Transcript DUALISM–SOCIAL AND TECHNOLOGICAL

DUALISM–SOCIAL AND
TECHNOLOGICAL
Introduction
Under developed economies of today are dual economics. It implies
the co-existence of a small developed sector and a vast ‘traditionally
backward sector’. In the developed sector modern techniques are used
while the backward sector survives largely on the conventional
techniques of production .the dual functioning of the economies of the
countries is what known as ‘economic dualism’. This highlight 2 basic
phenomena in the context of less develop economies .
1. the theories of growth or models of development as evolved in
developed nation are not applicable for the less developed countries
2. a uniform policy of development cannot be adopted across all
sectors of less developed economies .
MEANING OF DUALISM
• In the words of prof. Higgins, ‘dualism means existence of two
distinct sectors in underdeveloped economy . A modern
commercialise industrial sector developed alongside a traditional
subsistence agricultural sector .
• Dualism is the characteristics feature of less developed countries. In
these countries there exists on the other hand a backward traditional
sector,also called subsistence sector. Agriculture is the principle
occupation of the sector. Machines and money are used only to a
limited extent. Technique of production is backward. On the other
hand, there exists a modern sector also called capitalist sector.
Development in the sector depends largely upon external assistance
and control. Industry and mining are the principal occupation of this
sector. Modern techniques with intensive application of capital is a
common characteristic of the system of production in this sector.
Production is largely for exchange. However,compare to the
subsistence sector ,the modern industrial sector of the less
developed countries is very small.
THEORIES OF DUALISM
• Economists like Higgins and Boeke are of
the opinion that dualism in less developed
countries has been the principle constraint
in their growth process. There are 2 basic
theories in this context:
• 1. social dualism
• 2. technical dualism
SOCIAL DUALISM
•
•
•
•
Dutch economist J.S. Boeke propounded the concept of dualism. He based
his theory on his observations of Indonesian economy. He believed that
from the economic point of view,a society may be classified on the basis of
3 basic characteristics
1. social spirit
2. organisational forms
3. types of techniques
If all the characteristics are uniform across all sectors of the economy ,it should
be a homogenous economy in contrast if these characteristics are diverse
across different sector of an economy it should be characterised by social
dualism. Professor Boeke is of the opinion that social dualism has provided to
be a hindrance in the process of growth of less developed countries.
MEANING OF SOCIAL DUALISM
• In the words of professor Boeke,’’ social dualism is the clashing of
an imported social system with an indigenous social system of
another style. Most frequently the imported social system is high
capitalism. But it may be socialism or communism just as well or
blending of them’’
• Prof. Boeke uses ‘east’ and ‘west’ as different expressions for the
underdeveloped or dual economies and developed capitalist
economies,respectively. Underdeveloped economies of the east are
generally underdeveloped economiests. co-existence of 2 diverse
social orders is the principal properties of such economies. Social
dualism thus is kind of social disintegration caused by the rise of
capitalism in less developed economies. This integration points ti
the conflicts between the imported social order and the indigenous
social order of the underdeveloped economies .
FEATURES OF SOCIAL DUALISM
•
•
•
•
•
1. Limited needs: limited needs of the people is the foremost property of the dual
economies. Exchange is limited and there is limited use of money.production is largely
self-subsistence. Because of the limited wants,there is no compulsion or motivation to
work money. The supply curve of labour is thus generally backward-sloping in these
economies. This implies that in response to rise in wages beyond a particular point the
supply of labour starts diminishing,rather than increasing.
2. more importants of social needs:in the dual economies people attach more
importance ton their social needs .social perspective is of greater importance than the
national perspective. In the words of prof. Boeke,’’ it is not their economic usefulness or
the individual services they render their possesor which determine the value of goods. It
is what the community thinks of the commodities that give them value.’’
3. importance to self sufficiency: under social dualism, household prefer to be selfsufficient. That is,they would desire to be as less sdependent upon others as possible
for the satisfactions of their wants. Thus, exchange,monetization and specialization
remain dormant in these economies. Production is largely effected on small scale
without any complex technique of production.
4. lack of profit motive: yet another feature of the economies of ‘east’ is that production
is not done for the profit motive. Thus the modern theories of business enterprise do not
hold good in these economies. Windfal profits and loses are attached greater
significance in these economies.
5. lack of organization : Boeke asserts ‘lack of organisation as an important property of
the economies of the east. Because of the lack enterpreneurship people are wary of
undertaking business risks. Fatalism is preferred to organised and systematic efforts.
Thus writes prof. Boeke ,’’ the oriental is ,unfortunately ,totally lacking in organising
power where modern western enterprises are concern. Where western industry is
dominated by commonsense reason,eastern society moulded by fatalism and
resignation.
IMPLICATIONS OF SOCIAL
DUALISM
•
•
•
1. non-applicability of the principles of developed economies in underdeveloped economies . The difference between the economies of ‘east’ and
‘west’ is so large that the principles of the ‘west’are not applicable to the
‘east’.principles of the west are generally based upon unlimited
wants,extensive use of money and profit motives of production. None of these
features are found in the ‘east’. Boeke says, ‘’we shall do well,not to transport
the tender,delicate and hot house plants of western theory to tropical
soil,where an easy death awaits them.’’
2. pessimistic: Boeke’s theory pushes the economy of the ‘east’ into the realm
of pessimism. None of the theories of growth the western developed
economies are supposed to be applicable in the context of the
underdeveloped socially dual economies of the ‘east’.in the words of
prof.Boeke, ‘’ farmers of the east neither desire nor are capable adopting
developed techniques of their western counter parts. Only their conventional
wisdom is found to be more suitable in these economies. Because the
residents of these economies are generally averse to change,they do not opt
for improve and scientific techniques of productions.’’
3. traditional nature of organisation : compared to modern complex
organisationalstructure of the western economies ,one finds only traditional
organisational set up in the east . As a result , industries ,mines and
plantations are not efficientlf\y manage , and therefore renmaibn under
developed . Perhaps the principal costs of it is the insignificant exuistence of
the middle class in these economies.
•4. lack of technological development:there is a lack of technological
development in underdeveloped economies of the west. An enterprise of
the east fails to compete with his western counter part because
development of modern techniques is very expensive and beyond his
means. Also,people of the eastern economist are not prepared to exert
more for additional incomes.so they are averse to the adoption of new
techniques. technically.,therefore, these economies remain to be backward
economies.
•
5. unemployment:Prof. Boeke points out the existence of 4 types of
unemployment in less developed dual economies:1seasonal unemployment
2. unemployment of casual workers . These include those workers who
migrate from rural areas to work in plantations, mining and such other
ocuppations3. unemployment of urban white collar workers,4.
unemployment among eurasians. Prof.Boeke is of the opinion that the
government in these countries is incapable of removing of unemployment
because of the limited resourses. unemp;loyment in the east cannot be
removed by adopting theories of employment of the west.
•
6. nature of labour:most of the workers in the dual economies are casual
workers. This is because of excess poverty, illiteracy and acute sense of
fatalism in thesen countries. People are generally inert ,unorganized and
unprogressive. They accept poverty and unemployment simply as acurse of
nature and seldom strive for better living.
CONCLUSION
• In short,according to the theory of social dualism,less
developed economies are dual economies.
Consequently,solution of their problems is not possible
on the basis of theories of growth and developed
nations. Prof. Boeke is of the opinion that developed
nations would render a great service if they leave the
less developed countries alone for their development.
Any effort to help the less developed countries by
adopting their own programmes and policieswould only
push them further behind. Infact for the dual and diverse
economies their should be dualistic theories of growth,as
only that any true analysis of the 2 opposite social orders
would be possible.
•
•
•
•
•
CRITICISM
1.needs are not limited:prof. Higgins writes that Boeke’s contention that people have limited
needs and less developed countries is not correct. The fact is that the marginal propensity to
consume an importof the people in developing countries is very high. As a result, the
government in these countries is always confronted with the problem of meetin growing
requirements of the people. Higgins also questios the validity of Boeke’s contention that the
supply curve of labour in developing economies is backward slopping.
2. dualism is not particular to eastern economies : dualism is not the exclusive property of less
developed countries. Higgins says,’’even in the most advance countries such as
Italy,Canada,United states,there are areas where techniques lag behind those of the most
advance sectors and in which standards of economic and social welfare correspondingly ‘’. In
all economies of the world there is dualism .
3. unrealistic view of the nature of the labour ; the critique also points that Boeke’s theory
takes an unrealistics view of the nature of labour in less developed countries. It is wrong to
say that labour in these economies is casual and unorganized. These endeavour to protect
the interest of workers and promote their welfare. Even in Indonesia,on the experiences of
which Boeke founded this theory,there are trade unions. These unions are spreading their
activities fast for the welfare of the working classes.
4. Increasing trend towards urbanisation: prof. Higgins also denounced Boeke’s opinion that
workers in less developed countries are less mobile and that they do not migrate to the urban
areas from their rural homelands. In the words of prof. Higgins,’’ in part urban life of the larger
cities with its cinemas ,cafes,shops,librariesand sports events have proved attractive to
villagers to grt a taste of it.
5. unrealistic concept of specific characteristics Boeke’s contention that there are certain
specific characteristic if less developed dual economies is also wrong.infact, such
characteristic are common to all the countries,developed or underdeveloped. Many
characteristic of the east are fairyly common in the west. For eg, the tendency to make
speculative gains during periods of chronic dedepressi common both in developed as well as
underdeveloped countries. Likewise thje tendency to minimise risk is not a specific
characteristic of less developed countries.
TECHNICAL DUALISM
Prof. Higgins has propounded the concept of technical dualism in place
of social dualism.
1. Meaning of technological dualism: in the words of prof Higgins,’’
dualism is the situation in which productive employment
opportunities are limited not because of effective demand,but
because of resourse and technological constraint in the
2sectors.’’prof Higgins is of the opinion that different resource
endowment and production function across the traditional and
modern sectors of the less developed economies is the
fundamental basis of the technological dualism ih these
economies.
2. characteristic of the dual sector: A. features of the traditional
sector:1. agriculture,cottage and small industries including
handicrafts are the principal occupation of this sector.2different
techniques and different combinations of labour and capital are
often employed in this sector .thus ,technical coefficient of
production is highly variable in the sector.3. compare to
capital,labour is often more intensely utilized in the process of
production. That is, the process of production is dominated by the
labour intensive technique of production.
B.Features of modern sector
•
•
•
•
1. this sector includes industries,plantations,transport and related activities
as its principle occupations.
2. there is a limited scope of technical substitutability of factors of
production.accordingly, technical coefficient of production remains generally
fixed.
3. compare to labour,more of capital is utilised. Thus, the process of
productions is dominated by capital intensive technique of production.
4. besides labour and financial capital,developed land also constitutes a
major resource ofproductions in this sector.
3.Explanation of technical dualism
•
•
•
1. differences in factor-endowment-difference in the availabity of capital and
labour is one of the two fundamental basis of technical dualism.the traditional
sector of the dual economies is generally characterised by the abundance of
labour but also shortage of capital. So,production techniques are often labour
intensive in the sector. In contrast,in the modern sector,more of capital
compared to labour is generally observed. Thus, almost 2distinct techniques of
production are found to exist across two different sectors of dual economies.
2. difference in production function – difference in production function is the
second fundamental basis of technical dualism. While there are fixed coefficients
of production function in the modern sector,these are often variable in the
traditional sector. Higgins analysis this duality in the context of ‘factor
proportions.’ Eckaus offers a detailed explanations of this feature of less
developed countries.
Technological dualism suggest that the existence of vast unemployment in less
developed economies is not due to the lack of effective dimand but owing to the
resource constraint as well as technological backwardness. As regards resource
utilization,the less developed countries have severe structural imbalances-1. one
finds different coefficient of the same factor in its alternative usage2.the price
structure is compatible with resource supply. Thus professors Eckaus is of the
opinion that the problem of unemployment is generated owing to
•
•
•
•
•
1. incompleteness of price management and 2. surplus of labour owing to
thetechnical as well as demand constraints.
Prof.Higgins demonstrates through fig 1. below the existence
unemployment in less developed dual economies
1.there are 2 sectors of economy a) traditional sector b) modern sector
2. there are two factors of production a) capital b)labour
3. two commodities are produced
•
•
•
The figure shows on labour on x-axis and capital on Y-axis. Q1,Q2,Q3,Q4are
different isoquant curves. An isoquant shows different combination of capital and
labour to produced a given amount of output. Thus an isoquant which is to the
right and aboveanother isoquant represents relatively higher level of output. The
figure is based on the assumtions of fixed technical coefficient of
production.technique of production is capital intensive,that is more of capital is
use compare to labour.EO shows the expansion path.
Figure shows that Okunits of capital and OL units of labour are used to produced
OQ(100 units) ofoutput. If OL1 units of labour and OK1 units of capital are
actually available LL1units of labour would remain an unemployed as the ratio
between labour and capital used as inputs is fixed(OL plus OK) if the availabilaty
of capital increases, the producer would shift on to a higher isoquant curve
showing higher level of output.
According to Higgins unemployed labour in the industrial sector is left with no
option other than seeking employment in the rural sectorof the economy.
technical co- efficient of production can be change in the rural areas facilating
that absorption of labour with still greater application of labour
intensivetechniques of production but this reduces the marginal productivity of
labour even to the zero level causing the problem of disguise unemployment in
the rural areas of less developed countries.
CRITICAL EVALUATION
•
•
•
•
•
•
Compare to Boeke’s theory of social dualism,Higgins concept of
technological dualism is undoubtedly more realistic. The Higgins theory was
very clearly explains how unemployment as well as under employment
emerge in less developed countries owing to the process of industrialisation
and technical progress.the solution of unemployment problem lies in
accelerating the process of domestic capitals formation. Higgins theory is
not free from criticism. Following observation may be noted in this regard1. the theory explains the emergence of underemployment in the traditional
sector of developing economies,but does not offer any solution thereof.
2. the theory is based on a questionable assumption that the technical
coefficient of production is fixed in the modern sector of the underdeveloped
economies. Alittle degree of elasticity cannot be ruled in any production
function.
3. Higgins attaches importance only to the technical factors affecting the
ratio between the labour and capital. The theory is thus lopsided.
4. Prof.Higgins fails to offer a comprehehensive explanation of nature and
growth of unemployment in the traditional sector of dual economies.
5. it is also questionable to assume that development of industrial sector in
underdeveloped economies depends entirely upon imported technology.