Abstract

The Poor Economic Conditions of Towns in Under-Developed Countries. In the towns of under-developed countries, the economic system is composed of two sub-systems : the upper sector, consisting of the modern activities present in the agglomerations, and the lower sector, consisting of the non-modern, or non-capitalist or, in other terms, of the traditional activities. These two sectors are interrelated. All the parts of the lower sector are closely intertwined. The employment situation is responsible for the existence of deficitary budgets ; the permament debt condition to which the poor urban masses are subjected has resulted in the creation of production and intermediary activities that are quite characteristic. These activities provide for wants that are comparable to those of the proprietor classes, but the goods and services offered are generally of inferior quality. In this lower sector, the structure of the activities is different from that of the upper. Business activities, as well as those of artisans or those of small producers, is conducted with little capital and with techniques that are most often outdated. The profit margins, very high in relation to those of the activities in the upper sector, are the indispensable condition for survival of the employed in this sector and provide a considerable number of people with the income necessary to satisfy their basic needs. Although quite often of a traditional character or only partially modernized, the activities of the lower sector can be easily transformed into modern working methods. This form of mimesis is a guarantee of their permanence and enables a portion of the population, which otherwise would not be able to procur the goods and services necessary in the modern world, to have steady employment. The role of credit is important. In all the phases of the lower sector we see that credit constitutes a basic element in the working of the system. Without it, even the precarious economic state of the towns could not exist. It is a modern bank credit of the nature employed in the modern sector, but a credit that is personal, direct and, on account of this, even usurious. Because it is personal and direct, it affects only a small circle of people, normally relatives. The consequence of this is that it operates within a tight geographical area of the enterprises concerned. This economic sector provides a large number of jobs because the various associated tasks give occasion for a sort of division of labor that approches the dwindling point. On account of this , however, the lower, sector is able to offer work opportunities to migrants from the countryside who would be unable to find employment elsewhere.

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