From Subsistence to Exchange and Other Essays

168 Pages·2000·0.86 MB·English

by  Peter Tamas Bauer

FROM SUBSISTENCE TO EXCHANGE
AND OTHER ESSAYS
NEW FORUM BOOKS
Robert P. George, Series Editor
A list of titles
in the series appears
at the back of
the book
FROM SUBSISTENCE TO EXCHANGE
AND OTHER ESSAYS
Peter Bauer
With an introduction by Amartya Sen
PRINCETON UNIVERSITY PRESS PRINCETON, NEW JERSEY
Copyright © 2000 by Princeton University Press
Published by Princeton University Press, 41 William Street, Princeton,
New Jersey 08540
In the United Kingdom: Princeton University Press, Chichester,
West Sussex
All Rights Reserved
Library of Congress Cataloging-in-Publication Data
Bauer, P. T. (Péter Tamás)
From subsistence to exchange and other essays / Peter Bauer : with
an introduction by Amartya Sen.
p. cm. — (New forum books)
Includes bibliographical references and index.
ISBN 0-691-00667-9 (cl : alk. paper)
1. Economic development. 2. Commerce. 3. Economics.
I. Title. II. Series.
HD75.B38 2000
338.9—dc21 99-27680
This book has been composed in GALLIARD
The paper used in this publication meets the minimum requirements of
ANSI/NISO Z39.48-1992 (R1997) (Permanence of Paper)
http://pup.princeton.edu
Printed in the United States of America
1 3 5 7 9 10 8 6 4 2
To Nancy
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Contents
Introduction, by Amartya Sen ix
I. From Subsistence to Exchange 3
II. Disregard of Reality 15
III. The Land and the People 28
IV. Population Explosion: Disaster or Blessing 30
V. Foreign Aid: Abiding Issues 41
VI. Western Guilt and Third World Poverty 53
VII. The Liberal Death Wish 73
VIII. Ecclesiastical Economics: Envy Legitimized 94
IX. Hong Kong 109
X. Effective Influence on Opinion: The Shenoy
Memorial Lecture 116
XI. Class on the Brain 125
XII. Egalitarianism: A Delicate Dilemma 139
Index 149
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Introduction
PETER BAUER is in a class of his own as an outstanding economist. The
originality, force, and extensive bearing of his writings have been quite as-
tonishing. He is a real pioneer of modern development economics. He is
a profound theorist of the process of change that transforms a subsistence
or near-subsistence economy into an exchange economy.
Bauer has investigated in a definitive way the general importance of the
incentive to produce and consume, even in the most primitive societies,
and—related to that—the roles of relative prices and of the parameters of
personal and family behaviour. On more specific issues, he has shown the
crucial importance of small-scale trade, the significance of capital formation
by farmers and traders (often unrecorded in official statistics), and the pos-
itive contributions of cash crops (such as rubber, cocoa, and nuts) in pro-
moting exchange and prosperity. Bauer has drawn attention to and analyzed
the far-reaching economic importance of what is now called the “informal
sector.” He has cogently questioned the standard wisdom on the so-called
“population problem” and on the alleged benefits of international aid. He
has powerfully disputed the standard explanations of Third World poverty
(such as colonialism, or unequal exchange, or an inescapable shortage of
capital), and discussed how the poverty of a nation can be perpetuated with-
out any malign intervention by others.
Many of Bauer’s claims, while resisted at the time, have become a part
of the new “establishment” of ideas. Like the old lady who went to see
Hamlet and felt it was full of quotations, a young reader of Bauer’s early
books may find his arguments rather familiar. This is, to a great extent, evi-
dence of his triumph, though the new enthusiasts for Bauer’s ideas often
do not give him enough credit. He has presented novel and powerful argu-
ments in defence of positions which had been, at that time, quite out of
the mainstream. He has been a champion of international trade, even when
it used to be viewed with great scepticism by most development theorists
(and when even the defenders of international trade seemed to be more
engaged in identifying contrary cases than in showing the basic rationale
of trade). Now that the mainstream in development economics has caught
up with him on international trade, there remain further lessons—not yet
fully absorbed—to be learned from his work. The lessons can vary from the
pivotal importance of domestic trade and the emergence of the exchange
economy, to the need to see the population problem without ignoring the
basic fact that it is the presence and creativity of people that make this inert
planet the lively place it is.