Geography Reference
In-Depth Information
Summarizing the above discussion, two strong lines of argument, which we
have labelled “left” and “right” versions of development, held sway in the first
decades after the Second World War. However, data from observations of
national or regional level development do not provide a firm base for assertions
about a “normal” course of development, nor for the correctness of either general
view. We may briefly reconstruct some of the main tenets of theory and indicate
areas of similarity or agreement between the two sides, as this may lead to
consideration of what constitutes a real alternative. One important line of
argument arising in the 1970s and 1980s was is that neither left nor right were
correct about the sources of development, and that external factors were
overemphasized. Instead, the emphasis should be on internal or endogenous
sources of growth and development. Such a view comes from concepts such as
Development from Below and sustainable development. This idea implies that
development priorities are likely to move from the purely economic towards the
inclusion of social and environmental concerns, and to involve a measure of
decentralization of power to lower administrative levels.
The neo-classical model of development
As a representative of the right wing or orthodox view of development
processes, we may take the neo-classical model of economics. Without entering
deeply into the economic arguments, this may be described as a model of
balance, in which any slight imbalances are self-righting, so that no problem of
inequality should exist. This result is achieved partly because of the many
simplifying assumptions in the model (Richardson 1973). The basic model of
production for a country or region is Y =a K +b L, which may be regarded as
meaning that production (Y) is equal to some constant mix of capital and labour.
The three classic agents or factors of production are taken as being capital (K),
labour (L) and land, in which latter term all natural resources are included. Since
“land” is considered to be fixed, it can be left aside. The constants a and b in the
equation refer to the fixed amounts which are necessary for each of the two
factors considered. One implication of this simple model, since a and b are set
for the area under consideration, is that there is a fixed ratio between capital and
labour, the ratio K:L . For the purposes of illustration, let us suppose that the ratio
is 1:1. A further implication is that any emergent imbalance will be righted
towards the initial balance, by a migration of the overabundant factor to the
region where it is scarce. In Figure 2.1 we may visualize a sequence of events in
a two-region country; in stage I, the K:L ratio is equal in both regions. In stage
II, the ratio is disturbed by san investment from region B into region A of 10
units. (We might suppose a firm has set up a new factory in region A, and this is
a common form of capital movement.) In stage III, the balance is restored by a
movement of labour from B into A (i.e. a migration).
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