After Developmentalism and Globalization, What? by Immanuel Wallerstein

“The first question we need to ask now is, is it at all possible for every part of the world to attain–one day in a plausibly not too remote future–the standard of living of say Denmark (and perhaps also similar political and cultural institutions)? The second question is, if it is not, is it possible for the present lopsided and highly inegalitarian worldsystem to persist, more or less as such? And the third question is, if it is not, what kinds of alternatives present themselves to all of us now?”

In 1900, in preparation for the Exposition Universelle in Paris, the French Ministry of Colonies asked Camille Guy, the head of its geographical service, to produce a book entitled Les colonies francaises: la mise en valeur de notre domaine coloniale. A literal translation of mise en valeur is “making into value.” The dictionary, however, translates “mise en valeur” as “development.” At the time, this expression was preferred, when talking about economic phenomena in the colonies, to the perfectly acceptable French word, “developpement.” If one then goes to Les Usuels de Robert: Dictionnaire des Expressions et Locutions figurees (1979) to learn more about the meaning of the expression “mettre en valeur,” one finds the explanation that it is used as a metaphor meaning “to exploit, draw profit from.”

Basically, this was the view of the pan-European world during the colonial era concerning economic development in the rest of the world. Development was a set of concrete actions effectuated by Europeans to exploit and draw profit from the resources of the non-European world. There were a number of assumptions in this view: Non-Europeans would not be able or perhaps even willing to “develop” their resources without the active intrusion of the pan-European world. But such development represented a material and moral good for the world. It was therefore the moral and political duty of the pan-Europeans to exploit the resources of these countries. There was consequently nothing wrong with the fact that, as a reward, the pan-Europeans who exploited the resources drew profit from them, since a secondary advantage would go to the persons whose resources were being exploited in this way.

This rationale of course completely omitted discussion of the cost in life and limb to the local people of such exploitation. The conventional calculus was that these costs were, as we would say in today?fs euphemisms, the necessary and inevitable “collateral damage” of Europe’s “civilizing mission.” The tone of the discussion began to change after 1945, primarily as a result of the strength of anticolonial sentiments and movements in Asia and Africa, and a new sense of collective assertiveness in Latin America. It is at this point that “development” came to be used as a code word for the belief that it was possible for the countries of the South to “develop” themselves, as opposed to “being developed” by the North. The new assumption was that, if the countries of the South would only adopt the proper policies, they would one day, some time in the future, become as technologically modern and as wealthy as the countries of the North.

At some point in the post-1945 period, Latin American authors began to call this new ideology “desarollismo” or “developmentalism.” The ideology of developmentalism took a number of different forms. The Soviet Union called it instituting “socialism,” which became defined as the last stage before “communism.” The United States called it “economic development.” Ideologues in the South often used the two terms interchangeably. Amidst this worldwide consensus, all the states of the North–the United States, the Soviet Union (and its East European satellites), the West European colonial (now becoming ex-colonial) powers, and the Nordic countries plus Canada–began to offer “aid” and advice concerning this development that everyone favored. The Economic Commission for Latin America (CEPAL) developed a new language of “core-periphery” relations, used primarily to justify a program of “import-substitution industrialization.” And more radical Latin American (and other) intellectuals developed a language about “dependency,” which, they said, needed to be fought against and overcome in order that dependent countries be in a position to develop.

The terminology may have differed but the one thing that was agreed upon by everyone was that development was indeed possible, if only . . . When therefore the United Nations declared that the 1970s would be the “decade of development,” the term and the objective seemed virtually a piety. Yet, as we know, the 1970s turned out to be a very bad decade for most of the countries of the South. It was the decade of the two successive oil price increases instituted by OPEC and of stagflation in the North. The consequent rise in the cost of imports for countries in the South combined with a sharp decline in the value of their exports because of the stagnation in the world-economy created acute balance of payments difficulties for just about every one of these countries (including those in the so-called socialist bloc), with the sole exception of those which were oil-exporting states.

The oil-exporting states acquired incredibly large surpluses, a large part of which they deposited in banks in the United States and Germany, who thereupon needed to find a remunerative use for this extra capital. They found it in loans to states with acute balance of payments difficulties. These loans, actively promoted by the banks themselves, solved both problems: finding an outlet for the surplus money in the accounts of the banks of the North and solving the liquidity problems of the virtually insolvent states of the South. But, alas, the loans led to cumulative interest payments which, by 1980, had led to even greater balance of payments difficulties in these states. Loans unfortunately are supposed to be repaid. The world thus arrived at the suddenly discovered so-called debt crisis–Poland in 1980, Mexico in 1982, and then all over the place.

It was easy enough to find the villain in the piece. The finger was pointed at developmentalism, so universally praised just a decade before. Import-substitution industrialization was now perceived as corrupt protectionism. State-building was deconstructed as feeding a bloated bureaucracy. Financial aid was now analyzed as money poured down a sink, if not a gutter. And parastatal structures, far from being virtuous efforts at pulling oneself up by one’s own bootstraps, were exposed as deadening barriers to fruitful entrepreneurial achievement. It was decided that loans to states in distress, to be beneficial, needed to be hedged by requirements that these states cut wasteful state expenditures on such deferrable items as schools and health. It was further proclaimed that state enterprises were almost by definition inefficient and should be privatized as rapidly as possible, since private enterprises were again almost by definition responsive to the “market” and therefore maximally efficient. Or at least that was the consensus in Washington.

Academic buzz words and fads are fickle and usually last but a decade or two. Development was suddenly out. Globalization arrived in its wake. University professors, foundation executives, book publishers, and op-ed columnists all saw the light. To be sure, the optic, or better said the remedies, had changed. Now, the way to move forward was not to import-substitute but to export-orient productive activities. Down not only with nationalized industries but with capital transfer controls; up with transparent, unhindered flows of capital. In place of one-party regimes, let us all together study governance (a new word, splendidly erudite and quite inscrutable, if not meaningless). Above all, let us face Mecca five times a day and intone Allahu Akbar TINA–There is No Alternative.

The new dogmas took root in the 1980s amidst the decaying rot of developmentalist dreams. They flourished in the 1990s bathed by the sparkle of the “new economy” in which the United States and eastern Asia were supposed to be leading the world to its economic glory. But alas, the sheen began to tarnish. The currency crisis in East and Southeast Asia in 1997 (which spread to Russia and Brazil), the slide downward of the World Trade Organization from Seattle to Cancun, the fading of Davos and the spectacular rise of Porto Alegre, al-Qaeda and September 11, followed by the Bush fiasco in Iraq and the current accounts crisis of the United States–all this and more leads one to suspect that globalization as rhetoric may be going quickly the way of developmentalism. And hence our question–After Developmentalism and Globalization, What?

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(This article is a keynote address by Immanuel Wallerstein given in the conference, “Development Challenges for the 21st Century,” at Cornell University, Oct. 1, 2004)