From Subsistence to Exchange and Other Essays

From Subsistence to Exchange and Other Essays

Peter Bauer
With an introduction by Amartya Sen
Series: New Forum Books
Copyright Date: 2000
Pages: 168
  • Cite this Item
  • Book Info
    From Subsistence to Exchange and Other Essays
    Book Description:

    Peter Bauer, a pioneer of development economics, is an incisive thinker whose work continues to influence fields from political science to history to anthropology. As Nobel Laureate Amartya Sen writes in the introduction to this book, "the originality, force, and extensive bearing of his writings have been quite astonishing." This collection of Bauer's essays reveals the full power and range of his thought as well as the central concern that underlies so much of his diverse work: the impact of people's conduct, their cultural institutions, and the policies of their governments on economic progress.

    The papers here cover pressing and controversial issues, including the process that transforms a subsistence economy into an exchange economy, the reputed correlation between poverty and population density, the alleged responsibility of the West for Third World poverty, the often counterproductive results of foreign aid, and the effects of egalitarian policies on individual freedoms. Bauer addresses these and other matters with clarity, verve, and wit, combining his deep understanding of economic theory and methodology with keen insights into human nature. The book is a penetrating account of how to develop a prosperous economy alongside a free and fair society and a stimulating introduction to the work of a man who has done so much to shape our modern understanding of developing economies and of the relationship of economics to the other social sciences.

    "This selection of essays will give readers a wonderful opportunity to learn about the rich world of cognizance and analysis erected by one of the great architects of political economy. I feel privileged to be able to offer this letter of invitation."--From the introduction by Amartya Sen, Nobel Laureate in economics

    eISBN: 978-1-4008-2464-9
    Subjects: Political Science, Economics

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Introduction
    (pp. ix-2)
    Amartya Sen

    Peter Bauer is in a class of his own as an outstanding economist. The originality, force, and extensive bearing of his writings have been quite astonishing. He is a real pioneer of modern development economics. He is a profound theorist of the process of change that transforms a subsistence or near-subsistence economy into an exchange economy.

    Bauer has investigated in a definitive way the general importance of the incentive to produce and consume, even in the most primitive societies, and—related to that—the roles of relative prices and of the parameters of personal and family behaviour. On more specific...

  4. I From Subsistence to Exchange
    (pp. 3-14)

    When economists discuss contemporary growth in advanced Western countries, they do not think of internal trade (i.e., wholesale and retail trade) as one of the engines of growth. And they are right. It would be misplaced to associate current economic growth in the West specifically with the distributive sector. Instead, when economists discuss wholesaling and retailing in advanced Western economies, they focus on such subjects as the organization of these activities, the nature and extent of competition, concentration, economies of scale, vertical integration, and restrictive practices. The emphasis is on efficiency in the provision of distributive services: in broad terms,...

  5. II Disregard of Reality
    (pp. 15-27)

    According to Hegel, the Owl of Minerva spreads its wings only at dusk. The later stages of one’s career should be propitious for discerning tendencies and forces at work in society. Earlier preoccupations with specific studies can be helpful for subsequent reflection on wider issues but meanwhile absorb time and attention.

    Like many of my contemporaries, fellow undergraduates and young academics alike, in my early days I expected much from economics, both in public policy and in intellectual interest. The great advances in the subject and the high intelligence of my academic colleagues seemed to confirm these hopes. Nevertheless, from...

  6. III The Land and the People
    (pp. 28-29)

    It is widely held that the most important cause of poverty lies in the relationship between land and people, that is, in scarcity of land or exploitation of cultivators. This is not so. For instance, amidst abundant land and vast natural resources, the American Indians before Columbus remained wretchedly poor, without domestic animals and without even the wheel when much of Europe with far less land was already rich and had developed a very high culture. Incidentally, before Cortez the Aztecs commended in the show were very poor and practiced large-scale human sacrifice, which was not good for living standards,...

  7. IV Population Explosion: Disaster or Blessing
    (pp. 30-40)

    The twenty-third General Population Conference of The International Union for the scientific study of population which met in Beijing in October 1997 focused on overpopulation as a serious threat to human survival and a major cause of poverty. Warren Buffet, Bill Gates, corporations, governments, and international organizations are dedicating and promising to dedicate enormous resources to reverse the threat of overpopulation. But is there any correlation between population density and poverty?

    Poverty in the Third World is not caused by population growth or pressure. Economic achievement and progress depend on people’s conduct, not on their numbers. Population growth in the...

  8. V Foreign Aid: Abiding Issues
    (pp. 41-52)

    Foreign aid is demonstrably neither necessary nor sufficient to promote economic progress in the so-called Third World and is indeed much more likely to inhibit economic advance than it is to promote it. This is so because the inflow of foreign aid sets up major adverse effects on the factors behind economic progress. This has been so since the beginning of foreign aid. In recent years the adverse effects have been compounded by the practice of linking foreign aid to government policies to promote birth control in the mistaken belief that population growth is a major cause of Third World...

  9. VI Western Guilt and Third World Poverty
    (pp. 53-72)

    Yeats’s words might indeed have been written to describe the wide, even welcome, acceptance by the West of the accusation that it is responsible for the poverty of the Third World (i.e., most of Asia, Africa, and Latin America).¹ Western responsibility for Third World backwardness is a persistent theme of the United Nations and its many affiliates.² It has been welcomed by spokesmen of the Third World and of the Communist bloc, notably so at international gatherings where it is often endorsed by official representatives of the West, especially the United States. It is also widely canvassed in the universities,...

  10. VII The Liberal Death Wish
    (pp. 73-93)

    Liberals, Malcolm Bradbury wrote inStepping Westward,are people who embrace their destroyers. Professor Mazrui’s 1979 Reith Lectures confirm this perceptive observation.¹ Formerly at Makerere, Professor Mazrui is now professor of political science at the University of Michigan, a prominent liberal institution. As he himself recounts (p. 16), as a youngster he was taken up and helped by Europeans in East Africa. He was educated in Western-organized and -financed institutions in East Africa, Britain, and the United States. Yet hostility to the West pervades the lectures and provides their unifying theme. His view of the recent past is this:


  11. VIII Ecclesiastical Economics: Envy Legitimized
    (pp. 94-108)

    Envy is traditionally one of the seven deadly sins. Vocal modern clerical opinion endows it with moral legitimacy and intellectual respectability. The results of this specious legitimization of envy are the principal themes of this chapter.

    Since World War II, prominent clergymen and theologians have been much preoccupied with domestic and international differences in income and wealth. A broad consensus has emerged, and its supporters range from recent popes to explicitly Marxist clerics.

    The following are the central theme and its supporting arguments. Social justice requires that incomes should be substantially equal; appreciable differences in incomes reflect exploitation, oppression, discrimination,...

  12. IX Hong Kong
    (pp. 109-115)

    How would you rate the economic prospects of an Asian country which has very little land (and only eroded hillsides at that) and which is indeed the most densely populated country in the world; whose population has grown rapidly, both through natural increase and large-scale immigration; which imports all its oil and raw materials and even most of its water; whose government is not engaged in development planning and operates no exchange controls or restrictions on capital exports and imports; and which is the only remaining Western colony of any significance?¹ You would think that this country must be doomed,...

  13. X Effective Influence on Opinion: The Shenoy Memorial Lecture
    (pp. 116-124)

    B. R. Shenoy was a hero and a saint. He was a hero in the sense in which Thomas Sowell used the term when in a review article he referred to heroic figures who publicly resisted fashionable fads and fancies, however influentially canvassed and widely accepted. He was a saint in that, outwardly at any rate, he remained unmoved, even serene, in the face of neglect, disparagement, even abuse. It is an honor to lecture in memory of such a man. For me it is also an emotional experience. I knew Shenoy personally and felt great affection and respect for...

  14. XI Class on the Brain
    (pp. 125-138)

    In the 1970s, when Herr Schmidt was the West German chancellor, he provided a terse summary of received opinion on the subject of class. He was on an official visit to London in December 1975 when the pound was weak and the balance of payments in heavy deficit. He was reported in theFinancial Timesas saying:

    As long as you maintain that damned class-ridden society of yours you will never get out of your mess.¹

    And indeed this was what foreigners are told all the time by the British intelligentsia. Thus theFinancial Times’staff writer, who quoted Herr...

  15. XII Egalitarianism: A Delicate Dilemma
    (pp. 139-148)

    The wide economic differences between people in an open and free society result from differences in aptitudes, motivations, and circumstances. State action to remove these economic differences entails such extensive coercion that the society ceases to be open and free. Here lies the central dilemma for egalitarians. The implications of the dilemma and of the persistent, widespread failure to recognize them form the central argument of this essay.

    A discrepancy between an assumed norm or expectation and social reality is commonly described as a “social problem.” Inasmuch as social scientists are largely preoccupied with discerning, announcing, and emphasizing discrepancies between...

  16. Index
    (pp. 149-154)
  17. Back Matter
    (pp. 155-155)