Why most Economists are probably Wrong

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(No Transcript)
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The Benefits of Growth

• A Southeast Asian Development Example

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Paradox of Development

• Economic development is often assumed to be about
  poverty reduction (and is assumed to be the only
  route to poverty reduction).
• But poverty is relative as much or more than it
  is objective.
• Participation in capitalist markets increases
  economic disparity (both internally and
  internationally).
• Therefore, development on the whole often
  increases poverty.

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Why development based on export production is
problematic.

• Growth of GDP is correlated to an increase in
  exports.
• But up to 85 of the money from exports does not
  stay in poorer countries (Lappe and Collins,
  World Hunger Twelve Myths).
• It is not a comparative advantage of resources
  but comparatively low wages that influence who
  exports what.
• Income disparity within countries goes up.
• The poor increasingly compete with people in rich
  countries in a global market for basic goods
  relative poverty between regions and nations
  becomes more apparent.

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Steve Aloha Derné Memorial GDP Gap Graph (in
billions of US )
Indonesia 2003 GDP 208 billion 2023 GDP 480
billion USA 2003 GDP 11,000 billion 2023 GDP
20530 billion Malaysia 2003 GDP 104
billion 2023 GDP 333 billion
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GDP per capita(in thousands of US )
Projected 2023 values based on Indonesia
population of 276 million and GDP of 480
billion USA population of 335 million and GDP of
20,530 billion Malaysia population of 33 million
and GDP of 333 billion. (Population projections
from www.alsagerschool.co.uk)
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Costs/Benefits of Fetishizing Growth of GDP

• Economists Must have hyper growth of poor
  countries GDP if catching up in aggregate total
  production is the goal.
• But what are the practical benefits of such a
  policy?
• What are the costs of development that is based
  on a growth fetish? Are many of these costs
  externalized onto the poor and society as a
  whole?

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A couple of classroom resources on the critique
of development

• Hamilton, Clive 2004 Growth Fetish, Sterling,
  VA Pluto Press.
• Rahnema, Majid with Victoria Bawtree (eds.)
  1997 The Post-Development Reader, Atlantic
  Highlands, NJ Zed Books.