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UBC Theses and Dissertations

Myrdal, the state and political development Winterford , David B. 1972

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MYRDAL, THE STATE AND POLITICAL DEVELOPMENT by DAVID B. WINTERFORD B.A.(Honours), University of Alberta, 1971 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS in the Department of P o l i t i c a l Science We accept t h i s thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA September, 1972 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the Head of my Department or by his representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of P o l i t i c a l Science The University of British Columbia Vancouver 8, Canada Date September, 1972 ABSTRACT A d i s c u s s i o n and a n a l y s i s i s o f f e r e d o f Gunnar M y r d a l ' s c o n t r i b u t i o n s t o t h e t h e o r y o f p o l i t i c a l d e v e l o p m e n t . A t t e n t i o n i s f o c u s s e d on h i s c o n c e p t i o n o f t h e r o l e o f t h e s t a t e as an agent o f d e v e l o p m e n t . The p a p e r i s d i v i d e d i n t o two p a r t s . P a r t I i s c o n c e r n e d w i t h t h e d e v e l o p m e n t o f t h e s t a t e i n t h e a d v a n c e d w e l f a r e d e m o c r a c i e s o f t h e W e s t . We f i n d t h a t t h i s d e v e l o p m e n t b o t h a f f e c t s and i s a f f e c t e d by t h e emergence o f an o r g a n i z e d i n s t i t u t i o n a l i n f r a s t r u c t u r e . We d i s c u s s t h e p o l i t i c a l d e v e l o p m e n t o f t h e West - - t h e d e v e l o p m e n t o f a s t r o n g , c a p a b l e , and e f f e c t i v e s t a t e - - i n t e r m s o f t h e l i b e r a l i n t e r l u d e , t h e o r g a n i z a t i o n o f m a r k e t s , t h e s p r e a d o f e q u a l i t y and t h e emergence o f t h e " w e l f a r e s t a t e " as an " o r g a n i z a t i o n a l s t a t e . " We f i n d t h a t M y r d a l s e r i o u s l y u n d e r e s t i m a t e s t h e c r i t i c a l r e q u i s i t e s f o r an e f f e c t i v e y e t d e m o c r a t i c " o r g a n i z a t i o n a l s t a t e . " P a r t I I d i s c u s s e s M y r d a l ' s a p p l i c a t i o n o f h i s m o d e l o f d e v e l o p m e n t t o t h e u n d e r d e v e l o p e d w o r l d . Here we f i n d t h a t M y r d a l i s i d e o l o g i c a l l y c o m p a t i b l e w i t h t h o s e e l i t e s who s t i p u l a t e t h a t t h e s t a t e must be t h e m a i n agent o f d e v e l o p m e n t . Y e t t h r o u g h a d i s c u s s i o n o f t h e " m o d e r n i z a t i o n i d e a l s " o f s o c i a l i s m , p o l i t i c a l democracy and s t a t e p l a n n i n g as w e l l as t h e e x i g e n c i e s o f c o r r u p t i o n and p e r s o n a l i n s e c u r i t y we do n o t f i n d an o r g a n i z e d i n s t i t u t i o n a l i n f r a s t r u c t u r e u n d e r p i n n i n g t h e s t r o n g , c a p a b l e , and e f f e c t i v e s t a t e . R a t h e r we f i n d t h e " s o f t - s t a t e . " F o r what we c h a r a c t e r i z e as r a t i o n a l p o l i t i c a l r e a s o n s t h e " s o f t - s t a t e " i s m a r k e d by l o w c i t i z e n o b e d i e n c e and few o b l i g a t i o n s p l a c e d on t h e c i t i z e n s by t h e p o l i t i c a l l e a d e r s . We argue t h a t t h i s i s i n t i m a t e l y r e l a t e d t o t h e low d e g r e e o f e q u a l i t y between i n d i v i d u a l s and g r o u p s . I n f a c t , s i n c e so many r e c e i v e so l i t t l e f r o m t h e o u t p u t s o f s t a t e a c t i v i t y , t h e s t a t e i s u n a b l e t o e n f o r c e a n e t w o r k o f c i t i z e n o b l i g a t i o n s . We f i n d t h a t t h e " s o f t - s t a t e " i s c h a r a c t e r i z e d b y t t w o t h i n g s : a m b i v a l e n c e among t h e e l i t e s ; a n d , s t a b i l i t y o f t h e s y s t e m . Y e t t h i s s t a b i l i t y i s a s t a b i l i t y o f s t a g n a t i o n n o t d e v e l o p -ment . On t h e b a s i s o f M y r d a l ' s d i s c u s s i o n o f t h e a g r i c u l t u r a l s e c t o r we s u g g e s t t h a t t h e o n l y way t h e " s o f t - s t a t e " w i l l be h a r d e n e d i n t o a more c a p a b l e s t a t e i s t h r o u g h a s e l e c t i v e r e t r e n c h m e n t o f s t a t e a c t i v i t i e s . I t w o u l d a p p e a r t h a t t h e u n d e r d e v e l o p e d w o r l d w o u l d p r o f i t f r o m a l i b e r a l i n t e r l u d e o f r e d u c e d s t a t e a c t i v i t i e s . M o r e o v e r , by g i v i n g encouragement t o t h o s e g r o u p s i n s o c i e t y who a r e l e s s bound by c o n v e n t i o n and who do n o t have a v e s t e d i n t e r e s t i n t h e s t a t u s q u o , ( e . g . t h e p r o g r e s s i v e a g r i c u l t u r a l i s t s ) , i t may be p o s s i b l e t o s e c u r e p o l i t i c a l d e v e l o p m e n t , t h a t i s , t h e d e v e l o p m e n t o f an o r g a n i z e d i n s t i t u t i o n a l i n f r a s t r u c t u r e , m a k i n g f o r a s t r o n g , c a p a b l e , and e f f e c t i v e s t a t e . TABLE OF CONTENTS Section A. INTRODUCTION 1 PART I. DEVELOPMENT OF THE STATE IN THE WEST B. A BRIEF OVERVIEW: "THE OPPRESSOR STATE" . . . . . . C. ORIGINS OF STATE PLANNING . . 10 D. EXTERNAL FORCES AND THEIR EFFECTS ON STATE PLANNING 14 E. INTERNAL FORCES AND THEIR EFFECTS ON STATE PLANNING 15 F. THE "ORGANIZATIONAL STATE" ... . ; 21 G. PLANNING RE-VISITED 28 H. AN EVALUATION OF THE ORGANIZATIONAL STATE 32 I. NATIONAL INTEGRATION -- INTERNATIONAL DISINTEGRATION 42 PART II. THE ROLE OF THE STATE IN UNDERDEVELOPED COUNTRIES J. AN OVERVIEW . . . . . . . . . . . . . . . 55 K. NATIONAL INTEGRATION IN THE UNDERDEVELOPED COUNTRIES 60 L. THE STATE AS THE MAIN AGENT FOR DEVELOPMENT . . . . 65 MM THE ROLE OF THE STATE: THE MODERNIZATION IDEAL OF SOCIALISM 72 N. THE ROLE OF THE STATE: THE MODERNIZATION IDEAL OF POLITICAL DEMOCRACY . . 7 4 0. THE ROLE OF THE STATE: THE MODERNIZATION IDEAL OF PLANNING . . . . . . . . 7 5 i i P. MYRDAL RE-VISITED: THE REQUIREMENTS OF STATE PLANNING 79 Q. THE INTELLECTUALS AND PLANNERS RE-VISITED: THE MEANING OF "DEMOCRATIC PLANNING" 83 R. POLITICAL DECAY: THE BS0FT-STATE" . . 89 S. INDIA AS A "SOFT-STATE" 93 T. THE "SOFT-STATE" AS A CORRUPT STATE 99 U. PLAN CONTROLS IN THE "SOFT-STATE" 104 V. AGRICULTURAL POLICY IN INDIA . . 108 W. CONCLUSION 115 BIBLIOGRAPHY 121 i i i A. INTRODUCTION National e l i t e s i n the underdeveloped world charge the state with immense r e s p o n s i b i l i t i e s i n securing development. These r e s p o n s i b i l i t i e s are generally grouped under the "modernization ideals"^- and include such various and sometimes c o n f l i c t i n g elements as: development and planning for development; r a i s i n g productivity; r a i s i n g the standards of l i v i n g of the masses; achieving s o c i a l and economic equalization; improving or changing i n s t i t u t i o n s and attitudes; consolidating the nation-state; ef f e c t i n g p o l i t i c a l democracy even i f in a "guided" or narrow sense; mobilizing the masses through democracy at the grass-roots; and ef f e c t i n g development (generally a move towards a welfare-state) by state p o l i c i e s decided through "democratic planning." Individually a l l of these elements i n the moderniz-ation ideals could be the subject for intensive research and analysis. Here we w i l l merely offer general comments and perhaps a few suggestions as to how some of these ideals could be effectuated. In thi s respect, under closer scrutiny a l l the elements in the modernization.ideals share two things i n common: f i r s t , they are concerned with equality i n p o l i t i c a l , s o c i a l , and economic r e l a t i o n s ; 1 For a further discussion of the modernization id e a l s , see Gunnar Myrdal, Asian Drama, I (New York: The Twentieth Century Fund, 1968) pp. 57-69. page 2 second, they involve the state as a conscious planning agent for development. Both of these facets of development have occupied a central p osition i n the writings of Gunnar Myrdal. Myrdal, a native of Sweden, has served as professor of economics at various u n i v e r s i t i e s , as a cabinet minister i n the S o c i a l -Democratic government of Sweden and as head of the United Nations Economic Commission for Europe. As such, he has written quite extensively on both the Western world and the underdeveloped countries. With respect to the former, Myrdal has been concerned with the development and perfection of the welfare state. With respect to the l a t t e r , his attention has been directed toward the means for achieving the welfare state i n the underdeveloped world. The great moral p r i n c i p l e that has guided his research i s that a l l human beings have equal rights and that equalization of t h e i r l i v i n g and working conditions i s a supreme ideal and should be the exclusive r e s u l t of state a c t i v i t y . For Myrdal, the u n i v e r s a l i t y and timelessness of th i s equality p r i n c i p l e implies that "on the highest l e v e l of our valuation sphere, i t i s , i n f a c t , a moral ambition of a l l mankind. It i s a l i v i n g ideal and, as such, part of s o c i a l r e a l i t y : a valuation actually perceived by people to be morally r i g h t . " 2 2 Gunnar Myrdal, Ob j e c t i v i t y i n Social Research (New York: Pantheon, 1969), pp. 88-89. page 3 The i n s t i t u t i o n s that make up a society however, can either frustrate or enhance the operation of the equality i d e a l " People . . . obey dif f e r e n t moral valuations on d i f f e r e n t planes of l i f e . In t h e i r i n s t i t u t i o n s they have invested more than t h e i r everyday ideas which p a r a l l e l e d t h e i r actual behavior. They have placed i n them t h e i r ideals of how the world r i g h t l y ought to be. The ideals thereby gain f o r t i f i c a t i o n s of power and influence i n society. . . . Besides t h e i r direct effects on c i t i z e n s ' behavior, l e g i s l a t i o n and administration, always have the i n d i r e c t effects of propagandizing for certain i d e a l s . The same is true of decisions, regulations and declarations of other formal i n s t i t u t i o n s . In adhering to t h e i r i d e a l s , i n s t i t u t i o n s have a p e r t i n a c i t y matched only by t h e i r considerable f l e x i b i l i t y i n l o c a l and temporary accomodat ion.3 In the West, the state has become a chief repository and propagandist for e f f e c t i n g the equality i d e a l . While in Part I we w i l l show that t h i s has not always been the case, nevertheless the r e s u l t of the evolutionary process toward greater equality has been the emergence of the strong state. Moreover, as the state i t s e l f became stronger i t could enact and implement further equalizing measures that culminate i n the emergence of the f u l l democratic welfare state. In the underdeveloped world, however, while the state voices and even enacts e g a l i t a r i a n p o l i c i e s i t i s largely unable to implement them. As we s h a l l see i n Part I I , i n the underdeveloped world there i s not the strong state but the " s o f t - s t a t e . " 4 In the " s o f t - s t a t e " 3 Ibid., p. 37. 4 Myrdal, Asian Drama, II, 895-900, passim, page 4 i n s t i t u t i o n s do n o t enhance t h e s p r e a d o f e q u a l i z a t i o n b u t r a t h e r p e r p e t u a t e t h e s t a t u s quo o f g r o s s i n e q u a l i t y . I n t h i s r e s p e c t t h e e x i g e n c i e s o f government i t s e l f l a r g e l y f r u s t r a t e t h e i m p l e m e n t a t i o n o f e g a l i t a r i a n i d e a l s . As we m e n t i o n e d e a r l i e r , t h e s e c o n d common theme o f t h e m o d e r n i z a t i o n i d e a l s i s t h a t o f s t a t e p l a n n i n g . I n t h e W e s t , s t a t e p l a n n i n g emerged c o n c o m i t a n t w i t h t h e s p r e a d o f t h e e q u a l i t y i d e a l . I n f a c t , i n i t i a l e c o n o m i c p r o g r e s s l a i d t h e b a s i s f o r t h e d e v e l o p m e n t o f i n t e r e s t - g r o u p p o l i t i c s . T h i s , i n t u r n , f u r t h e r enhanced t h e s t r e n g t h o f t h e s t a t e . As we p o i n t out i n P a r t I , p o l i t i c a l d e v e l o p m e n t i n t h e West does i n f a c t mean t h e emergence o f an o r g a n i z e d i n t e r e s t g r o u p i n f r a s t r u c t u r e u n d e r t h e c o n s t i t u t i o n a l f ramework o f t h e s t a t e . I n t h e u n d e r d e v e l o p e d c o u n t r i e s , p l a n n i n g i s a c e n t r a l i d e o l o g y o f t h e a r t i c u l a t e s t r a t a . H o w e v e r , t h e i n t e n t t o p l a n f o r d e v e l o p m e n t i s v o i c e d b e f o r e much e q u a l i t y has been a c h i e v e d and b e f o r e an o r g a n i z a t i o n a l i n f r a s t r u c t u r e has emerged. I n P a r t I I we w i l l d i s c u s s how s t a t e p l a n n i n g , dependent as i t i s on t h e p r i o r p o l i t i c a l d e v e l o p m e n t o f an o r g a n i z a t i o n a l i n f r a s t r u c t u r e , i s h e l d t o be b o t h a means f o r s e c u r i n g e c o n o m i c d e v e l o p m e n t and f o r c r e a t i n g t h e i n s t i t u t i o n a l b a s i s f o r i t s own s u c c e s s . I n b o t h o f t h e s e r e s p e c t s we w i l l f i n d t h a t s t a t e p l a n n i n g has n o t e n j o y e d t h e r e m a r k a b l e s u c c e s s i t has h a d i n t h e a d v a n c e d W e s t e r n c o u n t r i e s . I n b r i e f o v e r v i e w t h e f o l l o w i n g w i l l be d i s c u s s e d page 5 i n t h i s p a p e r : i n P a r t I we a r e c o n c e r n e d w i t h t h e o r i g i n s and meaning o f s t a t e p l a n n i n g ; we w i l l d i s c u s s t h e r e l a t i o n s h i p between p l a n n i n g and e q u a l i t y and how b o t h o f t h e s e i n t u r n a f f e c t t h e c o n s o l i d a t i o n o f t h e n a t i o n - s t a t e . We w i l l d e p i c t i n a more o r l e s s i d e a l manner t h e emergence o f t h e s t r o n g s t a t e and how t h e s t a t e a c t u a l l y d e c i d e s and i m p l e m e n t s i t s p o l i c i e s t h r o u g h t h e o p e r a t i o n o f an i n s t i t u t i o n a l i n f r a s t r u c t u r e . We w i l l a t t h e same t i m e p o i n t out c e r t a i n p r e c a r i o u s f e a t u r e s i n t h e p o l i t i c a l base o f t h e a d v a n c e d w e l f a r e s t a t e t h a t s h o u l d warn us o f any e a s y c o m p l a c e n c y w i t h r e s p e c t t o t h e c o n t i n u a t i o n o f i t s d e m o c r a t i c h e r i t a g e . M o r e o v e r we s h a l l d i s c u s s t h e r a t h e r s t r i n g e n t r e q u i r e m e n t s f o r e f f e c t i v e s t a t e p l a n n i n g , • -r e q u i r e m e n t s w h i c h as we w i l l see i n P a r t I I , a r e n o t b e i n g r e a l i z e d i n t h e u n d e r d e v e l o p e d w o r l d . As a means o f l i n k i n g P a r t I w i t h P a r t I I we s h a l l b r i e f l y d i s c u s s M y r d a l 1 s t h e s i s t h a t t h e i n c r e a s i n g n a t i o n a l i n t e g r a t i o n o f t h e a d v a n c e d W e s t e r n c o u n t r i e s has had t h e u n f a v o r a b l e r e s u l t o f i n t e r n a t i o n a l d i s i n t e g r a t i o n . I n P a r t I I , we w i l l be c o n c e r n e d w i t h t h e t h e o r e t i c a l and a c t u a l o p e r a t i o n o f c e n t r a l s t a t e p l a n n i n g . Our m a i n f o c u s w i l l be t h e e x i g e n c i e s o f t h e " s o f t - s t a t e " and how t h i s i s b o t h a cause and e f f e c t o f g r o s s i n e q u a l i t y , " c o r r u p t i o n " and t h e i n a b i l i t y o f t h e s t a t e t o i m p l e m e n t i t s p o l i c i e s . To p r e v e n t us f r o m e n d i n g on a c o m p l e t e l y p e s s i m i s t i c n o t e w i t h r e s p e c t t o t h e l i k e l i h o o d o f t h e u n d e r d e v e l o p e d c o u n t r i e s e v e r a c h i e v i n g t h e momentum f o r page 6 d e v e l o p m e n t , we w i l l b r i e f l y d i g r e s s i n t o t h e a r e a o f l a n d r e f o r m . What M y r d a l has t o say w i t h r e s p e c t t o l a n d r e f o r m f u r n i s h e s us w i t h b o t h a r e s t r a i n e d o p t i m i s m , and a c o n c l u d i n g p l e a f o r a r e - d i r e c t i o n o f o u r t h i n k i n g on t h e r o l e o f t h e s t a t e i n p o l i t i c a l and e c o n o m i c d e v e l o p m e n t . page 7 PART I DEVELOPMENT OF THE STATE I N THE WEST B. A BRIEF OVERVIEW: THE OPPRESSOR STATE P r i o r t o t h e l i b e r a l i n t e r l u d e , t h e t r a d i t i o n a l r o l e o f t h e s t a t e was t o s e r v e as a f o c u s f o r t h e s o c i a l and e c o n o m i c p r o c e s s e s t h a t s u s t a i n e d i n e q u a l i t y . The e c o n o m i c a l l y a d v a n c i n g and w e a l t h i e r r e g i o n s and s o c i a l g r o u p s were more a c t i v e and e f f e c t i v e i n o r g a n i z i n g t h e i r i n t e r e s t s w h i l e t h e y u s u a l l y h a d t h e r e s o u r c e s t o p r e v e n t t h e o r g a n i z a t i o n a l e f f o r t s o f o t h e r s . Because o f t h i s , t h e s t a t e r e m a i n e d a means f o r a d v a n c i n g t h e . . . i n t e r e s t s o f t h e u p p e r c l a s s e s . G i v e n t h e h i g h m o r a l v a l u e t h a t M y r d a l p l a c e s on e q u a l i t y i t i s n o t s u r p r i s i n g t h a t he u t t e r l y condemns much o f e a r l y W e s t e r n h i s t o r y : F e u d a l i s m was a huge c o l l u s i o n between t h e r i c h and t h e m i g h t y t o l a y a h o l d on t h e l a n d and s e i z e power t o t a x t h e p e a s a n t s . The c i t i e s e n f o r c e d t h e i r ' p r i v i l e g e s ' upon t h e s u r r o u n d i n g r u r a l r e g i o n s : t h e m e r c h a n t s and i n d u s t r i -a l i s t s i n t h e c i t i e s p r o t e c t e d t h e m s e l v e s a g a i n s t c o m p e t i t i o n f r o m t h e o u t s i d e . I n t h e c i t i e s t h e r i c h e r c l a s s e s p r o t e c t e d t h e m s e l v e s e f f e c t i v e l y a g a i n s t t h e p o o r e r : l a b o r r e g u l a t i o n s , n o t o n l y i n t h e m e r c a n t i l i s t s t a t e b u t much e a r l i e r , were w e i g h t e d a g a i n s t t h e w o r k e r s and t h e i r g e n e r a l p u r p o s e was t o keep down wages and t o keep up t h e s u p p l y o f l a b o r . page 8 [This was] . . . the "oppressor state." Myrdal has nothing favorable to say of feudalism or the "oppressor state." For him, i t s hallmark was not an orderly society with reciprocal oblications between individuals but intolerable inequality. S o c i a l , economic and p o l i t i c a l i n e q u a l i t i e s are "burdens" and " r i g i d i t i e s " that hamper the development of a society and its. culture. This concern with equality should not be taken l i g h t l y for i t underpins much of Myrdal's contribution to the study of p o l i t i c a l development i n both the advanced countries and in the underdeveloped world. For the l a t t e r , the seeming i n t r a c t a b i l i t y of inequality accounts for Myrdal's rather t r a g i c v i s i o n of the state as the major agent for development. In the West, the i n d u s t r i a l revolution saw the breaking up of many of the regulations of the "oppressor state" that protected the r i c h from the poor. But i t did not r e s u l t in greater economic equality. Keeping the l i v i n g standards of the masses low was essential in the pre-democratic, i n d i v i d u a l i s t i c c a p i t a l i s t i c era i f large-scale saving and c a p i t a l formation was to occur. Eventually with population increases and technical advances i n agriculture, the supply of labor became so p l e n t i f u l that depressing wages did not require m e r c a n t i l i s t regulations. Market forces were s u f f i c i e n t . Yet, as our history shows, the poor did r i s e up 5 Gunnar Myrdal, Rich Lands and Poor [ B r i t i s h e d i t i o n : Economic 'Theory' arid Under-Developed Regions] (New York: Harper and Brothers, 1957) pp. 42-43. page 9 a g a i n s t t h e r i c h , t h e c o u n t r y s i d e a g a i n s t t h e c i t y and t h e p e a s a n t s a g a i n s t t h e l a n d o w n e r s . When s u c c e s s f u l , t h e s e r e v o l t s q u i c k l y r e c e i v e d t h e s a n c t i o n o f t h e s t a t e . M o r e o v e r , p o p u l a r movements and i n t e r e s t e d o r g a n i z a t i o n s , o f t e n l e d by members o f t h e u p p e r c l a s s , p r e s s u r e d t h e s t a t e f o r e q u a l i z i n g measures ( e . g . common s e r v i c e s , p u b l i c b u i l d i n g s and r o a d s ) and u l t i m a t e l y f o r e l e c t o r a l r e f o r m . S i n c e t h e p o o r c o n s t i t u t e d t h e v a s t m a j o r i t y w h e r e v e r t h e f r a n c h i s e was d r a w n , p o l i t i c a l p a r t i e s soon had t o c h a m p i o n e q u a l i z i n g r e f o r m s . I n c r e a s i n g l y , t h e s e r e f o r m s had t h e e f f e c t o f t r a n s f e r r i n g more f u n c t i o n s and more r e s p o n s i b i l i t i e s f r o m s m a l l e r t o e v e r l a r g e r u n i t s o f a d m i n i s t r a t i o n : f r o m t h e p a r i s h t o t h e l o c a l community t o t h e p r o v i n c e and t h e n t o t h e c e n t r a l s t a t e . I n t h e W e s t , t h e " o p p r e s s o r s t a t e " p a s s e d t h r o u g h a l i b e r a l i n t e r l u d e and t r a n s f o r m e d i t s e l f i n t o t h e " w e l f a r e s t a t e . " The d y n a m i c s o f t h i s d e v e l o p m e n t and i t s i m p l i c a t i o n s f o r t h e r o l e o f government and a d m i n i s t r a t i o n w i l l s h o r t l y be d i s c u s s e d . As we c a n see f r o m t h e s e b r i e f comments t h e s t a t e has p l a y e d an i m p o r t a n t , a l t h o u g h n o t a l w a y s a p r e d o m i n a n t r o l e , i n t h e e c o n o m i c d e v e l o p m e n t o f t h e W e s t e r n c o u n t r i e s . T h r o u g h s t a t e p o l i c i e s t h e e c o n o m i c and s o c i a l p r o c e s s e s have g r a d u a l l y assumed a g r e a t e r e g a l i t a r i a n b a s i s t h e r e b y p e r m i t t i n g t h e s t a t e t o become a f i r m a n c h o r o f c i t i z e n l o y a l t y and a f f e c t . The w h o l e d e v e l o p m e n t o f t h e s t a t e i n W e s t e r n c o u n t r i e s page 10 h a s , h o w e v e r , been a g r a d u a l and p i e c e m e a l p r o c e s s w i t h o u t many m a j o r d e m a r c a t i o n s . T h i s has g i v e n an a p p e a r a n c e and a r e a l i t y t o t h e n o t i o n t h a t t h e e v o l u t i o n o f t h e s t a t e has been a " n a t u r a l " phenomenon. A c o n v e n i e n t means o f g e t t i n g a t t h e r o l e o f t h e s t a t e i n t h e West i s t h r o u g h an e x a m i n a t i o n o f s t a t e p l a n n i n g . C. ORIGINS OF STATE PLANNING E c o n o m i c p l a n n i n g i s becoming an i n c r e a s i n g l y more p e r v a s i v e f e a t u r e o f l i f e i n W e s t e r n c o u n t r i e s . The r e a s o n s f o r t h i s t r e n d a r e r i s i n g awareness o f d i f f e r e n c e s and i n e q u a l i t i e s , i d e o l o g i c a l and p o l i t i c a l c l a s h e s , and i n t e n s e and u n i v e r s a l c o m p e t i t i o n f r o m t h e i n t e r n a t i o n a l s y s t e m . A l t h o u g h i d e o l o g i c a l c o n f u s i o n s u r r o u n d s t h e n o t i o n o f e c o n o m i c p l a n n i n g and i s m a n i f e s t e d i n an i n t e n s e d i s c u s s i o n o f a " f r e e " v e r s u s a " p l a n n e d " economy, i t i s e v i d e n t t h a t t h e d e b a t e does n o t r e f l e c t t h e r e a l i t y o f p o l i t i c o - e c o n o m i c l i f e i n t h e W e s t . P l a n n i n g has i n - f a c t been a c c e p t e d i n p r a c t i c e i f n o t i n p r i n c i p l e . T h i s i s so l a r g e l y b e c a u s e t h e i d e a l o f e c o n o m i c p l a n n i n g i n t h e West h o l d s t h a t t h e economy c a n be b r o u g h t t o f u n c t i o n i n a c c o r d a n c e w i t h t h e m a j o r i t y i n t e r e s t s o f a l l c i t i z e n s . N e v e r t h e l e s s , t h e p r e s e n t s t a g e o f s t a t e i n t e r v e n t i o n s i n t h e economy has n o t come about as a consequence o f r a t i o n a l p o l i t i c a l d e l i b e r a t i o n . W e s t e r n governments n e v e r made up t h e i r m i n d s t h a t t h e y w a n t e d economic p l a n n i n g . R a t h e r t h e page 11 state and i t s c i t i z e n s have been forced step-by-step into taking more and more r e s p o n s i b i l i t y for the d i r e c t i o n and control of the economy by the pressure of events not by conscious p o l i t i c a l choice. If we take a broad, long-range perspective we can agree with Myrdal that: No development has been more unplanned than the gradual emergence and increasing importance of planning i n a l l Western countries. Ideas and ideologies, theories and propoganda, p o l i t i c a l programs and p o l i t i c a l action directed consciously towards promoting planning, have played an altogether i n s i g n i f i c a n t role.6 Certainly the Industrial Revolution was not the res u l t of state planning for economic development towards higher standards of l i v i n g for the masses. Although t h i s formula i s prescribed for the underdeveloped countries, i n the West the Industrial Revolution was the res u l t of undirected and dispersed a c t i v i t y of i n d i v i d u a l entrepreneurs seeking to exploit t h e i r s k i l l s and inventions for t h e i r own p r o f i t . This type or s p i r i t of enterprise succeeded i n destroying ( a l b e i t , gradually) much of the t r a d i t i o n a l organic conception of society as well as the g u i l d and state regulations buttressing that conception. However, as we s h a l l see, once the l i b e r a l theory of economics was given p r a c t i c a l expression i n people's actual p o l i t i c a l and economic behavior, countervailing forces were brought into play, and had to be brought into play, to preserve organized society. Nevertheless, even during the l i b e r a l interlude, state ^ Gunnar Myrdal, Beyond the Welfare State;: Economic  Planning and i t s International Implications (New York: Bantom Press, 1967), (p. 17. page 12 i n t e r v e n t i o n i n t h e economy r e m a i n e d f r e q u e n t and i m p o r t a n t e v e r y w h e r e . But t h e n a t u r e and d i r e c t i o n o f t h e s e i n t e r v e n t i o n s c h a n g e d . M o r e o v e r t h e s e changes i n s t a t e i n t e r v e n t i o n were n o t p l a n n e d . F o r w h i l e e a r l i e r s t a t e r e g u l a t i o n s were s u p p o r t e d by i n t e r v e n t i o n i s t t h e o r i e s l i k e m e r c a n t i l i s m , t h e t h e o r y o f t h e l i b e r a l i n t e r l u d e was some v e r s i o n o f n o n - i n t e r v e n t i o n . F o r r e a s o n s w h i c h w i l l become e v i d e n t l a t e r , o v e r t h e l o n g t e r m t h e t o t a l volume and t h e r a t e o f s t a t e i n t e r v e n t i o n s has been s t e a d i l y i n c r e a s i n g . Y e t due t o p o p u l a r a n i m o s i t y a g a i n s t s t a t e d i r e c t i o n o f t h e economy, new m e a s u r e s were i n t r o d u c e d ad h o c , t o s e r v e what many c o n s i d e r e d t o be l i m i t e d and t e m p o r a r y n e e d s . I n d e e d , t h e y were c a l l e d f o r t h and a d m i n i s t e r e d by p o l i t i c a l f o r c e s w h i c h p r o c l a i m e d them-s e l v e s a d v e r s e t o e c o n o m i c p l a n n i n g . T h i s i s a n o t h e r r e f l e c t i o n o f t h e i d e o l o g i c a l c o n f u s i o n e x t a n t i n t h e West w i t h r e s p e c t t o s t a t e i n t e r v e n t i o n s . E v e n t u a l l y t h e s t a t e was f o r c e d t o c o o r d i n a t e i t s a c t i o n s : p a r t i c u l a r i n t e r v e n t i o n s t u r n e d out n o t t o be t e m p o r a r y ; t h e a c t s o f i n t e r v e n t i o n p r o v e d t o have d i s t u r b i n g s i d e - e f f e c t s ; a n d , t h e i r l a c k o f c o m p a t a b i l i t y w i t h e a c h o t h e r and w i t h t h e aims and p o l i c i e s o f t h e n a t i o n a l community were f e l t t o be damaging and i r r a t i o n a l . S i n c e t h e a b o l i t i o n o f i n t e r v e n t i o n s p r o v e d i m p o s s i b l e ( l a r g e l y b e c a u s e v e s t e d i n t e r e s t s had b u i l t up b e h i n d t h e m ) , l i b e r a l p o l i t i c i a n s and p u b l i c s e r v a n t s g r a d u a l l y became p r o p o n e n t s o f economic p l a n n i n g i n one f i e l d a f t e r a n o t h e r . page .13 The i r o n i c a l fact i s that "state planning was often the more ' l i b e r a l ' alternative to the v e r i t a b l e mess created by unco-ordinated and disorganising State interventions."' 7 In other words, state intervention did not emerge from a conscious desire to tamper with the economy but to make the l i b e r a l theory operational. Yet the attempts at coordination were also l i m i t e d i n scope and ad hoc i n nature. New acts of state intervention, again viewed as temporary, were constantly added. Soon, even the minimal amount of coordination attained was diminished. Because of t h i s approach to planning and due to the 8 i n s t i t u t i o n a l and p o l i t i c a l conditions i n Western countries, planning became pragmatic and piecemeal --never comprehensive and complete. Instead, planning has the nature of a p o l i t i c a l compromise between d i f f e r e n t organized interests seeking solutions to immediate p r a c t i c a l issues. The major momentum for planning was i n facttthe continuous growth of state interventions, interventions requiring coordination. More than anything else, planning i n 9 the Western countries tends to mean coordination. It i s Gunnar Myrdal, "The Trend Towards Economic Planning," Manchester School of Economic and Social Studies, XIX [January, 1951) , h~. See below pp. 15-21 ^ Myrdal's rather cumbersome d e f i n i t i o n of planning brings out t h i s essential point. He states that "planning" refers to the "conscious attempts by the government of a country --usually with the p a r t i c i p a t i o n of other c o l l e c t i v e bodies --to coordin-ate public p o l i c i e s more r a t i o n a l l y i n order to reach more f u l l y and rapidly the desirable ends for future development which are determined by the p o l i t i c a l process as i t evolves." Myrdal, Beyond the Welfare State, p. 20. page 14 important to bear th i s i n mind for when we discuss the under-developed world i n Part II i t w i l l be apparent that planning i s held to have a greater dynamic, complex and purposeful character. At t h i s stage i n our discussion, however, i t i s not adequate merely to note that there was "a continuous growth of state interventions." Reasons must be given for this trend: i t i s through a discussion of these reasons that we are able to present both Myrdal's conception of p o l i t i c a l development and the role he assigns to the state i n securing development. To accomplish t h i s we s h a l l divide our discussion between external and i n t e r n a l factors as they affected planning in the West. D. : EXTERNAL FORCES AND THEIR EFFECT ON STATE; PLANNING The growth in the volume of state interventions and the t a c i t acceptance of the necessity for r a t i o n a l economic planning was greatly accelerated by the continuous upheavals i n international r e l a t i o n s , s t a r t i n g with World War I and continuing to the present. The national interest i n internal s t a b i l i t y , employment of workers, welfare of farmers and generally i n undisturbed consumption and production, led national governments to undertake new, and then r a d i c a l , interventions in a l l sectors of the national economy. When the international crises abated, the removal of the protective page 15 measures was seldom complete for the crises often l e f t many-durable changes i n p o l i t i c a l and economic conditions at home and abroad (e.g. sources of supply and markets were disrupted while the gold standard and the international c a p i t a l market were severely constrained.) Moreover as vested interests b u i l t up behind protective state p o l i c i e s i t became p o l i t i c a l l y i n f e a s i b l e to abandon them. A l l these forces presaged an expanding role for the state. But perhaps more important, the disturbances from the international system brought about a remarkable change i n attitudes. People became accustomed to experiencing adverse changes and turned to the state to mitigate t h e i r e f f e c t s . Furthermore, a l l the sudden and violent changes, whatever t h e i r cause or character, tended to lessen respect for the status quo. The i n h i b i t i o n s from changing s o c i a l and economic conditions gradually diminished while people came to think of state interventions as useful not only for protecting but also for advancing t h e i r own i n t e r e s t s . E. INTERNAL; FORCES AND THEIR EFFECT ON STATE PLANNING The international crises merely accelerated a trend already independently i n motion under the dynamic push of powerful int e r n a l secular forces. Myrdal has i s o l a t e d the organization of markets as perhaps the leading i n t e r n a l i n s t i t u t i o n a l factor accounting for the change i n the role of the state. Moreover, i t seems that the organization of page 16 markets holds the key to his conception of p o l i t i c a l as well as economic development both in the West and in the under-developed world. To see the role played by the organization of markets in the p o l i t i c a l development of the West, we must f i r s t b r i e f l y review the basic assumptions of the l i b e r a l theory of perfect competition. As we w i l l r e c a l l , this theory i s e s s e n t i a l l y s t a t i c and atomistic. The s o c i a l frame, postulated and id e a l i z e d by the theory, was held to be unchanging. Although th i s may now appear to us as excessively r i g i d , under the atomistic assumption i t i s possible to conceive of such a system where a l l elements move toward f u l l and perfect adjustment. Prices and aggregate supply and demand were held to be beyond any individual's control. Moreover, prices as they were formulated i n the market performed smoothly and continuously the function of restoring equilibrium after every change. The theory of perfect competition holds that I f the economic units are i n f i n i t e s i m a l l y small r e l a t i v e to the size of the market, and i f they do not act together, then no unit by i t s own actions can influence market conditions. Markets and prices are then independent variables and form a set of given conditions for ind i v i d u a l behavior. While i t was understood that the perfect market never existed, i t was not re a d i l y accepted that r e a l i t y was further and further departing from the l i b e r a l i d e a l . That i s , individual units did not act i n i s o l a t i o n but combined together, page 17 i n e f f e c t , organizing the markets. In a sense, markets became consciously "regulated" by the p a r t i c i p a n t s . When the assumption of atomism was no longer tenable, the assumed s t a t i c i n s t i t u t i o n a l frame was no longer protected. Individuals ceased to obediently adjust to p r e v a i l i n g conditions, accepting rewards and burdens as they came (the l i b e r a l dictum); rather, they cooperated (or "combined") to influence t h i s process and, more importantly, to adjust t h i s process to f i t t h e i r own i n t e r e s t s . The ef f e c t of t h i s on the state was immediate and dramatic: [The state was compelled to undertake] large-scale measures of intervention. They become necessary simply to prevent the actual disorganization of society, which would res u l t from the organization of the i n d i v i d u a l markets, i f this development were not controlled and coordinated. And they are needed i n order to prevent those who have acquired a stronger bargaining power from exploiting the others.-*-u As soon as i n d i v i d u a l units i n the market become large or when they j o i n together to influence market conditions, the l i b e r a l rules of the game are shattered. Equilibrium i s not guaranteed as a result of market forces but may have to be restored by outside (state) interventions. Moreover, the i n i t i a l tendency to disorganization of markets, and therefore society, i s apt to be very strong when several markets are j o i n t l y becoming organized i n t h i s manner through the price 11 mechanism (e.g. the labor and commodity markets). In any event, since the nation-states of the West were 10 Myrdal, Beyond the Welfare State, p. 29. 1 1 Myrdal, "The Trend Towards Economic Planning," 12. page 18 more or l e s s emotionally i n t e g r a t e d they could not have allowed u n l i m i t e d free play of the market: I t i s a paradox that only a w e l l - i n t e g r a t e d community can abide by the r u l e s of economic competition; but that an i n t e g r a t e d community w i l l modify the r u l e s i f changes i n p r i c e s impose too d r a s t i c a d e c l i n e i n the income of any one s e c t o r , or re q u i r e too sudden s h i f t s i n resources o r , more g e n e r a l l y , i f the community favors a course of economic development other than the one that would r e s u l t from the fr e e p l a y of the market forces.12 Moreover, a l l these changes i n t h e . i n s t i t u t i o n a l framework were followed by a t t i t u d i n a l changes. The l i b e r a l r a t i o n a l i s t i c p l i l o s o p h y , based as i t was on a shallow hedonism, was elaborated i n economics i n the marginal theory of value and the u t i l i t a r i a n deduction of the general welfare out of enlightened s e l f - i n t e r e s t of the i n d i v i d u a l . However, when r a t i o n a l hedonism a c t u a l l y spread and i n d i v i d u a l s began to t h i n k and act l i k e the l i b e r a l "economic man," the r e s u l t 13 was that "the bottom f e l l out of l i b e r a l economic s o c i e t y . " P r i m a r i l y t h i s occurred because the l i b e r a l assumptions of atomism and a s t a t i c s o c i e t y assumed men to be t r a d i t i o n a l -i s t i c and s t r o n g l y i n h i b i t e d by s o c i a l taboos. Now, however, everything was i n f l u x . The i n s t i t u t i o n a l framework of the n a t i o n a l community was shaken by l a r g e - s c a l e s t a t e i n t e r v e n t i o n s brought about by i n t e r n a t i o n a l c r i s e s . The property taboos were shaken by i n f l a t i o n and d e f l a t i o n while markets l o s t t h e i r hallowed aura. Moreover, r i s i n g s o c i a l m o b i l i t y and increased 1 2 x Gunnar Myrdal, An I n t e r n a t i o n a l Economy: Problems and  Prospects, (New York: Harper and Brothers, 1956), p. 21""" 13 Myrdal, "The Trend Towards Economic Planning," 9. page 19 int e r - c l a s s contacts were i n f l u e n t i a l i n denying economic in e q u a l i t i e s t h e i r unquestioned "naturalness" or n e u t r a l i t y . A l l of this happened as democratization of the p o l i t i c a l process spread with each increase i n the franchise. As ever larger s t r a t a of the population achieved f u l l p o l i t i c a l power, and r e a l i z e d that i t could be used for t h e i r own in t e r e s t , the state was pressed for large-scale r e d i s t r i b u t i o n a l interventions and protection from the organized markets. Therefore the p r i n c i p l e of economic and s o c i a l equalization came increasingly to dominate p o l i t i c a l decisions. Almost every state intervention became conditioned, 14 i f only i n d i r e c t l y , by e g a l i t a r i a n motives. Moreover the state was compelled to increasing interventions as demands for equality grew under the pressure of the organized lower classes. Naturally i t was i n the interest of the poor to press the state to codify i n d i v i d u a l norms and contracts into general norms, laws, regulations and agreements. In this way, under the p r i n c i p l e of equality and i n conjunction with universal suffrage, private relations increasingly became public relations which only served to benefit the pos i t i o n of the lower classes. Furthermore, as Myrdal remarks: When the state becomes involved i n regulations of the building industry and the business of r e a l estate, such intervention takes on, by p o l i t i c a l necessity, the character of s o c i a l housing p o l i c y . Likewise, when the p r o f i t a b i l i t y of farming becomes a matter of public price f i x i n g , the interests of the small farmer . . . must be taken care of. When wages are becoming regulated by ever more inclusive national settlements between organizations i n the labor market, one general e f f e c t i s a tendency to 1 4 Myrdal, Beyond the Welfare State, p. 34. page 20 diminish the wage . d i f f e r e n t i a l s . . . . When commodities have to be rationed, the p r i n c i p l e i s again equality. . . . Whenever new measures of state intervention or semi-public regulations are introduced, even i f t h e i r purpose i s quite a d i f f e r e n t one, they w i l l tend to be u t i l i z e d as a means of equalization as well. . . . [Therefore] the drive for  equality of opportunity becomes a pressure or support for  state intervention, even outside the sphere of r e d i s t r i -butional reform proper. 5 It must be admitted that state interventions may give only an appearance rather than a fact of advantage to the poor. Yet, with increasing education and increasing organization into p o l i t i c a l p a r t i e s , greater and more eff e c t i v e intervention w i l l be demanded. There i s another int e r n a l force that must be recognized besides the organization of markets. The underdeveloped countries are not alone i n demanding economic development. In the advanced Western states, higher l e v e l s of production, consumption, investment and incomes are constantly urged. Part of t h i s may be due to international competition, yet as individuals and as participants i n national communities, we are continually seeking additional funds for new a c t i v i t i e s deemed important and urgent. Therefore our entire c u l t u r a l orientation, our very type of c i v i l i z a t i o n , places a high value on s t r i v i n g for the rewards that others have obtained. , A l l of these forces have come together to impress upon the state increased r e s p o n s i b i l i t i e s . The result of a l l of t h i s i s not the l i b e r a l state but the "organizational state. 1 5 Ibid., pp. 34-35, my emphasis. 16 i b i d , , p. 38. page. 21 F . ; THE ORGANIZATIONAL STATE-As we have s e e n , W e s t e r n c o u n t r i e s have e x p e r i e n c e d a g r a d u a l breakdown o f c o m p e t i t i v e m a r k e t s u n d e r t h e p r e s s u r e s o f t e c h n i c a l and o r g a n i z a t i o n a l d e v e l o p m e n t s as w e l l as a s o p h i s t i c a t i o n o f p e o p l e ' s a t t i t u d e s . M a r k e t p r i c e s and even t h e m a r k e t i t s e l f a r e no l o n g e r a c c e p t e d as g i v e n , o b j e c t i v e n o r m s . E c o n o m i c l i f e has become i n c r e a s i n g l y m a n i p u l a t e d i n t h e i n t e r e s t s o f t h e p a r t i c i p a n t s i n t h e n a t i o n a l c o m m u n i t y . As we saw e a r l i e r , when c o n f r o n t e d w i t h t h i s l i b e r a l t r e n d , i f t h e s t a t e had s t a y e d l i b e r a l and d e c l i n e d t o i n t e r v e n e , s o c i e t y w o u l d have d i s i n t e g r a t e d . M o r e o v e r , t h e e x i s t e n c e o f m o n o p o l i e s o r c o m b i n e s , u n c h e c k e d by s t a t e r e g u l a t i o n s , w o u l d have i m p l i e d u s u r p a t i o n o f t h e s o v e r e i g n powers o f t h e s t a t e t o t a x . F o r m o n o p o l i e s c a n d e c i d e w i t h i n b r o a d l i m i t s t h e p r i c e l e v e l , t h e v a l u e o f money as w e l l as what i s p r o d u c e d , consumed, d i s t r i b u t e d and i n v e s t e d . The f u r t h e r t h i s goes t h e more c e r t a i n i t i s t h a t t h e y w i l l have t o be c o n t r o l l e d and c o o r d i n a t e d by t h e s t a t e . O t h e r w i s e t h e r a i s o n d ' e t r e o f t h e s t a t e w o u l d be s e r i o u s l y u n d e r m i n e d . F o r a w h i l e t h e l i b e r a l s t a t e d i d a t t e m p t t o r e s t o r e t h e " f r e e w o r k i n g o f t h e m a r k e t . " Y e t t h e measures were i n e f f e c t u a l and s m a l l : t h e t r e n d c o u l d n o t be r e v e r s e d . The m a i n r e a c t i o n has been t o a c c e p t t h e t r e n d b u t t o r e g u l a t e i t s u c h t h a t t h e p u b l i c i n t e r e s t i n o r d e r and e q u i t y i s r e a s o n a b l y p r e s e r v e d . The r e s u l t i s t h a t " a p o w e r f u l b u t page 22 s t a t e - c o n t r o l l e d i n f r a - s t r u c t u r e o f c o l l e c t i v e o r g a n i z a t i o n s has come i n t o b e i n g , b e n e a t h t h e c o n s t i t u t i o n a l frame o f t h e s t a t e . " " ^ A l t h o u g h t h i s has m a r k e d t h e most i m p o r t a n t e x t e n s i o n o f s t a t e i n t e r v e n t i o n and h e r a l d s a m a j o r s t e p f o r w a r d i n t h e p o l i t i c a l d e v e l o p m e n t o f t h e W e s t , i t has l e f t even g r e a t e r scope f o r i n t e r v e n t i o n by p r i v a t e o r g a n i z e d i n t e r e s t s . The e q u a l i t y p r i n c i p l e i s a t work h e r e t o o f o r i t has l e d t h e s t a t e t o s t r e n g t h e n t h e b a r g a i n i n g power o f weaker g r o u p s e i t h e r by a i d i n g i n t h e i r o r g a n i z a t i o n o r by i m p r o v i n g t h e c o n d i t i o n s u n d e r w h i c h t h e y b a r g a i n i n t h e i n s t i t u t i o n a l i n f r a s t r u c t u r e . A l l o f t h i s i m p l i e s a m a j o r change i n t h e f ramework o f m a r k e t s . The l i b e r a l i d e a l o f f a i r p l a y o f m a r k e t f o r c e s has been t r a n s l a t e d i n t o a demand t h a t w a g e s , p r i c e s , incomes and p r o f i t s be s e t t l e d by v a r i o u s t y p e s o f c o l l e c t i v e b a r g a i n i n g . I t has become t h e r e s p o n s i b i l i t y o f t h e s t a t e t o p r o v i d e s u c h a f ramework t h r o u g h l e g i s l a t i o n and a r b i t r a t i o n . U n d e r p o l i t i c a l p r e s s u r e f r o m o r g a n i z e d w o r k e r s t h e s t a t e i n t r o d u c e d v a r i o u s p i e c e s o f s o c i a l l e g i s l a t i o n d e s i g n e d t o i m p r o v e c o n d i t i o n s o f employment and p r o t e c t i o n a g a i n s t r i s k s . H o w e v e r , a more d i r e c t r o l e i n t h e l a b o r m a r k e t was assumed when t h e s t a t e began t o a f f e c t t h e demand f o r l a b o r i n t i m e s o f h i g h u n e m p l o y m e n t , a n d , a f t e r W o r l d War I I , 1 7 I b i d . , p . 39. page 23 committing i t s e l f to preserve " f u l l employment." Similar state p o l i c i e s were put into effect i n other markets, p a r t i c u l a r l y agriculture. The important point to stress i s that the guiding p r i n c i p l e has been to improve the bargaining p o s i t i o n of those who would otherwise have f a l l e n behind and not shared in the national development. Therefore the p r i n c i p l e of equality of opportunity and the rights of c i t i z e n s to share in national advance has prompted increasing state interventions. Underoeonditions established by the state, organizations i n the market-place make binding agreements for theirnmembers. Usually i f the state does not i n t e r f e r e d i r e c t l y i n the bargaining process i t i s because i t has already established a near balance between the organized interests through previous intervention. Therefore these organizations in effect function as organs for public p o l i c y . Myrdal goes so far as to declare that "many of the most important p o l i c y decisions . . . are taken outside parliament, and put into e f f e c t by other organs than those 18 of state administration." Moreover, because "private" organizations perform t h i s public r o l e , a l l p r i c e s , wages and supply and demand curves become, in a sense, " p o l i t i c a l . " This could not be further from the "free market" of l i b e r a l theory. Yet i t i s clear that a l l these quasi-public organs can only function because the state allows them to be an extension of the more formal state structures. 1 8 Ibid., pp. 40-41. page 24 A l l of t h i s has i t s effect on the role of the state. Now the government and the administration, representing the point of view of central economic planning and backed by i t s sovereign powers to l e g i s l a t e , are faced with the task of leading negotiations and c o n t r o l l i n g compromises between the organized power groups. As the entire society becomes more organized, integration i s achieved at higher levels through combines and price and income agreements reached through m u l t i l a t e r a l c o l l e c t i v e bargaining perhaps covering the entire economy. Organizations representing workers, farmers, i n d u s t r i a l employees, bankers and consumers a l l p a r t i c i p a t e under government leadership. This i s p r e c i s e l y Myrdal's v i s i o n of a great organizational state i n which production and consumption continue with t h r i f t and e f f i c i e n c y under state d i r e c t i o n or control. Moreover, i t i s because Western countries went through a period of l i b e r a l i s m that the state i s able to assume such 19 massive r e s p o n s i b i l i t i e s . Primarily i n Great B r i t a i n and 20 Scandanavia, p o l i t i c a l l i b e r a l i s m created a strong and i y Myrdal,"The Trend Towards Economic Planning," 15. 20 p o r reasons which need not detain us here, Myrdal doubts the e f f i c a c y of the l i b e r a l interlude i n creating the "strong state" i n the United States. America has not achieved the strong, e f f i c i e n t and non-corrupt state c h a r a c t e r i s t i c of, say, Great B r i t a i n . Moreover the organization of markets has not proceeded as far in the United States while c i t i z e n p a r t i c i p a t i o n i s lower. For a l l these reasons "a more than desirable share" of r e s p o n s i b i l i t i e s for the d i r e c t i o n and execution of public p o l i c y must be ca r r i e d out by federal and state governments "which themselves lack the structure that would make them i d e a l l y f i t t e d for the task." See Gunnar Myrdal, Challenge to Affluence (New York: Pantheon, 1962) 97, also pp. 79, 83-85 and 93-96. page 25 f a i r l y e f f e c t i v e state capable of l a t e r assuming a more dynamic r o l e . Liberalism held that the state should have very l i m i t e d r e s p o n s i b i l i t i e s , but within i t s spheres, the state should be strong, incorrupt and e f f i c i e n t . Although i n the late eighteenth and early nineteenth centuries p o l i t i c a l l i f e and the state administration were generally corrupt, i n e f f i c i e n t , and a r b i t r a r y , under the impact of l i b e r a l i s m fundamental reforms were i n s t i t u t e d covering p o l i t i c a l p a r t i e s , parliament and the c i v i l service. In other words, the basis for the strong state, capable of undertaking massive inter-ventions i n the economy, was l a i d i n a period of retrenchment in state a c t i v i t i e s . Now however, with a l l the ad hoc interferences i n the market, there was a compelling need for a great deal of coordination, that i s , state planning. Therefore, for e s s e n t i a l l y two reasons the result was to dramatically increase the importance of the state. F i r s t , only the central state, as the chief organ for coordination of public p o l i c i e s , could possibly cope with the massive task of coordination. Second, as people combine together i n the market t h e i r attitudes change such that they demand dire c t state intervention i n t h e i r favor. Gradually, people are conditioned to press the state for even more r a d i c a l interventions. After a certain point, the mass of d i v e r s i f i e d state interventions has to be coordinated into u n i f i e d structures of state regulations within a planned page 26 economy. As Myrdal points out: The state had to assert i t s e l f as the f i n a l a r b i t e r . It had to lay down rules for what went on within the organizational infrastructure. It had to change the con-ditions for c o l l e c t i v e bargaining among the organizations and control them so as to make the results, conform to the public w i l l . It i s only on the i n s t i g a t i o n of the state or with i t s acquiescence and within the framework of i t s l e g i s l a t i o n and administration, that these other manifest-ations of organized society are given play --that they are allowed to function, to plan, and to regulate.21 However within the framework of state, controls, the organizations have gained not l o s t influence. They hold greater r e a l power i n t h e i r individual f i e l d s . Therefore the hallmark of p o l i t i c s i n the advanced welfare state i s the active functioning of an organizational infrastructure and ef f e c t i v e decentralization of p o l i t i c a l power. The increased strength, number and a c t i v i t y of organizations as well as new r e s p o n s i b i l i t i e s allocated to r e v i t a l i z e d p r o v i n c i a l and municipal governments mean a spreading out of p a r t i c i p a t i o n , i n i t i a t i v e and influence over l e g i s l a t i o n to more and more people. The p a r t i c i p a t i o n of c i t i z e n s w i l l not be lim i t e d to voting at intermittent elections. Although the elections themselves w i l l become much more important as presumably they w i l l be understood i n terms of rea l and concrete i n t e r e s t s . In addition, however, c i t i z e n s w i l l take an active i n t e r e s t i n t h e i r organizations, being elected to o f f i c e and deciding on what i s i n ef f e c t public p o l i c y . It i s obvious that Myrdal's concept of the 2 1 Myrdal, Beyond the Welfare State, pp. 42-43. page. 2 7 "organizational state" embraces h a l f - r e a l i t y and half-hope. Even though we do not have the complete organizational state his analysis contains the seeds for a possible diminuation of direct state interferences. Through c i t i z e n p a r t i c i p a t i o n i n the organizational in f r a s t r u c t u r e , i t may be possible to pass much of the regular state a c t i v i t y from the bureaucracy to the organizations. In a sense, communal control through the pressure of enlightened public opinion and the bargaining strength of organizations might reduce the need for anything but a minimum of state d i r e c t i o n . The existence of th i s 22 "welfare culture," e s s e n t i a l l y a more cooperative national community with greater national i d e n t i f i c a t i o n , s o l i d a r i t y and p a r t i c i p a t i o n i n the p o l i t i c a l process of planning would represent the completion of a f u l l c i r c l e of p o l i t i c a l development: From the "oppressor state" of mass poverty, much s o c i a l r i g i d i t y and gross inequality of opportunity; through the l i b e r a l interlude of minimal state a c t i v i t y , purging the state aparatus of corruption and laying the basis for the firm, e f f i c i e n t arid capable state; to the period of ad hoc interferences with intermittent attempts at coordination; to the present period of dire c t and s t i l l growing volume of state interferences; and f i n a l l y to the "welfare culture" period where people are activated to take care of th e i r own interests within very general rules established by the democratic state. 2 2 Ibid.,, p. 78. page 28 G. ; PLANNING- RE-VISITED I£ we re-examine planning i n the Western world we can get a glimpse as to why Myrdal views the "organizational state" as the hallmark of current Western p o l i t i c a l develop-ment. Moreover we can tap more c l e a r l y the relationship between planning and national integration, a relationship that perhaps offers another aspect to the peculiar problems af f e c t -ing integration i n the underdeveloped world. Indeed, as we s h a l l see i n Part I I , the operation of national planning i t s e l f i s c l e a r l y influenced by the degree of national integration present i n an underdeveloped country. In the West we do not as yet have an advanced welfare state. Rather we have an ide o l o g i c a l commitment to i t . This commitment i s related to the broad goals of economic develop-ment, f u l l employment, equality of opportunity, s o c i a l security and protected minimum standards of income, n u t r i t i o n , housing, health and education for a l l regions and a l l s o c i a l groups within a nation-state. The welfare state was not planned, indeed i n some Western countries i t i s s t i l l not planned i n any comprehensive manner. Instead, numerous p o l i c y i n i t i a t i v e s are adopted that have the e f f e c t of gradually reaching the goal of the welfare state. As we saw e a r l i e r , coordination becomes imperative due to a l l the unplanned interferences. Yet coordination does not lead to planning, i t i s planning. Both the goals of the democratic welfare state and the page 2 9 gradual reaching of these goals r e f l e c t a converging of p o l i t i c a l attitudes. The once important divisions of opinion on the p r i n c i p l e s of the welfare state are c l e a r l y less important now. For example, few people now deny that we should have progressive taxation. The points of disagreement are more l i k e l y to be about the rates and the extent of such taxation. Although there are differences and people do see shortcomings in t h e i r national community and i t s laws . . . the d i f f e r i n g p o l i t i c a l attitudes to the community as i t i s functioning and constantly developing dwindle to ripples on the surface of the fundamental s i m i l a r i t i e s , to variations b u i l t around a main theme. . . . This t e s t i f i e s to the general community of ideals i n our Western c i v i l i z a t i o n . . . . 2 3 This converging of attitudes i s r e a d i l y apparent. P o l i t i c a l parties now compete in propagating new and more sweeping r e d i s t r i b u t i o n a l reforms. No longer are reactionary threats to dismantle the welfare state taken seriously just as threats of indiscriminate n a t i o n a l i z a t i o n are r a r e l y put forth by social-democratic p a r t i e s . As Myrdal puts i t , i n 24 the West we have a certain degree of " p o l i t i c a l harmony" among c i t i z e n s . Yet t h i s harmony i s not the automatic harmony postulated by l i b e r a l theory. Rather i t i s a 25 "created harmony," created by state p o l i c i e s . In seeking accomodation between clashing i n t e r e s t s , the state undertook an ever increasing number of interventions that gradually 23 Myrdal, An International Economy, p. 31. 2 4 Myrdal,, Beyond the Weifare State, p. 66. 25 Ibid., p. 69. page 30 turned the welfare state into an ideal for the whole nation. While t h i s process evolved, our society became an increasingly regulated one, leaving "free" enterprise to move only within a frame marked by a system of controls under the ultimate authority of the state. Moreover, in d i v i d u a l rights with respect to property, disposable income, fobs, h i r i n g and f i r i n g , a l l became subject to state regulation. Perhaps the remarkable thing i s not the degree of regulation of our l i v e s but the fact that so many people do not notice, or i f they notice, do not mind l i v i n g a regulated l i f e . Part of the reason for t h i s willingness to obey laws i s the fact that i n the democratic welfare state c i t i z e n s both p a r t i c i p a t e i n government and receive tangible benefits from state action. As Myrdal puts i t , "most people have good 26 reason to f e e l f reer, not l e s s free i n the Welfare State." Undoubtedly the very success of the welfare state enhances i t s legitimacy. Tangible benefits plus dispersion of authority lead c i t i z e n s to f e e l that they have improved the conditions under which individual choices are made. It is through p a r t i c i p a t i o n , p a r t i c i p a t i o n made possible by the equality i d e a l , that national s o l i d a r i t y and i d e n t i f i c a t i o n with state a c t i v i t i e s , regulations and demands i s possible. Besides the tangible economic benefits, the a b i l i t y of the broad mass of people to pa r t i c i p a t e i n decision-making i f they wish, allows the state to make t r u l y extraordinary demands of the people. As we: sh a l l see i n 2 6 Ibid., p. 73 page 31 Part I I , the a b i l i t y of the state i n underdeveloped, countries to make sim i l a r heavy demands i s greatly circumscribed. In the West, c i t i z e n p a r t i c i p a t i o n i n decision-making and in the f r u i t s of economic advance has had a wholesome influence on the p o l i t i c a l system. These two factors have tended to make people's attitudes more s p e c i f i c and more related to t h e i r r e a l , even i f narrow --interests - - t h e i r opinions w i l l be more worldly and i n that sense more r a t i o n a l . . . . Their p o l i t i c a l choices w i l l be better protected against the influence of free-wheeling phantasts and demagogues, dealing i n slogans and emotionally-charged and distorted stereotypes. As this r a t i o n a l i z a t i o n of people's attitudes i s materializing . . . democracy i s undoubtedly strengthened."2 7 A l l these effects of state planning are l a r g e l y reducible to the fact that due to the psychological orientation of the c i t i z e n s toward the state, the state i s able to place tremendous burdens on i t s c i t i z e n s . It can do t h i s because the p r i n c i p l e of equality has allowed a l l s o c i a l groups to p a r t i c i p a t e i n the rewards of state a c t i v i t y . Myrdal has c a l l e d t h i s psychological strengthening of the 2 8 moorings of the state "the miracle of the sovereign state." Up to now we have been content merely to relate Myrdal's conception of p o l i t i c a l development i n the West. Although we agree with him that p o l i t i c a l development means the emergence or creation of an interest-group infrastructure we cannot agree that his conception of the"organizational state" i s 2 7 Ibid., p. 89. 2 8 Gunnar Myrdal, "Towards a More Closely Integrated Free World Economy" in National Policy for Economic Welfare At Home and Abroad, ed. by Robert Lekachman (New York: Russell and Russell, 1961), 251. page 32 without fundamental flaws. In f a c t , as our evaluation of the organizational state w i l l make evident, e f f e c t i v e state planning i s predicated on rather stringent requirements, requirements that are by no means assured either i n the advanced welfare states of the West or in the underdeveloped countries. H. AN EVALUATION; OF THE ORGANIZATIONAL STATE State planning, e s p e c i a l l y the decentralized planning c h a r a c t e r i s t i c of the organizational state, i s based on many necessary and s u f f i c i e n t conditions that may or may not be present. F i r s t , t h i s type of planning requires a great deal of s e l f - r e s t r a i n t on the part of those in the organized i n f r a -structure. Public p o l i c y can be delegated to these organs only as long as they have a clear conception of the public good and are w i l l i n g and able to carry into effect the public w i l l . A continual problem would seem to be to prevent c o l l u s i o n among the organized interests in a market. For example, as consumers are weakly organized almost everywhere, the temptation to pass on unreasonable price increases presents serious problems for a democratic state. Second, (and t h i s i s d i r e c t l y related to our f i r s t point) Myrdal's model depends on a f i n e l y balanced i n s t i t u t i o n a l i n f rastructure. E f f e c t i v e delegation of state r e s p o n s i b i l i t i e s i s not possible i f some organizations are page 33 g r o s s l y p r e d o m i n a n t o v e r o t h e r s . M o r e o v e r t h e p r o b l e m o f l i m i t i n g power and p r i v i l e g e may p r o v e f a r more i n t r a c t a b l e t h a n t h e r u l e s and r e g u l a t i o n s o f t h e s t a t e . F o r e x a m p l e , i t i s a l l e g e d by some o b s e r v e r s t h a t t r a d e u n i o n s may have t o o much i n f l u e n c e i n p o l i t o - e c o n o m i c d e c i s i o n - m a k i n g . I f t h i s s h o u l d be t h e case i t may p r o v e e x t r e m e l y d i f f i c u l t f o r a democracy t o c u r b t h i s t y p e o f p o w e r . As we a r e a w a r e , t h e f o r m a t i o n o f t r a d e - u n i o n s grew out o f t h e d e m o c r a t i c i d e a l and was i n f a c t i n s t r u m e n t a l i n h u m a n i z i n g t h e " o p p r e s s o r s t a t e . " F o r a democracy t o c h a l l e n g e t h e o r g a n i z e d l o w e r c l a s s w o u l d amount t o r e j e c t i n g p a r t o f i t s own h e r i t a g e . As s u c h , measures t o c u r b t r a d e u n i o n s c o u l d evoke m a s s i v e p u b l i c r e s i s t a n c e w h i l e at t h e same t i m e t h e p u b l i c r e m a i n s a m b i v a l e n t o v e r t r a d e u n i o n p o w e r . M o r e o v e r , t h e i m b a l a n c e i n t h e o r g a n i z a t i o n a l i n f r a s t r u c t u r e c o u l d work i n t h e o p p o s i t e d i r e c t i o n as w e l l . F o r e x a m p l e , t h e anonymous i n f l u e n c e o f c o r p o r a t i o n s i n o u r p o l i t i c a l l i f e i s s e l d o m d e m o c r a t i c a l l y b a l a n c e d by t h e o r g a n i z e d power o f c o n s u m e r s . I n t h i s c a s e , a c l a s s s t r u c t u r e , i n t e r l o c k i n g d i r e c t o r s h i p s , and l o w p a r t i c i p a t i o n i n t h e o r g a n i z a t i o n a l i n f r a s t r u c t u r e w o u l d t e n d t o g i v e more an a p p e a r a n c e t h a n a r e a l i t y t o r e f o r m m e a s u r e s . Above a l l , t h e w h o l e n o t i o n o f a b a l a n c e d i n s t i t u t i o n a l i n f r a s t r u c t u r e i s h e a v i l y dependent on a c l e a r c o n c e p t i o n o f t h e p u b l i c i n t e r e s t t h a t i s common t o a l l members o f t h e n a t i o n - s t a t e . T h i r d , M y r d a l h o l d s t h a t a p a r l i a m e n t w i l l somehow r e m a i n a l o o f f r o m t h e power s t r u g g l e s i n t h e i n s t i t u t i o n a l page 34 i n f r a s t r u c t u r e w h i l e r e m a i n i n g t h e c u s t o d i a n o f some p u r e c o n c e p t i o n o f t h e " p u b l i c i n t e r e s t . " A l l a c t i o n s o f t h e s t a t e w o u l d seem t o c o n f o r m t o and enhance t h e p u b l i c g o o d . F o r M y r d a l , i t seems c o n c e i v a b l e t h a t a l l t h e o r g a n i z e d g r o u p s t h e m s e l v e s a r e c o g n S z a n t ' t o f t h e " c o r r e c t " p u b l i c i n t e r e s t . He does n o t seem u n d u l y c o n c e r n e d t h a t " c o l l e c t i v e b a r g a i n i n g " f o r t h e common good may n o t emerge b u t r a t h e r t h a t v a r i o u s s e c t o r s o f s o c i e t y w i l l be p e r p e t u a l l y d i s c r i m i n -a t e d a g a i n s t as t h e y w i l l n o t have t h e p o l i t i c a l power t o combat o t h e r , more h i g h l y o r g a n i z e d o r o t h e r w i s e a c c e p t a b l e i n t e r e s t s . M o r e o v e r , h i s d e c e n t r a l i z a t i o n o f p u b l i c p o l i c y t o p r o v i n c i a l and m u n i c i p a l g o v e r n m e n t s as w e l l as t h e o t h e r q u a s i - p u b l i c o r g a n s may n o t r e s u l t i n any h a r m o n i o u s p r o m o t i o n o f c o l l e c t i v e i n t e r e s t s and common c a u s e s i n f u l f i l l m e n t o f any " p u b l i c i n t e r e s t " u n l e s s t h e " p u b l i c " i s s e v e r e l y r e s t r i c t e d . F o u r , what i s t o p r e v e n t t h e v e s t e d i n t e r e s t s t h a t w i l l have f o r m e d a t t h e p r o v i n c i a l , m u n i c i p a l and i n t e r e s t g r o u p l e v e l f r o m d e f y i n g t h e c e n t e r and hence d e n y i n g i t s l e g i t i m a c y t o a c t i n p r e s c r i b e d ways and even i n p r e s c r i b e d a r e a s ? E a c h o f t h e s e b o d i e s may have t h e i r own " p l a n " t h a t t h e y may n o t w i s h t o see s u b o r d i n a t e d t o any c e n t r a l - s t a t e b l u e p r i n t . I n o t h e r w o r d s , t h e o r g a n i z a t i o n a l s t a t e depends on a g r e a t d e a l o f g i v e and t a k e t h a t may n o t be p r e s e n t . I n f a c t , l e g i t i m a c y and c i t i z e n l o y a l t y c o u l d e a s i l y be d e f l e c t e d t o some " l o w e r " l e v e l o f g o v e r n m e n t , t h e r e b y f r u s t r a t i n g any w i l l i n g n e s s t o compromise i n t e r e s t s . page 35 F i v e , t h e e n t i r e f u n c t i o n i n g o f t h e s t a t e and i t s o r g a n i z a t i o n a l s u b s t r u c t u r e i s b a s e d on a c t i v e c i t i z e n p a r t i c i p a t i o n . The c r u c i a l p r o b l e m i s t h a t c i t i z e n s must be w i l l i n g t o c o n t i n u o u s l y p a r t i c i p a t e i n t h e p o l i t i c a l p r o c e s s . I f t h e y do n o t p a r t i c i p a t e at an i n t e n s e l e v e l , t h e o r g a n i z a t -i o n s c o u l d e a s i l y become t h e b a s i s f o r a w i d e s p r e a d c o m p l e x o f o l i g a r c h i e s f u n c t i o n i n g n o t o n l y b e n e a t h t h e s t a t e l e v e l b u t at t h e s t a t e l e v e l as w e l l . I t c o u l d be an e n l i g h t e n e d a u t o c r a c y b u t t h e more p r o b a b l e r e s u l t i s a m i r e o f c o l l u s i o n , p r o f i t e e r i n g and p l a i n c o r r u p t i o n . W i t h o u t a b a l a n c e o f o r g a n i z e d i n t e r e s t s and s u s t a i n e d c i t i z e n p a r t i c i p a t i o n we must c o n s i d e r t h e p o s s i b i l i t y t h a t M y r d a l ' s c o n c e p t i o n o f t h e a d v a n c e d w e l f a r e s t a t e w i l l be b u t a v a r i a t i o n o f t h e " o p p r e s s o r s t a t e . " M o r e o v e r , i f i n d i v i d u a l s f a i l t o p a r t i c i p a t e i n t h e i r o r g a n i z a t i o n s t h e y w i l l l i k e l y a l s o be a p a t h e t i c about t h e i r o b l i g a t i o n s as c i t i z e n s o f t h e s t a t e . I t c o u l d be a r g u e d t h a t i f t h e o r g a n i z e d i n f r a s t r u c t u r e does n o t f u n c t i o n a c c o r d i n g t o t h e " p u b l i c i n t e r e s t " ( t h a t i s , i f t h e o r g a n i z a t i o n s become c o r r u p t and o l i g a r c h i c a l ) t h e n t h e s t a t e may be c o m p e l l e d t o i n t r o d u c e more d i r e c t c o n t r o l s . Y e t what w i l l p r e v e n t t h e s t a t e f r o m becoming c o r r u p t o r t h e p o s s e s s i o n o f t h e s t r o n g e s t o l i g a r c h i c a l i n t e r e s t ? I n d e e d i t becomes i n c r e a s i n g l y d i f f i c u l t t o c o n c e i v e o f some " p u r e " c e n t r a l s t a t e i f t h e s t a n d a r d s o f c o n d u c t a r e so c o m p l e t e l y d i f f e r e n t i n t h e i n s t i t u t i o n a l i n f r a s t r u c t u r e . S u r e l y t h e r e page 36 would be a congruence effect or a s t r a i n toward uniformity - - i n t h i s case meaning the penetration of the state by the now perverted organizational infrastructure. A s i m i l a r argument could be applied to the p r o v i n c i a l and municipal governments. If they become boss-ridden and corrupt due to, say, an unwatching and apathetic c i t i z e n r y , w i l l much be accomplished by transferring t h e i r " l o c a l " functions to the central state? Myrdal i s not unaware of the problems of maintaining c i t i z e n p a r t i c i p a t i o n . He states that: . . . paradoxically enough, the very success of the modern democratic Welfare State i n attaining a high degree of 'created harmony' of interests [?] . . .9may also decrease some of the stimulants to p a r t i c i p a t i o n . 2 9 For example, the emotional appeal of cooperatives and trade unions might be l o s t as they become part of the national establishment; with f u l l employment guaranteed there may be less incentive to b u i l d up and maintain organizations and p o l i t i c a l parties to defend workers' in t e r e s t s . On the other hand, those who might p r o f i t the most from an apathetic c i t i z e n r y w i l l thrive i n such an environment. Although Myrdal seems to deny the interest a r t i c u l a t i o n and aggregation functions of p o l i t i c a l parties i n an advanced welfare state, he does seem to charge parties with the r e s p o n s i b i l i t y for continual vigilance i n building up and preserving p a r t i c i p a t i o n . Yet surely with a l l the power struggles taking place between organized pressure groups, " 2 9 Myrdal, Beyond the Welfare State, p. 45. page 37 p o l i t i c a l parties would be l i t t l e more than s o c i a l clubs providing pleasant diversions while the hard battle for power takes hold i n a possibly o l i g a r c h i c a l organizational i n f r a -structure. It i s not that p a r t i c i p a t i o n w i l l be absolutely low, rather, Myrdal's "organizational state" demands such ext r a o r d i n a r i l y high p a r t i c i p a t i o n rates i f i t i i s to be e f f e c t i v e while remaining democratic. Moreover, there must be a clear conception of the public good both among the participants and at the state l e v e l . Therefore one i s forced to disagree with Myrdal and conclude that the welfare state may well remain "that rather shallow bureaucratic, strongly centralized, i n s t i t u t i o n a l machinery, manipulated by c r a f t y organizational entrepreneurs and vested i n t e r e s t s . . . ," J K J Six, c i t i z e n p a r t i c i p a t i o n and control of both the organizations and the p r o v i n c i a l and municipal governments i s also essential i f decentralization of p o l i t i c a l power i s to occur. Yet to achieve decentralization would require a determined e f f o r t of immense d i f f i c u l t y to dislodge the central state bureaucracy. Giving up administrative controls, dismissing personnel, and shaking loose from p r i v i l e g e s and automatic patterns are not things that would be r e a d i l y accepted by the state administration. The "meddlesome state," of which Myrdal warns, has i t s vested interests both among the bureaucrats and i n the i n s t i t u t i o n a l i n f r a s t r u c t u r e . On 3 0 Ib"id.;> p. 86 3 1 i b i d - , p. 96 page 38 this Myrdal i s strangely s i l e n t . In addition, the "welfare culture" that would support decentralization assumes a c u l t u r a l homogeneity and a degree of national consolidation with undivided l o y a l t y that may not exist anywhere outside of his native Sweden. To counteract these c e n t r i f u g a l forces direct intervention from the center may be necessary for an rhfteffiimiiltee period. Indeed, there i s every reason to assume that by strengthening sectional or l o c a l a u t h o r i t i e s , thereby encouraging vested interests to gravitate towards those centers of power, the c e n t r i f u g a l forces w i l l not only p e r s i s t but w i l l increase i n scope and i n t e n s i t y . Moreover, i t seems naive to believe that a weakened central state could long withstand the predatory adventures of t h r i v i n g p r o v i n c i a l a u t h o r i t i e s . Seven, we should also be aware that Myrdal inveighs against regimentation. In p a r t i c u l a r , and a matter to which we s h a l l return i n Part I I , Myrdal warns against the "spreading out" of direct state interventions i n the economy. If the welfare state i s to remain the strong, e f f i c i e n t , incorrupt state then direct state controls must be held in check. 32 "Petty t i n k e r i n g " s i g n i f i e s the lack of w i l l and strength to enforce resolutely general non-discretionary controls. Moreover, a p r o l i f e r a t i o n of regulations, rules and controls serves to endanger the standards of morality in business and in government. National integration, s o l i d a r i t y , and ccommunal cooperation apparently are not s u f f i c i e n t checks on 3 2 Ibid., p. 96. page 39 e i t h e r p r i v a t e o r p u b l i c m o r a l i t y . The d i lemma i s t h i s : s i n c e t h e l i b e r a l i n t e r l u d e i s n o t l i k e l y t o be r e p e a t e d ( a l b e i t M y r d a l ' s " o r g a n i z a t i o n a l s t a t e " s h a r e s some s i m i l a r t r a i t s w i t h t h e " l i b e r a l s t a t e " ) , i s i t p o s s i b l e t o e n s u r e b o t h p r i v a t e and p u b l i c m o r a l i t y w i t h o u t f a l l i n g b a c k on t h e d u b i o u s p l e a f o r g r e a t e r p a r t i c i p a t i o n o r g r e a t e r d e c e n t r a l i z a t i o n ? I s i t r e a s o n a b l e t o e x p e c t t h a t t h e d e m o c r a t i c c i t i z e n , a l r e a d y b u r d e n e d w i t h immense r e s p o n s i b i l -i t i e s i n t h e o r g a n i z a t i o n a l i n f r a s t r u c t u r e w i l l have t h e t i m e , i n c l i n a t i o n o r a b i l i t y t o be a c o n t i n u o u s - w a t c h d o g o v e r p o t e n t i a l l y c o r r u p t a b l e s t a t e o f f i c i a l s ? M o r e o v e r , even i f e v e r y i n d i v i d u a l i s b u s i l y p u r s u i n g h i s own i n t e r e s t s i n t h e o r g a n i z a t i o n a l i n f r a s t r u c t u r e and i n t h e v a r i o u s l e v e l s o f t h e s t a t e a p p a r a t u s , what i s t o p r e v e n t h im f r o m s e c u r i n g e v e r y a d v a n t a g e a v a i l a b l e w h e t h e r o b t a i n e d t h r o u g h h o n o r a b l e o r p e r v e r s e means? The p r o b l e m i s m o t m e r e l y one o f b a l a n c i n g o r g a n i z a t i o n a l s t r e n g t h b u t o f b a l a n c i n g t h e norms o f c o o p e r a t i o n and i n d i v i d u a l i s m . M y r d a l ' s model b e a r s a s u s p i c i o u s r e s e m b l a n c e t o a s o r t o f " c o o p e r a t i v e — H o b b e s i a n " s t a t e . I n d i v i d u a l s o r g a n i z e c o l l e c t i v e l y n o t p r i m a r i l y f o r c o l l e c t i v e g o a l s but f o r s e c u r i n g i n d i v i d u a l g o a l s i n a c o l l e c t i v e f r a m e w o r k . I n o t h e r w o r d s , t h e r e a p p e a r s t o be l i t t l e c o n c e p t i o n o f a communal s p i r i t o r a s e n s e o f s a c r i f i c e " f o r t h e n a t i o n . " Even t h o u g h i n d i v i d u a l s may be c o l l e c t i v e l y o r g a n i z e d i t i s m e r e l y t o a c h i e v e v e r y l i m i t e d p a r t i c u l a r i s t i c g o a l s . I n t h e o r g a n i z a t i o n a l s t a t e t h e r e a r e few s u p e r o r d i n a t e o r " n a t i o n a l " page 40 goals that could act as an ide o l o g i c a l glue binding the m u l t i p l i c i t y of centers of power. Would i t be possible to have a democratic nation-state with intense a r t i c u l a t i o n of li m i t e d goals but with l i t t l e , i f any, aggregation of interests? Myrdal would argue that the state should act as an umpire between competing organiz-ations. But as we have seen, who can guarantee the imparti-a l i t y or morality of the state? Indeed, with a f i e r c e l y competitive and (theoretically) balanced i n s t i t u t i o n a l infrastructure coupled with a li m i t e d aggregation of i n t e r e s t s , why should we expect the state to produce any "correct" decision between e s s e n t i a l l y monopolistic power structures? Eight, our e a r l i e r statements about the welfare state, i t s development and i t s p o l i c i e s , have emphasized that i t s chief concern i s with one nation. In other words, an advanced democratic welfare state i s n a t i o n a l i s t i c . But as we suggested, contrary to Myrdal's expectations, the welfare state i s n a t i o n a l i s t i c only to the extent that people believe t h e i r i n d i v i d u a l wants and desires can be f u l f i l l e d within the boundaries of the state-controlled c o l l e c t i v e bargaining structures. This does not imply i t i s n a t i o n a l i s t i c in the sense of having many overarching values or goals that a l l strata subscribe to and are w i l l i n g to s a c r i f i c e for t h e i r attainment. Myrdal's "organizational state" i s an economic state circumscribed by a p o l i t i c a l boundary. The rewards for page- 41 p a r t i c i p a t i n g i n t h i s state are not unquantifiable intangibles: they are specific,: concrete economic rewards. As long as these economic rewards are forthcoming the welfare state i s securely moored i n people's attitudes and expectations. Only i f we grant the assumption of continuously high and intense c i t i z e n p a r t i c i p a t i o n i s i t possible to conceive of such a state building up other forms of p o l i t i c a l c r e d i t . Affect and l o y a l t y could emerge i f decentralization prevented o l i g a r c h i c - a u t h o r i t a r i a n rule. Otherwise legitimacy and i d e n t i f i c a t i o n of the state are dependent on continuous economic growth. The dependence on economics would seem to account for the " s p i r i t u a l desert" that Myrdal sees i n the welfare state: What in the end, are we going to do with our wealth, except to increase i t a l l the time and make i t ever more certain that a l l of us have an equal opportunity to acquire i t ? I admit that we are not there yet. But to reach i t i s d e f i n i t e l y within our grasp. What then, on the other side^o'f „;theo h i l l s , i s our distant goal? What s h a l l we s t r i v e for? • • • While the dreamers, planners, and fighters of e a r l i e r generations are f i n a l l y getting almost a l l they asked f o r , somehow the "better l i f e " in a moral and s p i r i t u a l sense, the craving for which was t h e i r supreme i n s p i r a t i o n , i s slow i n developing. . . .33 But we should not underestimate the importance of the economic rewards. The economic success of the welfare state has v i r t u a l l y frozen opposition to i t . As t h i s "service state" comes about, people are increasingly unwilling to dismantle i t or even s l i g h t l y retrench on i t s ideals and accomplishments. 33 Myrdal, Ah International Economy, p. 32 2. 3 4 Myrdal, Beyond the Welfare State, p. 138. page 42 Indeed, the. very experience of l i v i n g and p a r t i c i p a t i n g i n an e f f e c t i v e welfare state induces psychological approval of state actions. Undoubtedly i f the "organizational state" develops according to Myrdal's model we would share his rather optimistic conclusions. But we must keep in mind that Myrdal's analysis presupposes rather stringent conditions for a successful democratic welfare state: s e l f - r e s t r a i n t ; a balanced organizational inf rastructure; a clear conception of the public good among a l l p a r t i c i p a n t s ; a high and intense l e v e l of c i t i z e n p a r t i c i p a t i o n ; a competent and incorruptable state administration in conjunction with a high degree of private morality; and a willingness on the part of the state bureaucracy to i n effect dismantle i t s e l f . I. NATIONAL INTEGRATION -- INTERNATIONAL DISINTEGRATION The nationalism c h a r a c t e r i s t i c of the democratic welfare state places Myrdal i n a large l y unresolved dilemma. While he i s a firm believer i n the ideals and accomplishments of the welfare state, he i s at the same time a committed i n t e r n a t i o n a l i s t . Myrdal's main thesis i s that the n a t i o n a l i s t i c economic p o l i c i e s of the welfare state are continually strengthening the very attitudes among the people who are s t r i v i n g for even further advances along these p o l i c i e s . That i s , the trend i s toward increasing economic nationalism in a l l countries with consequent d e s t a b i l i z i n g effects on the page 43 international system. As this point i t i s pertinent for us to. discuss t h i s issue. We s h a l l do so for three reasons: f i r s t , i t i s a means of r e i t e r a t i n g and summing up the argument thus far; second, i t puts the development of the welfare state i n the perspective of the international system; t h i r d , i t i s a means of introducing i n broad form the arguments to follow in Part II, dealing with the underdeveloped world. During the nineteenth century the international system was dominated by an integrated p a r t i a l world community consisting of northern and western Europe, North America and A u s t r a l i a . These nations, today forming the exclusive c i r c l e of r i c h and progressive states, also stood at the apex of world society at that e a r l i e r time. They were c u l t u r a l l y s i m i l a r and were economically, and i n a sense p o l i t i c a l l y , integrated. As we have seen recurring international crises have led to the d i s i n t e g r a t i o n of t h i s p a r t i a l world community. In fact, the p o l i t i c a l development of the Western countries was not compatible with continued international integration. During the l a s t sixty years the movement of persons, c a p i t a l , enterprise as well as goods and services has been severely distorted. Exchange rates are now regulated by 35 Gunnar Myrdal/"Economic Nationalism and International-ism," Austrailan Outlook, XI (December, 1957) 3-50. For further comments: also see Myrdal, Beyond the- Welfare State, pp. 117-48, 167-87, and Myrdal, An International; Economy, pp. 32-55 and 299-335. page 44 c e n t r a l governments as a r e i m p o r t s and e x p o r t s . I n o t h e r w o r d s , t h e d i r e c t cause o f t h e d i s i n t e g r a t i o n o f t h i s o l d i n t e r n a t i o n a l e c o n o m i c s y s t e m has been t h e p o l i c y measures a d o p t e d by i n d i v i d u a l s t a t e g o v e r n m e n t s . I t i s t r u e t h a t t h e s e p o l i c y measures were i n p a r t f o r c e d on governments by t h e r e a l o r i m a g i n e d e f f e c t s o f s e v e r a l i n t e r n a t i o n a l p o l i t i c a l c r i s e s on n a t i o n a l e c o n o m i e s . Y e t n a t i o n a l p o l i c i e s a l s o a g g r e v a t e d i n t e r n a t i o n a l c r i s e s and hence s p u r r e d i n t e r n a t i o n a l d i s i n t e g r a t i o n . These c r i s e s i n t u r n l e d t o new d e f e n s i v e p o l i c y measures by i n d i v i d u a l governments a l l t h e w h i l e l o o s e n i n g t h e t a b o o s on s t a t e i n t e r v e n t i o n i n t h e economy. A l t h o u g h W o r l d War I and i t s a f t e r m a t h was a p o w e r f u l s t i m u l a n t t o s t a t e i n t e r v e n t i o n , W o r l d War I I u n d e r m i n e d a l m o s t c o m p l e t e l y t h e e s t a b l i s h e d i n t e r n a t i o n a l power s y s t e m . T h i s o c c u r r e d b o t h i n t h e r e l a t i o n s between t h e a d v a n c e d c o u n t r i e s and i n t h e i r r e l a t i o n s h i p s w i t h t h e u n d e r d e v e l o p e d w o r l d . L i b e r a t i o n f r o m c o l o n i a l r u l e o f a l a r g e number o f c o u n t r i e s demanding e q u a l i t y o f o p p o r t u n i t y , l i b e r t y , d e v e l o p -ment and i n d e p e n d e n c e g r e a t l y i n c r e a s e d t h e scope o f i n t e r -n a t i o n a l r e l a t i o n s w h i l e m a k i n g t h e i n t e r n a t i o n a l s y s t e m somewhat l e s s p r e d i c t a b l e w h i l e much more c o m p e t i t i v e . W i t h t h e b r e a k - u p o f c o l o n i a l e m p i r e s , i t s e l f a m a j o r d e s t a b i l i z i n g f o r c e , t h e n e w l y l i b e r a t e d n a t i o n s began t o f o r m u l a t e p o l i c i e s i n t h e i r own n a t i o n a l i n t e r e s t . T h i s f u r t h e r weakened i n t e r n a t i o n a l i n t e g r a t i o n . Of c o u r s e , t h e o t h e r a g g r a v a t i n g f a c t o r was t h e page 45 enormous i n c r e a s e i n t h e power o f t h e S o v i e t U n i o n . As we a r e a l l a w a r e , t h e e c o n o m i c c o n s e q u e n c e s o f t h i s d e v e l o p m e n t i n c l u d e t h e armaments r a c e , m i l i t a r i z i n g o f n a t i o n a l e c o n o m i e s and t h e i n t r o d u c t i o n o f s t r a t e g i c i n t e r e s t s , as i m p o r t a n t , i f n o t d e c i s i v e , e l e m e n t s i n a l l i n t e r n a t i o n a l e c o n o m i c r e l a t i o n s . G e n e r a l l y , a l l t h e s e d e v e l o p m e n t s t h r e w " a n i r r a t i o n a l , p e r v e r t i n g , and c o n f u s i n g f o r c e i n t o a l m o s t a l l 3 6 p r o b l e m s o f n a t i o n a l and i n t e r n a t i o n a l p o l i c y . " As we d i s c u s s e d e a r l i e r , w h i l e t h i s h i s t o r i c a l p r o c e s s was e v o l v i n g t h e a d v a n c e d s t a t e s o f t h e West were a c c e l e r a t i n g t h e i r m a r c h t o w a r d n a t i o n a l i n t e g r a t i o n . The r o l e o f t h e s t a t e t o o k on new and m a s s i v e p r o p o r t i o n s as a t t e m p t s were made t o e n s u r e e c o n o m i c p r o g r e s s and p o l i t i c a l d e m o c r a t i z a t i o n . M e a n w h i l e t h e r i g h t s o f c i t i z e n s h i p were e n l a r g e d t o i n c l u d e t h e r i g h t t o m a t e r i a l p a r t i c i p a t i o n i n t h e f r u i t s o f n a t i o n a l p r o d u c t i o n . I t was no l o n g e r c o n c e i v a b l e i n t h e West t o a l l o w i n d i v i d u a l s , g r o u p s o r w h o l e r e g i o n s t o e x i s t o u t s i d e t h e e x p a n s i o n a r y s p r e a d o f e c o n o m i c d e v e l o p m e n t . A t t h e same t i m e , economic p r o g r e s s p e r m i t t e d w i d e r c i t i z e n p a r t i c i p a t i o n i n t h e p o l i t i c a l m a c h i n e r y . T h i s b r o u g h t t h e e c o n o m i c s y s t e m t o o p e r a t e i n e v e r c l o s e r a c c o r d a n c e : w i t h t h e i d e a l s o f l i b e r t y , and e q u a l i t y o f o p p o r t u n i t y . I n t u r n , by a l l o w i n g p a r t i c i p a t i o n and by d i s t r i b u t i n g , e c o n o m i c r e w a r d s t h e s t a t e was a b l e t o i n c r e a s e 3 6 M y r d a l , " E c o n o m i c N a t i o n a l i s m a n d I n t e r n a t i o n a l i s m , " 10. page- 46 c i t i z e n obedience and to make ever increasing demands on indiv i d u a l s . The net effect with respect to the international system, however, was the introversion or l o c a l i z a t i o n of attitudes and apathy towards events beyond the national boundary. The concern for l i b e r t y and equality d e f i n i t e l y did not extend to a l l mankind. Yet t h i s was not an i r r a t i o n a l response on the part of Westerners. For the protective p o l i c i e s of the "organiz-ational state" meant closed systems of merit and s e n i o r i t y were b u i l t up as national standards and defended by national organizations. Furthermore the welfare state i s expensive: heavy burdens of taxation, insurance premiums and membership fees made i t only natural that people would want maximum benefits from a national welfare state which they had b u i l t and paid f o r . Moreover, the very operation of the organizational infrastructure was within a national framework. The r e s u l t of a l l of th i s was that c u l t u r a l differences on dif f e r e n t sides of a border, perhaps i n i t i a l l y minor, grew i n importance. Concomitant with the introversion of attitudes was a 37 d r i f t toward national autarchy. Although no clear d i s t i n c t -ion can be made between, on the one hand, the p o l i c y measures designed to protect national economies from disturbances i n the international system and, on the other hand, welfare state p o l i c i e s per se, the international setting of the developing Myrdal, Ah International Economy, p. 38. page 47 welfare state has been one of progressive d i s i n t e g r a t i o n . As we: have seen, national planning i n the "organizational state" or the "service state," while permitting a r e a l growth in s o c i a l democracy, has an inherent autarchic tendency. Policies: directed towards welfare, equality, f u l l employment and s t a b i l i t y extend only as far as the national boundary. L i t t l e concern i s shown for i n t e r -national integration. Meanwhile, the goals of equality and progress severely r e s t r i c t the f l e x i b i l i t y of the welfare state i n adjusting to changes in the international system. The ideals of f u l l employment, p o l i t i c a l democracy and equality of opportunity cannot be e a s i l y s a c r i f i c e d i n attempts to meet international c r i s e s . In f a c t , even i f these ideals had permitted i t , the i n s t i t u t i o n a l ramification of the developing welfare state i n h i b i t s f l e x i b i l i t y . As Myrdal warns, the p o l i c i e s of the advanced welfare state are: . . . i n t r i n s i c a l l y autarchic and they are now firmly entrenched i n our national i n s t i t u t i o n s and ways of l i f e . The national economy has been changed towards a maximum of int e r n a l a d j u s t a b i l i t y which increasingly makes i t more possible to preserve internal s t a b i l i t y , but only at the expense o f l l e s s e r external f l e x i b i l i t y , which must result in international i n s t a b i l i t y and d i s i n t e g r a t i o n . Examples abound of n a t i o n a l i s t i c p o l i c i e s , a l b e i t adopted for r a t i o n a l p o l i t i c a l reasons, that could be 39 detrimental to international integration: the need for stable markets, stable employment and high u t i l i z a t i o n of 38 Myrdal, "Economic Nationalism and Internationalism," 15. 3 9 Myrdal, An International Economy, pp. 47-48. page 48 plants and equipment implies discrimination against foreigners; f u l l employment requires p o l i c i e s to control exports, imports, foreign exchange and foreign payments; r e d i s t r i b u t i o n a l schemes requiring comprehensive f i s c a l and s o c i a l p o l i c i e s generate s o l i d a r i t y , a s o l i d a r i t y which i s contained by national boundaries; a g r i c u l t u r a l protection, another in d i c a t i o n of national s o l i d a r i t y , i s r e f l e c t e d i n "dumping" on the international market; t a r i f f s , transportation rates and a l l the buying of state authorities tends to empha-size the p r i n c i p l e of national integration. While these n a t i o n a l i s t i c p o l i c i e s strengthen the trend toward international d i s i n t e g r a t i o n , they were adopted p a r t l y in response to international c r i s e s . As the process continues, the functioning of the "organizational state" becomes set i n a matrix of economic nationalism. Moreover, through these p o l i c i e s the state i t s e l f becomes stronger. The flow of material rewards, the spread of equality and the increasing opportunity for c i t i z e n s , t o control or p a r t i c i p a t e in state actions enhances national integration and the l o y a l t y and obedience of c i t i z e n s . But the increase in i n t e n s i t y and scope of nationalism i s not r e s t r i c t e d to the advanced states. World War II brought the collapse of the c o l o n i a l empires with the consequent emergence of scores of new states demanding both l i b e r t y and equality. Ideologically this represents the rapid spread of the ideals of Western c i v i l i z a t i o n . Yet nationalism in the underdeveloped world also represents a page 49 d e s t a b i l i z i n g effect on the international system. For one thing, the favorable international setting that characterized the old, p a r t i a l world community no longer e x i s t s : the ratioiiof- population to natural resources i s less favorable; there i s no easy access to inexpensive foreign c a p i t a l ; outlets for emigration are closed; and, i t i s no longer possible to i n d u s t r i a l i z e through ex p l o i t a t i o n of suppliers of raw materials and markets for manufactured goods. Internally, the more r i g i d s o c i a l structure marked by inequality, the indifference towards the rule o£ law, the lack of t r a d i t i o n of p o l i t i c a l independence, the d i s t o r t i o n of p o l i t i c a l democracy and the d i f f e r e n t sequence of c i t i z e n s h i p rights a l l represent less stimulating prods to enterprise, entrepreneurship and individual advance. 4^ Moreover, i n the underdeveloped world there are demands for r e d i s t r i b u t i o n a l reforms before there i s much increase i n national productivity. In the West, higher productivity made i t possible to move closer to equality of opportunity, which i n turn enhanced national prosperity. For a l l these reasons i t i s clear that the path to development currently adopted by the countries bears l i t t l e resemblance to that of the West. In the underdeveloped world we: do not see state planning emerging after economic advance, rather, i t i s planning for that advance. Yet as we have seen, planning i s an open i n v i t a t i o n to economic nationalism. 40 Myrdal, "Economic Nationalism and Internationalism," 18-19. page 50 However, even aside from the economic needs for state planning and therefore nationalism, the p o l i t i c a l l i f e of the underdeveloped countries dictates that nationalism is a necessary, indeed an essential, element. P o l i t i c a l nationalism represents a social force that creates the conditions for and fuels broad social, educational and economic policies that would at least make substantial development conceivable. Moreover nationalism could provide a framework and a spur for national integration and more to the point, the development of a strong state. Myrdal is keenly aware of this imperative of p o l i t i c a l development: The new nations must' be -moIded into; e f f e c t l w p o l i t i c a l ; entities which can decide upon, arid enforce, tnose far- ;  reachingpolicy measures which can release their peopleiY from cultural and economic stagnation. The primary task facing p o l i t i c a l leaders is to attempt to l i f t people out of apathy and frustration, inspire them to feel the unity of nationhood, give them the vision of economic development and i n s t i l l the discipline among them to strive effectively for accomplishment of this development.41 Yet as we shall see in Part II, ten years after this statement was written Myrdal is profoundly disillusioned with and more alert to, the weakness of the state in the underdeveloped countries. As we have tried to suggest, nationalism is important in the development of the underdeveloped world. Myrdal accepts this realism but is perhaps overly-optimistic. While he calls for a heavy dose of nationalism (albeit a "sane and 4 1 Myrdal, "Economic Nationalism and Internationalism," 25/ my emphasis". page 51 soiffid nationalism") 4^ to transform "the amorphous, dispersed and divided masses of people," 4 3 living under ancient mores and s p l i t in castes and classes, into national communities guided by an effective state, he rather sublimely assumes that the expansionary momentum of economic development ( i f i t occurs), w i l l create a common nationalism and a common culture. He seems strangely unaware that nationalism, with or without economic development and compatible with both states, may not lessen but may well increase communal hos t i l i t y . For one thing, there is no reason why awareness of others must bring with i t affection or identification with those others as common citizens with the same citizenship rights. Moreover, in the West one could predict that national integration, fired by economic development, would increase feelings of solidarity and cohesion. But in the West, the nation-states thus formed were of greater cultural homogeneity than is true of much of the underdeveloped world. Indeed, even in the Western states, communalism and ethnic antagonisms are by no means entirely absent. Although Myrdal warns of "nationalism beyond reason" 4 4 his concern is with its effects on the international system not the domestic p o l i t i c a l l i f e . Nevertheless, just as in the welfare states of the West, 4 2 Myrdal, Rich Lands arid Poor, p. 68. 4 3 Myrdal, Beyond the Welfare State, p. 173. 4 4 Myrdal, "Economic Nationalism and Internationalism," 27. page 5 2 nationalism in the underdeveloped world accelerates the trend toward international disintegration. Feelings of oppression and discrimination may easily deflect nationalism into dislike of foreigners. Along with this dislike may come discriminatory state policies designed less as an inducement to national developmenttthan as a means of thwarting foreign nations. Since nationalism is an obvious way to arouse the masses and usually to secure support from the educated e l i t e , i t becomes an effective means, indeed perhaps the only means, of acquiring and retaining p o l i t i c a l power.45 Again the result can be both anti-foreign and anti-development policies. In addition, i f the rich nations of the West feel undue discrimination they can easily slow capital movements and restrict investments thereby hampering economic development in a poor country. The general result w i l l be international instability and consequent disintegration. Myrdal once called for a "welfare world"4** as a means of counteracting international disintegration. As this became patently unrealistic for the indefinite future, he 47 lowered his sights to advocate "more education" and a 45 Myrdal notes that "once more the old adage is validated that nothing is so easily popularized as nationalism. The whole of the intelligentsia and the tiny middle class w i l l naturally be unanimous in their intense nationalism, however varied their other p o l i t i c a l inclinations and interests; but the pliant, i l l i t e r a t e masses can also be aroused by nationalistic appeals." An Iriterriatiorial' Economy, p. 154. 4 6 Myrdal, "Economic Nationalism and Internationalism," 31. 4 7 Myrdal, Beyond the Welfare State, p. 164. page 53 coordination of national policies, that i s , international 4.8 planning. ° Myrdal*s dilemma of national integration and international disintegration could only be resolved by harmonizing and internationalizing the existing structures of national economic policies. However i t is obvious that the obstacles to internation-al planning are not merely restricted to securing agreements, d i f f i c u l t though that may be. On a deeper level, what Myrdal is advocating is the sacrifice of some portion of a nation's "national interest" of sovereignty in an international system lacking the degree of human solidarity characteristic of the advanced welfare states of the West. Indeed, who would popularize the ideals of international cooperation in the "organizational state"? As Myrdal himself remarks, "the national state and a l l that goes on within i t s framework becomes the practical reality for everybody, while internationalist strivings are impractical dreams."49 At a more basic level, an ideal like international integration affects individuals in a general and dispersed way. In a national community of intensely organized but limited interests, a general goal with dispersed support is practically doomed. How would its advocates counteract the institutional inertia and vested interests of organizations, legislation and administration? In effect there is a gaping institutional imbalance between the forces working for 4 8 Ibid., pp. 221-22. 4 9 Ibid., p. 150. See also An Iriterriatiorial •Economy, p. 237. page 54 national and international integration. The paradox is that the solidarity evident in the individual welfare states has meant a shrinking of international solidarity. Moreover, Myrdal himself once characterized the international system as an "indeterminate ocean of power p o l i t i c s , where the crackpots and the demagogues swim with great pleasure." 5^ A l l of this means that the advanced Western countries are primarily interested in preserving the status quo. Change is d i f f i c u l t to bring about as "the psychological solidarity basis among the peoples and the imagination and 51 daring among their p o l i t i c a l leaders are largely lacking." Moreover, effective and acceptable international planning presupposes the development, or at least the ini t i a t i o n of development, in the underdeveloped world. As we shall see in Part II, even Myrdal's optimism and belief in the efficacy of the state in ensuring development is severely strained by the actual circumstances in that part of the world. Myrdal, An International Economy, p. 112. Myrdal, Rich Lands arid Poor, p. 73. page 55 PART II , THE ROLE OF THE STATE IN UNDEHTJEVELOPTiD COUNTRIES J. AN OVERVIEW From Part I we can derive Myrdal's assumption that general economic progress is necessary for granting a greater degree of equality of opportunity. At the same time, equalizing opportunity is a condition for sustained economic progress while i t is reflected in the development of an organ-izational infrastructure. These relationships account for national integration in the advanced countries and as well, they are necessary for integration in the underdeveloped countries. Moreover, their lack constitutes the prime reasons why these latter countries are not "moving": The equality issue is central in the development problems of the underdeveloped countries. Inequality relates to a l l social and economic relationships. . . . Inequality-arid the trend toward' rising IriequalIty stanfl as a complex  of inhibitions' arid obstacles to; development"^ I I consequently, there is an urgent need for reversing the trend and creating equality as a condition for speeding up development.52 Furthermore, economic integration in the West was a result of the effective p o l i t i c a l organization of individuals who combined to in i t i a t e policies progressively realizing the 5 2 Gunnar Myrdal, The Chal1erige'of World' Poverty. (New York: Pantheon, ,1970) , 49-50. Italics in the original. page 56 ideal of equality. Each advance toward economic integration saw a further refinement of this p o l i t i c a l technique. Meanwhile market forces became increasingly regulated through direct state policies. As we saw earlier, the i n i t i a l conditions in the underdeveloped countries are quite different from those that characterized the early phases of development in the West. As such, these differences suggest that large-scale state intervention and planning w i l l be necessary i f development is to be secured. Yet, unlike the West, the underdeveloped countries do not possess an efficient, capable state able to place heavy demands on i t s citizens while both enacting and implementing development legislation. Moreover, at present, these countries seem unwilling to go through a liberal interlude that would permit a purging of the incompetent, corrupt state. Therefore, a major problem for the under-developed countries is securing the strong state while at the same time carrying out massive state interventions. While the sequence of development is different, Myrdal is quite emphatic that the same relationships between p o l i t i c a l , economic, and social conditions hold true in the underdeveloped world. Economic progress, the abolition of social and economic barriers, and the realization of greater equality of opportunity are a l l interlinked in cause and effect relationships. In the advanced Western countries, economic progress and the rise in the levels of living 5 3 See section I, p. 49 page 57 meant more elbow room for everyone: the ideals of rational generosity could be given freer expression for there were more rewards that could be distributed; privileges could more easily be given up and the costs of common burdens were more bearable. A l l of this strengthened economic progress and gave a firmer basis for additional egalitarian policies. This, 54 in turn, strengthened p o l i t i c a l democracy. In the underdeveloped countries the means for init i a t i n g a l l the changes implied in these relationships is held to rest on purposeful, dynamic and effective state action. Yet as we shall see in Sections P through T inclusive, the state is far removed from the requisite capability and effectiveness. In Myrdal*s earlier writings he shows reasonable optimism with respect to the p o l i t i c a l and economic develop-ment of underdeveloped countries. He views the spread of independence, the i n i t i a l chorus of demands for p o l i t i c a l democracy and economic progress, and what he once saw as an emerging national solidarity, as "the victorious spread of Western ideals. We are f i n a l l y conquering the world spir i t u a l l y . This is the reason why we have not the 5 4 Myrdal has remarked that: "The more effectively a national state becomes a welfare state --motivated in a way which approaches a more perfect democracy and having at i t s disposal national resources big enough to carry out large-scale egalitarian policies with bearable sacrifices on the part of the regions and groups that are better off --the stronger w i l l be both the urge and capacity to counteract the blind market forces which tend to result in . . . in-equality." ' Rich Lands arid Poor, p. 41. page 58 capacity to fight this development. . . ."55 As w i l l become evident, this optimism has turned to disillusionment. Myrdal did warn, however, of the pos s i b i l i t i e s that might result from the failure to achieve economic development: . . . i f the underdeveloped countries do not achieve real and substantial success in their strivings for economic development, they w i l l be faced with very serious dangers of p o l i t i c a l cataclysms. . . . But . . . great care should be exercised before suggesting the precise nature of these possible cataclysms. In many cases a further spread of military dictatorships or other forms of Fascist rules seems, indeed, a more probable outcome, at least in the short run; in some other cases the result could be merely social and p o l i t i c a l decay and bottomless misery, perhaps lasting for decades.56 Committed to p o l i t i c a l democracy, the earlier writings betray Myrdal's hope that this form of rule w i l l result in economic development. However, in later years he becomes much less sanguine about the existence of real as opposed to formal or guided democracy, while much more insistent upon the necessity of more extensive equality i f development is to occur. Moreover, the utter apathy of the lower classes in iLarge part tempers his earlier prediction of ''explosive p o l i t i c s . " In a sense, Myrdal's later personal and tragic dilemma is that he is unable to see either democracy or equality emerging in the underdeveloped countries. The i n i t i a l strong and emotional drive for economic development and p o l i t i c a l independence has meant that development has become an intensely p o l i t i c a l matter, a 55 Myrdal, An International Economy, p. 158 56 Tbldl, pp. 134-35. page 59 m a t t e r f o r the s t a t e . In t he W e s t , t h e e n g i n e o f economic p r o g r e s s was l e d by t he i n d i v i d u a l e n t r e p r e n e u r a i d e d by 57 d i v e r s e and ad hoc s t a t e i n t e r v e n t i o n s . The p r a c t i c a l g o a l was immed ia te p r o f i t and p r o d u c t i o n . I n t h e u n d e r d e v e l o p e d w o r l d , h o w e v e r , economic deve lopment i s m o t i v a t e d by an i d e o l o g i c a l f o r c e : t he d e s i r a b i l i t y o r n e c e s s i t y o f r a i s i n g t h e l i v i n g s t a n d a r d s o f the m a s s e s . In S e c t i o n s R, S and U h o w e v e r , we w i l l p o i n t ou t t h a t t he a r t i c u l a t e s t r a t a has e x c e p t i o n a l l y a m b i v a l e n t i f n o t c o n f l i c t i n g v i e w s on deve lopment g o a l s t h a t have s e r v e d to f r u s t r a t e and i n a c t i v a t e s t a t e p o l i c y . The West went t h r o u g h a p a r t i c u l a r sequence o f d e v o l v i n g c i t i z e n s h i p r i g h t s on the i n d i v i d u a l t h a t p e r m i t t e d economic deve lopment w i t h o u t r a i s i n g t he l i v i n g s t a n d a r d s o f CO t h e m a s s e s . The g a i n s o f i n d u s t r i a l p r o g r e s s were f u n n e l e d i n t o p r o f i t s ; t he consequen t u n e q u a l d i s t r i b u t i o n o f income made p o s s i b l e l a r g e s a v i n g s w h i c h were u s u a l l y p l o u g h e d back i n t o i n v e s t m e n t , w h i c h , i n t u r n , r a i s e d p r o d u c t i o n . The p o l i t i c a l b a s i s f o r t h i s i n d i v i d u a l i s t and " a c q u i s i t i v e s o c i e t y " was o r d e r l y government and t he r u l e o f l aw - - n o t p o l i t i c a l democ racy . The u n d e r d e v e l o p e d c o u n t r i e s , h o w e v e r , seem to be 57 J o s e h p A . S chump e t e r , C a p i t a l i s m . .So 'c iar ism' and  Democracy (New Y o r k : H a r p e r and Row, 194ZJ p a r t i c u l a r l y P a r t 1 1 . 5 8 S e e , f o r e x a m p l e , R e i n h a r d B e n d i x , N S t i o n - B u i l d i n g and C i t i z e n s h i p (New Y o r k : J o h n W i l e y and S o n s , 19b4J e s p e c i a l l y c h a p t e r 3 . page 60 ideologically devoted to creating " i n i t i a l welfare" 5 9 directly out of poverty and with Cat least, theoretical) p o l i t i c a l democracy. Yet, as we point out in Section R, the necessity of capital formation and the requirements this imposes on individuals are riot demands the state either w i l l or can make on the citizen. Moreover, due to i t s ideological appeal, the work of international organizations, and the "demonstration effect" of advanced countries, the modern welfare s t a t e " t h e crowning result of decades of heavy saving and rapid industrial development under the most favorable conditions, is becoming a revolution exported to the stagnant, poverty- < stricken regions" 6^ Myrdal's concern is with effecting the welfare state in the underdeveloped countries; our concern is with the means chosen to this end and the "soft" variables of po l i t i c s as they relate to those means. As such, the "revolution," perhaps doomed from the start, has been hampered i f not completely aborted, under the impact of largely internal forces in the underdeveloped countries. K.; - NATIONAL INTEGRATION IN THE UNDERDEVELOPED COUNTRIES. Although national integration is not compatible with international integration, 6 1 Myrdal foresees economic and 5 9 Myrdal,' An Iriternatiorial Economy, p. 165 6 0 Ibid., p. 166. 6 1 See Section I. page 61 s o c i a l stagnation unless the under-developed countries become 62 consolidated nation-states. However he does not conceive national integration to be simply a matter of economic change. As he points out, i n many underdeveloped countries t h i s bias conforms with the powerful vested interests of o l i g a r c h i c groups. They desire economic development but want i t without any changes i n the s o c i a l structures within which they occupy p r i v i l e g e d p o s i t i o n s . 6 3 As we warned e a r l i e r , Myrdal i s emphatic i n his b e l i e f that development i s not possible without substantial changes i n s o c i a l r e l a t i o n s . This, i n turn, i s premised on the ideal of equality of opportunity progressively implemented through direct state action. When economic change h i t s a society of closed minds and entrenched s o c i a l r i g i d i t i e s , s o c i a l values are destroyed almost by necessity. . . . [Yet] to prepare the way for economic development [underdeveloped countries] need i n i t i a l reforms of the s o c i a l structure on a vast scale; without them there w i l l be no national integration and so no development. 6 4 He l a t e r adds th i s somewhat cautious statement: . . . i f the p o l i t i c a l necessity, of rapid economic develop-ment i s assumed, the obvious conclusion i s that c u l t u r a l and s o c i a l changes have to be planned and controlled, to a  certain: extent they may even have to' be induced. . . . opening the way for economic development and steering the 6 2 "In a l l the underdeveloped countries the economic development problem i s primarily a problem of seeking national integration i n i t s necessary combination with economic progress, the one being both the result of and the condition of the other." Myrdal, An Iriterriatiorial Economy, p. 167. 6 3 See Section Q. 6 4 Myrdal, An Irite'rnatiorial Economy, p. 170. page 62 s o c i a l changes towards wholesome [Western] a d j u s t m e n t s " 6 5 We should note here that these e a r l i e r statements are not qui t e as s t r i d e n t or i n s i s t e n t as t o the d e c i s i v e r o l e of the s t a t e . Myrdal's b e l i e f i n the e f f i c a c y of the s t a t e and h i s d i s i l l u s i o n m e n t w i t h the s t a t e become much more obvious i n Asian Drama. The "wholesome adjustments" of which Myrdal speaks include d e s i r e s f o r e f f i c i e n c y and m a t e r i a l advancement, r a t i o n a l i s m , experimentation and e n t e r p r i s e , s o c i a l m o b i l i t y , the removal of a l l " r i g i d i t i e s " i n the s o c i a l system, a respect f o r the r u l e of law, and the removal of c o r r u p t i o n , a r b i t r a r i n e s s and i n e f f i c i e n c y i n the s t a t e a d m i n i s t r a t i o n . These "modernization i d e a l s " 6 6 c e r t a i n l y represent sweeping changes. Yet i t i s vrorthwhile to note that Myrdal's e a r l i e r w r i t i n g s contain l i t t l e h i n t of the means f o r a t t a i n i n g them. This question of means i s important. Although Myrdal i s thoroughly opposed to the e t h n i c , c u l t u r a l or r e l i g i o u s chasms i n underdeveloped c o u n t r i e s , he does not yet o f f e r any e f f e c t i v e p r e s c r i p t i o n f o r t h e i r removal. He inveighs against "dual c u l t u r e s , dual populations and dual economies" as meaning segregation and ther e f o r e d i s c r i m i n a t i o n . Even though he admits that these d i v i s i o n s may represent some s o c i a l l y u s e f u l f u n c t i o n s and may not be " i r r a t i o n a l , " s ince they are not vol u n t a r y and since they v i o l a t e the i d e a l of 6 5 I b i d . , 6 6 Myrdal, Asiari Drama, I , pp. 47-69. page 63 equality they must be eradicated. 6 7 Besides remaining silent on the means for their •V eradication," Myrdal ignores the costs (financial or otherwise) of inducing these "wholesome adjustments." It is 6 8 assumed that a l l the "hardened institutions of inequality" are a l l equally damaging to development. Their forced removal, presumably by the state, is alleged to result in f u l l benefit for economic development. We shall return to this problem in our conclusion. In the area of class relations and their effects on national integration, Myrdal*s early analysis is to a degree superficial. It is not until AsTan Drama that he works out an incisive argument against inequality of wealth. Neverthe-less, i t is pertinent to mention a few points here. Inequalities in the distribution of wealth and income pose a heavy burden on both the p o l i t i c a l and economic development of the underdeveloped countries. Moreover, their continued existence, exclusive of any benefits to the lower classes (Myrdal incorrectly sees none) implies a passive acceptance on the part of the masses which is i t s e l f a cause of stagnation. Furthermore, as we shall see later, apathy among the masses is also a fundamental reason for the weakness of the state while i t is reflected in a low degree of p o l i t i c a l development. fin Myrdal, An InterriatTonal Economy, p. 178. fLQ Myrdal," Rich Lands and Poor, p. 60. page 64 For reasons of population distribution and rates of growth as well as the need for raising productivity, the main thrust of the equality ideal must be towards land reform. Land reform is essential i f the masses are to identify with the state and to grant legitimacy to the demands of the state. Myrdal is keenly aware of the d i f f i c u l t i e s of carrying through tenancy reforms against the powerful and deeply entrenched vested interests of the upper classes. Yet his earlier writings suggest a definite optimism in spite of the d i f f i c u l t i e s . . . . the reforms are not li k e l y to be handed down to the poor masses of people merely because of the rationality and benevolence of the privileged classes; as always before in history, reforms have to be fought for and won against the fierce resistance of most of those \>rho have to accept sacrifices. . . . the decisive struggle has to be waged on the homeground. The reforms w i l l have to come as a result of a gradually more effective domestic p o l i t i c a l process. However, without equality of p o l i t i c a l power, this •'decisive struggle" w i l l only result in rural poverty and backwardness. Ideals and social conscience are weak as self-propelled forces originating reforms. As we saw in Part I, the lower classes must become p o l i t i c a l l y organized to press Land reform occupies a crucial part in our later arguments therefore we shall return to i t in Section V. On the question of land reform also see Gunnar Myrdal "Will We Prevent Mass Starvation?" New Republic .•Vol. GLII (April 24, 1965) 14-15. "Jobs, Food, and People." ^riteTriatiorial  Development Reviewt Vol. VII (June, 1965) Z-o. "Land Reform In Its Broader Economic and Social Setting," Economic  Planning, Vol. II (.1966), 5-10. "Paths of Development," New Left Review, Vol; XXXVI (March-April, .1966) , ,65-74 (also re-printed as "Economic Development in the Backward Countries," Dissent, Vol. XIV, [March-April, 1967] 180-91). 70 Myrdal, An Iriterriatiorial Economy, p. 185. page 65 for redistributional reforms. At this stage in his career, Myrdal drew no clear connection between the entrenched vested interests thwarting land reform at the local level, and the existence of these and similar interests at the state level. These same interests systematically prevent effective land reform from 71 being enacted, or i f enacted, from being implemented, while frustrating the participation of the masses in the p o l i t i c a l process. Later Myrdal w i l l write: The main impediments to development are p o l i t i c a l , institutional and attitudinal. The power in many underde-veloped countries is in the hands of reactionary people who have or shortsightedly believe they have --an interest in preventing those changes in landownership and tenancy that would increase the opportunities and incentives for the peasantry to try and improve their lot. Indeed, in many countries where there are enlightened national leaders in p o l i t i c a l control they are made impotent by the landlords, moneylenders and other middlemen who have the power in the villages as well as in the parliament and who use i t to prevent the implementation of the leader's decisions, even when they are put in the form of legislation. And the poor . masses often do not protest; they are sunk in apathy, ignorance and superstitious beliefs caused and maintained by their poverty. 7 2 L. THE STATE AS THE MAIN AGENT FOR DEVELOPMENT A l l the changes that Myrdal sees as necessary for development could not emerge through piecemeal and ad hoc 71 For a useful distinction between the "enactment" stage and the "enforcement" stag:e of legislation see James C. Scott, "Corruption, Machine P o l i t i c s , and Social Change" American P o l i t i c a l Science Review, Vol. LXIII (December, 1969 1142-59. Myrdal, "Jobs, Food, and People," 6. page 66 interventions by the state, as occurred in the development of the West. Without radical involvement of the state in a planned and coordinated manner, stagnation, even retrogression, not development, w i l l be the result. The meaning and origin of state planning in the underdeveloped world are dealt with in Sections 0 and Q. Here we wish merely to mention several pertinent facts. In the poor nations, development cannot be secured through unhampered market forces. A fundamental reason for underdevelopment is precisely that market forces by them-selves are neither as strong nor as effective in - advancing the social system to any sort of "take-off"" Rather, in an unhampered free market the "spread effects" (the beneficial inputs derived from an i n i t i a l expansionary momentum) tend to be outweighed by the "backwash effects" ( a l l relevant adverse 73 changes). The result is great regional, and therefore individual, inequality. This result was evident during the colonial period when the play of market forces, i f i t led to any development at a l l , tended to be one of an "enclave" type. The implications of this for national integration are serious: If things were l e f t to market forces unhampered by any policy interferences, industrial production, commerce, banking, insurance, shipping and, indeed, almost a l l those economic activities which in a developing economy tend to give a bigger than average return --and, in addition, science, art, literature, education and high culture generally --would cluster in certain localities and regions, leaving the rest of the country more or less in a backwater. 7 3 Myrdal, Rich Lands arid Poor, pp. 30-31. 7 4 i b i d . » P» 2 6 • page 67 Clearly, no national government could afford to restrict its interventions in the economy unless i t was prepared to accept the consequences of the p o l i t i c a l decision for this type of development. Moreover, i t is not merely a question of the state guiding or releasing entrepreneurial activity to act in accordance with the national interest. In these countries there is l i t t l e existence of a "vigilant and enterprising 75 business class," consequently entrepreneurs are lacking --the state must create them and take on entrepreneurial functions i t s e l f . As our discussion of planning w i l l show, the real task of state planning is that of "institution-building." State actions may well serve to enhance not discourage private enterprise: If the underdeveloped countries are to succeed, their national economies are going to contain, even in an early stage of development, large elements of socialism, larger even than in the nationally highly integrated and industrialized countries. . . . "Capitalism" . . . modified in a fundamental fashion as a result of a re-organization under collective, public, quasi-public and private influences and containing substantial elements of socialism --has today perhaps a greater momentum than ever. . . . [In the West] i t is youthful, robust, expanding and anything but in decay. In most of the underdeveloped countries, however, . . . capitalism and private enterprise are weak and show only the most feeble tendencies to develop by themselves. . . . Only as a result, and \^ithin the general framework, of state planning and large-scale state promotional activity from the very beginning is there any hope for eventually fostering some kind of capitalism and private enterprise in these countries. Due to the weakness of market forces, most of the state 7 5 Myrdal, An International Economy, p. 257. ' Ibid.', p. 211. See also Myrdal, Rich Lands- arid Poor, p. 82. page 68 investment is not likely to be profitable in the ordinary sense. Indeed, because of "external economies"77 (trained workers, expanding markets) i t may be incorrect to calculate in terms of costs and profits. In fact, even in the usual meaning of costs and profits, i t is because investments were unprofitable from a market point of view that l i t t l e development took place. If the state were to follow the same c r i t e r i a , there would likewise be l i t t l e state inter-vention and therefore continued stagnation. As such, economic factors cannot be the determining factors in state planning. The plan and its targets are therefore decisions which represent p o l i t i c a l choices. Unlike the other economists, Myrdal demonstrates an admirable a b i l i t y to see the essential p o l i t i c a l nature of 78 national economic choices, yet he f a i l s to draw out the implication of this for national planning in the under-developed countries. Besides the irrationality i t may intro-duce from an economic point of view, this also means that the decisions of the state in the national plan are both the c r i t e r i a and the ihstrumerits of development. In other words, the actions of the state by definition accord with the national interest. We only need to remark that this need not be the case. For example, using scarce resources in "show- ' piece" public works or other forms of conspicuous public consumption may or may not serve a short-term function of 77 Myrdal, Rich Lands arid Poor, p. 90 7 8 Myrdal, Asian Drama, III, pp. 1878-98. page 69 enhancing national pride while i t may be extremely detrimental to the "national interest" in conserving materials and administrative competence. In addition, a major dilemma is that the state is so utterly weak that the demands placed upon i t far out-strip its present capacities. Economic liberalism, .currently ruled out by ideological reasons, is presently not conceivable as a means of launching a strong, capable, and effective state. Yet demands are pressing: not only must the masses be "awakened" and brought to participate in national affairs, but the entire economic and p o l i t i c a l infrastructure must be built and maintained.- Originally Myrdal warned against over-centralization in trying to cope with these demands. His advice was "to preserwith utmost care" whatever exists of voluntary, industrial or other organizations including local self-government. Yet we w i l l find that in Asian Drama, he no longer views these organizations as "agencies for democratic development" but rather props for stagnation. State-planning in the underdeveloped countries is confronted by vast problems largely absent from the Western experience: there is no highly integrated national community with well-entrenched legal traditions; no extensive network of organizations for protecting economic interests or social ideals; no vigorous democracy at the provincial or municipal level; no p o l i t i c a l l y mature and public-spirited citizenry; 79 Myrdal, An International Economy, .210. page^ 70 and above a l l , no e f f e c t i v e and incorrupt c i v i l service. As we discuss in Sections R through T a l l these factors adversely affect the role of the state as the main agent for development. In the main, the i n s t i t u t i o n a l infrastructure beneath the state l e v e l i s weak and i n i m i c a l to development. Many countries lack completely p r o v i n c i a l or municipal structures that could function as agencies for cooperative self-govern-ment. Appointed o f f i c i a l s often rule and exploit people i n c i t i e s and r u r a l areas while taking orders from a central state which i s usually dominated by landlords and other r u r a l e l i t e s . Therefore the tasks of p o l i t i c a l development --the development of a strong, capable and e f f e c t i v e state underpinned by an organizational infrastructure --face onerous obstacles. For Myrdal, i t i s l a r g e l y through state planning that means for e f f e c t i v e state planning w i l l be created. But his e a r l i e r writings demonstrate l i t t l e awareness of the consequence of these obstacles on the i d e a l , the very concept of planning i t s e l f . His r e a l i z a t i o n of these 80 consequences furnishes yet another personal tragedy for him. A state plan, to be e f f e c t i v e in meeting i t s goals and i n creating a p o l i t i c a l i n f r a s t r u c t u r e , must be more than just a general statement about intentions and hopes. It must show in d e t a i l the o v e r - a l l d i r e c t i o n of development, the amount of c a p i t a l required, the proportions of c a p i t a l to be allocated i n d i f f e r e n t sectors, and the s p e c i f i c inducements 8 0 See Section P. page 71 and controls to be used to r e a l i z e these d i r e c t i v e s . In a word, the plan must be "operational" That t h i s i s not the case i n most underdeveloped countries i s c l e a r l y evident from Section U, where we point out that the "non-operational plan" i s a r e f l e c t i o n and a cause of the weak state. Note that what Myrdal means by "planning" i n the underdeveloped world i s not mere "coordination." It i s superplanning by Western standards --superplanning which must take place within a framework of a weak government and administration. A l l the immense s o c i a l changes as well as the r e a l i z a -t i o n of greater equality are held to be a r e s u l t of d i r e c t state intervention. Myrdal i s a firm believer i n the "big 81 push" approach to development. The "big push" w i l l only come about through direct state action. Moreover, i t implies not just changing attitudes but changing the i n s t i t u t i o n a l structures that buttress those attitudes. The problem i s that changing attitudes requires a heavy dose of compulsion; compulsion, i n turn, requires a consolidated nation with a strong and e f f e c t i v e state. Yet, as we w i l l argue l a t e r , the strong and e f f e c t i v e state i s not possible without f i r s t sec-uring a basis for c i t i z e n compliance. Heavy demands on the c i t i z e n are not conceivable unless the c i t i z e n i s a participant in the control of the state and i n the d i s t r i b u t i o n of the rewards of state a c t i v i t y . In essence, we agree with Myrdal that equality i s essential for economic development. Yet 8 1 Myrdal, Asian Drama, I, p. 115, and I I I , pp. 1897-1912. page 72 equality w i l l not come about until organized pressure groups are created that w i l l press the state to implement as well as enact legislation favorable to the lower classes. M. THE ROLE OF THE STATE:' THE MODERNIZATION IDEAL OF SOCIALISM Three components of the modernization ideals bear directly on the role of the state: the ideologies of planning, democracy and socialism. A l l the aspirations embodied in these ideologies are far above the actual accomplishments. Although socialism has a vague and shifting meaning in the underdeveloped world, i t is often hailed by the articulate 8 2 strata as a goal, i f not an actual achievement. During the liberation and post-independence periods, free trade and free enterprise were identified with capitalism to the consequent detriment of a l l three. The prevalent poverty and stagnation, and the reaction of intellectuals to these conditions, led to an intense resentment against private business. Liberation was held to include not only p o l i t i c a l independence but freedom from the colonial structures of capitalism. Yet the psychological impetus of socialism varies from country to country: in some i t refers to the public interest with private benefit (e.g. India); in others "socialism" means depriving alien groups of their privileges (e.g. in Ceylon and generally throughout south Asia). The 8 2 Myrdal, Asian Drama, II, p. 801. page • .73 principle, however, is usually to replace alien capitalists with indigenous ones. Moreover the concept of socialism contemplates only limited, i f any, state ownership and management. It may include nationalization of large-scale industry (of"which there is l i t t l e ) , u t i l i t i e s , banking and insurance but in general the goal seems to be to improve existing private enterprises not their transfer to the public sector. 8 3 With respect to the largest economic activity, agriculture, decentralization of ownership and management is held as the ideal even in "s o c i a l i s t " I ndia. 8 4 Any debate over whether to develop large-scale industry by investment in the public or private sector has usually been solved more by ad hoc practical considerations than by any ideological commitment. Even in the area of heavy industry, in the exceptional case when private investors have come forward, they have been allowed to pursue their projects. What Myrdal says of Ceylon is perhaps of more general import: The main reason for the state to go into industrial•enter-prise is the dismal lack of willing, honest, and competent private entrepreneurs. Unfortunately . . . there is nothing to suggest that the state is more competent than private enterprise to undertake industrial development on a large s c a l e . 8 5 8 3 Ibid., pp. 810-11. 8 4 Ibid., p. 807. 8 5 Ibid., p. 831. page 74 N. ': THE ROLE OF THE STATE: THE MODERNIZATION IDEAL OF POLITICAL DEMOCRACY. Along with socialism, democracy in the form of universal suffrage was hailed as a benefit of the independence struggle. Indeed i t was thought essential to the achievement of social and economic equality. Unlike the West where universal suffrage was the triumph of education, p o l i t i c a l agitation and i n i t i a t i v e , 8 6 In the underdeveloped world p o l i t i c a l rights were often granted from above without the masses ever having been organized to demand them or to know and understand what these rights implied. This has had the unfortunate result that the masses do not feel or behave as active participants in the nation-building process hence both economic and p o l i t i c a l development is hampered. This is particularly evident in India where "democracy" seems to have the greatest, oven i f superficial, appeal: India's failure to make more progress in the direction of welfare democracy reflects the fact that no significant attempts were made to organize the masses, or to impress upon them their stake in agitating for a break-up of the country's rigidly inegalitarian social and economic structure. The impressive facade of parliamentary democracy cannot hide the fact that p o l i t i c a l participation in any meaningful sense is confined to small upper-class groups (including the urban "middle-class" and the "rural elite" of landowners and middlemen). The p o l i t i c a l behavior of the masses is largely controlled by individual personal-iti e s who appeal to religious sentiments, caste, or to regional loyalties and antipathies. India's parliamentary system has proved to be remarkably stable, but i t is the stability of stagnation.87 See above pp. 8-10 and note 58. 7Myrdal, Asian •Drama ,11, p. 776. page 75 Myrdal is convinced that when democracy falters or fa i l s in an underdeveloped country i t is not because the masses have so effectively organized themselves that the ruling el i t e f e l t compelled to take drastic action to protect their p r i v i l e g e s . 8 8 Rather p o l i t i c a l conflicts take place above the heads of the masses; the only perceptible difference might be a coup which replaces one set of elites with another. As an aside, i t is worthwhile to note that the so- ' called "modernizing military," highly regarded by some Western scholars, is not that effective in securing either economic or p o l i t i c a l development. A "modernizing" oligarchy may achieve some i n i t i a l limited success yet i t is unlikely to effect basic social structural changes. It i s , of course, incompatible with real as opposed to "guided" democracy. For this reason alone i t is surprising that some Westerners should advocate restricting participation (a consequence of oligarchical rule) instead of effectively broadening i t . 0. THE ROLE OF THE STATE:' THE MODERNIZATION IDEAL OF PLANNING The central ideology of the eli t e s , and the route chosen to secure development, is that of central state planning. In the underdeveloped world, planning means that the state should take an active, decisive role in the economy; 8 8 Ibid., II, p. 780. page 76 through state intervention in investment and enterprise and by its various controls over the private sector, the state is held responsible for initiating and directing economic development. Economic development in turn, usually means planning for heavy industrialization. Often i t is held that the state should plan for a "self-reliant" economy as national consolidation is alleged to depend on producing most 89 of the capital goods at home. This reinforces what we said earlier: national planning is not primarily an economic exercise but rather a p o l i t i c a l program that reflects the 90 p o l i t i c a l choices a government has made. Once the idea of inducing changes through coordinated state policies is accepted, most of the inherited social and p o l i t i c a l conditions appear undesirable and in need of reform. This conception of the state's role originated with the small intellectual e l i t e , spread horizontally among the articulate strata while gradually some of i t seeped down to the broad masses (largely through liberation movements, independence and the functioning of po l i t i c s and administration). Although planning has not been a success in most of the underdeveloped countries, mainly because of the discipline that i t demands and the power of vested interests in thwarting state actions, the ideology of planning has served as a rationalization for interventionist policies. Moreover, governments everywhere want to claim that state 8 9 Ibid., II, p. 1162. 9 0 Ibid., I l l , p. 1881. page 77 policies have been instrumental in securing development. Every advance is hailed as a result of successful state policies while every failure gives a rationale for austerity. Earlier we mentioned some of the reasons why state planning was chosen as the path for development.91 The "demonstration effect" of the welfare state in the West posed a sharp contrast to the relative stagnation in the poor countries. It was f e l t that a strong induced impetus was needed to end that stagnation as market forces were weak. Moreover, the international capital market has largely become a concern of governmental of quasi-governmental organizations. These lenders demanded to see "projects" as part of a development plan before committing funds. Since these funds were at any rate insufficient for economic development, the problem remained to "squeeze" and "twist" consumption so as to extract resources from the people. A l l of this implied large-scale state intervention in export and import controls. Moreover entrepreneurial talent was lacking and had to be created. The wealth of the country was the monopoly of the few and they together declined to risk money in productive enterprise. Instead, this upper class preferred speculative quick profit and conspicuous consumption and investment. The ideological basis for planning stems from the nationalist era of liberation struggles. Planning expressed a protest against colonial 1 aissez;-faire'. In effect, planning 9 1 See Section I, pp. 49.-50. page 78 * became a symbol of nationhood, a reminder of past battles fought for the nation and an expression of anti-imperialism. Furthermore, since private enterprise and c a p i t a l were associated with colonialism and imperialism they were often suspect by national leaders: Beyond any doubt, the ideology of planning contained an element of resentment against private, e s p e c i a l l y foreign, business; t h i s resentment was a force for i t s rapid spread, p a r t i c u l a r l y among the i n t e l l e c t u a l s . . . . [This] remains so today, even when public declarations and p o l i c i e s seem fr i e n d l y enough. 9 2 In addition, p o l i t i c a l independence forced leaders everywhere to begin to frame and implement p o l i c i e s to serve the national i n t e r e s t . Due to the sheer magnitude of the task and the scarce resources available for p o l i c y implementation, planning was unavoidable. Indeed, n a t i o n a l i s t leaders often had a goal or v i s i o n of a "better society" that required d i r e c t i o n from the state i f i t was to be achieved. The legacy of colonialism --paternalism, authoritarian-ism and passive submissiveness to authority --although i n r e a l i t y detrimental to a strong state, inbued national leaders and government o f f i c i a l s with a psychological orientation to organize and do things for the people. Although i t i s u n l i k e l y the masses ever went through a "revolution of r i s i n g expectations" that suddenly awakened 93 them to the p o s s i b i l i t i e s of state planning, they may well have come to expect that some o f f i c i a l should do more for 92 Myrdal, Asian Drama, I I , p. 724. 9 3 Ibid., I I , P. 730. page 79 them. However t h i s does not imply they understood the requirements of s t a t e planning or tha t they were organized to press e f f e c t i v e l y f o r t h e i r r i g h t s . P.; MYRDAL RE-VI SI TED: THE REQUIREMENTS' OF STATE PLANNING-Myrdal's expectations were undoubtedly that s t a t e planning would lead to a type of " o r g a n i z a t i o n a l s t a t e " s i m i l a r to that of the West. For example, he st a t e s t h a t : The p o l i t i c a l and i n s t i t u t i o n a l s t r u c t u r e i n a l l co u n t r i e s of South A s i a permits only a l i m i t e d degree of c o o r d i n a t i o n by means of c e n t r a l government command. . . . So long as a measure 6£ autonomy f o r s t a t e s , provinces and m u n i c i p a l i t i e s i s preserved and . . . so long as production and trade have not been c o l l e c t i v i z e d and brought under d i r e c t c o n t r o l of the c e n t r a l government, the re g u l a r mode of.o p e r a t i o n i n preparing a plan and implementing i t becomes e s s e n t i a l l y that of n e g o t i a t i o n w i t h a l l s o r t s of c o l l e c t i v e o r g a n i z a t i o n s beneath the c e n t r a l s t a t e . . . . In these n e g o t i a t i o n s the government should have the upper hand and be able to an extent, to induce these other c o l l e c t i v e o r g a n i z a t i o n s to f a l l i n t o l i n e w i t h i t s purposes. I t can exert a u t h o r i t y . . . by p l a y i n g o f f i n t e r e s t s against each other. . . . I t has a l s o at i t s d i s p o s a l a number of l e v e r s of c o n t r o l --inducements as w e l l as r e s t r i c t i o n s --which i t can, when necessary, i n c r e a s e . 9 4 However, because i t depended on a c l e a r conception of the p u b l i c i n t e r e s t , a u n i t e d government, a government fr e e of vested i n t e r e s t s , law and order, p o l i t i c a l s t a b i l i t y , i n t e r n a l u n i t y , s e l f - r e s t r a i n t and a f o r t u i t o u s combination of leadership s k i l l and a b i l i t y , Myrdal's r a t h e r o p t i m i s t i c c h a r a c t e r i z a t i o n of the " r e g u l a r mode of op e r a t i o n " of s t a t e planning was i n c r e a s i n g l y shattered by the r e a l i t y of p o l i t i c s i n the underdeveloped c o u n t r i e s . 9 4 I b i d . , pp. 734-35. page 80 Myrdal foresaw planning as y i e l d i n g a dividend of massive c i t i z e n p a r t i c i p a t i o n i n government. In e f f e c t , planning would bring about not only economic development but p o l i t i c a l development and a democratization of the entire p o l i t i c a l framework as a multitude of diverse organizations encapsulated an ever increasing number of c i t i z e n s . A l l these people would therefore have an interest i n preserving and enhancing the state. Moreover, the continual increase of persons with a very r e a l vested interest i n planning would gradually l e v e l concentrations of power and wealth. Under the pressure of e f f e c t i v e democracy the ideals of s o c i a l and economic equality would rule supreme with benefits heretofore denied to the poor gradually working t h e i r way downward. Why would the upper class frustrate the growth of greater equality? As Myrdal sees i t , the push for equality would not impoverish the wealthy but enrich them. However, as we s h a l l see, the flaw i n Myrdal's argument i s that we cannot depend on the state to create the organizational infrastructure that w i l l i t s e l f enhance the strength of the state. Granted equality i s e s s e n t i a l , but equality w i l l not be had u n t i l the masses are e f f e c t i v e l y organized to press for t h e i r i n t e r e s t s . I t i s naive to believe that an upper-class dominated state w i l l undertake the means of i t s own destruction. We cannot expect s e l f - d e n i a l 95 from the p r i v i l e g e d groups. 9 5 Myrdal himself points out that India i s p a r t i c u l a r l y page 81 Not as paradoxically as i t may seem, although the elites have proclaimed greater equality as a universal goal of planning, marked inequality s t i l l exists. Indeed, in spite of a l l the attempts at planning equality between the social strata has not decreased, i f anything i t has increased. Part of the problem is directly related to the weakness of the state. For example, tax avoidance and tax evasion are pervasive while taxes on mass consumption have increased and 97 are more effectively collected. But the problem goes deeper: the beneficiaries of supposedly egalitarian state policies have not been the poor but the middle and upper classes. Moreover, specific legislation to aid the poor, motivated by the ambitions and pretensions of Westernized eli t e s , rarely gets to the implementation stage. Of course, this too is a reflection of the weakness of the state: i t w i l l not be altered unti l the masses are p o l i t i c a l l y organized to press for their interests. It is evident that Myrdal*s type of planning is dependent on the advanced p o l i t i c a l development characteristic of the West. For the underdeveloped countries, we see an increasing realization that the exigencies of p o l i t i c a l l i f e , plagued by endless moral exhortations to the rich to share in the "common struggle" and show greater "sensitivity" to the poor. Of course, this inheritance from the Ghandi era is ineffectual. "Moral fervor alone cannot eliminate traditional inequalities." See' Asian" Drama, II, p. 764. 9 6 Ibid., II, p. 756. 9 7 Ibid., II, p. 762. page 82 t he a l m o s t comp le te l a c k o f o r g a n i z a t i o n a l i n f r a s t r u c t u r e , t h e power o f v e s t e d i n t e r e s t s i n p r e s e r v i n g t he ' s t a tus ' quo and t he d i s m a l l e v e l o f p a r t i c i p a t i o n o f t h e masses i n n a t i o n a l a f f a i r s p r e c l u d e s e f f e c t i v e o p e r a t i o n o f t h i s t y p e o f p l a n n i n g . However M y r d a l * s c o n c l u s i o n seems t o be t h a t s t a t e p l a n n i n g w i l l i n e f f e c t c r e a t e t he c o n d i t i o n s f o r i t s own a c h i e v e m e n t . I f t he o r g a n i z a t i o n a l i n f r a s t r u c t u r e i s l a c k i n g , s t a t e p l a n n i n g w i l l c r e a t e i t ; i f n a t i o n a l c o n s o l i d a t i o n i s n o t p r e s e n t , p l a n n i n g w i l l i n d u c e i t ; i f l e g i t i m a c y and a f f e c t f o r t h e s t a t e i s l o w , p l a n n i n g w i l l r a i s e them; i f c i t i z e n p a r t i c i p a t i o n i s v i r t u a l l y n o n - e x i s t e n t , p l a n n i n g w i l l b r i n g i t a b o u t . The p o s s i b i l i t y t h a t p l a n n i n g f o r d e v e l o p m e n t , e s p e c i a l l y h i s c o n c e p t i o n o f p l a n n i n g , i s u n w o r k a b l e and n o n -v i a b l e t h e r e f o r e ought t o be d i s c a r d e d , i s s i m p l y n o t e n t e r -t a i n e d . We w i l l r e t u r n to t h i s p o i n t l a t e r . Here we s h a l l m e r e l y n o t e t h a t M y r d a l wants i n e f f e c t d i r e c t s t a t e a c t i o n t o c r e a t e an i n f r a s t r u c t u r e o f o r g a n i z e d b a r g a i n i n g and a l l t h e t h i n g s t h a t go w i t h i t even though t h i s came about as a s p o n -taneous deve lopment i n t he W e s t . The c r e a t i o n o f t h i s i n f r a -s t r u c t u r e - - p o l i t i c a l deve lopment t owards t he s t r o n g s t a t e - -becomes a c o n d i t i o n f o r , and consequen t o f , e f f e c t i v e s t a t e p l a n n i n g . L a t e r , o u r p o i n t w i l l be t h a t e f f e c t i v e s t a t e p l a n n i n g i s s i m p l y n o t p o s s i b l e g i v e n t he a c t u a l c o n d i t i o n s o f p o l i t i c a l l i f e i n t h e s e c o u n t r i e s . P e r h a p s w e , a l o n g w i t h M y r d a l , w i l l have to r e c o n s i d e r t he r o l e o f t h e s t a t e i n page .83 development. Q. THE •INTELLECTUALS- AND- PLANNERS' RE"-VISITED: THE MEANING OF DEMOCRATIC PLANNING • The articulate strata place great f a i t h in "democratic planning" as a means of achieving development. However what they mean by "democratic planning" has sharp differences from the model presented in Part I. Although the concept of "democratic planning is uncertain, i t does seem to include two specific things: f i r s t , democratic planning should enlist the support and active participation of the masses in plan preparation and implementation; second, popular participation should emerge "Voluntarily, that i s , state policies should not require , . 98 compulsion. The rationale for the "quest of mass involvement" is that development w i l l ultimately require changes i n the way people think, feel and act. Individually, they w i l l have to work harder and more efficiently; collectively, they w i l l have to cooperate to improve their society and its institutions. This faith in democratic planning rests on the belief that the masses,, as they become aware of their dismal living conditions and are shown the efficacy of state policies in improving those conditions, w i l l respond by supporting the adoption of those policies and f a c i l i t a t i n g their fulfillment. 9 8 Tbld., II, p. 850. page 84 The d i f f i c u l t i e s with this " o p t i m i s t i c bias" are re a d i l y apparent: this conception of democratic planning i s based on a non-existent equality while i t i s held to r e s u l t in greater equality between individuals and s o c i a l groups. Planners and i n t e l l e c t u a l s greatly underestimate the tenacity of inherited s o c i a l arrangements while they greatly overestimate the a b i l i t y to e f f e c t the ideals of planning without more state compulsion. Although without this bias the ideology of planning would disintegrate, i t does appear that planning cannot wait for the voluntary surge of approval of the unorganized masses. In other words, planning may well be unsuccessful simply because the stringent requirements es s e n t i a l for i t s operation are not present i n the general society. Moreover, i n the absence of e f f e c t i v e p o l i t i c a l organization and without state compulsion i t i s d i f f i c u l t to conceive any greater equality i n the interests of the masses. The wealthy w i l l not w i l l i n g l y forego t h e i r p r i v i l e g e s while the masses w i l l not w i l l i n g l y change t h e i r inherited patterns of i n t e r a c t i o n . Planners and i n t e l l e c t u a l s generally assume greater s o c i a l and economic equality through voluntary mass support for planning. However, given the pervasive socio-economic inequality, p o l i t i c a l equality i s v i r t u a l l y non-existent. The preparation and implementation of planning i s predominantly i n the control of p r i v i l e g e d groups who may voice e g a l i t a r i a n page 85 intentions yet largely frustrate their implementation. One of the crucial differences between planning in the West and planning in the underdeveloped countries is the time sequence, that i s , the ideal of planning has been adopted in the underdeveloped world before much development has actually been accomplished. This is one of the main reasons why state policies for effecting social and economic equality as well as p o l i t i c a l democracy are largely ineffectual. There is simply not the same basis of an expanding economy that would make greater generosity possible Myrdal concludes that a greater role for the state is necessary i f popular support is to be mobilized for development. The imperatives of development dictate that these countries cannot wait for the emergence of voluntary or spontaneous support from below: . . . i f a modern infrastructure cannot be created by state intervention, there is scant hope for any development at a l l that might later generate the appropriate spontaneous response. . . . There is no choice but to create the institutional infrastructure by government policy and to spur its growth by government intervention.I" 1 Or later he says: . . . in the stagnant villages of South Asia this voluntary participation does not emerge spontaneously as i t did in Western Europe; i t needs to be fostered and directed by 1 0 0 Scott has termed the psychological dynamics that emerge in a poverty-stricken country the "constant-pie orien-tation." Essentially i t reflects the severely limited avail- ' abi l i t y of power, prestige, wealth, land and status and the effect this has on increasing insecurity while precluding co-operative action. See James C. Scott, PoTitlcaT Ideology in  Malaysia', (New Haven: Yale University Press, J.yb8j Chapter six. 1 0 1 Myrdal, Asian' Drama, II, p. 869. page 86 the government. The great poverty and rapid population increase rules out gradualness; the alternative to rapid development is no development at a l l or even regression.1® 2 However as we noted earlier, the state is an institution controlled by the privileged groups. Is i t likely they would enact and effectively implement state policies designed to create an organizational infrastructure that would only serve to undermine their privileged positions? Moreover, the efficacy of an organizational infrastructure, i f i t is not merely to perpetuate oligarchical rule, depends on broad and intense citizen participation. This too brings us right back to the problems of equality. Furthermore, even i f i t could be accomplished without a monolithic state, disciplined ruling party and a network of zealous cadres, a state-created institutional infra-structure could be a direct challenge to democracy. It is hard to conceive of such an infrastructure resulting in less not more centralization. Fred Riggs makes the valid point that i f the state creates an interest group infrastructure then these interest groups w i l l function both in the input processes of government (as originators of policy) and in the output or administrative functions (as implementators of policy). With low citizen participation the problem is to prevent the institutional infrastructure from becoming a mere appendage of state control. In this instance, the organizational infrastructure is then not a means of popular control over 1 0 2 Ibid.;, II, p. 878. page 87 government but rather an instrument of popular regimentation. 103 We would then have p o l i t i c i z a t i o n but without democracy. Nevertheless, the creation and operation of an i n s t i t u t i o n a l infrastructure assumes immense powers and resources at the command of central state structures that are c l e a r l y beyond reach. Therefore, the p o s s i b i l i t y emerges that "planning for development" i s an i l l u s o r y goal that may well weaken the whole development e f f o r t . Moreover, Myrdal i s ambivalent over the d e s i r a b i l i t y 104 of mass p a r t i c i p a t i o n . His dilemma i s that he wants a strong, capable^effective and benevolent state that w i l l e f fect s o c i a l reforms. However, i t i s clear that due to the power of vested interests and the tendency toward in e f f e c t u a l o l i g a r c h i c a l rule i t becomes imperative that the masses p a r t i c i p a t e more, not less intensely i n decision-making structures. Furthermore t h i s p a r t i c i p a t i o n must be organized independently l U b Fred W. Riggs, "Bureaucrats and P o l i t i c a l Development: A Paradoxical View" i n Bureaucracy and P o l i t i c a l Development, edited by Joseph LaPalombara (Princeton: Princeton University Press, 1963) 120-67. Riggs also states that the bureaucratic organs (what we have termed the "planning organs") "are not a spontaneous product of c i t i z e n demand in response to f e l t needs. The groups extend the reach of the bureaucracy providing i t with transmission belts through which t o t a l mobilization can, p o t e n t i a l l y , be achieved. Hence the growth of state sponsored interest groups augments bureaucratic control without necessarily strengthening any centers of autonomous p o l i t i c a l power capable of bringing bureaucratic machines under popular control." See pp. 140-41. i U 4 See for example Asian Drama, II , pp. 879, 883. Also, Gunnar Myrdal, " P o l i t i c a l Factors in Economic Assistance," S c i e n t i f i c American, Vol. CCXXVI ( A p r i l , 1972), 19. page 88 of the central state structures i f the power of vested interests is to be broken at that level. It is through this prior p o l i t i c a l organization that equality of opportunity w i l l be effected to gradually dissolve the perpetuators of the status quo. Wherever the state is a preserve of a landed oligarchy i t has not shoivn any remarkable benevolence in effecting egalitarian reforms such as land redistribution. Yet in countries like India, the absence of land reform precludes effective mass participation in a state-created public or quasi-public institutional infrastructure. 1^ 5 As Myrdal diagnoses, land reform has been kept ineffective by state legislatures, administrators and local notables in the villages. Due to the distribution of p o l i t i c a l power, state interventions have not helped the poor but rather the rural elite and the upper classes.l^ 6 No amount of sermonizing w i l l change this as i t is caused by the basic inegalitarian power structure. If "democratic planning" is an i l l u s i o n so is the idea of a "benevolent state." Undoubtedly the great stress on "voluntariness" by the intellectuals and planners is related to the equality issue. Although Myrdal is content merely to castigate this "weak" approach and to decry the "indulgence" shown towards the 107 people, i t would seem to have a quite rational p o l i t i c a l 105 W e r e t u r n to the issue of land reform in Section V. 1 0 6 Myrdal, Asian Drama, II, p. 889. 1° 7 Ibid., II, p. 911 and pp. 1140-41. page 89 basis. How could p o l i t i c a l leaders, planners and intellectuals i n s i s t that the masses assume greater obligations when pervasive inequality prevents the people from participating in decision-making or the distribution of rewards? Because the people receive so much less from the outputs of state activity and contribute so l i t t l e to the inputs, ° they could hardly be asked to assume greater burdens than their poverty already imposes. P o l i t i c a l leaders, aware of the low level of benefits actually reaching the lower classes, wisely resist enforcing additional burdensome obligations. Therefore, although the "extreme laxity" of discipline and the state policy of using the carrot rather than the stick appear as irrational for economic development, they are entirely rational for maintaining p o l i t i c a l s t a b i l i t y , that i s , stagnation and the p o l i t i c a l status' quo. R. POLITICAL DECAY: THE "SOFT-STATE" A l l the problems of socialism, democracy, planning, popular participation and the power of vested interests come together to form not the strong, capable and effective state Apathy and disinterest are, of course, a form of input into the p o l i t i c a l system. Although these "support" p o l i t i c a l s t a b i l i t y , i t is a sta b i l i t y of stagnation. Therefore these effective popular inputs must be held detrimental to p o l i t i c a l development. page 90 but the " s o f t - s t a t e . " 1 0 9 As Myrdal sees it,, the "soft-state" has a notorious lack of social discipline marked by deficiencies in legislation particularly in law observance and enforcement. Moreover, there is a general lack of obedience to rules and directives as they are handed down to lower levels of public o f f i c i a l s . In fact, these o f f i c i a l s often act in collusion with the powerful vested interests whose conduct they should regulate. Generally, throughout society there is a general inclination of people in a l l strata to resist public controls and their implementation. From our perspective, for perfectly rational reasons the state requires very l i t t l e of i t s citizens. There are few obligations either to do things in the community interest or to avoid actions opposed to that interest. Moreover, even those obligations that do exist are enforced inadequately, i f at a l l . Myrdal warns that in the underdeveloped countries, democratic planning does not primarily mean that policies should be decided by democratic p o l i t i c a l procedures or that they should be implemented with cooperative and shared responsibility of local and sectional communities rather i t 110 is implied that policies should not require compulsion. Yet successful democratic planning requires the readiness and 1 0 9 Myrdal, Asian Drama, II, p. 893 and III, p. 1863. Also see, Gunnar Myrdal, "The Soft States of South Asia: The C i v i l Service Problem," Bulletin of the Atomic Scientists, XXV CApril, 1969), 7-10. 110 Myrdal, Asian Drama, I, pp. 66-67. page 91 the a b i l i t y to place obligations on people i n a l l s o c i a l s t r a t a . To enforce these obligations requires decisive doses of compulsion. E a r l i e r we saw that i n Western Europe the strong state came into existence as the networks of obligations gradually encompassed ever larger p o l i t i c a l units. More recent trends indicate that c i t i z e n obligations have increased tremendously i n scope and degree while the burdens and benefits have been more equitably d i s t r i b u t e d . As such the strong state, i n e f f e c t a by-product of l i b e r a l i s m , could both demand and receive greater c i t i z e n compliance while reducing arbitrariness under the impact of the p a r t i c i p a t i o n ethos. In the underdeveloped world, however, these same processes have not occurred. Liberation movements were e s s e n t i a l l y rebellions against authority with passive resistance to authority (e.g. India) being a prime weapon. This has resulted i n an "oppositional mentality""'"''"1 that 11 2 plagues governments everywhere i n the underdeveloped world. Moreover, th i s legacy of anarchist attitudes has an ide o l o g i c a l and emotional force deriving from i t s successful use against the c o l o n i a l power. Now t h i s same legacy i s being used against the n a t i o n a l i s t governments. Concomitant with the passive resistance of the lox^er 111 _ Edward Shi Is,' P o l i t i c a l Development In the New- States (The Hague: Mouton, 1962) , pp. 34-36.. 1 1 2 We are excluding those states controlled by a Communist party. page 92 classes, there is a rational reluctance among the articulate strata to place citizens under specific obligations sanctioned by state power. The reluctance to use compulsion, in effect a countervailing force to the colonial legacy of authoritarianism and paternalism, has resulted in the enactment but not the implementation of broad reform legislation. Therefore one of the main explanations of the "soft-state" is that most p o l i t i c a l power is in the hands of the upper classes. This upper class can afford to voice egalitarian laws and policies but are in the unchallenged 113 position to prevent their implementation. To counteract these obstacles or "indiscipline," to enact and enforce a system of community rules, is not an easy task. The inegalitarian institutions that prevent the masses from receiving their due benefits also make them considerably less susceptible to government control. Furthermore, the inauguration of the strong state is handicapped by the inhibitions of the p o l i t i c a l rulers. Scott's comments are worth noting: The fact that there is more uncertainty (less consensus) about behavioral norms and community goals in transitional society than in either industrial or folk societies has another important consequence. Where the means and goals of po l i t i c s are more settled, administration occupies an increasingly important place vis-a-vis p o l i t i c s . But where conflict over means and goals s t i l l prevails as i t does in transitional society p o l i t i c s achieves primacy. The society that has not yet attained a viable consensus on ultimate goals, which values should be emphasized (equality? freedom? progress?) and how they should be achieved - - i s the p o l i t i -cized society par excellence.I 1 4 113 Myrdal,' Challenge to World Poverty, pp. 221-22. 1 1 4 Scott; •Political- Ideology in Malaysia:.• p. 137. page 93 The result of the "politicized society" is that: The risks of po l i t i c s . . . are so imposing as to discourage long-run strategies. The concern with holding on to one's post at a l l costs and the generally high level of opportunism . . . illustrates a short-run, exploitationiat orientation toward the rewards of p o l i t i c s . It is not surprising that many p o l i t i c a l leaders in new nations, finding themselves in this situation, attempt to maximize their security of tenure by whatever means are at their disposal and, f a i l i n g that, eschew long-run commitments and concentrate instead on the short-term material and status rewards of office. The very real f r a g i l i t y and unpredictability of the p o l i t i c a l world, as of the economic and, to a lesser extent, the bureaucratic environment, lend a quite rational quality to the pursuit of short-run, personal values. Perhaps a better appreciation of the exigencies of the ."soft-state" would be achieved i f we looked more closely at developments in India since 1947. S. INDIA AS A "SOFT-STATE" Following independence, India's p o l i t i c a l leaders generally abandonned Ghandi's advice to lead the ascetic l i f e . Instead, through ostentatious living an attempt was made to recreate the imperial pomp and ceremony of British India. Naturally this increased the economic and emotional distance between the rulers and the ruled,and,:'in fact, was upheld by the inegalitarian structures that prevented broad mass participation in national affairs. Myrdal has written that: Because of the narrow social base of the elite and the absence of any pressure from the masses, the leaders were under no compulsion to govern vigorously and disinterestedly. 1 1 5 Ibid., pp. 142-43. page 94 [Moreover] India's acute problems . . . made i t seem imperative to avoid issues that might threaten the unity of the articulate upper strata. The urgency of achieving order and stability induced most leaders to shelve ideological commitments and acquiesce in postponing the implementation of the f u l l Congress program. 1 1 The result of this was a strange ambivalence of radicalism in principle but conservatism in practice. Many social reforms were intentionally permissive (e.g. banning dowries, child marriages and untouchability) with the result that enacted laws were rarely enforced. In fact the dichotomy between professed ideals and reality, between enacted legislation and its implementation, is a prime characteristic of the "soft-state." This ambivalence was rationalized as the necessity of getting the "modernization ideals" firmly accepted before implementing the necessary reforms. However this approach to modernization has had unfortunate results for Indian development: [It has] strengthened not merely conservative but often reactionary forces, thereby making the realization of the modernization ideals ever more d i f f i c u l t . . . . The postponment of the promised social and economic revolution, which was to follow India's p o l i t i c a l revolution, is thus in danger of becoming permanent. Even the p o l i t i c a l revolution is less of a reality than the ideological leaders expected. India is s t i l l very far from being controlled by the majority of its people, or even having its policies devised so as to be in the interests of the masses. 1 1 Rather than leading to mass participation in government, therefore a movement toward effective social reform, universal suffrage has compelled p o l i t i c a l leaders to seek accomodation 1 1 6Myrdal. Asian Drama,- I, p. 275. 1 1 / Ibid., I, p. 278. page 95 with the dominant interests in society: the rural e l i t e , merchants, and moneylenders. This has meant not the removal but the solid i f i c a t i o n of the traditional social structures. The " p o l i t i c a l mechanism" which has led to this frustration of the development efforts is as f o l l o w s : 1 1 8 With i n i t i a l high hopes, the Congress party, as the major party, achieved a few immediate successes which helped to establish state authority; this success provided a rationale for not carrying through a more sweeping social and economic revolution; as India became more of a "soft-state" p o l i t i c a l leaders were increasingly inhibited from carrying out reforms; as the nationalist leaders were gradually replaced, the upper class slipped into positions of power and abstained from enacting policies that contravened their privileged positions; since Congress needed the financial support of the wealthy, the social and economic stratification systems were enhanced and the masses were kept poor, ignorant and passive; meanwhile, the operation of the democratic processes strengthened the power of conservative and reactionary groups who lacked the egalitarian visions of earlier Congress leaders; consequently, the absence of social and economic reforms hampered national consolidation and economic development while i t enhanced the negative features of the "soft-state'.' In effect, Congress went from an i d e a l i s t i c , nationalist party of liberation to an opportunistic, special-interest 1 1 8 Ibid., I, pp. 280-81. page 96 forum. "As politics became increasingly concerned with. practical issues, so the pressure of vested interests on the politicians grew stronger and with i t , corruption and 119 nepotism became profitable." We have characterized this as p o l i t i c a l l y rational given the environmental constraints. Yet i t has had the unfortunate effect of leading to an early stagnation in social reform. Nor has i t had a beneficial influence on p o l i t i c a l l i f e : "Politics now is commonly considered an avenue to privileges and patronage; to be a poli t i c i a n is to be regarded as a self-seeker and opportunist.' Most of the members of parliament and the state assemblies, elected by universal suffrage, belong to the privileged classes. While they frustrate effective reform legislation that would benefit the masses, they quickly vote 121 themselves salary and housing accomodation above average. Meanwhile, through the bestot^al of p o l i t i c a l jobs and favors they often gain s t i l l more advantages as "representatives of the people." While this may be perfectly rational for securing their p o l i t i c a l positions, i t does indicate that in conditions of gross inequality, universal suffrage, without effective p o l i t i c a l organization of the lower classes, is an inegalitarian not an equalizing tool. Therefore the "soft-state',' although i t may be highly 1 1 9 Ibid., I, p. 290. 1 2 0 Ibid., I, p. 292. 1 2 1 Ibid.,11, p. 766. page 97 stable, i s characterized by p o l i t i c a l and economic stagnation. E f f e c t i v e state action requires enforcement at the lower levels of the c o n s t i t u t i o n a l structure --the s t a t e s , d i s t r i c t s , and l o c a l i t i e s . Yet due to the poverty, i n s e c u r i t y , ignorance and apathy of the masses plus the habitual dependence on and passive submissiveness to people of wealth (as we have stated, a r a t i o n a l response), e f f e c t i v e p o l i t i c a l power at the lower levels i s held by landlords, merchants and moneylenders. It is p r e c i s e l y these groups which stand to benefit i f reform measures are thwarted. Moreover, since these groups function as p o l i t i c a l brokers who control the votes of the poor unorganized 122 masses, national leaders, even when they are so i n c l i n e d , are constrained from i n i t i a t i n g broad s o c i a l reforms: Suffrage has given the r u r a l e l i t e a power that state ministers and l e g i s l a t o r s must respect. P o l i t i c a l decentralization, or panchayat r a j , has strengthened t h e i r p o sition s t i l l further by offering them more opportunities for p o l i t i c a l o f f i c e arid patronage. Democracy i t s e l f thus plpiaysnint ohfche.ahandsfo^ .125 If the goal i s p o l i t i c a l s t a b i l i t y , then i t has been achieved. Yet i t has been achieved at the expense of a strong state and an innovating p o l i t i c a l system. This suggests that universal suffrage i n a harshly i n e g a l i t a r i a n and extremely poor society with unorganized lower classes does not lead to 1 2 2 James C. Scott, "Patron-Client P o l i t i c s and P o l i t i c a l Change In Southeast Asia," American; P o l i t i c a l Science; Review, LXVI (March, 1972), 91-113. 123 Myrdal, Asian Drama, II , p. 293. Emphasis in the o r i g i n a l . page 98 a popular "revolution" of any sort. Indeed, the i n e f f i c a c y of "socialism" or "planning" from above plus the lack of popular pressure from below are i n d i c a t i v e of the power of vested i n t e r e s t s . Moreover, i t should caution, and should have cautioned Myrdal, against any cavalier suggestions about purging the state of s o c i e t a l influences --of making the state strong --while at the same time positing an ever increasing burden of state r e s p o n s i b i l i t i e s . If these states were not " s o f t - s t a t e s , " then "democratic planning" could have reduced the power of the r u r a l e l i t e s and the upper classes. Y e t . i t seems that state planning i s i n fact a main prop of the " s o f t - s t a t e " : as long as the poor remain i n a r t i c u l a t e and unorganized, positing or demanding an increased role for the state gives greater scope for the machinations of p r i v i l e g e d groups; furthermore, each f a i l u r e of state planning has paradoxically led to the cry for greater, rather than l e s s , state intervention, thereby againllaying the basis for further f r u s t r a t i o n . While state planning has been a r e l a t i v e success i n the West, i t s r e l a t i v e f a i l u r e i n the " s o f t - s t a t e s " of the underdeveloped world should induce a r e - d i r e c t i o n of our thoughts. Clearly Myrdal can be faulted for e x t o l l i n g the benefits of central planning.whHe himsetLfelias diagnosed the stringent requisites for planning as well as t h e i r almost t o t a l lack in the underdeveloped countries. Furthermore, the d i f f i c u l t i e s in planning for the strong state are more page 99 stark when we r e a l i z e that the " s o f t - s t a t e " i s a corrupt state. TV ; THE "SOFT-STATE"; AS A CORRUPT STATE Myrdal claims the " f o l k l o r e of corruption" i s a dominant t r a i t of the "soft-states.""'" 2 4 Generally, t h i s refers to i n d i v i d u a l b e l i e f s about corruption, the emotions attached to those b e l i e f s and the valuations placed on corruption by individuals i n the public and private spheres. Myrdal holds that i f i n d i v i d u a l c i t i z e n s believe that corruption i s widespread, e s p e c i a l l y among high government o f f i c i a l s , then corruption e a s i l y spreads to a l l sectors of society. What Myrdal has i n fact found i n South Asia i s rampant corruption i n government, business and among the general public. The " f o l k l o r e of corruption" has created a psychic state of "well, i f everybody seems corrupt, why shouldn't I be corrupt?" Increasingly t h i s results i n the state being subject to massive plundering for i n d i v i d u a l benefit: While i t i s . . . exceedingly d i f f i c u l t in South Asia to introduce the p r o f i t motives and market behavior into the the sector of s o c i a l l i f e where they operate i n the West --that i s , the economic sphere - - i t i s . . . d i f f i c u l t to eliminate motivations of private gain from the sector where they have been suppressed i n the West --the sphere of public r e s p o n s i b i l i t y and power.I" 1 2 4 Ibid., I I , p. 940. 1 2 5 Ibid., I I , p. 948. page 100 However, surely this indicates that we should not be primarily concerned with eradicating corruption i n the public sector but rather we should seek means that would encourage the development of s i m i l a r behavior patterns i n the private sphere. That i s , a psychological orientation of securing the greatest i n d i v i d u a l gain even i f i t i s at the expense of other c i t i z e n s . Primarily, this would mean stimulating acquisitiveness and risk-taking while leaving the state the function of maintaining broad l i m i t s as to tolerable behavior. Myrdal i s unflinching i n his condemnation of corruption and i t s effects on development. Yet he does not c l e a r l y indicate that corruption i s both a r e f l e c t i o n of, and an inducement for, the gross inequality and the great absolute poverty of the " s o f t - s t a t e s . " For example, the benefits of holding any public o f f i c e are enormous while the penalties for attempting to obtain one by bribery are r e l a t i v e l y minor in r e l a t i o n to low standards of l i v i n g or pressure from 1 27 r e l a t i v e s for favors. l^b wertheim writes that: "just as i n the eighteenth century as a new sense of values broke through i n keeping with the maxim public right i s public duty, so now a new sense of values i s developing that might be summed up . . . private right i s public duty. . . . [Therefore] in t h e i r present condition of tension, [the Southeast Asian states] cannot possibly f i n d a secure foothold i n a nineteenth century morality which i s becoming obsolete." See W. F. Wertheim, "Sociological Aspects of Corruption i n Southeast Asia," P o l i t i c a l Corruption, edited by Arnold J. Heidenheimer, (New York: Holt, Reinhart and Winston, 1970), 210. I 2 7 Colin Leys, "New States and the Concept of Corruption," i n Heidenheimer, P o 1 i t i c a1 Corruption, 341-45 . page 101 Furthermore, Myrdal f a i l s to see that when corruption i s widespread i n the society, s t r i c t action against corruption only serves to increase the opportunities for corruption. Likewise, his rather p u r i t a n i c a l attitudes suggest a denial of the bargaining and compromise ess e n t i a l to p o l i t i c s . In th i s respect Huntington's observation i s worth repeating. The escalation of standards i n a modernizing society and the concomitant devaluation and rej e c t i o n of p o l i t i c s represent the vi c t o r y of the values of modernity over the  needs of society. 128 ~ Myrdal remains convinced that corruption counteracts attempts at national consolidation, decreases respect for and allegiance to the government and endangers s t a b i l i t y . In addition, contrary to i t s name, "speed money" or bribes given with the hope of expediting bureaucratic procedures, actually i n h i b i t s decision-making while introducing 129 " i r r a t i o n a l i t y " i n plan f u l f i l l m e n t . He does not consider the contrary proposition, namely, that corruption, irrespective of i t s effects on economic development, at least keeps important groups within the p o l i t i c a l system and i n fact represents a certain type of i d e n t i f i c a t i o n with the state. Like machine or vv c l i e n t e l i s t i c p o l i t i c s , corruption provides s p e c i f i c and concrete benefits to groups and individuals who might 1 2 8 Samuel P. Huntington, "Modernization and Corruption," in Heidenheimer, P o l i t i c a l Corruption, 494. 129 Myrdal, Asian Drama, I I , pp. 951-55. page 102 otherwise be t o t a l l y alienated from the p o l i t i c a l system. However, we must admit that pervasive corruption of this sort may substitute for e f f e c t i v e reforms while defusing the impetus for any revolutionary changes. In f a c t , Huntington may well be correct when he states that corruption 130 i s possibly conducive to p o l i t i c a l s t a b i l i t y . Yet i t i s a s t a b i l i t y of stagnation. Furthermore, the relationship that Huntingdon posits between corruption and p o l i t i c a l i n s t i t u t i o n a l i z a t i o n may not be as clear as he suggests: rather than corruption enhancing i n s t i t u t i o n a l i z a t i o n , perhaps corruption, through i t s adverse effects on the equality ideal and i t s negative influence on s o c i a l reforms, actually frustrates attempts to organize the masses and increase t h e i r popular p a r t i c i p a t i o n . Scott's observation i s pertinent here: the patronage and bribes d i s t r i b u t e d to the unorganized poor represent a "side-payment" which a l l but precludes basic structural change that might improve the c o l l e c t i v e access of the poor to economic opportunities and make those opportunities less ephemeral.1^1 The b e l i e f s that underpin a corrupt society (everyone for himself at the expense of the common good) suggest that the " s o f t - s t a t e s " are not amenable to Myrdal's type of planning, that i s , his type of planning c a l l s for cooperative action and c o l l e c t i v e bargaining. In addition, i t presumes a clear conception of the public good and a 1 3 0 Huntington, "Modernization and Corruption," 498. 1 3 1 James C. Scott, Comparative P o l i t i c a l Corruption, (Englewood C l i f f s : Prentice H a l l , 1972) p. 149, my emphasis. page 103 harmony of interests, created by state p o l i c i e s . In the absence of a community of goals and a s o l i d national i d e n t i f i c a t i o n perhaps more encouragement should be given to the type of behavior that Myrdal finds so objectionable. Since he posits such a large role for the state i n securing development, Myrdal i s p a r t i c u l a r l y alarmed at the extent of corruption i n the bureaucracy: The state both as entrepreneur and as c o n t r o l l e r of private enterprise has to r e l y on public services as the instrument of carrying out i t s p o l i c i e s . The very fact of planning, therefore, enhances very d e c i s i v e l y the role of the public services for development. These countries w i l l have l i t t l e chance of rapid and continuing development i f they do not succeed i n building up an e f f i c i e n t cadre of public servants, reaching from the highest positions . . . down to . . . a l l the others employed by public authorities.132 He i s p a r t i c u l a r l y opposed to overstaffing or the great number of "hangers-on" who do l i t t l e useful work and have low e f f i c i e n c y i n work performance. However his pre s c r i p t i o n i s merely to give better t r a i n i n g to c i v i l servants as this would "reduce the need --and the excuse 133 --of having overgrown s t a f f s . " This naive view t o t a l l y ignores what we know of the modus operandi of c l i e n t e l e 134 networks. Myrdal, "The Soft States of South Asia: The C i v i l Servant Problem," 8. Servant Problem," 8. 1 3 3 Ibid., 9. * 3 4 Among the recent l i t e r a t u r e on p o l i t i c a l c l i e n t e l i s m see Rene Lemarchand, " P o l i t i c a l Clientelism and E t h n i c i t y i n Tropical A f r i c a : Competing S o l i d a r i t i e s i n Nation-Building," APSR, LXVI (March 1972) 69-70; Rene Lemarchand and Keith Legg, " P o l i t i c a l C lientelism and Development," Comparative P o l i t i c s , IV (January 1972) 149-78; John Duncan Powell, "Peasant Society page 104 Overstaffing may r e f l e c t incompetence but i t i s not primarily caused by incompetent public o f f i c i a l s . Rather, the search for security, the pressure of family, kin, v i l l a g e or l o c a l i t y forces o f f i c i a l s to give consideration to the pleas for employment made by friends and r e l a t i v e s . U n t i l these environmental factors are dealt with, better t r a i n i n g or other "reforms" are not l i k e l y to withstand the sustained pressure from the general society. In other words, i_f the state i s to have a large and increasing role in development, the problems of overstaffing, nepotism and graft w i l l be continuing features of public bureaucracy. As a means of strengthening our l a t e r argument we must make two important digressions: f i r s t , we must consider the nature of controls used in the state plans; second, we must b r i e f l y look at the issues of land reform and a g r i c u l t u r a l p o l i c y . U. • PLAN CONTROLS; IN THE "SOFT-STATE" Besides p l a i n graft, nepotism and "speed money," the prevalence of corruption within the state i s both encouraged and r e f l e c t e d by the type of operational controls used to regulate the economy. Even though there i s a shortage of competent and and C l i e n t e l i s t P o l i t i c s , " APSR, LXIV (June 1970) 411-25; and, James C. Scott, Patron Client P o l i t i c s and P o l i t i c a l change i n Southeast Asia," APSR,. LXVI (March 1972) 91-113. page 105 honest administrators, the plans are not operational i n the sense of having the levers of p o l i c y planned i n advance. There i s a marked preference for discretionary as opposed 135 to non-discretionary controls. This seems to r e f l e c t one of the "opportunistic biases" of which Myrdal frequently warns: by keeping the plans non-operational, planners and p o l i t i c a l leaders can conveniently divert t h e i r attention from the reforms and other measures necessary for plan implementation e.g. l i t t l e attention i s paid to planning 136 taxes or e f f e c t i v e land reform. Of course t h i s aids those groups interested i n perpetuating the status quo while i t r e f l e c t s the exigencies of the " s o f t - s t a t e . " E a r l i e r i n his carreer Myrdal c l e a r l y warned of the negative consequences of discretionary controls: The system tends e a s i l y to create cancerous tumors of p a r t i a l i t y and corruption i n the very centre of the administration, where the sickness i s continuously nurtured by the favors d i s t r i b u t e d and the grafts r e a l i z e d and from which i t tends to spread out to every limb of society. I n d u s t r i a l i s t s and businessmen are tempted to go i n for shady deals instead of steady, regular business. Individuals who might have performed useful tasks i n the economic development of t h e i r country become i d l e hangers-on, watching for loopholes i n the decrees and dishonesty i n t h e i r implementation. This i s a l l the more dangerous as a general weakness in underdeveloped countries . . . -L^ *5 Discretionary controls involve i n d i v i d u a l decisions by an administrative authority with the power to act on i t s own d i s c r e t i o n . Non-discretionary controls are controls which are applied automatically following the formulation of some d e f i n i t e rule. Further d i s t i n c t i o n i s made between pos i t i v e and negative controls: the former are aimed at stimulating or encouraging production or consumption while the l a t t e r are meant to prevent or l i m i t production or consumption. Myrdal, Asian Drama, I I , p. 904. 1 3 6 See also Ibid., I I I , p. 2010. page 106 i s that t h e i r business classes are too much i n c l i n e d to-,37 look for easy p r o f i t s i n place of sustained i n t e r p r i s e . The r e s u l t of numerous and often c o n f l i c t i n g controls i s that few minor nand no major decisions i n the private sector can be taken without p r i o r permission of the administrative a u t h o r i t i e s . The existence of p o s i t i v e controls (e.g. import controls, low interest rates, tax holidays) designed to encourage private enterprise often c a l l forth compensatory negative controls when the parameters of foreign exchange and resource a l l o c a t i o n are reached. The paradoxical result i s that "while everyone talks about the necessity of encouraging private enterprise and while a greater number of controls are i n s t i t u t e d with this i n view, most o f f i c i a l s have to devote most of t h e i r 138 time and energy to l i m i t i n g or stopping enterprise." By encouraging private enterprise beyond p r a c t i c a l l i m i t s , a huge bureaucratic system of discretionary controls i s needed to r e s t r a i n business a c t i v i t y . This would seem to: r e f l e c t a competition between which path of development to follow, that i s , private or public investment. An important effect of these c o n f l i c t i n g controls i s that e x t r a o r d i n a r i l y high p r o f i t s can be made by those successful i n working t h e i r way through the system. This explains, why coordination and s i m p l i f i c a t i o n i s not effected: 137 My rdal, An International Economy, p. 283. 138 Myrdal, Asian Drama, II , p. 925. page 107 the controls give wealth and power to those o f f i c i a l s and p o l i t i c i a n s who administer them; the system favors big, already established firms and, i n f a c t , p a r t l y accounts for what Myrdal sees as a trend toward increasing oligopoly i n 139 these 1 countries. For these reasons, Myrdal's "remedy" seems larg e l y i r r e l e v a n t : he advocates "better" planning which w i l l reduce the need for so many discretionary controls. The question i s , who w i l l enact and carry through th i s reform? Entrenched vested interests i n both business and government greatly p r o f i t from the status quo. Moreover, since we are i n e f f e c t dealing with a problem of s o c i e t a l corruption as well, i s i t conceivable to have a large and expanding incorrupt state that could withstand the predatory advances from the community? The existence of corruption and the " f o l k l o r e of corruption" on which i t i s based w i l l not be abolished even i f a l i t t l e tinkering with the controls i s effected. What Myrdal wants i s a purge of corruption and the creation of a strong-state while the state i s b u s i l y expanding i n a l l directions --creating an organizational i n f r a s t r u c t u r e , e f f e c t i n g massive reforms, leading the way in economic development and r a i s i n g the health, educational and l i v i n g standards of the poor. What we have said of the power of vested i n t e r e s t s , the absence of equality and the exigencies of the " s o f t - s t a t e " would normally lead us to a 1 3 9 Ibid., II, pp. 929-30. page 108 t o t a l l y pessimistic conclusion about the l i k e l i h o o d of such developments occurring. However i f we look at what Myrdal has to say of land.reform, i t becomes possible to suggest an alternative to continued economic and p o l i t i c a l stagnation V. ; AGRICULTURAL POLICY IN INDIA Myrdal bases any hope he may have for economic development on e f f e c t i n g changes i n the a g r i c u l t u r a l s e c t o r . 1 These changes, long thwarted by the exigencies of the " s o f t -state," perhaps provide a clue to overcoming the effects of the " s o f t - s t a t e " and enhancing p o l i t i c a l development. The major problem confronting the a g r i c u l t u r a l sector i s the necessity of increasing both the u t i l i z a t i o n of the greatly underutilized labor force and the productivity of 141 those engaged in agriculture. Although Myrdal places great hope on the application of modern s c i e n t i f i c technology 142 and a r e d i r e c t i o n of a g r i c u l t u r a l research, i n s t i t u t i o n s and attitudes remain the major impediments to e f f e c t i n g highe productivity, better labor u t i l i z a t i o n and enhancement of mass p a r t i c i p a t i o n i n national development. As we mentioned e a r l i e r , land reform measures were 1 4 0 See note 69. 141 Myrdal, Asian Drama, II, p. 1244. Unlike most Westerners, Myrdal rejects the notion that agriculture i s "labor-intensive" i n South Asia. Rather low yields per acre r e f l e c t a "labor-extensive" economy where the labor input i s low i n terms of nam-hours and e f f i c i e n c y . page 109 lar g e l y frustrated i n the post-independence period. This i s often attributed to the p o l i t i c a l pressure exerted by large landowners who early joined the n a t i o n a l i s t movements and therefore were well represented i n the r u l i n g p o l i t i c a l p a r t i e s . However t h e i r influence can be exaggerated. Inaction i n land reform must also be attributed to the lack of a p o l i t i c a l l y organized lower c l a s s . As Myrdal points out, " i t must not be assumed that a handful of big landowners, however well placed,could have vetoed r a d i c a l agrarian l e g i s l a t i o n had i t received massive popular support. Due to the nature of interests involved, a consensus did not emerge i n the a r t i c u l a t e s t r a t a on r a d i c a l land reform p o l i c i e s . The d i f f u s i o n of land ownership among the urban upper class and the r u r a l e l i t e (here including many high and low placed government o f f i c i a l s ) created a powerful anti-reform bloc. Aththe v i l l a g e l e v e l i n f l u e n t i a l peasant landlords opposed nearly a l l types of land reform measures. The result was that the state r e l i e d on cooperation and "community development" as a means of r a t i o n a l i z i n g agriculture. But as we saw e a r l i e r , since t h i s by-passed the equality issue, benefits, o the equality issue, benefits accrued to the upper s t r a t a in the v i l l a g e s not the lower classes. Therefore the "cooperative" i n s t i t u t i o n s --and the government subsidies given for t h e i r "development --had the net e f f e c t of creating 1 4 2 Ibid., I I , pp. 1251-1301 1 4 3 Ibid., II, p. 1303. page 110 m o r e , n o t l e s s , i n e q u a l i t y . I t w o u l d seem t h a t t h e community d e v e l o p m e n t p r o g r a m s were doomed from t h e b e g i n n i n g . F o r one t h i n g , t h e i d e o l o g i c a l p h i l o s o p h y u n d e r l y i n g community d e v e l o p m e n t o r " p a n c h a y a t r a j " p r e s u p p o s e d t h a t t h e v i l l a g e was a u n i t w i t h a b a s i c harmony o f i n t e r e s t s among i t s mambers. A l t h o u g h c o n s i s t e n t w i t h G h a n d h i ' s c o n c e p t o f v i l l a g e l i f e , t h i s was and i s u n r e a l i s t i c . C o n f l i c t n o t harmony i s t h e norm between t h e e c o n o m i c and s o c i a l g r o u p s . T h i s c l a s h o f i n t e r e s t s i n t h e v i l l a g e h e i r a r c h y p l u s t h e f a i l u r e t o i n s t i t u t e l a n d r e f o r m s a r e t h e f u n d a m e n t a l r e a s o n s f o r t h e f a i l u r e o f community d e v e l o p m e n t e f f o r t s . ! 4 4 M o r e o v e r , t h e v e r y a t t e m p t a t community d e v e l o p m e n t has f r u s t r a t e d o t h e r r e f o r m s . A g r i c u l t u r a l e x t e n s i o n s e r v i c e s b e n e f i t t i n g m a i n l y t h e i n f l u e n t i a l p e a s a n t l a n d l o r d g r o u p , enhanced t h e i d e a t h a t money c o u l d be o b t a i n e d t h r o u g h m o d e r n i z a t i o n and t h a t s t a t e a i d was f o r t h c o m i n g f o r t h i s p u r p o s e . R e a l i z i n g t h i s , p e a s a n t l a n d l o r d s became l e s s d i s p o s e d t o h a v i n g t h e i r h o l d i n g s r e d i s t r i b u t e d t o t h e p o o r . I n o t h e r w o r d s , t h e v e r y a t t e m p t t o f o l l o w a s o c i a l i s t p a t t e r n has had t h e e f f e c t o f m a k i n g a g r i c u l t u r e more .. . . • 14g c a p i t a l i s t i c . S i n c e t h e s e programs have a i d e d t h e b e t t e r - o f f s n o t t h e p o o r , t h e p o l i t i c a l consequence i s t h a t t h e most 1 4 4 I b i d . , I I , p p . 1343-44. 1 4 5 I b i d . , I I , p . 1345. Page 111 o p p o r t u n e moment f o r a r a d i c a l l a n d r e d i s t r i b u t i o n may have p a s s e d : Sweeping changes m i g h t p e r h a p s have b e e n a c c o m p l i s h e d i n t h e r e v o l u t i o n a r y e n v i r o n m e n t o f t h e i m m e d i a t e p o s t - w a r anand p o s t - i n d e p e n d e n c e y e a r s . But i f c o n s e n t f o r a f u n d a m e n t a l change i n p r o p e r t y and t e n a n c y r i g h t s m i g h t . have been won t h e n , i t i s n o t p o s s i b l e now. The p i e c e m e a l r e f o r m s t h a t have been a c c o m p l i s h e d have b o l s t e r e d t h e p o l i t i c a l , s o c i a l , and e c o n o m i c p o s i t i o n o f t h e r u r a l u p p e r s t r a t a on w h i c h t h e p r e s e n t governments depend f o r d r u c i a l s u p p o r t . Not o n l y has t h e p o l i t i c a l i n f l u e n c e o f t h i s g r o u p i n c r e a s e d , b u t i t s i n t e r e s t i n p e r p e t u a t i o n o f t h e s t a t u s quo has been e n h a n c e d . I t s s t a k e i n t h e e x i s t i n g o r d e r i s , o f c o u r s e , s h a r e d by t h e m i d d l e and u p p e r s t r a t a o f t h e u r b a n p o p u l a t i o n , whose members o f t e n own l a n d . I n c o m b i n a t i o n , t h e s e f o r c e s e x e r t a s t r o n g p r e s s u r e f o r c o n s e r v a t i s m i n r e g a r d t o t h e a g r a r i a n s t r u c t u r e , however r a d i c a l t h e t o n e o f p o l i c y r e s o l u t i o n s and c e r t a i n l a w s . . . . P i e c e m e a l r e f o r m s have t h u s dimmed t h e p r o s p e c t s f o r r a d i c a l r e f o r m i n a g r i c u l t u r e , d e s p i t e t h e d e t e r i o r a t i o n i n t h e s t a t u s o f t h e weaker members o f t h e r u r a l h i e r a r c h y and t h e r a p i d i n c r e a s e i n t h e i r members, b o t h a b s o l u t e l y and r e l a t i v e l y . 1 4 6 T h e r e f o r e , r e j e c t i n g r a d i c a l l a n d r e d i s t r i b u t i o n o f , c o n s o l i d a t i o n as p o l i t i c a l l y i n f e a s i b l e , 1 4 7 M y r d a l a d v o c a t e s T AO t h e d e v e l o p m e n t o f a g r i c u l t u r e on c a p i t a l i s t l i n e s . ^° S t a t e p o l i c i e s i n i t i a t e d up t o now ( l a n d r e f o r m s , l e g a l p r o t e c t i o n o f t e n a n t s , community d e v e l o p m e n t p r o g r a m s and 149 a g r i c u l t u r a l e x t e n s i o n s e r v i c e s ) have s t r e n g t h e n e d t h e p o s i t i o n o f t h e u p p e r r u r a l s t r a t a , and i n t h a t g r o u p t h e p r o g r e s s i v e p e a s a n t l a n d o w n e r s and p r i v i l e g e d t e n a n t s . H o w e v e r , due t o t h e r a d i c a l t o n e o f p o l i t i c a l d i s c u s s i o n , t h e f u l l p o t e n t i a l f o r a g r i c u l t u r a l improvement f r o m w i t h i n t h i s l a t t e r group has n o t y e t b e e n t a p p e d . 146 I b i d . , I I , p . 1367. . 14a ' I b i d , T P . 1380. 147 i b i d . , I I , p p . 1375-77. 1 4 9 I b i d . , I I , p p . 1323-56. page 112 U n c e r t a i n t y , p r e v a i l s w i t h r e s p e c t t o a n t i c i p a t e d f u t u r e s t a t e a c t i o n . A t t h e same t i m e , p r e s e n t s t a t e e f f o r t s have been d i s s i p a t e d i n an u n s u c c e s s f u l a t t e m p t t o p r o m o t e g r e a t e r e q u a l i t y . The r e s u l t has been l e s s e q u a l i t y , g r e a t e r d i s c o u r a g e m e n t and c y n i c i s m , w h i l e e f f i c i e n c y has n o t been s u i t a b l y r e c o g n i z e d and r e w a r d e d . S i n c e t h e " s o f t - s t a t e " i s b o t h u n w i l l i n g and u n a b l e t o p u r s u e r a d i c a l a l t e r n a t i v e s , M y r d a l has i n e f f e c t c o m p l e t e l y abandoned t h e s o c i a l i s t a l t e r n a t i v e and o p t e d f o r a l i b e r a l a p p r o a c h . I t w o u l d seem t h a t p o l i t i c a l r e a l i t i e s d i c t a t e t h a t we s h o u l d r e a d j u s t o u r c o n c e p t i o n o f t h e r o l e o f t h e s t a t e as t h e m a j o r agent f o r d e v e l o p m e n t . W h i l e M y r d a l makes much o f t h e f a c t t h a t h i s a l t e r n a t i v e does n o t mean l a i s s e z - f a i r e , i t does seem e v i d e n t t h a t what i s r e q u i r e d i s a r e t r e n c h m e n t o f s t a t e a c t i v i t y . R a t h e r t h a n a s s u m i n g an a l l - e m b r a c i n g r o l e as t h e agent f o r d e v e l o p m e n t , t h e s t a t e s h o u l d r e d u c e i t s a c t i v i t i e s w h i l e c o n c e n t r a t i n g on s p e c i f i c a r e a s . C u r r e n t l y s t a t e i n t e r v e n t i o n s l a r g e l y p e r p e t u a t e t h e s t a t u s q u o . A " g u i d e d c a p i t a l i s m " r a t h e r t h a n a " g u i d e d d e m o c r a c y " w o u l d h o w e v e r , c a l l f o r t h and i n d u c e a m a j o r t r a n s f o r m a t i o n o f t h e s o c i e t y . F o r one t h i n g , as M y r d a l p o i n t s o u t , a g e n u i n e l y c a p i t a l i s t p a t h o f d e v e l o p m e n t c a n n o t t o l e r a t e p a s s i v e and p a r a s i t i c l a n d o w n e r s h i p . F u r t h e r m o r e , t h e c a p i t a l i s t o p t i o n n e e d n o t n e c e s s a r i l y t a k e away l a n d f r o m l a r g e o w n e r s : i t w o u l d m e r e l y mean t h a t t o r e t a i n t h e i r l a n d , a b s e n t e e and u n p r o d u c t i v e l a n d o w n e r s page 113 would have to greatly increase the e f f i c i e n c y and production of t h e i r holdings. Therefore large scale land ownership per se need not be regarded as an e v i l . Moreover, such an approach would s t r i p away the facade of "socialism" and "equality" that breeds cynicism and apathy among the poor and insecurity among the progressive. Such a r e d i r e c t i o n does not mean the state would not have any r e s p o n s i b i l i t y for a g r i c u l t u r a l development. Any adverse effects of a c a p i t a l i s t agriculture such as labor displacement ( i f i t were to occur at a l l ) could be offset by state p o l i c i e s r e s t r i c t i n g the importation of unnecessary ca p i t a l - i n t e n s i v e equipment. In addition, as we know in the West the state i s quite active i n promoting and protecting agriculture. It was stated e a r l i e r that the " s o f t - s t a t e " i s unable to place heavy demands on the c i t i z e n s because the great mass of c i t i z e n s receive so few benefits from government. Therefore, besides giving p o s i t i v e encouragement to c a p i t a l i s t a g r i c u l t u r a l entrepreneurs, a p o l i c y of l i m i t e d land reform would increase i d e n t i f i c a t i o n with the state while supplying an incentive for greater productivity. From Myrdal's study i t would appear that land i s available for a modest resettlement and r e d i s t r i b u t i o n a l scheme.1-50 We cannot escape completely from the equality issue. It seems reasonable to conclude that the c a p i t a l i s t 1 5 0 Ibid., I I , pp. 1261-72. page 114 alternative would also enhance p o l i t i c a l development i n another sense. What i s needed i s e f f e c t i v e leadership to organize the lower classes to press for further e g a l i t a r i a n measures. This leadership could be provided by the c a p i t a l i s t a g r i c u l t u r a l i s t s . These a g r i c u l t u r a l i s t s w i l l face s t i f f opposition from the vested interests that have for so long perpetuated the status quo. Therefore i t would be i n t h e i r interests to organize the poten t i a l p o l i t i c a l power of the lower classes to fight the entrenched i n e r t i a and resistance of the upper st r a t a . In a l a t e r period i t i s conceivable that the laboring classes w i l l generate t h e i r own leadership cadre. The resu l t of the c o n f l i c t between these organized interests might then be a dynamic that leads to further p o l i t i c a l development and an escape from the d e b i l i t a t i n g features of the " s o f t - s t a t e . " For Westerners, i t i s p e r f e c t l y reasonable to hope that t h i s development w i l l be i n the d i r e c t i o n of the modern democratic welfare state. Yet, as we discuss further i n the conclusion, so much depends on selec t i v e state retrenchment not state expansion. Undoubtedly t h i s would be d i f f i c u l t to achieve given the vested interests of the bureaucracy, the ideology of the a r t i c u l a t e s t r a t a , and the benefits of the status quo to o l i g o p o l i s t business and o l i g a r c h i c a l groups. However so much remains to be done and so l i t t l e has been accomplished that we must r e t a i n a r a t i o n a l i s t f a i t h that other alternatives w i l l not be completely rejected. page 115 W. CONCLUSION Our conclusion i s less a summation of what has been said e a r l i e r than a plea for a red i r e c t i o n of thinking v i s -a-vis the role of the state. As we saw i n Part I, the strong state, i n effect an "organizational state," had i t s basis i n the l i b e r a l interlude of lim i t e d state a c t i v i t i e s . Within i t s sphere of r e s p o n s i b i l i t i e s , the state was required to be e f f i c i e n t , competent and incorrupt. Under the impact of harsh external and internal forces the state gradually assumed the role of umpire between competing organized interests i n the i n s t i t u t i o n a l i n f r a -structure. While the organizational state i s heavily dependent on balanced i n t e r e s t groups, intense c i t i z e n p a r t i c i p a t i o n and a high degree of s e l f - r e s t r a i n t - - a l l of which i s problematical and not guaranteed --the state has increasingly secured i t s psychological moorings and i t s c a p a b i l i t i e s to effect broad r e d i s t r i b u t i o n a l reforms culminating i n the welfare state. Through the operation of the equality i d e a l , the state i s able to place tremendous demands on the c i t i z e n s p r e c i s e l y because the c i t i z e n s receive tangible benefits from state actions. However when we: come to the underdeveloped world, we do not f i n d the strong, capable, e f f e c t i v e and e f f i c i e n t Page 116 state but the " s o f t - s t a t e . " The state i s required to e f f e c t massive s o c i e t a l changes, to be the engine of development, when i t i s i n fact not capable of discharging i t s r e s p o n s i b i l i t i e s . Under the exigencies of the " s o f t - s t a t e " the ideologies of planning, socialism, and democracy emerge in a distorted and twisted form. If anything i s the hallmark of the " s o f t - s t a t e " i t i s not i t s low s o c i a l d i s c i p l i n e but rather i t s ambivalence; e l i t e s voice e g a l i t a r i a n desires but frustrate t h e i r implementation; because there i s a vague and s h i f t i n g conception of who should lead development, state controls both encourage and hamper private enterprise. The result of the "ambivalent state" i s p o l i t i c a l , economic and s o c i a l , stagnation. However, as our b r i e f discussion of land reform sought to demonstrate, there i s an alternative to the confusing and d e b i l i t a t i n g features of the"soft-state," namely, a commitment to follow a clear path of c a p i t a l i s t development. Above a l l ' e l s e , t h i s e n t a i l s the adoption of the l i b e r a l conception of the state's role i n development. As we pointed out, l i b e r a l i s m could not function i n the West once "economic man" began to behave as the theory wrongly assumed he already did. The assumption of l i b e r a l i s m --atomism and a s t a t i c s o c i a l framework --implied the prevalence i n society of individuals who were the very opposite of the r a t i o n a l i s t "economic man" of the l i b e r a l theory. People had to be t r a d i t i o n a l i s t i c , non-experimenting page 117 non-reflecting, non-questioning, conventionalists. It i s pre c i s e l y these t r a i t s that generally p r e v a i l i n the "soft -state." Therefore, while l i b e r a l i s m did not work i n the West i t may f i n d a comfortable home i n the underdeveloped world or at least have a fightin g chance of surviving i n this more or less hospitable envoronment. Our discussion of corruption i s pertinent here for two reasons. F i r s t , i t indicates that the psychological orientations of private gain at public expense f l o u r i s h and thrive both i n the state and i n the general society. If they have the opportunity people w i l l seek to enhance t h e i r individual p o s i t i o n p r e c i s e l y because t r a d i t i o n a l i s m has prevented the emergence of a higher conception of the public i n t e r e s t . In t h i s sense, the behavior patterns that Myrdal terms "corruption" are so mainly because the laws are not i n conformity with the c u l t u r a l orientation. For example, g i f t - , giving to state o f f i c i a l s can only be c a l l e d "corruption" i f both the doner and the receiver have some common conception of the public good. Likewise for the existence of patron-, c l i e n t networks. In fa c t , however, a common conception of the public good or the national interest does not ex i s t . Therefore, while the l i b e r a l harmony of interests did not spontaneously emerge but had to be created i n the West through state p o l i c i e s , i t i s conceivable that i t w i l l emerge in the underdeveloped countries. In t h i s respect, current state p o l i c i e s frustrate rather than f a c i l i t a t e the creation page 118 of the public good. At the same time, they hamper development. Secondly, a l l of what we have said e a r l i e r i n Part II, indicates that the state should r e s t r i c t not expand i t s f i e l d of operation. What i s needed i s a selective role for the state. With respect to "corruption", i t i s because the state has been expanding i t s a c t i v i t i e s at a feverish pace i n a l l directions that Westerners perceive a rapid increase i n corruption. Meanwhile, as the resources and c a p a b i l i t i e s of the state are spread so t h i n l y , very l i t t l e has been accomplished i n securing development. Since the a r t i c u l a t e s t r a t a i s vocal i n announcing i t s e g a l i t a r i a n intentions, reactionary groups and i n general a l l the forces of stagnation have gravitated toward the state structures. The effect of t h i s has been to undermine a l l reforms whether or not they would be to the detriment of the upper classes. Therefore we advocate selective retrenchment of state a c t i v i t i e s for these additional reasons: f i r s t , by encouraging certain groups i n society (for example the progressive a g r i c u l t u r a l i s t s ) the state may be able to i n d i r e d t l y e s t a b l i s h countervailing forces that could i n turn d i r e c t l y challenge the power of vested i n t e r e s t s . In e f f e c t , i n the long-run t h i s would create an "organizational i n f r a s t r u c t u r e " through "back-door" p o l i c i e s . In the interim, i f the state were to encourage a c a p i t a l i s t development i t would conserve scarce resources ( f i n a n c i a l and otherwise) that could be more f r u i t f u l l y deployed. Second:1, through retrenchment of state a c t i v i t i e s page 119 those members of the a r t i c u l a t e s t r a t a deriving benefit from state a c t i v i t i e s would be forced to turn t h e i r many talents toward productive enterprise. No longer would i t be possible to have massive plundering of the state for i n in d i v i d u a l p r o f i t . This e s s e n t i a l l y passive occupation would have to be abandoned i n favor of the more lucrativ e opportunities emerging i n the private sector. Furthermore, i t may evolve that businesses i n the private sector w i l l themselves eliminate detrimental behavior patterns as they search for greater productivity and p r o f i t . It i s apparent that t h i s approach would greatly s a c r i f i c e the e g a l i t a r i a n i d e a l . But as we have seen, i t s operation i s largely frustrated anyway. Nevertheless i t s complete abandonment may not be necessary. For example, our discussion of c a p i t a l i s t agriculture suggested that the laboring classes may prove f e r t i l e ground for p o l i t i c a l organization. That i s , p o l i t i c a l parties may well achieve a more dynamic r o l e . i n development rather than being the preserves of vested i n t e r e s t s . Laborers could be educated to t h e i r own interests and organized to pressure for e g a l i t a r i a n p o l i c i e s . A simultaneous organization might occur among the upper classes. Yet due to the now e f f e c t i v e enlargement of the franchise members pftfehiscdbass would have to compromise some of t h e i r interests i n preserving the status quo. Moreover what we advocate i s selective retrenchment of state a c t i v i t i e s . In other words the state would s t i l l page 120 pursue e g a l i t a r i a n p o l i c i e s but would have a concentration rather than a dispersion of its: resources of money and administrative competence. Besides having broad regulations over c a p i t a l i s t enterprises (which as we have seen existed in the West even during the l i b e r a l interlude) and pursuing p o l i c i e s that encourage rather than thwart private business, the state could devote much of i t s energies to r a i s i n g the educational and health requirements of i t s c i t i z e n s . As Myrdal ably demonstrates i n Asian Drama, 1 5 1 lownnutfitional, health and educational standards are a great obstacle to increased productivity. Moreover they drain the strength of the mass of poor while encouraging apathy and d i s i n t e r e s t in national a f f a i r s . I d e n t i f i c a t i o n with the state and national integration w i l l not be possible u n t i l the great masses of poeple receive tangible benefits from state a c t i v i t i e s . It i s of course highly doubtful that the liberal-.; c a p i t a l i s t approach to p o l i t i c a l and economic development w i l l be adopted i n the underdeveloped countries. Central state "planning," and "socialism," irrespective of t h e i r f a i l u r e , exert a tremendous appeal to the "modernizing" e l i t e . Yet, as we have seen, these e l i t e s are quite: capable of incorporating diverse and c o n f l i c t i n g elements into t h e i r ideologies. We cah only retain our f a i t h i n " l i b e r a l " rationalism and hope that a c a p i t a l i s t approach to p o l i t i c a l and economic development w i l l not be completely rejected. 151 Myrdal, Asian Drama, I I , chapters 30, 31, 32 and 33. page 121 SELECTED BIBLIOGRAPHY B a y l e y , D a v i d H. "The E f f e c t s o f C o r r u p t i o n i n a D e v e l o p i n g N a t i o n . " P o l i t i c a l C o r r u p t i o n . E d i t e d by A r n o l d J . Heidenheimer. New York: H o l t , R e i n h a r t and W i n s t o n , 1970. B e n d i x , R e i n h a r t . Nat i o n - B u i l d i n g and C i t i z e n s h i p . New Y o rk: John W i l e y and Sons, 1964. H u n t i n g t o n , Samuel P. " M o d e r n i z a t i o n and C o r r u p t i o n . " P o l i t i c a l C o r r u p t i o n . E d i t e d by A r n o l d J . Heidenheimer. New York: H o l t , R e i n h a r d and W i n s t o n , 1970. L e f f , N a t h a n i e l H. "Economic Development Through Bureau-c r a t i c C o r r u p t i o n . " P o l i t i c a l C o r r u p t i o n . E d i t e d by A r n o l d J . Heidenheimer. New Y ork: H o l t , R e i n h a r d and W i n s t o n , 197 0. L e y s , C o l i n . "New S t a t e s and the Concept o f C o r r u p t i o n . " P o l i t i c a l C o r r u p t i o n . E d i t e d by A r n o l d J . Heidenheimer. New Y ork: H o l t , R e i n h a r d and W i n s t o n , 1970. M c M u l l a n , M. " C o r r u p t i o n . i n the P u b l i c S e r v i c e s o f B r i t i s h C o l o n i e s and E x - C o l o n i e s i n West A f r i c a . " P o l i t l e a l C o r r u p t i o n . E d i t e d by A r n o l d J . Heidenheimer. New Y ork: H o l t , R e i n h a r d and W i n s t o n , 1970. M y r d a l , Gunnar. "The Trend Towards Economic P l a n n i n g . " Manchester S c h o o l o f Economic and S o c i a l S t u d i e s , XIX ( J a n u a r y , 1951) , 1-42. ' _________ "The R e l a t i o n Between S o c i a l Theory and S o c i a l P o l i c y . " B r i t i s h J o u r n a l o f S o c i o l o g y , IV (1953), 210-42. ' . " R e a l i t i e s and I l l u s i o n s In Regard t o I n t e r g o v e r n -m e n t a l O r g a n i z a t i o n s . " L. T. Hobhouse Mem o r i a l L e c t u r e s Number Four. ( F e b r u a r y 25, 1954). Hobhouse M e m o r i a l L e c t u r e s . London: A n t h l o n e P r e s s , U n i v e r s i t y o f London, 1962. . An I n t e r n a t i o n a l Economy: Problems and P r o s p e c t s . New Y o r k : Harper and B r o t h e r s , 1956. . "Trade and A i d . " The American S c h o l a r , XXVI ( S p r i n g , 1957), lZl^T. "~ page 122 Myrdal, Gunnar. Rich Lands and Poor. [ B r i t i s h e d i t i o n : Economic Theory and Under-Developed Regions] New York: Harper and Brothers, 1957. : _. "Economic Nationalism and Internationalism." Australian Outlook, XI (December, 1957), 3-50. . Value i n Social Theory. Edited by Paul Streeton. London: Routledge and Kegan Paul, 1958. ' "Towards a More Closely Integrated Free World Economy." National P o l i c y for Economic Welfare at Home' and Abroad. Edited by Robert Lekachman. New York: Russell and Russell, 1961. ' Challenge to Affluence. New York: Pantheon, 1962. ' " W i l l We Prevent Mass Starvation?" New Republic, CLII (April 24, 1965), 14-15. '_ ' ' "Jobs, Food and People." International Development Review, VII (June, 1965), 2-6. " ' "Land Reform In Its Broader Economic and Social Setting." Economic Planning, II (1966), 5-10. _ _ _ _ _ _ "Paths of Development." New Left Review, XXXVI (March-April, 1966), 6 5 - 7 4 " Reprinted as "Economic Development i n the Backward Countries." Dissent, XIV (March-April, 1967), 180-91. Beyond the Welfare State: Economic Planning and Its International Implications. 2nd ed. New York: Bantom Press, 1967. _________ "The Theories of 'Stages of Growth,' 11 Scandinavian Economic History Review, XV (1967), lTTT. . "Too Late to Plan?" B u l l e t i n of the Atomic S c i e n t i s t s , XXIV (January, 1968) , 5-9. ' "Twenty-five Years of the United Nations Economic Commission for Europe." International Organization, XXII (Summer, 1968), 617-28. ' Asian Drama. 3 vols. New York: The Twentieth Century Fund, 1968. . "The Soft States of South Asia: The C i v i l Service Problem." B u l l e t i n of the Atomic S c i e n t i s t s , XXV ( A p r i l , 1969), 7-10. page 123 Myrdal, Gunnar. Ob j e c t i v i t y in Social Research. New York: Pantheon, 1969. . The Challenge of World Poverty. New York: Pantheon, 1970. ________ " P o l i t i c a l Factors i n Economic Assistance." S c i e n t i f i c American, CCXXVI ( A p r i l , 1972), 15-21. Riggs, Fred W. "Bureaucrats and P o l i t i c a l Development: A Paradoxical View." Bureaucracy and P o l i t i c a l Development. Edited by Joseph La Palombara. Princeton: Princeton University Press, 1963. Schumpeter, Joseph A. Capitalism, Socialism and Democracy. New York: Harper and Row, 1942. Scott, James C. P o l i t i c a l Ideology i n Malaysia. New Haven: Yale University Press, 1968. "Corruption, Machine P o l i t i c s , and Social Change." American P o l i t i c a l Science Review, LXIII (December, 1969), 1142-59. ' "Patron-Client P o l i t i c s and P o l i t i c a l Change i n Southeast Asia." American P o l i t i c a l Science  Review, LXVI (March, 197 2), 91-113. _. Comparative P o l i t i c a l Corrupt ion. Englewood C l i f f s : Prentice H a l l , 1972. S h i l s , Edward. P o l i t i c a l Development in the New States. The Hague: Mouton, 1962. Wertheim, W. F. "So c i o l o g i c a l Aspects of Corruption i n Southeast Asia." P o 1 i t i c a l Corruption. Edited by Arnold J . Heidenheimer. New York: Holt, Reinhart and Winston, 1970. The following selected reviews offe r the most challenging analyses of Gunnar Myrdal's writings: Bauer, P. T. "International Economic Development." Economic Journal,LXIX (March, 1959), 105-23. Boulding, Kenneth. "Asia: Soft States and Hard Facts." New Republic, CLVIII (May 4 , 1968), 25-28. page 124 Currie, Lauchlin. "Myrdal on South Asia." Journal of  Economic Issues, III (June, 1969) , 166-76. Geertz, C l i f f o r d . "Myrdal's Mythology." Encounter, XXXIII (July, 1969), 26-34. Hume, L. J. "Myrdal on Jeremy Bentham: Laissez-Faire and Harmony of Interests." Economica, XXXVI (August, 1969), 295-303. Rostow, W. W. and Rostow, Elspeth. "Mr. Myrdal Brings U t i l i t a r i a n i s m Up to Date." The Reporter, XV (July 12, 1956), 43-46. ' 

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