THE POLITICAL ECONOMY OF GROWTH
THE POLITICAL ECONOMY OF GROWTH
Paul A. Baran
Monthly Review Press
New York
Copyright © 1957 by Monthly Review Press, Inc.
All Rights Reserved
Library of Congress Catalog Card Number: 57-7953
ISBN 0-85345-076-5
Monthly Review Press
146 West 29th St., Suite 6W
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Manufactured in the United States of America
For my son Nicky
Preface to the First Edition
The manuscript of the present volume was completed in the autumn of 1955. Much that has since happened in the world bears a direct relation to a number of themes dealt with here. Resisting for obvious reasons the strong temptation to insert some of the relevant considerations into the galley proofs, I decided to attempt to summarize them briefly in this preface.
The events in the Near East which culminated in the Anglo-French military action against Egypt provide corroboration of one of the main theses of this book: the “unreformed” nature of contemporary imperialism and its inherent animosity towards all genuine initiative at economic development on the part of the underdeveloped countries. The role played in this conflict by the United States demonstrates the unabated rivalry among the imperialist countries as well as the growing inability of the old imperialist nations to hold their own in face of the American quest for expanded influence and power. In the bitter words of the London Economist: “We must learn that we are not the Americans’ equals now, and cannot be. We have a right to state our minimum national interests and expect the Americans to respect them. But this done, we must look for their lead.” (November 17, 1956.)
While the assertion of American supremacy in the “free” world implies the reduction of Britain and France (not to speak of Belgium, Holland, and Portugal) to the status of junior partners of American imperialism, this shift may well have certain favorable consequences for the underdeveloped countries. Transferring as it were from service in an impoverished business to employment in a prosperous enterprise, the colonial and dependent countries may expect their new principal to be less rapacious, more generous, and more forward-looking. Although it is most doubtful whether this change will make any serious difference in the basic issues of economic and social development in the backward areas, some improvement in their fate is not unlikely.
Recent developments in the socialist countries of Europe are even more germane to the propositions advanced in (and underlying) this study. Khrushchev’s revelations concerning some aspects of Stalin’s rule and the subsequent events in Poland and Hungary have brought into the open with renewed force the steepness of the backward countries’ ascent to a better and richer society. But it is merely the “cult of personality” in reverse to ascribe all the crimes and errors committed in the Soviet Union before the Second World War and in all of Eastern and Southeastern Europe after it to the evil personalities of Stalin, Beria, and their associates. Matters are not so simple; and the general feeling is wholly understandable that it is indeed the “entire system” that must be held responsible for what was perpetrated by the leadership. Yet it is a grievous fallacy to conclude from this that socialism is the “entire system” that needs to be repudiated. For it is not socialism that can be fairly charged with the misdeeds of Stalin and his puppets—it is the political system that evolved from the drive to develop at breakneck speed a backward country threatened by foreign aggression and in face of internal resistance. The emergence of such a political system under the unique circumstances prevailing in Russia after Hitler’s seizure of power and in the countries of Eastern and Southeastern Europe during the frightening years of the cold war does not “prove” that socialism is inherently a system of terror and repression. What it does mean—and this is a historical lesson of paramount importance—is that socialism in backward and underdeveloped countries has a powerful tendency to become a backward and underdeveloped socialism. What has happened in the Soviet Union and the socialist countries of Eastern Europe confirms the fundamental Marxian proposition that it is the degree of maturity of society’s productive resources that determines “the general character of social, political and intellectual life.” It casts no reflection on the fundamental rationality, desirability, and potentialities of a socialist transformation in the West. Indeed, it accentuates its desperate urgency. For a socialist society in the advanced countries would not be compelled to engage in “forced marches” towards industrialization, or bound to withdraw from popular consumption large parts of miserably low incomes, or constrained to devote to military purposes significant shares of small aggregate outputs. Such a socialist society would not only attack head-on the waste, irrationality, and cultural and moral degradation of the West, it would also throw its weight into helping to solve the entire problem of want, disease, and starvation in the underdeveloped parts of the world. Socialism in the West, once firmly established, would destroy for all time the bases and the need for any reappearance of the political and social repression that marked the early stages of socialism in the East. Hence for socialists in the West the time is now—as never before—to renew our dedication to the cause of reason, progress, and freedom, to redouble our efforts to advance the cause of socialism. For it is on the ultimate success of these efforts that the fate of humanity depends—both in the West and in the East. It is only these efforts that can restore to the economically most advanced countries the moral, ideological, and political leadership of the world that at the present time is no longer theirs. Only the advanced countries’ progress and guidance on the road to a socialist democracy will terminate the untold suffering to which mankind has been condemned thus far.
The contents of this book were presented in the barest outline in a course of lectures delivered at Oxford during the Michaelmas Term in 1953. In the interval of reworking the lectures with a view to their publication, I have made many changes both of a formal and of a substantive nature. The process of writing is a process of learning; and much has become clearer to me in the attempt to transform my original rough notes into what I hope is an intelligible presentation. Not that I suffer from any illusion of having now even approximately “covered the ground.” The terrain is vast, and the complications and implications encountered at every step are numerous and baffling; the most I can aspire to is to have sketched its general contours and thus to submit a tentative map the chief function of which, I hope, will be to encourage further travel and to stimulate deeper exploration.
Throughout this work I have been fortunate enough to be in contact with a number of good friends working and thinking on similar problems. I am particularly grateful to Charles Bettelheim, Maurice Dobb, Leo Huberman, Michal Kalecki, Oskar Lange, and Joan Robinson for the time and attention which they have devoted to discussing matters related to the theme of this book or to reading all or parts of the manuscript. Their suggestions and criticisms were invaluable. I wish to thank also John Rackliffe who made a valiant effort to turn my style into comprehensible and readable English; if his success remained only partial, it is difficult to imagine what the book might have been without his help. I am obliged to Elizabeth Huberman who prepared the index, and to Sybil May and Catherine Winston who saw the book through press. My debt is largest to Paul M. Sweezy, whose generous friendship I have enjoyed for nearly two decades. The courage, lucidity, and unwavering devotion to reason that render his work one of the bright spots in America’s postwar intellectual history have been to me all that time a never-failing source of stimulation and encouragement. There is hardly an issue considered in this book that we have not on one occasion or another touched upon in our discussions. It is impossible for me to say which of the thoughts expressed here belong to him, and which are my own. I hasten to add that neither he nor anyone else is responsible for whatever errors and confusions may still mar my argument. These are due wholly to my own failings and occasionally to my stubbornness.
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