Tuesday, April 8, 2014

Home-grown change, neoclassical economics, and the struggle

This is an interesting article that considers the value of "the struggle", that is, the tortuous path of missteps and trials and adaptation that any idea, product, or process goes through before it becomes successful.  The article looks at this struggle in the context of international development, where pre-packaged, proven "best practices" are often recommended for developing countries to adopt and scale up in order to improve their level of wellbeing.  The article asks (in light of the frequent failure of such an approach), whether the struggle, the "costly and time-consuming process" of home-grown change, is in fact part of what is necessary for lasting economic development.  If so, this would turn on its head the philosophy of importing best practices from elsewhere, and even the very notion of such best practices.  While we're at it, it would overturn much of neoclassical economic thinking on trade, which sees only the short-term efficiency of a poor country's exporting low-value products and importing high-value products, regarding the struggle of home-grown change and development as inefficient, a waste of time.

I tend to believe in the struggle as opposed to the neoclassical trade regime.  The only way I see that all of today's wealthy countries (the US, much of Europe, some of East Asia) could have become wealthy while "inefficiently" spurning neoclassical free trade thinking and essentially practicing import substitution, is that the struggle matters.  By limiting trade early on, thus foregoing short-term trade efficiencies in favor of developing their own domestic production and especially higher-value sectors, all these countries broke out of the trap of a raw materials, low-value economy.  Conversely, free-market countries and continents like Haiti, 19th- and early 20th-century Latin America, and 1980s Africa did indeed stagnate economically and socially, at least until some of them started more aggressively protecting their high-value economic sectors and cultivating their domestic markets in the past decades.  Another striking example of this are the Northern and Southern parts of the US.  The North's long-standing focus on developing industry, domestic markets, and a robust middle class contrasts with the South's focus on producing raw materials for export for much of our history.  Even today the two regions have very different living standards stemming in large part from the different development paths they chose two centuries ago.

A tangent off of this question is something I've often thought about as the world becomes more culturally and economically homogenous.  There are any number of local things, be they languages, customs, foods, even crops and ecosystems, that are lost as more and more people adopt a standardized, globalized way of living.  We recognize the tragedy of this when it comes to ecosystems and crop diversity, but what about the human diversity that is lost?  Recently I've been reading a lot of British spy novels, and they have many references to the quirks and customs of the British aristocracy that I know nothing about.  Certain types of clothes for different occasions, different accents and customs depending on which private boarding school you went to.  I've even learned that there are a number of different football-like games throughout England.  There are of course soccer, rugby, and North American football.  But apparently many boarding schools in England have their own form of football, with very place-specific rules, such as field measurements stemming from the distance between one campus landmark and another.  If England weren't the historical frontrunner of industrialization and imperial power but rather some peripheral outpost in the world, surely such minute diversity would have been lost long ago.  No different types of tweeds, no different rules of football, no quirky customs for thatching roofs or brewing beer or making meat pies.  They'd just be copying some global standard, convinced of the irrelevance of their own local idiosyncracies.  How many analogs to different football rules are we losing without even knowing it in places like Benin or Suriname or Cambodia, that don't have the cultural or economic wherewithal to hang onto their own little quirks?  I don't know that I can attach an economic value to the preservation or loss of such things, but I do think our world is poorer if we lose them.

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