Abstract

Some economic and social aspects of planning in underdeveloped countries The author defines underdevelopment as an insufficiency of capital relative to the natural resources exploitable by the population in the present state of technical development. The fundamental problem of such countries is the low capital /labour coefficient. Two extreme policies can be envisayed : dilution of capital (spreading it as widely as possible), and concentration of capital (creating high capital intensity in particular areas). It is argued that both these policies are compatible with full employment. The true choice is one of period : immediate but not very productive full employment or productive full employment at a later dale. The first type of policy would seem to be supported by the marginal principle, but the author advances a number of arguments for the view that marginalism is an unsatisfactory guide in such a context. Also, the apparent evidence of history in some less developed countries, which have had centres of capital intensity in petrol or mining but have nevertheless failed to develop generally, is misleading as a guide to the future because of the «colonial» character of the investment concerned. Developed economies have not grown through simultaneous marginal») progress on many fronts, but have evolved around «centres of growth» (high capital intensity), and this is the relevant historical parallel. The need is to create such centres of growth at carefully specified points (which will often be centres of heavy industry ) in less developed countries. The process of industrialisation brings material benefits, but the price of growth in «human costs» must also be considered. Such costs are not easy to assess precisely against the benefits of economic development ; the final part of the article comments upon their nature and possible importance.

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