Volume 43, Number 171,
October-December 2012
Theories of Capitalist Development.
A Comparative Evaluation
Ignacio Trucco

Between Growth Modeling and the Traditional/Modern Society Duality

After the end of the Second World War, the capitalist world organization projected newly imagined ideas born from the protection of the Keynesian-Welfare State, Fordist production, mass consumption and the corporate structuring of certain basic socialization principles particularly centered on salary relations (Jessop, 2008: 67-74). In this social-historical context, economic theory developed in central countries tried to rationalize these processes to present logically articulated universal principles lacking any concrete historical specificity. The reference model with a specific incident was the one developed by Harrod and Domar, which, after defining the determinants of per capita product growth, tries to find the savings rate that would stabilize the model on a growth path where predictions match results and the effective product matches the potential.3 Although this is redundant for an essentially unstable model, it sets the reading criteria for a self-regulated society that “develops” based on the accumulation of physical capital, once the technical determinations that convert the increase in physical capital into an increase in the product have been specified.

But the model’s key hypothesis (and probably the strongest hypothesis) is not in the product per capita growth determinants, but rather, more than anything else, in the type of society assumed to be compatible with this social dynamic: a society based on de-centralized decisions with individuals determining consumption, savings and investment under rationality defined by the organized action with goals for which, necessarily, there is no other principle ordering behavior in the process of capital accumulation.

These determinations allow us to conceptualize a system of individual self-regulated decisions whose aggregate behavior, neither conscious nor deliberate, provide certain regularities that can be presented as laws of movement.

This non-explicit supposition is what starts to generate resistance between the theorists that observe how peripheral societies do not respond easily to these demands. Hans Singer explicitly rejects this pretense as a doubtful operation, at the least: “This was a direct application of the ideas developed in industrial countries, by industrial countries, for industrial countries and based on concepts only applicable in industrial countries” (Singer, 1981: 48-49).

In a certain sense, the problem of capitalist development in the Harrod-Domar model is already resolved before beginning to study it. Singer makes clear the investment that this approach supposes and pays attention to the exogeneity of the population growth rate. However, assuming this exogeneity is to put on the outside what should be born from within the system of arguments. In this sense, Singer writes that:

The real problem of long-term development undoubtedly consists of creating equal opportunities for the current generation of children, feed, clothe, house, educate and train them in such a way that they become more efficient producers than their predecessors. That is the process of economic development in a sense that is much more important than the process of physical capital formation (Singer, 1981a: 53-54).

The problem highlighted here is not exactly a normative problem. On the contrary, the growth models inexplicitly make an ontological bet on the type of existing society, where a specific nature of man is assumed and (if it is not resolved, at least) delimits the moral human problem in production and reproduction of its material life. As such, capitalist accumulation with all of its determination on man and society ends up as a supposition for the orthodox theory approach.

Walt Whitman Rostow is a figure that appears in a controversial, ambiguous and more than anything, contradictory place. He tends to simultaneously represent a defense of the hierarchy of the technical change in interpreting social dynamics and at the same time, initiates a complex and wider debate on the nature of capitalist development.

He introduces the notion of product growth and of rational control of technology as its foundation, structuring a historical dynamic. In this way, societies go through successive stages and deploy methods of social organization that make a specific relationship between man and technical scientific knowledge in such a way that the Keynesian growth models finally make sense.

In some cases, Rostow’s ideas have been interpreted as the affirmation of only one possible trajectory, for which all societies in the world confront its contrast. Hirschman, in this sense, understands that Rostow is in a “monoeconomic position” (Hirschman, 1984:23).

But beyond appreciation for Hirschman, Rostow is obligated to transcend the limits of formal language to be able to interpret the historic change. With this, he must arrive at a key moment: the process by which one type of society transforms into another, and as such, the need to define if qualitatively different societies exist or if, on the contrary, there are only quantitative differences. In the literature of Latin America, this will be received as the dualism of “traditional” versus “modern.”

3 To see separate developments of the model in Harrod’s and Domar’s versions, see Galindo and Malgesini (1994: 11-27).

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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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