Myrdal's end
JOHN WOOD
The Challenge of World Poverty Gunnar Myrdal (Allen Lane The Penguin Press 84s) Unable to express himself fully in his mam- moth three volume 11 million word Asian Drama, Professor Myrdal now adds 'the
missing eighth part' in order to explain his 'rather definite views on the policy issues'.
This is, therefore, as the author says, 'a political book' concerned with political aims and how to achieve them. Unfortunately, it is marred by the author's animosity for the West and his contempt for the methodology of economics Not only is the West apparently largely to blame for the position of the under- developed countries (whose problems it dis- cusses 'with an air of insincerity and even hypocrisy'), but most of what it is doing is
wrong. Western governments may lend to these countries, but this only increases their burden of debt. Western business may set up enterprises but these are only foreign enclaves best regarded as a kind of occupied territory. Western experts may develop `wonder' grain and rice to feed the hungry, but this postpones land and agrarian reform.
Western economists, in particular, have a great deal to answer for. They pretend that their science is concerned with objective truth, not realising that there is no such thing as a 'disinterested' social science, be- cause everything is permeated by subjective value judgments. Value Theory? Merely the relic of outdated hedonism, utilitarianism and natural law without which it has no content. International Trade Theory? Merely an at- tempt to 'explain away' international in- equality. Markets? They either do not exist or are highly imperfect.
It is not surprising that although Profes- sor Myrdal frequently refers to `us econ omists', economic concepts appear only to be dismissed, and no use is made of econ- omic analysis. But positive economics can help in the fight against poverty. Super- ficiality and error rather than understanding are the inevitable results of ignoring it.
It is not true, for instance, that the under- developed countries are currently stagnating,
or that they made no progress between the wars. The existence of a -widening gap be- tween rich and poor countries has never been established and Professor Myrdal does not even try to define or explain what the gap is. His view that trade and capital inflows serve to widen the gap is quite unsupported by any evidence. And his judgment that 'as a matter of fact, ever since the first world war, most underdeveloped countries have seen their trading position deteriorating', is nonsense. Even Professor Myrdal's occasional in- sights have been anticipated by other econ- omists years ago Examples include his ap- preciation of the importance of climate, and the need for a minimum degree of literacy,
his insistence that national income data in these countries are useless, that general legis- lation making sweeping changes is likely to be ineffective, and that the advantages of low wages can be offset by low productivity.
The most interesting and welcome de- velopment in Professor Myrdal's thinking is his new emphasis on the importance of in. stitutions and "attitudes in these countries. But even here to recognise their importance may set limits to the value of economic an- alysis; it cannot replace it.
With this volume Professor Myrdal has now completed his 'Inquiry into the poverty of nations'. Students of economic develop. ment may still find more to help them in an earlier and shorter work with a somewhat similar title—An Inquiry into the Nature and Cause of the Wealth of Nations by A. Smith, London, 1776.
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