Volume 44, Number 173,
April-June 2013
The Importance of Suitable Ideas
on Development and Globalization
Aldo Ferrer
NATIONAL DENSITY

Some of these conditions include the integration of society, leadership with power accumulation strategies based on dominating and mobilizing the resources available in the national space, institutional stability and a long-term policy, the existence of critical thought not subordinated to the criteria of the hegemonic centers of the world order and, consequently, economic policies that generate opportunities for large social sectors, protecting national interests and able to arbitrate distributional conflicts to ensure macroeconomic balance

. In successful cases, the totality or majority of the population participated in the transformation process and growth and distribution of the results. These countries did not have deep societal fractures based on ethnic or religious causes, nor did they have extreme differences in the distribution of wealth and income. In all cases, the majority of their populations participated in the opportunities opened by development.

Successful countries had social and business leaders that developed and broadened their power of accumulation founded on savings and natural resources and the preservation of power over exploitation of natural resources and the primary chains of aggregate value. The dynamic nuclei of development in each stage were reserved for national companies or subject to regulatory frameworks that integrated the subsidiaries of foreign firms into the process of endogenous development. Leaders promoted non-subordinate relations between their countries and the rest of the world, and in the case of those countries that became great powers, dominant relations.

In all cases considered, rules of the political-institutional game that were able to overcome the inherent conflicts of a society for growth and transformation prevailed. Under different political organization regimes, republic or monarchy, federal or unitary, the exercise of power was supported by an acceptance of the rules of the game by all social and political actors involved. An interruption in domestic peace due to internal conflicts (such as the North American Civil War, German unification under the Second Reich and the elimination of the shogunato in Japan during the Meiji Restoration) or military defeat and foreign occupation (as in the case of Germany in the two world wars of the twentieth century or of Japan in the second) were transitory events followed by stability in the institutional political systems and national territories of these countries. In successful countries, there was a predominant sense of belonging in society and shared destiny.

The diverse planes of national density are intimately related. Social integration contributed to form leaders that accumulated power within the national space, maintaining control over principal activities and incorporating the majority of society into the development process. Likewise, the participation of society in these new opportunities made possible political and institutional stability, which guaranteed property rights and the adhesion of the dominant social groups to the rules of the political and institutional game.

These endogenous and necessary conditions for development were accompanied by other decisive factors. The foundational economic ideas of economic policies in successful countries were never subordinated to the intellectual leadership of more advanced and powerful countries. Rather, they always responded to visions centered on the behavior of the international system and national development. When they accepted theories conceived in center countries, they did so by adjusting them to their own interests. These were functional visions and approaches for the implementation of accumulation processes in the broader sense, founded in the mobilization of available resources. They conceived of foreign companies and loans as subsidiaries in the accumulation process, based on the preservation of power of the most profitable activities and the major source of broadening the productive capacity.

The State was an essential instrument to put into practice ideas of national development and a sovereign link to the external context. According to the individual circumstances of each case and each time period, the State intervened where useful, but rarely more than necessary, in order to regulate markets, open or close the economy and drive the activities considered as priority, oriented towards internal credit and many other paths. The State was a key player with varying degrees of linkage to the private sector, depending on the case, in developing national science and technological systems to promote innovation and the incorporation of imported knowledge in the national space. The growing complexity of economic activity broadened and diversified the demand for technology, which was met in large measure by their own supply of complex goods and knowledge. Higher levels of education and the promotion of science and technology were important objectives for public action in successful countries, while their development multiplied the incentives for the private sector to develop their own activities and research and development.

The convergence of these endogenous and necessary conditions consolidated property rights, providing ever-higher levels of profitability, and reducing transaction costs for private operators to facilitate activities. It likewise maintained a long-term macroeconomic balance, including the budget, the balance of payments, currency and price stability. Even when countries went off track, such as the extreme case of German hyperinflation in the 1920s, these instances were temporary. In no case were systemic imbalances established, such as an exaggerated level of long-term external debt.

Globalization is putting the national density of countries to the test. Currently, the intensity of globalizing forces is increasing and the rules of the game designed by central countries are gaining strength. At the same time, the opportunities are multiplying and new spaces are opening up for economic development, even in lagging countries. The quality of responses to the challenges and opportunities of globalization will be even more decisive than in the past to determine success or failure. These responses will continue to depend primarily on the international and endogenous conditions of each country in critical aspects such as social integration, the behavior of leadership and the stability of the political and institutional framework.

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Published in Mexico, 2012-2018 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 194 July-September 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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