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Lies My Poets Told Me: The Prehistory of Development Economics

This post is by Adam Martin, a post-doctoral fellow at DRI.

A couple months ago, Bill addressed the imperial origins of state-led development, arguing that economic development was a substitute for racism as a rationalization of empire. I think it’s worthwhile to delve a bit further into the intellectual and social context in which these ideas were put forward.

Why bother? Because ideas matter for policy. There are good, hard-nosed reasons for believing that rationales are not mere epiphenomena of political interests. Understanding why and how certain policies are implemented requires some digging into the justifications of policymakers. A bit of intellectual archaeology might also identify some path dependence in economic thinking about development. The point is not to impugn the motives of current policymakers or academic researchers, but to shed light on any hidden intellectual baggage that might be weighing down their efforts. Old dead economists might teach us something valuable after all.

John Ruskin slays a racialized student of the Dismal Science

John Ruskin slays a racialized student of the Dismal Science

How do the ideas of economists fit into this historical collision of racism, imperialism, and international politics that gave us the development establishment? Before jumping right into more proximate causes, a bit of pre-history might help set the scene. WWII was not the dismal science’s first collision with race and empire. As it turns out, the “dismal” moniker that economists have long enjoyed stems from those very debates.

David Levy and Sandra Peart have extensively chronicled the relationship between classical economics and the racism contemporary to it. The surprise ending? The economists were the good guys. That’s right. Vile, contemptible economists–apologists for markets, purveyors of selfishness–were the public defenders of racial equality (along with the “Exeter Hall” evangelical Christians). Then who were the bad guys? The poets: Thomas Carlyle, John Ruskin, and everyone’s favorite literary critic of capitalism, Charles Dickens. It was Carlyle who christened economics as the dismal science, in contrast with the “gay science” of poetry. The context is shocking:

Truly, my philanthropic friends, Exeter Hall philanthropy is wonderful; and the social science — not a “gay science,” but a rueful –which finds the secret of this universe in “supply and demand,” and reduces the duty of human governors to that of letting men alone, is also wonderful. Not a “gay science,” I should say, like some we have heard of; no, a dreary, desolate and, indeed, quite abject and distressing one; what we might call, by way of eminence, the dismal science. These two, Exeter Hall philanthropy and the Dismal Science, led by any sacred cause of black emancipation, or the like, to fall in love and make a wedding of it — will give birth to progenies and prodigies: dark extensive moon-calves, unnameable abortions, wide-coiled monstrosities, such as the world has not seen hitherto!

Carlyle is arguing here for the reintroduction of slavery in the West Indian colonies. John Stuart Mill responded, in line with classical economists’ assumption of a deep human homogeneity. Differences between societies are the result of the incentives individuals face, meaning that history and institutions are the root cause of different levels of development. By contrast, the Romantic poets argued that inherent differences between individuals justified hierarchical relationships–for the good of the lesser races, of course. They longed for bygone feudalism when better men cared for their inferiors, while the economists argued that equals should come together in mutually beneficial market exchange.

BrightEconomists played this part again in the debate over Irish home rule, arguing that Ireland’s economic backwardness was due to bad institutional arrangements, themselves the result of centuries of British invasions. For their part, the economists’ opponents depicted them–personified as John Bright–as peddling snake oil to the subhuman Irish.

In both these cases, economists’ underlying egalitarianism clashed with paternalism of an ugly sort. The “dismal” label should be worn as a badge of honor for precisely this reason. But why did later dismal scientists sign on so readily to the paternalist project of development? Why were voices like Bauer and Frankel so rare? I don’t think the abandonment of racist language is a sufficient cause. Other tectonic shifts in economic thought took place in the intervening decades. Which were decisive? This is an open question worth pursuing further.

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  1. this is a really interesting piece. It doesn’t surprise me that economists were anti-slavery and anti-racist for the simple reason that we tend to look for the unifying characteristics among people and not the differences as you say.

    I never bought the idea of development economics as a new form of racism or of control. Paternalism might more plausibly spring from our habit of universalizing answers, and the translation of more subtle academic work into practical applications, taking on characteristics of dogma.

    In other words, we’re not paternalist and patronising to local people, but to people who don’t agree with us.

    We need to question ourselves, and our most basic understandings a bit more.

    Posted November 12, 2009 at 2:56 am | Permalink
  2. Fernando wrote:

    Nice piece, but it ignores a recurring theme in this blog: Political Economy.

    For all the nice intellectual ideas and lofty moralizing, it took a hard fought act of parliament to abolish slavery in England. The economics interests at stake were huge.

    My favorite political economy of why this act was passed runs as follows.

    After the British invaded Cuba during the 7 years war they introduced modern machinery for sugar production and even more slaves. Soon after Cuba returned to the Spanish fold in exchange for Florida. By which point it had become the pre-eminent sugar producer in the Caribbean and hence the world.

    Unfortunately British Caribbean planters, long anti abolitionist, were being driven out of business by Cuba’s newly found preeminence. What to do?

    They decide to abolish slavery and import so-called coolie labor from India – a British monopoly. Why?

    To cut off the supply of labor to Cuba and raise Cuba’s cost of production. A story of oligopolists reducing output by cajoling the leader.

    This explains why England constantly pushed other nations, especially Spain and Portugal, to abolish the slave trade. To the point of stepping on their sovereignty by inspecting transatlantic trade ships under the excuse that they had loaded slaves from British colonies.

    Therefore, rather than enlightened ideas of economists, it was the self interest of oligopolist planters that ended slavery.

    To economists this ought to be a much more plausible story. One cannot have it both ways…

    Posted November 12, 2009 at 3:17 am | Permalink
  3. Stephen Jones wrote:

    They decide to abolish slavery and import so-called coolie labor from India – a British monopoly. Why?

    Slight chronological problem here. The slave trade was abolished in 1807 after twenty years of campaigning. The first Indian coolies were not imported until 1826 and by the French not the British.

    Posted November 12, 2009 at 9:05 am | Permalink
  4. Fernando wrote:

    @ Stephen Jones

    The slave trade was abolished in 1807 but not slavery. The British fleet nevertheless tries to enforce a world wide ban on slave trade – to protect the planters in the Caribbean. A lot of smuggling keeps them supplied.

    The French may have been the first to import coolie labor, but the English soon dominated the trade.

    Interestingly by your own dates it appears that experimentation with such labor preceded the abolition of slavery itself.

    Maybe because the planters had found a substitute. One that would play against the competition.

    This said, clearly the abolition was not monocausal. And all the idealist, campaigners etc. played a key role. But the planters had effectively the veto in Parliament. It was only when they decided not to block reform that it went through.

    What I find is the interesting lesson for the modern aid industry is how great moral causes can often also be used to further baser interests….

    Posted November 12, 2009 at 10:34 am | Permalink
  5. TGGP wrote:

    Mencius Moldbug argues that Carlyle & co were correct while Exeter Hall has caused the disasters prophesied.

    Posted November 13, 2009 at 11:25 am | Permalink

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  2. By Food for Thought « Aid Thoughts on November 13, 2009 at 6:01 am

    […] divide as Marx did, or their rational thought process as a member of the species homo economicus. Race isn’t one of them, and we knew this even when others around us were mourning the end of the slave trade (tip of the […]

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