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Book Notices

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
June 1967
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Geiger, Theodore, The Conflicted Relationship, New York, N.Y., U.S.A., McGraw-Hill Book Company, 1967, xiv + 303 pp., $7.95.

THIS BOOK, which is subtitled “The West and the Transformation of Asia, Africa, and Latin America,” is a study based upon economics, history, theology, anthropology, sociology, and psychoanalytic theory. So interdisciplinary is it, indeed, that it is to some extent extradisciplinary; as the author notes, it is “not only nearly devoid of scholarly references; it is also full of unscholarly generalizations.” The result is a book that is at once humane and skeptical, penetrating, original, and literate.

The book is original in that it opens with an account not of the attitudes and expectations of the developing world in regard to the developed, but of Western man’s attitudes and expectations in regard to his own environment—attitudes and expectations that are ineluctably extended to the developing world.

To this world the author then turns, analyzing the traditional and transitional societies in the light of his own experience within a sociological and psychological framework derived from the work of, among others, Max Weber, Talcott Parsons, and Benjamin Nelson. He deals with development strategies in Asia and Africa and their limitations, under such headings as the relation of political and economic development, the characteristics of transitional political regimes, and the economic implications of development strategies. Turning to Latin America he plunges intrepidly into “The Iberian Background,” the “Structure and Personality Types of Latin American Society,” and “The Dramatic Design of Latin American Culture.” He then turns to the political and economic modernization of the subcontinent.

In the course of this world tour Dr. Geiger touches upon such subjects as messianic cults, the sociological implications of Zen Buddhism, the tariff protection of infant industries, “African Socialism,” Latin American landholding systems, and the influence of medieval scholasticism upon the development of Latin American culture. The reader who travels with him may find himself at the end a little short of breath, but the author himself is not. Like an experienced guide, he is at ease on his chosen route, which is planned to give the reader both particular insights and a general view which could not so easily have been provided in any other way.

One of Dr. Geiger’s insights seems especially penetrating and important. During the last few years a considerable number of books, and articles have appeared in which Americans and other Westerners have been chided for their brash and insensitive attitudes to the people of the developing countries. The authors of such books and articles have often had long experience in developing countries. They form a highly civilized and perceptive group, and as individuals working in developing countries they may be very effective, if only because they have the will, imagination, and sympathy to break through the barriers that divide their colleagues alike from the local elite and from the traditional society.

The insight that I have referred to in The Conflicted Relationship as being especially penetrating is the way in which Dr. Geiger reveals, without moralizing about, the gulf which divides these somewhat exotic characters who are at ease in both worlds from their own fellow citizens, the Westerners-in-the-street who vote for or against development aid. He cites public opinion polls which suggest that Americans (who in this context may be allowed to represent the West) care less and less about helping the poor countries; against 70 per cent favoring foreign aid 15 years ago, only 50 per cent do so now. He argues—or it might be truer to state that he suggests—that this is partly because Americans are disappointed in the results of aid already given; the developing countries seem to them to have been ineffective, purposeless, lazy, so unable as to appear positively unwilling to change conditions which they yet proclaim to be intolerable.

No doubt such American attitudes are deeply provincial; and that indeed is Dr. Geiger’s point—that in relation to the world at large, American attitudes are both deep and provincial—to just about the same degree that the tenets of some Eastern religions are both deep and provincial. The holders of each appear to their opposite numbers as completely incomprehensible and perverse. American feelings about American values, however, run so deep (Dr. Geiger argues) that “the United States would not be providing aid on a meaningful scale if this activity did not also constitute a major way of expressing the American will to action, positivistic conviction of mastery over nature and society, and senses of mission and guilt.” Only if we understand the religious quality of this commitment and its potency can we see through what the author calls “the rhetoric of development” and effectively produce and manage development aid. That this will not be an easy task we all appreciate, and the author’s stern view may not be unduly pessimistic; yet it seems curious that a spirit of enquiry that ranges so widely should be unconcerned with the role or even the potential of such international institutions as the IMF and the World Bank.

Dr. Geiger is addressing himself principally to the Western, above all to the American, policymakers of aid; but it is of wider interest that in doing so he gives the screw of sophistication another turn in asking from the developing world that it should try more perceptively to understand to what an extent the transitional peasants of the developed world, for all their cars and refrigerators, are still the prisoners of traditional beliefs; how many of us, as inheritors of the Puritan ethic, are in the depths of our being the followers of such great religious teachers as Calvin and Knox and of their exceedingly potent and tenacious, if not always amiable, doctrine of “effective good works.” In development aid as elsewhere there has to be a degree of recognition of the element in our behavior of which it must be said that, God helping us, we can do no other.

J.D. Scott

Stolper, Wolfgang F., Planning Without Facts: Lessons in Resource Allocation from Nigeria’s Development, Cambridge, Mass., U.S.A., Harvard University Press, 1966, xx + 348 pp., $7.95.

THIS IS AT ONCE a book on the practical problems of planning in a developing country, an essay in economic theory, and a manual for economic advisors. Many of the divergencies between theory and practice are set out clearly, examples of solutions to planning in the absence of reliable information are given, and theoretical problems issuing from the economic peculiarities of a developing economy are met squarely. The latter, in particular, is an act of courage, since much of present-day theoretical economics is shot through with enormous logical complexities expressed in a difficult mathematical lingo, and its understanding requires powerful methodological and analytical abilities, as well as sure instinct.

The author applies his skills to three main topics: the rationalization of planning methods in a framework that can be subject to rigorous economic analysis; the utilization of national accounts as a planning tool (a discussion which has the flavor of a personal diary); and the analysis of appropriate investment criteria.

Dr. Stolper has built his arguments on these topics around the experience he gained in Nigeria in 1960-62 as head of the Economic Planning Unit.

Nigeria is the main subject matter of the remaining parts of this essay: a discussion of money and banking, a presentation of the author’s ideas on the relationship between business and government, and an analysis of resource allocation as the central theme of a developing economy.

It is a measure of the author’s success that the reader, unfamiliar with the Nigerian case, is provoked less into looking into the peculiarities of the country as into the fundamental theoretical and policy arguments—applicable to any country—developed in this book.

This being a provocative book, there is much one can disagree with. The author’s attempt to show that profitability is the criterion on which should be based project, sector, and economy-wide decisions will not convince many other economists.

There will also be doubt as to Stolper’s refutation of import substitution as an investment criterion. This is done by comparing the logic of import substitution with that of profit maximization; the comparison, however, is not necessarily correct, since one can always devise an import substitution strategy within a profit maximization framework, wherein the relevant prices have been established at the outset.

Yet, Stolper’s critique of shadow prices is convincing and timely. The resulting contradiction is certainly not the author’s fault, but a poignant demonstration of the difficulties of modern economics. These difficulties, this book shows, have a significant bearing on day-to-day actions and policies. One of the merits of the author, who inclines toward neoclassical economics, is that he nevertheless does so with a refreshing skepticism, showing the value of a pragmatic and thoughtful approach.

The book is accompanied by an input-output analysis of the Nigerian economy, a brilliant effort by N. G. Carter showing the possibilities of this tool for planning purposes.

Paolo Leon

Arndt, Hans-Joachim, West Germany, Politics of Non-Planning, Syracuse, New York, U.S.A., Syracuse University Press, 1966, xxiii +162 pp., $3.95.

IT IS NOT an easy task to explain why, after all the destruction of World War II, West Germany developed into one of the most dynamic industrial nations in Europe. Certainly, such a task is beyond the scope of this monograph, but the author, Hans-Joachim Arndt, gives his reader many insights into the complexities of the “German Economic Miracle.”

Written from a multidisciplinary point of view, the book, West Germany, Politics of Non-Planning, examines the various attitudes and influences which have created the “Social Market” system. The first half of Dr. Arndt’s text provides a stimulating description of Germany’s early experiences with governmental planning. Yet, planning in the Federal Republic of Germany is haunted by two ghosts—memories of the Weimar Republic’s failure to maintain economic stability, and the grim policies of “planned scarcity” pursued by the National Socialist Third Reich. These specters seem to be embedded in the nation’s contemporary economic doctrine, which, says the author, “emphatically regards itself as anti-planning.”

In contrast, the second half of the study examines a vast array of groups and institutions which make up Germany’s social fabric. Special attention is given to analyzing the attitudes and values expressed by different “generations” within the private sector’s managerial class. From this framework, similarities and differences between the various age groups are uncovered, as well as broad patterns of human interaction. The reader may be somewhat disappointed with the description of the private banking system, for little is said about the function and role of the corporation supervisory boards. With the wide representation of the private banks on these boards, collaboration on a broad scale between varied business interests is made possible. Such widespread consultation has many macro-planning implications.

In spite of minor inadequacies, however, this is a welcome addition to the existing paperbacks in the National Planning Series, throwing much light upon contemporary arguments over the future course of Germany’s economic policy.

Jeffrey H. Dennis

La Guerre des Monnaies, Numéro Spécial de “Chronique Sociale de France”, December 1966, Lyons, France, 160 pp.

The “Chronique Sociale de France”, a well-known French periodical, devoted, at the end of 1966, a special issue to the international monetary reform, or, rather, to what it called “the war of the currencies.” Various authors, including Professors Bye, Breier, F.V. Meyer, and Triffin, attempt to describe the problem of international liquidity and present various solutions. No informed reader would agree with all the statements printed in this special issue, but he would also recognize that by reading it the uninformed reader will receive instruction which will help him to find a path out of the money muddle.

J. van der Mensbrugghe

Finance and Development does not attempt to evaluate books or contributions thereto by members of the staff of the International Monetary Fund or the World Bank, but notes them as likely to be of interest to its readers.

Kamarck, Andrew M., The Economics of African Development, New York, N.Y., U.S.A., Frederick A. Praeger, 1967, xi + 294 pp., $7.50.

MR. KAMARCK’S latest book discusses African development and in general estimates just how successful the nations on that continent may be in handling their problems in the struggle for economic prosperity. The author, who is Director of the Economics Department of the World Bank, suggests some ways to speed up the pace of development. One would be to invest more international resources in research on the tropics. Mr. Kamarck also suggests that new development techniques may be needed, such as the consideration of a “generation-long contract between an international aid agency and the recipient country, through which the necessary transformation of the country’s economy from top to bottom could be systematically and thoroughly carried out.”

The book is issued in the Praeger Series on International Economics and Development.

Effective Aid, London, England, The Overseas Development Institute, 131 pp., 15s. (plus postage).

THIS BOOK constitutes the report of an International Conference in England held jointly by the Ditchley Foundation and of the Overseas Development Institute in the summer of 1966. It contains papers on aid administration at home and overseas, terms and conditions of aid, the role of technical systems, the coordination of aid, measures to ensure the effective use of aid, and motives and objectives of aid. The paper on the coordination of aid was written by Mr. Michael Hoffman of the World Bank.

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