Volume 43, Number 168,
January-March 2012
Back to Development
Jaime Ornelas
THE KEYNESIAN APPROACH ( ...continuation )

Under these premises, Nicolas Kaldor, who represents post-Keynesian thinking, states in his book Essays on Economic Development that the aim of his analysis of growth theory is "to show how it may be used for defining principals that serve to guide economic policy for accelerated development" (Kaldor, 1961:12).

In his book, Kaldor emphasizes the idea of economic policy stimulating growth, placing doubt upon the capacity of the market to stimulate growth and proposing certain principles, also identified with growth, to direct the intervention of the State in the process of economic development.

Kaldor’s ideas, which highlight the significance of industry in economic development, are expressed as three "principles." (1) "There is an important relationship between the growth rates of gdp and the production of manufactured goods." (2) "The growth of productivity in the manufacturing sector is positively related to the growth of production in this sector" and (3) Among the reasons for differences in the growth rates of manufactured goods, supply and demand plays an important part: consumption, investment and manufactured exports (Galindo and Malgesini, 1994: 60).

In this way, industrialization, particularly for Kaldor, but also for all the Keynesian economists, was seen as the quickest way to resolve the problem of growth and employment, that is to say, of achieving development by overcoming poverty and diminishing social inequality.

In any case, Keynes and the Keynesians showed that the only "natural" path to growth was through development, that is, growth and the expansion of capitalism sustained by ISI, a strategy that was also shared at the time by the Economic Commission for Latin America and the Caribbean (eclac). 5

Finally, both the neoclassical and Keynesian ideas for achieving development, in emphasizing the move from a backward, traditional or feudal society with low levels of consumption, towards a modern, developed and capitalist society of mass consumption, assumed that the problems that must be resolved stemmed from the periphery countries, and consequently focused their analysis on the obstacles to development observed from within underdeveloped countries, ignoring one of the determining factors in the productive structure of development: the dependency on the external sector as a source of inequality and backwardness.

Thus development theories of metropolitan countries prevailing at this time were limited to describing the move from a backward society to a developed one, and the removal of obstacles that emerged in backward societies as an impediment to their own development, without considering those issues derived from dependency.


It can be concluded from the analysis undertaken on metropolitan ideas for development, that this idea was devised according to the views and needs of central countries. They proposed that underdeveloped nations focus their efforts on attaining the way of life, such as the social-economic organization, of developed countries. This is the only possible way to overcome underdevelopment given the differences in economic indicators that exist between periphery countries and those at the center. In this way, the quantitative registers of developed nations became a measure of the good and the bad, or development and underdevelopment.

Those from developed countries who analyzed the reality of underdevelopment and proposed the means of leaving it behind, agreed that if the highest levels of growth and the best life styles were to be found in the United States and Canada and likewise in central and north western European countries, this was because their culture was superior to that of underdeveloped countries. As a consequence, while western culture represented development, the rest of the world remained underdeveloped.

In this way it was understood that economic growth for development depended to a great extent on the attitudes assumed by society in respect of "work, wealth, savings, procreation, intervention, foreigners, adventure etc. etc." attitudes derived from "profound sources of the human mind" (Lewis, [1955] 1963: 14).

Underdevelopment was a kind of negative mental attitude to factors that in the United States and Europe were the ingredients of development. For this reason many studies on development tried to explain the reasons why these attitudes hampered growth, coming to the conclusion that the incompatibility between central nations and those on the periphery depended on "differences in the natural environment, climate and race" or on the lack of technology or on institutions that slowed development. In this respect, Arthur Lewis writes:

5 According to Ruy Mauro Marini, "The view of industrialization as a substitute for imports is a basic element in development ideology, of which eclac was a follower. The classic work in this area is that of María da Concepción Tavares, about industrialization in Brazil, published in March 1964" (Marini, 1973/1977: 55, num. 33).

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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 195 October-December 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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