation can be called ‘normal ethnocentricity’ - the collective self-esteem which is part and parcel of every culture - and if the Greeks, despite their vulnerability in face of their neighbouring rivals, never renounced their claims to superiority, it is hardly surprising that this was also a constant parallel theme to perception of differences in Western civilization. In fact, the Western perception of differences emerges over a background cacophony of blasting and blustering only because of the clarity of its timbre and the force of its logic. If the theory of environmental determinism can be said to be the ideal instantiation of pre-nineteenth century Western perceptions of cultural differences and cultural relativism, the concomitant and associated idea of political despotism probably best manifests the tendency towards forthright Western ethnocentricity. It was also Montesquieu who established the classical connection between the two with his speculations on the origins of despotism in the central Asian steppes, a concept so beguiling that the contemporary British economic historian E. L. Jones has made it the core of his own disquisitions on the origins of inter-cultural inequality, but environment and despotism are really independent intellectual strands. The influential testimony on Mughal India by the seventeenth-century French physician and traveller, F. Bernier, correlated despotism and the absence of legal property rights. In The Wealth of Nations (1776), Adam Smith emphasized instead the connection between Asiatic governments and the maintenance of public, specifically hydraulic, works for the benefit of agriculture. By then, all the elements were in place for an enquiry into the origins of the West's economic advance over all the other cultures, once the evidence for this happening had become manifest and indisputable (Table 1.1). But before any serious work on the subject could proceed, the West itself went through a prolonged intellectual phase of hubris and intense self-admiration.¹

Table 1.1 Major Western historical sources for the definition of Oriental despotism.

State property of land	B3, M2
Lack of juridical restraint	Bl, B3, M2
Religious substitution for law	M2
Absence of hereditary nobility	Ml, B2, M2
Servile social equality	M2, H
Isolated village communities	H
Public hydraulic works	S, M2
Torrid climatic environment	M2, M3
Historical immutability	M2, H, M3

Key: Bl = J. Bodin

B2 = Francis Bacon

B3 = F. Bernier

H = Hegel

Ml = Machiavelli

M2 = Montesquieu

M3 = J. Mill

S = Adam Smith

Source: P. Anderson, The Lineages of the Absolutist State, London 1974 (p. 472).

Despite the often explicit but by no means unanimous pre-nineteenth-century Western denunciation of Oriental or Asian despotism as a form of governance, despotism itself did not necessarily connote weakness and, in reality, despotic empires such as the Ottoman were not up for easy grabs by Europe even at the start of the nineteenth century. By then, however, India had succumbed to British power and James Mill's notorious History of British India (1816), in which Indian backwardness is confidently related to the deficiencies of its legal practices, manifested an assertive tone of absolute contempt. The idea that India was afflicted by both lawlessness and despotic excess had been advanced already by Bernier, but in the pen of the British historian this perception is besmirched by vitriol and it stands as a monumental testimony not to its intrinsic scholarly significance but to the historical circumstances in which it was written. What can be said unequivocally is that when Mill wrote on India the world balance of strength had been altered radically in favour of Europe and the case for Eurocentrism was in the way of obtaining a plea of nolo contendere from any rival outlook in the West on non-Western cultures. It is not unfair to say that the change from perception of differences to outright Eurocentrism was gradual, determined by events that seemed to occur in slow motion, but that, if the kernel of Eurocentrism was embedded in the nebulous start of the process, the historical events that gave it definite sanction were probably lagging behind the European perception of its own superiority. By the time of the Opium Wars and probably long before them, the change to the unchallengeable Eurocentric vision had already been accomplished. In Goethe and Hegel, in whom Eurocentrism is perhaps less ordinary and less contemptuous than in Mill, this attitude has the disheartening plangency of a curtailment of reason and yet it was as unavoidable as doom. The eighteenth century consecrated the triumph of Eurocentrism with the accumulated evidence of centuries of European travels, commerce, exploitation and conquest. The nineteenth century added on the inflexion of self-righteousness and disdain. But what exactly is Eurocentrism?

Racism and social Darwinism

The combination of Western ethnocentricity and Western material advantages over other cultures - expressed in economic, military, and political terms - engendered the cultural attitude that is known as Eurocentrism. In one sense, Eurocentrism is a circular and self-justifying affirmation of absolute cultural superiority. It has no other foundation than strength and the ‘rights’ of conquest. In another sense, however, it is grounded on two signal intellectual manifestations of nineteenth-century Western thought: racism and social Darwinism, both again founded in part on the evidence of Western progress and Western expansionism, but with at least the semblance of rational justification. In this particular sense, Eurocentrism would qualify as a legitimate theory on the origins of intercultural and international inequalities, if it were not for its implicit proviso that inequality, or some relativistic cultural definition of equality, is simply inconceivable, and where there is nothing to explain there can hardly subsist the need to explain. Finally, and perhaps most significantly over the long-haul, Eurocentrism embodies the universal creed of modernization and material progress. But this perception is something that the world has come to accept as gradually the more invidious aspects of Eurocentrism have fallen by the wayside of history.

Racism offers at least two handholds for analysis, although the subject is admittedly too complex for facile summarization. There is racist thinking, which is a reflexive and patterned way of reacting to ordinary social relations, events and processes. It can be found in association with normal ethnocentricity, and it is probable that there has never existed a culture that has not indulged in racist thinking of one form or another. Western racial thinking, which derived a great deal of its strength and influence from slavery and slave trafficking, spread on the back of Western world hegemony and Western conquest, and thus became a force that far transcended the bounds of Western civilization. Racial thought and racial discrimination in the West - excluding, of course, certain notorious and isolated instances - no longer count with legal or overt social sanctions, and although by no stretch of the imagination can they be said to have disappeared, at least they are no longer as respectable as they once were. Doctrinaire racism, which for the sake of brevity can be identified with pseudo-scientific theories and world-historical interpretations that flourished in the nineteenth century and survived in etiolated or aberrant forms into the twentieth century, crumbled from the lack of solid scientific foundations and from the revulsion of humankind at the excesses that it nurtured and fostered.

Social Darwinism was perhaps marginally less intellectually invi-able than racism, although the indefeasible symbiosis between them virtually assured that it could not prosper or even subsist without racism. To put it in a nutshell, and as G. Lichtheim expressed it, social Darwinism is the proposition that the weak deserve their fate. It is founded on the ideas of the pervasiveness of struggle and of the survival of the best and fittest. It was a going proposition before the irruption of Darwin's biological theories, but it gained considerable momentum from them, principally from their adaptation to social theory by Herbert Spencer although not insignificantly from Darwin's own speculations on the ancestry of humanity. Social Darwinism developed two distinct branches: a social branch, which had a conservative tinge and became very influential with the elaboration of the theory of eugenics by F. Galton and K. Pearson, and an international branch, which was almost spontaneously incorporated into imperialist theory and doctrine. In considering the relevance of racism and social Darwinism to Eurocentrism, it is not inaccurate or unreasonable to posit that if racism was the invariant motif throughout the nineteenth century in all manifestations involving intercultural and international relations, then social Darwinism provided the intellectual mechanics or dialectics whereby racism was employed to proclaim Western superiority. Unlike racism, which had a deep anchorage in cultural prejudice, not to speak of human psychology, social Darwinism died an almost instant death in the indecisive and self-destructive carnage of the First World War.²

As can be gathered from our reference to James Mill, the prevalence of Eurocentrism concurrent with Western world hegemony did not signal the demise of the theories that had been used in more relativistic times to explain cultural differences, but there were important changes. What in Montesquieu and many other authors had been a theory on environmental influence in a nineteenth-century writer and traveller such as E. W. Lane, had become an intellectual reflex to categorize backwardness. The consciousness of the inferiority of non-Western cultures was just as automatic a response, and it overshadowed the importance of environment as a cultural determinant. The superiority of Western civilization, which was considered to be the result of more than sheer materialism, stood out so clearly that mere climate could hardly explain it; and when the environment did come up as a significant part of theory, it had a very definite discriminatory rather than explanatory function.³ Apart from its inherent inconsistencies and logical failures, which were there, of course, before the nineteenth century, climatic theory ultimately had reached the end of its useful life in a predominantly Eurocentric context. It sounded superfluous when speculations revolved around the loci of race and social Darwinism, mission civilisatrice and manifest destiny. However, the environmental hypothesis was too powerful to disappear altogether, and come back it did before long. It returned in a challenge/response version in a world historical context, rather than in the vague geographic mould it was cast into formerly owing to the limited scope of knowledge. And especially it returned in the developmentalist post-1945 awareness that unequal economic development had somehow to do with the differences between the torrid and the temperate latitudes.

The qualification of inferiority implied in the concept of Asiatic despotism did not necessarily indicate hopeless or eternal stagnation, and it was in this spirit that John Stuart Mill wrote in 1859 that despotism was a justifiable form of governance if in the end it dragged a society out of barbarism. This was consistent with the interpretation that his father, James Mill, put on Indian history and society, and it was part of the utilitarian programme for the reformation and progress of India. It was on a vision of despotism not unlike this one that Karl Marx and Friedrich Engels founded their theoretical explanation of non-Western economic backwardness, which was the most rational and fecund nineteenth-century elaboration of this type. Although imbued with an outspokenly Eurocentric outlook, Marx and Eng...

Table of contents

• Front Cover
• Half Title
• Title Page
• Copyright
• Title Page
• Copyright
• Contents
• List of abbreviations
• List of tables
• Introduction
• 1 Cultural relativism, Eurocentrism and Marx’s Asiatic mode of production
• 2 The anti-imperialist reaction and the Marxist pre-emption of economic-imperialism theory
• 3 Policies and politics in the struggle for the Third World
• 4 The Marxist response to Western developmentalism
• 5 The overthrow of the orthodoxies and the progress of the West
• Conclusions
• Notes
• Further Reading
• Index