Roots of development

Not quite a math equation, but this isn’t a math class!

How long has the concept of (international) development been with humanity? The idea of governments and organizations helping countries and governments by providing formal assistance is a relatively recent . . . development. The actual term ‘development’ came into common usage after the second World War.

After WWII, several things happened:

  1. There was a realignment of nation-states (based on economic, political systems). This was the beginning of the ‘Cold War.’ The Soviet Union was the center of the communist world (referred to as the ‘2nd world‘), the U.S. and Western Europe the center of the capitalist nations (referred to as the ‘1st world‘–guess who came up with this classification??), and the other non-aligned countries became potential pawns in a game of expansion, control and containment. They were referred to as the ‘third world‘ countries. Over time, the concept of ‘third world’ has come to denote low-income, underdeveloped countries. I may use the term in class, but it is mostly as a matter of convenience, a synonym for longer terms like ‘least-developed countries’ or ‘low-income countries.’ Or poor countries. Or countries of the non-industrial Global South. Now some refer to the ‘fourth world‘ countries, based more on measures of development, as well as the NICs (‘newly industrialized countries’). So you see, there is a semantic problem, and a structural problem. We’ll focus more of our energies on the structural problem of global inequality.
  2. Bretton Woods–This was an attempt at monetary reform–having a system of money that facilitated international trade. Bretton Woods was the name of the town in New Hampshire where the initial meetings to hammer out trade arrangements occurred. World trade works better when there is some degree of currency regulation and predictability. Countries generally want currencies they can use, and whose value they know and recognize. For instance, if you tried to go into the store and buy food with rupees or drachmas, or CFA, you might find that no one’s interested in taking them. Even Canadian coins have limited caché here (here’s a good page to get a handle on the value of some more obscure currencies relative to the US dollar). So transactions on world markets are usually made with dollars, yuan, rupees, euros, krones, pounds, etc. Bretton Woods was a precursor to the International Monetary Fund (IMF) and the World Bank. The original mission was to help finance redevelopment of Western Europe after its devastation as a result of WWII.
  3. Food policies–While the U.S. was encouraging free trade in the world, and helping to rebuild the economies it hoped would be its key trading partners, it was pursuing protectionist policies at home that favored U.S. farmers and U.S. agricultural production. In other words, it was expensive for other countries to export their goods to the U.S., which often put up trade barriers (e.g., tariffs), but the U.S. was demanding free markets–that is, demanding that other countries lower or eliminate their trade barriers to U.S. producers–to export its own agricultural products to other countries. Food aid to poor countries became more important during this era. For many reasons. One was humanitarian–helping people in need, especially where natural disasters or wars produced widespread famine. Another was political–remember the Cold War struggle that was going on. Another was economic–food was often used as a market price regulator–too much grain on the world market meant low prices for American farmers. Give some away to countries in need, and the forces of supply and demand would drive up the price of grain and benefit grain producers selling on the world market. Also, this was the dawn of the petro era–US agriculture was undergoing a massive technological transformation. Crops were grown with chemicals, chemicals produced with cheap fossil fuels, which also fueled mechanization (tractors, combines, etc.). Agriculture became much more productive, meaning less need for laborers, more food produced per farmer. This was the model to be held up to the world (without much recognition of the heavy subsidies of non-renewable energy required to sustain such yields ovre the long-term).
  4. Marshall Plan–European reconstruction. Because the European countries’ economies were devastated after WWII, in 1947 the Unites States offered a substantial amount of money–over $13 billion–to help them rebuild their economies. This was a very successful initiative, which had several outcomes: it accelerated economic recovery; it revived U.S. trading partners, provided an important precedent for the concept of ‘development,’ and; it rendered the World Bank mission irrelevant–the Marshall Plan was essentially direct aid–the World Bank was offering loans. So what it did was shift the World Bank’s emphasis toward those non-aligned, non-industrialized countries. The World Bank (often referred to as the IBRD, International Bank for Reconstruction and Development) was ‘re-branded, becoming the center of financing for development projects.
  5. Decolonization, or the end of colonialism. There was great pressure to grant the colonies independence. Some refer to this as a period of ‘decolonization.’ Some societies achieved independence in the first half of the century (e.g., India in 1948). The African countries began demanding independence in the mid- to late 1950s. There were new leaders, and pressure to acknowledge the important role that the colonies played in WWII. Independence marked the official end of colonialism (Portugal left kicking and screaming, and destroyed much of their countries’ infrasturctures upon departure), but there were and still are key economic and political ties that create very unbalanced relations between the colonized and their colonizers. The World Bank nicely fit into this post-colonial era as a financier of international development, which it still is. Yes, there was a true desire to help the colonial powers, but there were many economic motivations, too. The West had lots of technologies it wanted to export–technologies that would create markets for other products (think of all that is required to transfer tractor technology, for instance). And again there was the Cold War and the struggles to control the political futures of the ‘non-aligned’ nations.

So a crude equation of development’s genesis would look something like this:

D = (Cold war + Marshall Plan + Bretton Woods + Food policies) * (post-colonial states) * 1/2 dose of altruism

And the result? Well, more people impoverished today than when this enterprise began (but 7 + billion people vs 3 billion in 1960), and wider gaps between the wealthiest nations and the poorest nations. This isn’t necessarily the fault of ‘development’, because the spread of corporate global capitalism has occurred at the same time. Nor is the latter’s spread and the former’s unfulfilled promise a coincidence. But a different way to phrase the question might be: To what extent has development served as a check on the expansion of capitalism, and to what extent it has enabled that expansion?

Depends, perhaps, on what you want to call ‘development.’