Economic development is undemocratic

BarryDoodles

In the pub the other day and a friend bluntly came up with the notion that Economic development is undemocratic..we discussed this for quite awhile but have not come up with a definitive answer, any views?

ChocolateSauce

They're not mutually exclusive.

Time Magazine

Nonsense.

First, what if it is the will of the people to improve their lot, as it usually is?

Second, economic growth encourages what is usually considered pro-democratic behaviour, such as greater rights for minorities.

brianthebard

Economic development almost always involving someone else losing out. One could go further and say it involves the majority losing out. It involves increasing production, which means a reduction in the value of the worker in order to increase profits. At some stage the system becomes unbalanced; this can be alleviated by revolution, or by granting concessions. Government usually goes with the latter. Baran's Politics of economic growth is a great text on this subject. For a more pared down version of Baran and Sweezy's Monopoly Capitalism read http://www.monthlyreview.org/1004pms2.htm
From this we can expand on the point of undemocratic practises. Since capitalism gravitates towards monopoly it follows that politically a capitalist society also gravitates in that way. Thus we see a monopolisation of the interests in politics (frequently referred to as Big business) and also a monopolisation in the concept of what progress can be, ultimately leading in Fukayama's thesis towards 'the end of history'. What he argues is that global society would gravitate towards one political system, bringing and end to ideological conflict-not very democratic.

DadaKopf

'Economic development' is a term that comes with a lot of baggage. It's one that has been constantly redefined and deployed in the service of various interests.

Moreover, 'economic development' is a narrower conception than 'development', and even that is wide open to interperetation

So, to have any meaningful discussion on this interesting topic, the OP should probably define things a bit more.

BarryDoodles

Yeah a situation of terms is necessary. Guessing held's definition of democracy and economic development..eh..I'm not sure.

I'd argue that economic development is merely a means to pacify the people into acceptance..thats why we see an up shot in liberal voting when things go wrong.

(I’m being brief as its far to late, early? to be thinking
about this)

Time Magazine

brianthebard wrote: »

Economic development almost always involving someone else losing out.

Jaysus. No it doesn't.

One could go further and say it involves the majority losing out.

Lol. Care to back that up?

It involves increasing production, which means a reduction in the value of the worker in order to increase profits.

Pure bollox. Really. Come on.

Since when does increasing production mean a reduction in the value of the worker?

Increased production can be achieved through hiring new staff, previously unemployed; or staff producing more, perhaps after being educated. My marginal product is higher as an economist than when I worked in Spar. So is my wage. Nobody loses out by me being more productive

Finally, profits get spent by whom exactly? Lazy people who don't work?

DadaKopf

I still think the OP should define terms. Otherwise this will turn into one of those annoying threads where everyone speaks at cross-purposes.

SkepticOne

brianthebard wrote: »

It involves increasing production, which means a reduction in the value of the worker in order to increase profits.

I think a lot depends on how we define "value".

brianthebard

The Economist wrote: »

Jaysus. No it doesn't.

Lol. Care to back that up?

You make a statement like the above, but ask me to back mine up? Please. There's no need to be so derogatory just because someone expresses an opinion that doesn't fit with a neat neo liberal idea of capitalism.

Pure bollox. Really. Come on.

Since when does increasing production mean a reduction in the value of the worker?

Increased production can be achieved through hiring new staff, previously unemployed; or staff producing more, perhaps after being educated. My marginal product is higher as an economist than when I worked in Spar. So is my wage. Nobody loses out by me being more productive

Finally, profits get spent by whom exactly? Lazy people who don't work?

If a worker does 10 hours and produces a 1000 "things", and is asked to increase that to 1200 "things" in the same time for the same money, his work is reduced in value. Read estranged labour. Duh.

I noticed that you quoted all of three lines in my post, should I assume you agree with the rest of it? Or did you just decide that since you couldn't argue against them you would stick your tongue out at my viewpoint because it differs from your own?

Time Magazine

brianthebard wrote: »

You make a statement like the above, but ask me to back mine up?

I backed mine up with my personal analogy. Your assertion is far less reasonable and you have yet to back it up. I can see how your 1200 things story might be considered bad, but I certainly don't see how this generalises to "the majority [losing] out".

Please. There's no need to be so derogatory just because some expresses an opinion that doesn't fit with a neat neo liberal idea of capitalism.

Let's play the assume economists are neo-liberal gane \o/

I agree that there's no need to be so derogatory just because it's not in line with neo-liberalism. That's not why I'm dismissing it so bluntly. I'm dismissing it because it's as outlandish as the neo-liberalism's claim that all economic growth (as distinct from economic development) is unambiguously positive. Which, to be fair, is not even a claim many neo-liberals make.

If a worker does 10 hours and produces a 1000 "things", and is asked to increase that to 1200 "things" in the same time for the same money, his work is reduced in value. Read estranged labour. Duh.

I disagree. I think he is increasing his value. Consumers (also known as workers) now have 200 more of these things to consume, so society is better off. The price of this will fall.

As long as we're not talking about him sweating to the death, but rather him being more efficient (which is both more realistic and more along (think of Dublin Bus drivers' efficiency levels...) the lines of economic development) then it's a pretty unambiguous increase in productivity rather than anything definitively bad.

If he's now producing 1200 rather than 1000, and not getting a higher wage, he's in a bad bargaining position. However this isn't a negative-sum game in general equilibrium. If everyone in the economy moved from 1000 to 1200 without an increase in wages, the increased quantities in the economy would lower prices to act as increase in (nominal wages / prices), which is the same thing as increasing wages. I want to know why you think this is a bad thing.

If the economy is producing more, more will be consumed. If an uneven share of this consumption is being taken by the higher-ups, that's an issue for the tax system, not economic development per se.

I noticed that you quoted all of three lines in my post, should I assume you agree with the rest of it? Or did you just decide that since you couldn't argue against them you would stick your tongue out at my viewpoint because it differs from your own?

I didn't quote past "From this.." because I completely disagreed with your basis.

nesf

brianthebard wrote: »

Economic development almost always involving someone else losing out.

If and only if it is a zero sum game, which it is not if you factor in our ability to innovate and develop newer and better ways to do things. Economic development can be as simple as some new technology meaning we can now produce some object or service in a day with two people where it used to need three people. Not all economic development, or more accurately economic growth, is implicitly positive but much of it is.

Sure the rich get richer etc but what of it if the median person's quality of life improves? Ditto with the poorest and so on.

EamonnKeane

BarryDoodles wrote: »

Yeah a situation of terms is necessary. Guessing held's definition of democracy and economic development..eh..I'm not sure.

I'd argue that economic development is merely a means to pacify the people into acceptance..thats why we see an up shot in liberal voting when things go wrong.

(I’m being brief as its far to late, early? to be thinking
about this)

By improving their lives? Those dastardly capitalists! Is there nothing they won't stoop to?

,8,1

Democracy is a lie.

Time Magazine

nesf wrote: »

If and only if it is a zero sum game

He goes further; beyond the Mercantalist zero-sum game, to claim that it's negative-sum.

brianthebard

nesf wrote: »

Sure the rich get richer etc but what of it if the median person's quality of life improves? Ditto with the poorest and so on.

How are you measuring improvement? this shows that in many cases over the last decade or so wages in the US slowed or even fell in real terms.
So despite an upturn job the poorest people's quality of life continued to deteriorate.

The following charts and tables show precisely this phenomenon at work in the current U.S. economy. The jobless recovery has persisted long enough to dampen wage growth, and in some cases, wages are even falling in real terms, eroding living standards for some working families despite the fact that they have maintained their employment.

nesf

brianthebard wrote: »

How are you measuring improvement? this shows that in many cases over the last decade or so wages in the US slowed or even fell in real terms.
So despite an upturn job the poorest people's quality of life continued to deteriorate.

Eh, in all but one year in those tables real wages increased (the exception being 2003). A few points on this, first what matters isn't the short term trend but the medium to long term trend. Real wages decreasing in a year is very different when the other nine years in the decade saw increases versus only five other years seeing increases. US real wages just cannot increase that quickly at the moment.

Second, we would expect to see smaller real wage increases in the US, where GDP per head is extremely high than in countries which are playing catch up. Essentially the potential for economic development is much higher in somewhere like India than it is the US next year because of their relative starting points. It doesn't mean that India will catch up or have a good next year (which is dependent on a whole host of separate factors) but the potential is there.

Thirdly, when we talk about the great good that economic development can do, we are really talking about how it can lift nations out of poverty and closer to the richer countries. The scope for improvement is there with richer countries but it is much smaller. The simple reason for this is because of technological differences in rich and poor countries and the low productivity techniques that are used in poorer countries. The scope for improvement in the richest countries is far far less simply because of the existent highest quality technologies there probably isn't much they aren't already using, in fact in many places they're using technologies centuries behind what is used in the West and the more developed parts of Asia. We are faced with a fundamentally different question when it comes to economic development in the richest countries than in the poorest ones.

Fourthly, no serious person except for those on the extreme right believe that only economic development is needed. Economic development won't automatically fix other social problems such as inequality in legal rights, though such social problems can and do slow economic development, especially where property rights are not equal. Economic development is essentially agnostic on a lot of very important issues. There is nothing implicit in the market that forces people to screw each other over, that is an unfortunate aspect of humanity that we need to deal with separately through regulation and employee rights etc.

brianthebard

Its not just the past few years though, real wages have been static or decreasing since the Fifties. I'll try and find something to back that up in a minute.
As for economic underdevelopment in the third world, its not simply a problem with technology. Its a complex situation involving monopoly capitalism and capital accumulation away from the poor countries into the rich countries. They can't develop while their potential economic surplus is being siphoned off to reward companies in the west. Here is an article, it can't really be condensed much more. http://www.monthlyreview.org/1004pms2.htm
Also when we look at the economic development of China, unprecedented growth, we see that the majority are not benefiting from this growth. The majority are living on a few dollars a day, there are millions of acres eroding and becoming desert, but it is held up as an example of wonderful modernisation and the tiny bourgeoisie that exists there are an example of an increase in the standard of living that development brings. This is exactly what I meant when I said the majority are losing out.

nesf

brianthebard wrote: »

Its not just the past few years though, real wages have been static or decreasing since the Fifties. I'll try and find something to back that up in a minute.
As for economic underdevelopment in the third world, its not simply a problem with technology. Its a complex situation involving monopoly capitalism and capital accumulation away from the poor countries into the rich countries. They can't develop while their potential economic surplus is being siphoned off to reward companies in the west. Here is an article, it can't really be condensed much more. http://www.monthlyreview.org/1004pms2.htm
Also when we look at the economic development of China, unprecedented growth, we see that the majority are not benefiting from this growth. The majority are living on a few dollars a day, there are millions of acres eroding and becoming desert, but it is held up as an example of wonderful modernisation and the tiny bourgeoisie that exists there are an example of an increase in the standard of living that development brings. This is exactly what I meant when I said the majority are losing out.

Like I said, economic development is only one factor in a multi-faceted problem that needs solving. The situation in China is a joke, especially for the rural population precisely because they have little to no property rights and mini-oligarchs control land ownership. Economic growth isn't going to help most of the people if their basic rights are not there. The thing is economic development on its own won't solve all the problems, it needs to be combined with other kinds of reforms to ensure the poor aren't getting poorer.


There is also a problem at looking at only real wages because of the cheapening of technology. Inflation measures don't capture improvement in the quality of goods which is a major issue with it when looking at long term trends. It also can't capture factors like greater selections of goods, which might seem trivial at first glance but it can have huge effects quality of life when combined with improvements in the quality of goods. Unfortunately while real wages are a good measure because it is easily measured and fairly unambiguous, it will only have a rough correlation with more ephemeral things like quality of life.