Abstract
ABSTRACT New developmentalism was a response to the inability of classical developmentalism and post-Keynesian macroeconomics in leading middle-income countries to resume growth. New developmentalism was born in the 2000s to explain why Latin American countries stopped growing in the 1980s, while East Asian countries continued to catch up. This paper compares new developmentalism with classical developmentalism, which didn’t have a macroeconomics, and with post-Keynesian economics, whose macroeconomics is not devoted to developing countries. And shows that to follow the East Asian example is not enough industrial policy, it is also necessary a macroeconomic policy that sets the five macroeconomic prices right, rejects the growth with foreign savings policy, and keeps the macroeconomic accounts balanced.
Highlights
New developmentalism was a response to the inability of classical developmentalism and post-Keynesian macroeconomics in leading middle-income countries to resume growth
Marxian political economy was an analysis of capitalism, and a critique of the former classical economists; Keynesian macroeconomics was a response to the 1930s Great Depression, and a critique of neoclassical supply sided economics
Classical developmentalism reflected the conditions and challenges confronted by underdeveloped countries after the Second World War; new institutionalism is an attempt to provide the neoclassical school with a historical explanation of growth; and new developmentalism is a theory based on the successful experiences of growth of middle-income countries, of Brazil’s and the East Asian countries
Summary
Classical developmentalism was developed between the 1940s and the 1960s by economists like Rosenstein-Rodan, Arthur Lewis, Raúl Prebisch, Gunnar Myrdal, Hans Singer, Michael Kalecki, Albert Hirschman and Celso Furtado. Arthur Lewis (1954), in his classical paper on growth with elastic supply of labor, recognized this fact He argued the transference of labor from low value added per person in the traditional sector of the economy benefited the infant manufacturing industry, because the additional wage that industrialists were supposed to pay to their workers were inferior to the associated increase of the productivity. As Raúl Prebisch (1949) and Hans Singer noted, the increase in productivity in the manufacturing industry in rich countries is not fully transmitted into the fall of prices which would benefit the countries not producing manufactured goods, as neoclassical economics assumes, but causes the direct increase of the wages in rich countries They argued that while the workers in these countries are organized and able to retain their productivity gains, the workers in the primary sector of developing countries are not, from what results a tendency to the deterioration of the terms of change in the developing countries. The bourgeois revolution or the national-developmental political pact was for the first time defended in Brazil in the early 1950s by the nationalist intellectuals like Hélio Jaguaribe, Ignácio Rangel, Guerreiro Ramos and Álvaro Vieira Pinto, who understood economic development as a “national revolution” (the formation of an autonomous nation-state) and an industrial revolution, and view rich countries as an imperial system associated to the old Brazilian oligarchy and the liberal middle class.
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