UC Berkeley - HIST 186 - 2012 Spring - Sargent - International and Global History Since 1945 - Lecture 06 - Decolonization and Development - 01h 21m 08s

Introduction and Nomenclature

[0:00]

Okay, good morning. I should start just with a word of acknowledgement about the title. It's a little bit of a misnomer. This lecture, though, it's titled "Decolonization and Development," it's really about development. The story of decolonization we'll deal with next week. So, a better title for the lecture would be "Development in the Decolonizing and Postcolonial World." Besides the fact that would be too long to fit in a single line, this is the title that happens to be in the syllabus. So, blame the person who wrote the syllabus.

Lecture Overview

[0:33]

Okay, what we're going to deal with today is the very difficult history of development and under development in the sort of vast region of the world outside of the sort of industrial North. We might describe the region that we're dealing with as the Global South↗, the Developing World, perhaps, the Third World. There are sort of different ways of describing this part of the globe.

[1:03]

Each of the terms has slightly different implications. Third World implies a sort of Cold War schema in which the world is divided into a capitalist first world, a communist second world, and a developing third world.

[1:22]

So, there are sort of implications to the terminology that we might choose to use. I, personally, like Global South, because I think it's sort of less loaded than some of the other terms of phrase. But really, it's not important. You can come to your own conclusions as what the right terminology is to describe the sort of vast region of the world with which we are dealing today.

[1:43]

The question that we're sort of going to address principally has to do with development. How did the developing world try to sort of improve its economic situation in the decades immediately subsequent to the Second World War?

The Shift in Wealth and Its Reversal

[1:59]

I'd like to start off by contextualizing this history within a sort of larger historical panorama. So, I'm going to show you some slides that we've already seen, and we'll try to think about sort of the implications of the sort of larger historical framing for the particular history with which we're going to be dealing today. Let's think about, first of all, the changing global distribution of wealth over the past three centuries.

Where does the wealth go in the era of the Industrial Revolution, late 19th century globalization, and, of course, the 20th century? Well, there's a really clear path in which this chart illustrates and that is that the West gets rich and the rest of the world doesn't, at least through 1950.

[2:50]

A distribution of global wealth between sort of the West, China, and India is relatively even around 1700, at the beginning of the 18th century. In fact, India is the sort of wealthiest of those three regions. This is kind of striking. By 1950, the realities could not be more different. The West has far eclipsed China and India, the three major centers of global sort of wealth and productivity, around the turn of the 18th century.

[3:24]

So, this is a big, big shift in the global distribution of wealth. We're not going to try to explain that shift today. That would be the subject for an entirely different lecture class. What we're dealing with are the consequences of this sort of shift in global wealth. Our story begins about there, in 1950. But it's still important to have a sense of the prehistory, right, because that powerfully animates the ways in which historical actors in the second half of the 20th century understand their own position, their own situation, and the challenges that lie ahead of them. I could show you a couple of maps which are scaled so as to reflect the global distribution of wealth.

[4:03]

These maps tell, essentially, the same story as the charts, which I just showed you. Three major centers of global wealth in 1500; Europe, South Asia, and China. The story has changed quite dramatically by the time we get to 1960. By the time we get to 1960, Europe, and its North American offshoot, the United States, are, of course, predominant. The share of wealth accruing to India and China has shrunk really dramatically by comparison.

[4:42]

Of course, one of the sort of interesting phenomena of the period that we're going to be dealing with, the second half of the 20th century, is that this shift in wealth towards the West begins to be reversed. Think about the distribution of wealth today. In a sense the circle is turning, if not full circle, it's at least moving in that direction. Today, you see a slightly more – a rather more balanced distribution of global wealth. China has, self-evidently, resurged. India is very much in the process of doing so.

[5:20]

So, when we sort of try to explain the history of the second half of the 20th century, we have to be aware, both of what has happened over the preceding two or three centuries as well as aware of what is going to happen over the next half-century. To a substantial extent, the inequalities in wealth, which emerge during the 18th and 19th and first half of the 20th centuries will be reversed in the second half of the 20th century. Western Europe's share of global output declines fairly precipitously after the Second World War. This is really important. This is the big picture.

[6:00]

At the same time, it's very important to remember that historical actors in the second half of the 20th century – development economists working in the 1950s – did not know what was going to happen next. We have a privileged perspective on the economic history of the 20th century. We have a sense of what happened. That could not be known in 1950. So, we should remember that when we deal with theorists of development, economists who propose solutions for dealing with the underdevelopment of China and India and Africa, Latin America, the developing world writ large, they didn't necessarily know that catchup was attainable. So, the privilege of hindsight is both sort of a privilege and a liability because it can get in the way of our historical understanding and that's important to remember.

Hans Rosling's 200 Countries, 200 Years, 4 Minutes Video

[6:54]

So, before we sort of transition from talking about the very big picture which is really more of a preamble to today's lecture than the substance of today's lecture, I wanted to show you a video clip which I think does about as good a job of telling the history of development in four minutes as any video clip can do. So, I'm just going to turn over the display for a moment to the Swedish statistician, Hans Rosling↗. Have any of you heard of him?

Okay, one or two of you.

Well, for the rest of you, I think you'll enjoy this. It's both a really interesting sort of snapshot of 200 years of historical change, and a very impressive demonstration of the visualization of statistics. So, here goes.

[7:41]

Hans Rosling: So, here we go. First an axis for health, life expectancy from 25 years to 75 years. Down here, an axis for wealth, income per person; $400.00, $4,000.00, and $40,000.00. So, down here is poor and sick and up here is rich and healthy. Now, I'm going to show you the world 200 years ago in 1810. Here come all the countries. Europe, brown. Asia, red. Middle East, green. Africa, South of Sahara, blue and the Americas is yellow. The size of the country bubble shows the size of the population.

In 1810, it was pretty crowded down there, wasn't it? All countries were sick and poor. Life expectancy were below 40 in all countries. Only the U.K. and the Netherlands was likely better off, but not much. And now I start the world.

The Industrial Revolution makes countries in Europe and elsewhere move away from the rest. The colonized countries in Asia and Africa, they are stuck down there. And eventually the Western countries get healthier and healthier. And now, we slow down to show the impact of the First World War and the Spanish Flu epidemic. What a catastrophe!

Now I speed up through the 1920s and the 1930s. In spite of the Great Depression Western countries forge on towards greater wealth and health. Japan and some others try to follow, but most countries stay down here. Now, after the tragedies of the Second World War, we stop a bit to look at the world in 1948. 1948 was a great year. The war was over. Sweden topped the medal table at the Winter Olympics and I was born.

But the difference between the countries of the world was wider than ever. The United States was in the front. Japan was catching up. Brazil was way behind. Iran was getting a little richer from oil, but still had short lives. And the Asian giants: China, India, Pakistan, Bangladesh and Indonesia, they were still poor and sick down here. But look what is about to happen.

Here we go again. In my lifetime, former colonies gained independence and then, finally, they started to get healthier and healthier and healthier. And in the 1970s, then countries in Asia and Latin America started to catch up with the Western countries. They became the emerging economies. Some in Africa follows. Some Africans were stuck in civil war and others hit by HIV. Now, we can see the world today in the most up to date statistics.

Most people, today, live in the middle. But there are huge difference, at the same time, between the best of countries and the worst of countries. And there are also huge inequalities within countries. These bubbles show country averages. But I can split them.

Take China. I can split it into provinces. There goes Shanghai. It has the same wealth and health as Italy today. There is the poor, inland province Guizhou. It is like Pakistan. If I split it further, the rural parts are like Ghana in Africa. And yet, despite the enormous disparities today, we have seen 200 years of remarkable progress. That huge historical gap between the West and the rest is now closing. We have become an entirely new converging world. And I see a clear trend into the future with age, trade, green technology, and peace. It's fully possible that everyone can make it to the healthy, wealthy corner.

Measures of Poverty and Development

[11:38]

So, look; this is obviously a very optimistic positive (laughter) perspective on global economic change, but it's not wholly inaccurate, right? I mean the statistics do speak for themselves.

Yet, it's important for us to remember that we have a different vantage, depending upon whether we approach the history of global economic change from this very macroscopic vantage point than from if we approach it from the perspective of a particular developing economy, right?

[12:15]

Poverty is self-evidently still with us in the world of the early 21st century. It exists. It has to be explained. When we talk about poverty, it's very important to remind ourselves that it is not distributed equally in the world.

Infant Mortality

[12:31]

Let's take infant mortality as a statistical proxy for absolute poverty. It's a pretty good indication of it. Where does infant mortality exist, for the most part? In South Asia and Africa. These are still among the poorest, most desperate, and destitute regions of the world.

[12:56]

The case of South Asia is particularly striking, right, because we've already identified South Asia as a region that is booming in terms of its global share of wealth. At the same time, South Asia remains one of the world's major centers for infant mortality. So, this is a paradox with which we're going to have to grapple.

Deaths from Wars and Civil Conflict

[13:16]

Let's take another indicator of underdevelopment. This is not an economic indicator but rather a sort of metric which we can use to gauge political instability and look at deaths in war and civil conflict. This data is from 2002. Where in the world are people most likely to suffer untimely death due to political instability or inner state violence? The answer is pretty clear. Africa is, without a shadow of a doubt, the least politically stable part of the world. You're much more likely to die a violent death if you're an African than if you're a Latin American or a European or a North American and so on.

[14:06]

This is a very stark illustration of the very different material conditions in which human being find themselves at the turn of the 20th century. Inequality persists in the world of today, even as inequalities between nations, between continents have tended to narrow in the second half of the 20th century as basic indicators of material well-being, GDP per capita and life expectancy have tended to converge.

What are the Causes of Poverty?

[14:43]

The endurance of poverty demands an explanation. Why are poor country's poor? Is it because we exploit them? Or is it because they have failed to develop? These are two profoundly sort of different interpretations for the persistence of poverty. Does poverty have something to do with the prosperity of the West? We might now add the prosperity of China and the prosperity of other economic centers of dynamism in the developing world.

[15:14]

Or should poverty be explained really in terms of the circumstances of poor countries? Are poor countries poor because of their own failure to develop, their own failure to develop institutions capable of encouraging and sustaining growth, or are they poor because they are the victims of economic exploitation by the rich world?

[15:36]

This is a really, really big question and it's a question that development economists have offered quite different kinds of answer to. We're not going to go into sort of development economics in any great detail. There are classes on campus that will do that for you if you want to do it, but it's worth just pointing out a couple of quite different schools of thought when it comes to the issue of development and underdevelopment. I'm going to sort of try to sketch out for you, too, sort of different conceptual frameworks for thinking about the history of development and underdevelopment. The first I'll call a core-periphery model and the second, a model which emphasizes the autonomous development of nation-states.

Core-Periphery Model

[16:21]

The core-periphery model of the global economy begins with a basic distinction between sort of the industrial affluent core, the West, and the developing world. Immanuel Wallerstein↗, one of the sort of economic historians who was most associated with the core-periphery model, also identifies a sort of intermediary zone which he calls the semi-periphery. These zones each serve a distinct economic function.

[16:56]

The industrial West, the core, is where high-value production occurs. The developing world, the periphery, is a center of low-value, sort of agricultural, and commodity production. The semi-periphery, you might think the industrial regions of Mexico, for example, may be defined by the presence of sort of low-value, industrial manufacturing. Dirty production of the kind that the core does not want to take place on its own territory.

[17:31]

But what's really important about this model isn't so much the sort of precise designation of regions – core, periphery, and semi-periphery – as the postulation about the links that exist between them. For Wallerstein and other proponents of sort of a core-periphery model, the prosperity of the core is fundamentally linked to and dependent upon the poverty of the periphery. The two things are interdependent. You couldn't have the prosperity of the core without the periphery existing in a state of semi-economic servitude. Inversely, the fact that the periphery is so poor reflects the fact of it being exploited by the rich, industrial core. So, the two things are linked, and the linkages are sort of absolutely crucial.

[18:26]

The core-periphery model fundamentally challenges some of the most basic assumptions of liberal trade theory. Can anybody remind us what David Ricardo↗ told us about trade?

Absolutely. Ricardo offers a theory of trade specialization. Countries should specialize in what they are best suited to produce. Who benefits if countries do that, if everybody specializes? That's right, we all benefit. This is sort of a basic assumption of Ricardian Trade Theory.

Raúl Prebisch and Import Substitution Industrialization

[19:08]

It's an assumption that the proponents of dependency theory challenge very directly. Here, probably the single most important economic theorist is Raúl Prebisch↗, an Argentinian economist who develops, early in the postwar period, his first major paper is published in 1949, a powerful critique of Ricardian Trade Theory.

[19:33]

Prebisch argues that in contra to the claims of liberal trade theory, free trade does not make everybody better off. Rather, he argues, liberal free trade produces structural inequalities in the global economy. It sustains and perpetuates a distinction between a rich industrial core and a developing primarily agrarian periphery. Trade, he argues, does not benefit the poor. It does not afford them opportunities to move up the food chain, to become richer, more materially prosperous. Furthermore, Prebisch suggests that the rich have a vested interest in the poor remaining poor. It will be unlikely, he suggests, that poor countries can sort of develop and improve their situation within a global economic framework defined and dominated by the wealthiest and most powerful countries in the world.

[20:29]

There are obvious policy implications to the dependency or dependencia framework that Prebisch articulates sort of early in the postwar period. One of the first really important implications is that developing countries will not prosper within the framework of an integrated globalizing world system. For Prebisch, integration and globalization merely sustain and perpetuate inequality. Thus, in order to develop and prosper, developing countries will need to sort of break away from the global economic system. They'll need to establish barriers to globalization in order to protect their own economies against foreign competition. So, dependencia implies sort of a circumscription of the reach of global economic interaction.

[21:20]

A second implication is that the developing countries will need to emulate the rich industrial core. If they want to be rich, affluent, and prosperous like the core, they will need to become like the core in terms of their own sort of economic profiles. The way to do this, Prebisch argues, is to promote industry. Insofar as developing countries like Argentina import, say, automobiles, from the United States, they should try to develop domestic industry capable of making those goods for themselves. They should substitute domestic products, domestic automobiles, for imported goods; hence, import substituting industrialization↗ or ISI.

[22:07]

The assumption that ISI is good for growth, is good for the periphery, is really, really pervasive in the first decades after the Second World War. Through the '50s and into the '60s, economists and policy makers throughout the developing world are, for the most part, committed to an ISI paradigm. They believe that developing domestic industries is the way to make their countries more affluent, more modern, ultimately.

Western Economists and Autonomous Development

[22:38]

What about Western perspectives on development? To what extent do Western economists concur with Prebisch's analysis of the underlying causes for underdevelopment? In general, and this is a generalization because there is a great deal of sympathy in the West for Prebisch's core-periphery model, but in general, Western economists, at least those who are sort of closest to policymaking circles, take a somewhat different perspective. They're much less inclined than Prebisch was to see direct connections between the prosperity of the core and the relative underdevelopment of the periphery.

[23:27]

For more classically liberal economists, the underdevelopment of the periphery is to be explained primarily in terms of the conditions that exist in peripheral countries. If Argentina is less developed than the United States, it's simply because Argentina hasn't developed so far as the United States has done. But, Argentina's underdevelopment has very little to do with the prosperity of the United States. The things are, essentially, sort of disconnected and autonomous.

[24:00]

So, this is a key sort of distinction. Proponents of a core-periphery model see the exploitation of the periphery as a necessary explanation for the wealth of the core. More classically sort of liberal theorists of development see the natural condition of humankind as being miserable and poor. What is to be explained, if you're a liberal economist, is not poverty. Poverty is easy to explain. It's a natural state. The thing which is hard to explain is affluence. So, if you're a liberal economist, you might sort of look at the historical lessons that, or the historical experiences, that produce a greater affluence in the West and ask why the developing world has not yet developed along kind of a similar trajectory.

Walt Rostow and Stages of Economic Growth

[24:50]

This is what Walt Rostow↗, one of the most influential, sort of liberal theorists of development in the 1950s, does.

[24:58]

Rostow proceeds from the assumption that poverty does not require explanation, prosperity does. In the hope of sort of devising a model that can explain the lessons of prosperity with the hope that they can be taught to the underdeveloped or developing world, Rostow undertakes a very careful study of Britain's historical industrialization.

[25:28]

He argues that economic growth and modernization can be sort of broken down into a series of stages, each dependent upon the one that precedes it. Rostow posits a sort of grand, historical transformation from traditional society in which life is sort of nasty, brutish, and short – to use Hobbes'↗ turn of phrase, to an advanced, industrial, mass consumer society such as that which exists in the United States and Great Britain by the middle of the 20th century.

[26:04]

Rostow posits a series of kind of stages through which development passes, from traditional society to sort of protoindustrialization to industrial takeoff to the maturation of industrial production, and finally, to the accomplishment of a mass consumption society, a society in which sort of every automobile worker can aspire to buy an automobile as emerges in the United States in the first half of the 20th century.

[26:33]

The sort of postulation of distinct stages of development is a not too subtle jab at Marx↗ or sort of Marxist theorists who suppose that economic development can be broken down into a small number of distinct phases. Rostow subtitles his book, A Non-Communist Manifesto. So, it's The Stages of Economic Growth: A Non-Communist Manifesto, is the title of Rostow's book.

[27:08]

There is an irony there, right, because Rostow's framework is, in key respects no less deterministic than Marx's framework of historical development had been. What Rostow offers is sort of, in a sense, a series of hypotheses about liberal economic development that parallel Karl Marx's theories of sort of class-based economic growth.

[27:37]

Although there are sort of key differences between the core-periphery economists and the liberal economists, there are important similarities which should also be emphasized when it comes to the policy implications of their models. Can anybody hazard a guess as to what those might be? If Prebisch and other dependency theorists argue that the periphery needs to become more like the core in order to prosper and if Rostow postulates a sort of teleological history of industrialization based upon the British example but universally emulable, what might be sort of the shared policy implications of the different models?

(Student response)

Exactly. So, they're coming from different positions. But the conclusions are essentially interchangeable. Whether you're a liberal or whether you're a dependency theorist, you will probably conclude that what the developing world needs to do in order to get rich and happy is to emulate the historical experience of the West. The developing world needs to develop. It needs to acquire modern industries. It needs to increase productivity. It needs to undertake exactly the same historical transformation that the West undertook in the 19th century.

Modernization Theory

[29:14]

This insight animates a sort of school of theory which is highly influential in the United States and particularly on US Cold War foreign policy in the 1950s and 1960s -- the school of theory, which we might describe as modernization theory↗. What is modernization theory? Modernization theory is a theory which, essentially, propounds that the experience of Western development, Western industrial growth can be emulated by developing countries. They might need a little bit of assistance from the West. They certainly need to make the right policy choices. But the modernization theorists argue there is no earthly reason why developing countries should not develop into much the same kinds of productive economies that exist in the West.

[30:10]

Why is modernization theory such a hot topic, an urgent theme in the early 1950s, or late 1940s, early 1950s, and on through the '60s? The rise of modernization theory has, in part, with the conditions that actually exist in the world. Insofar as poverty is still endemic in much of the world, the quest for solutions is necessarily an urgent one. We could see modernization theory simply as a response to the endurance of wide-scale misery in the world of the mid-20th century. But it's also a response to specific political conditions, specifically the advent of the Cold War and the challenge that the Soviet Union poses.

[30:10]

When we think about the history of development, we should remember that circa 1950, the most impressive model of industrial development that's sort of available on view, may not be that of Great Britain and the Industrial Revolution. How long did Britain's Industrial Revolution take? About a century, I heard. How long did it take the Soviet Union to industrialize under Stalin?

Student response: Seven years.

Yeah, not nearly so long. So, if you're developing a country, if you're a leader of a newly postcolonial state like India, where are you going to look for a historical model to emulate?

Student response: The Soviet Union

The Soviet Union, perhaps. You may have reservations about adopting the Soviet model. You may not want to starve 10 million peasants to death and throw all of your political enemies into the gulag, but the accomplishments of the Soviet model are, nonetheless, impressive.

[32:04]

So, the modernization theorists are sort of responding to the specter of Soviet accomplishment -- trying to distill the lessons of the West's economic history into a package that can be sort of neatly applied to the circumstances of the non-industrial world.

[32:23]

Of course, modernization theory seeks to fulfill the needs of newly postcolonial states for economic policy prescriptions. One of the reasons that modernization theory rises in the 1950s is that prior to the 1950s, much of the developing world had been colonized and the colonial powers had been, for the most part, much less interested in promoting development in the colonies than the postcolonial regimes that take over from them will be.

[32:56]

One key assumption that pervades modernization theory – this is also true of communist approaches to development, which we'll talk about more in due course – one of the key assumptions has to do with the universal applicability of Western experience. Modernization theorists don't spend a lot of time worrying about the possibility that the Industrial Revolution might have been dependent upon sort of factors that were historically or culturally specific to the British Isles. Rostow sees the Industrial Revolution as a process that could have easily have unfolded anywhere in the world and that can be easily emulated by other countries. He doesn't see industrialization as having a particular attachment to sort of culture or history even.

Daniel Lerner and Transitioning from Traditional Society to Modernity

[33:49]

Prominent amongst the ranks of development theorists are, of course, economists like Rostow. The role of sociologists is probably also worth pointing out. Sociologists are less concerned with industrialization per se; rather, their concern is with the condition of modernity, itself. Here, Daniel Lerner↗ is a good example. During the 1950s, Lerner researches a book which sort of posits a grand historical transformation from what he terms traditional society to a condition of modernity.

[34:27]

Lerner argues in the late 1950s that the Middle East is sort of engaged in the process of making this transition, but the conclusions are really much more sort of sweeping than that. All of human history, Lerner proposes, can sort of be divided into two phases, tradition and modernity. The task that awaits the developing world is to make that transition. And Lerner argues along with other proponents of modernization that the United States government can help the developing world to make that shift. The US can help to make traditional societies modern.

[35:01]

How should it do this? Well, it can provide direct material assistance. It can also provide technical and policy guidance. Why should Americans believe that they are sort of in a position to help modernize and develop the Global South? This seems, from a certain vantage point, to be an extraordinary kind of hubris. How can the United States sort of realistically hope to promote the modernization of the Global South? Can any of you sort of suggest why American policy makers in the 1950s might have been so optimistic about the power of their government to enact these sort of vast, far-reaching, social and economic transformations?

[35:53]

(Student response)

Absolutely. They're looking at the lessons of recent history, the recent history of economic development and transformation in Europe, and also in the United States. From that perspective, the assumption is easy to reach that similar transformations can be orchestrated and implemented on a global scale.

The Tennessee Valley Authority as a Model for Modernization

[36:17]

So, the development project or the modernization project draws heavily on the experience of recent history. Here, probably no experience is more formative than that of the TVA, the Tennessee Valley Administration↗.

[36:35]

What is the TVA? The TVA, as most of you probably know, is a sort of public works project that establishes a series of kind of major hydroelectric installations in the Tennessee Valley with the purpose of generating power, distributing that power to sort of residents of an impoverished region of the upper South, and of providing employment.

[37:08]

So, the Tennessee Valley Authority is a sort of grand experiment in public works, something without precedent in the American Experience. But it's an experiment that will sort of powerfully inform concepts of modernization and development in the postwar world. Insofar as the TVA transforms the landscape and the economic prospects of the Tennessee Valley, policy planners in the postwar era imagine that similar feats of accomplishment might be attempted elsewhere.

[37:39]

Early in the postwar era, there's a great deal of talk in Washington about the construction of a TVA for the Danube↗. Can Central Europe be transformed and modernized much as the Tennessee Valley was? Later on, in the 1960s, there'll be talk of a TVA for the Mekong Delta↗. Why not accomplish a similar transformation in Vietnam or, for that matter, in Egypt where the United States could help to create a TVA for the Nile?

[38:07]

Why is the TVA such an irresistible model? Well, in part, it's because David Lilienthal↗, who was the head of the Tennessee Valley Authority, is a very enthusiastic and effective promoter of the sort of TVA model. Lilienthal publishes a bestselling book, Democracy on the March in 1944 which sort of hails the TVA as a sort of new model for democratic governance in which democracy will take on sort of unprecedented responsibility for the promotion of economic growth and wellbeing.

[38:49]

So, Lilienthal is an unabashed statist and he sees the sort of fusion of political power and economic responsibility in the TVA as a model for the future of sort of democracy as a system of government. This is a lesson that he sorts of propounds to a wide readership in Democracy on the March.

[39:17]

There's substantial sort of enthusiasm for modernization at the very highest levels of US government policy. President Truman embraces commitment to modernization as early as 1949. Having orchestrated the Marshall Plan, which you might see as a sort of development project for Western Europe after 1947, Truman will in 1949, in his sort of second –- no, it's his first inaugural address, because he didn't give an inaugural address after Roosevelt died. In his first inaugural address, Truman articulates a commitment to –- here I'm going to quote directly –- "embark on a bold, new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas." This is the fourth point in Truman's 1949 inaugural and it becomes known as The Point Four Program↗, a program for making sort of our economic and technical advances available to the underdeveloped world. This is the first sort of major, sort of presidential commitment to embark upon modernization as a grand ambition.

[40:38]

Student Question: Would the US want to do that just because of the Cold War or was there some kind of moral obligation?

Yeah. That's a really good question. There's a great deal of debate as to what the ultimate purposes of US led modernization might have been. Did it reflect a sort of moral commitment? Was it purely a matter of sort of Cold War strategic interest? You might also raise the possibility that the development of the developing world might have fulfilled an economic interest for the United States by creating sort of expanded markets for the sale of American goods.

[41:20]

So, there are a range of possible explanations, some self-interested, some more altruistic. I think the best answer that I can give is that it depends. I think the strategic purpose is very clear. It's no coincidence that Truman articulates Point Four in 1949, a year in which the Cold War intensifies sharply. Subsequent proponents of development in the US government, here President Kennedy is fairly exemplary, are quite unambiguous and unapologetic in tethering the modernization project to the accomplishment of Cold War strategic purposes.

[41:59]

So, I think of, you know of all of the explanations that you might offer. The one that stresses strategic self-interest is the most persuasive. Other historians may see it differently. I think a more cynical explanation would be that development served an economic self-interest. The least cynical and most generous interpretation would be that it was undertaken for reasons of altruism.

American Action to Facilitate Development

[42:24]

How is development to be orchestrated and implemented? Initially, Truman imagines that the agencies of the United Nations will play a leading role. But soon, the United States begins to construct a development apparatus of its own. The Mutual Security Act↗ creates the Mutual Security Agency↗ in 1951, and it will provide sort of military assistance to the developing world.

[42:55]

In 1961, Kennedy creates the new agency committed not to sort of providing military and security assistance but to providing economic and developmental assistance. USAID↗ is created in 1961 and it marks a sort of zenith in the modernizing project as the United States worked to promote it.

Modernization in the Developing World

[43:16]

But for all the efforts that American economists and sociologists and policymakers made to promote and propound modernization as an agenda for the developing world, it is really, really important to remember that modernization was not imposed on the developing world by the West. It was not cooked up in Washington and then exported to the Global South. On the contrary, leaders of the Global South are, themselves, modernizers. They have, for the most part, a very clear sense of the kinds of change that they want to accomplish. Probably the best way to illustrate this is to turn to some specific case studies which is what we'll do next.

Development in India after Decolonization

[44:01]

Let's talk, first of all, about India. I'll talk about India because I know a little bit more about it than I do about some of the other cases, but more importantly, because one of your readings for this week, Sunil Khilnani↗'s extract on the "Temples of the Future" deals directly with the experience of India. Here, you see in the slide, a photograph of Jawaharlal Nehru↗, in the early 1960s. He's now India's fairly elderly prime minister sitting at the dedication of the Bhakra Dam↗, a vast hydroelectric project that was one of those "Temples of the Future" that Khilnani addresses in this week's reading.

Gandhi's and Nehru's Different Visions for Indian Prosperity

[44:45]

Let's talk a little about Nehru and his vision of the future. Nehru is an appropriate sort of point of departure for considering the Indian developmental experience. Who was Nehru and what did he want to accomplish? Nehru was the first prime minister of Independent India. He became prime minister in 1947, at the moment of Indian independence. He had not been the primary leader of the Indian National Congress, which was the sort of main political party in India which struggled for, and then in 1947 accomplished national independence.

[45:27]

It was, of course, Mohandas Gandhi, Mahatma Gandhi↗, who was usually given the greatest credit for the accomplishment of Indian independence. Gandhi was not only the symbolic but also the real political leader of the Indian independence movement. Nehru was Gandhi's protégé. It was Gandhi who sort of anointed Nehru as the man who would become India's first independent prime minister. But Gandhi was the leader of the nationalist movement that won India early independence following the Second World War.

[46:07]

We'll talk much more about sort of the process of decolonization itself next week. This week, we're really focused on development, itself. And here it's important to note that Gandhi's vision of India's future, specifically Gandhi's vision of India's economic future, was in key respects very different from Nehru's. It was very different from the future that India would end up living. Gandhi believed that European modernity was inappropriate to Indian circumstances. He did not want India to develop into a facsimile of Great Britain. He argued that sort of the ecological consequences of doing so would be catastrophic.

[46:50]

India, Gandhi argued, could not possibly aspire to enjoy the same kinds of standards of material wellbeing that Britain enjoyed. India was such a big country, contained so many people that if Indians were to be as well-off as Britains, the consequences would be catastrophic. Gandhi argued that development, insofar as it were to occur, would have to be sustainable. This is one of the reasons why Gandhi, though he's not taken very seriously as a development theorist in his own time, will be taken much more seriously as a proponent of sustainable development from the 1970s onwards. But we'll come to that in due course.

[47:30]

Gandhi, besides arguing that development should be sustainable, argues that it should be primarily agrarian. His vision of India's future is not a vision of factories and cities and railroads. It is a vision of largely self-sufficient agricultural villages in which industry is local, small-scale, and primarily done by hand. Handwork and craftwork were absolute priorities for Gandhi. It's no coincidence that the symbol of the Indian National Congress is a spinning wheel, a hand-driven spinning wheel which sort of represents the Gandhian commitment to traditional, handcrafted industries.

[48:14]

Nehru's vision of the future was really, really different from this. Nehru had spent a great deal of time in the West. He was a graduate of Cambridge University. He'd also visited the Soviet Union in the 1930s where he had been really impressed by Stalin's accomplishments in the promotion of forced industrialization. Nehru adhered to a dependency view of colonialism. He believed that India's great poverty in 1947 was directly attributable to British colonial exploitation. To be free, Nehru believed, India needed to industrialize and it needed to industrialize quickly.

[48:52]

Nehru's modernization vision, as it was, had three basic elements. It would pursue industrialization and the government would lead in the promotion of industrialization. It would not be private markets or private capitalist entrepreneurs but the state itself that would be the dynamo propelling Indian industrialization forwards into the future. Even as Nehru saw a substantial role for the state in the organization and promotion of development he believed that India ought to remain a constitutional democracy. He was impressed by aspects of the Soviet experience, just not the political ones.

[49:32]

And finally Nehru wanted to create a state in which there would be sort of expanded support for the poor, and in India, the poor is a very large category. Nehru wanted the state to tax and redistribute wealth so as to sort of begin to offset the gratuitous inequalities in income that existed in 1947 within India.

[50:00]

How was this to be accomplished? Nehru's vision for industrialization, modernization would depend upon the establishment of a centralized planning apparatus within the Indian state.

Prasanta Mahalanobis and Nehruvian Economic Planning in India

[50:15]

Here, a figure like Prasanta Mahalanobis↗ provides us some insight as to how Indian development was to work in practice. Mahalanobis was an Indian mathematician and economist and become one of the most influential and important Indian planners of the postwar era. He had, like Nehru, degrees from British universities and became, in the early 1950s, an influential member of India's planning commission, a commission that Nehru established to plan the economy. Mahalanobis emphasized the sort of production of aggregate statistics, statistics that could be used to quantify and then plan India's economic production.

[51:07]

The role of numbers in the orchestration of planning cannot be overemphasized. Insofar as planning depends upon central government allocating resources, capital in particular, but also labor and land, it's necessary for a state that would plan to know a lot about the economy that it seeks to orchestrate and organize. So, the establishment of vast statistical collection bureaus for accumulating data about the economy is an essential part of the sort of industrial planning process.

[51:44]

In India, the history of economic planning in the era of early independence passes through a number of sort of distinct phases, each demarcated by a five year plan. The five year plan was the sort of master plan that the Indian government established. It both sort of set the targets for development and described how those targets were to be accomplished. The institutional body responsible for the production of the five year plans was the planning commission which Nehru established in 1950, just three years after India accomplished its independence.

[52:23]

The first five year plan was, in some respects, a fairly modest economic plan. It targeted a unit total capital investment of about 35 billion rupees and it emphasized the expansion of heavy industry, of coal and steel and the production of sort of hydroelectric plants. So, it was really concerned with sort of those sectors of the economy that Lenin characterized as the commanding heights: big, heavy industry.

[52:56]

The plan was fairly successful. It succeeded over five years in increasing national income by about 18 percent, which is a fairly good rate of return.

[53:09]

A second five year plan was introduced in 1956. This was a much more ambitious plan. Total expenditure was almost double what it had been in the first five year plan. Whereas, the first five-year plan emphasized primarily industry, the second five year plan aspired to sort of direct and lead a broader range of economic sectors. It also envisaged transforming agriculture to make agriculture more productive and efficient and expanding the production of consumer goods. So, from fairly early, from the mid-1950s onwards, Nehruvian planning in India will come to emphasize a broad range of economic objectives.

Inferences from Economic Planning in India

[53:51]

What general sort of inferences can we draw from the history of economic planning in India in the 1950s?

The Primacy of Investment

[54:01 ]

One really key point to take away has to do with the primacy of investment. For Nehru and for planners elsewhere, planners in countries other than India, sort of the key thing that you have to do in order to develop your economy was to increase the savings rate. You had to put more capital to work. You had to save in order to industrialize. There's a key role for the state in a planned economy in directing savings towards productive investment. By consequence, the planned economy will often involve very high rates of taxation, because in order to sort of acquire the capital which can then be used for the purposes of development, you have to tax your citizens, or you can borrow that capital. But then, of course, you have to pay it back.

Grand Prestige Projects

[54:59]

Besides the emphasis on investment as the sort of crucial vehicle of modernization, planning in the sort of Indian context manifested a commitment to grand, prestige projects. So, there was even a sort of aesthetic aspect to planning that's worth thinking about. I think that Khilnani's phrase, "Temples of the Future" -– actually it's not Khilnani's phrase; it's Nehru's phrase, but Khilnani uses it as the title of his chapter -– is really quite apt for describing the kinds of project that India sought to orchestrate in the era of Nehruvian planning. We're talking about big public works projects; dams, steelworks like the Tata Works outside of Calcutta. Projects that don't overly serve an economic purpose, but which represent a sort of tangible instantiation of the state's commitment to make a society and an economy modern.

Development in Indonesia after Decolonization

[55:59]

The Indian experience is, by no means, unique. Let's briefly consider the case of Indonesia. In Indonesia, the trajectory of economic development was broadly similar to India's. It just did not end so well. Indonesia becomes independent just a couple of years later than India, in the late 1940s. Its politics are dominated by a single figurehead, Sukarno↗, a man who had been a sort of Japanese collaborator during the Second World War, but nonetheless emerges as the leader of independent Indonesia. He's every bit as influential and powerful as Nehru is in India.

[56:40]

During the 1950s, Sukarno pursued an ambitious agenda of state-led economic development. The agenda became more aggressive as the decade progressed. In the early 1950s, crudely in the first half of the decade, Sukarno's government sought to direct economic development through the allocation of capital. Independent Indonesia quickly established a state-owned bank and the state bank was able to sort of channel funds to enterprises that the state was especially interested in promoting, usually, you know, heavy industry.

[57:21]

Despite the utilization of state-owned finance as a sort of instrument to direct development, development in the first half of the 1950s is more cautious than ambitious. Sukarno does not undertake sort of intense state-led industrialization, at least not yet. Things begin to change in the second half of the 1950s. The nationalization of Dutch owned businesses in 1957 is an important turning point. Two years later, Sukarno unveils what he characterizes as the guided economy. The name is sort of the giveaway. It is to be a tightly planned and controlled program of economic development.

[58:08]

In pursuit of state-led modernization, Indonesia unveils an eight year plan, not a five year plan, but an eight year plan, in 1960. It sets very ambitious targets for the industrialization of Indonesia. The plan itself is quite a spectacle besides what it proposes to accomplish. The plan comprises eight bound volumes. So, it takes up a lot of space on a bookshelf, and the volume of the plan is sort of illustrative of the ambition of its office.

[58:41]

Things in Indonesia do not go terribly well, however. The eight year plan prioritizes expensive industrial development -- the creation of sort of large state-owned and state-operated enterprises. To put the explanation very succinctly, the problem for Indonesia is that the government tries to spend money that it doesn't have. It tries to sort of channel investment in excess of its tax revenues.

[59:12]

By consequence, the government ends up borrowing and it ends up printing money. One of the things that a government can do when it spends more than it earns is to print money. Indonesia debases the currency to spectacular effect. By the mid-1960s, inflation rates, annual inflation rates are running at about 1,500 percent per year. So, this is hyperinflation or something very close to it.

[59:41]

This is an economic catastrophe and it quickly deteriorates into a political crisis, too. Sukarno is overthrown, and he is replaced by a dictatorial regime under Suharto↗. Indonesia's descent into political authoritarianism is, fortunately, sort of exceptional when you compare Indonesia's experience to India's. It looks less exceptional if you look at the developing world writ large. But this is a theme that we'll come to in due course.

[60:15]

One of the things that's sort of interesting about the experience of the authoritarian regime that takes over Indonesia in the mid-1960s is that it quickly ratchets back the ambition of economic planning as it had sort of developed under Sukarno. The authoritarian regime will emphasize the pursuit of balanced budgets. In sum, it tries to sort of implement a retrenchment agenda, which in key respects sort of prefigures to turn away state-led planning and towards sort of balanced budgets and responsible fiscal policies that will sort of repeat itself throughout the developing world in the 1970s and 1980s. But this is a story for a future lecture.

Development in Ghana after Decolonization

[61:01]

Let's sort of move out of Asia and into Africa to consider the developmental experience of a different country. Ghana is a sort of appropriate point to begin to tell the history of African development. Ghana is the first African country or the first Sub-Saharan African country to win independence, which it does in 1957. Just a quick aside, under the British Empire, the colony that became Ghana was not known as Ghana. It was known as the Gold Coast, but it becomes independent in 1957 as Ghana.

[61:36]

The leader of the new state is the man pictured here in the slide, Kwame Nkrumah↗, educated, gifted politician in whom there is a great deal of hope not only in Ghana but also in the West. Nkrumah features on the cover of Time Magazine, for example, as the man on whose shoulders sort of Africa's hopes depend.

[62:01]

Nkrumah has a development concept that is not so different from Nehru's. Like Nehru, he has been heavily influenced by his own experiences in the West. He is, by no means, a Ghandian. He wants to create a Ghanaian state that will be industrial and modern, a Ghanaian state fashioned after Western models.

[62:21]

Like Nehru, Nkrumah believes in dependency theory. He sees a connection between Ghana's relative poverty in 1957 and the affluence of the West. He argues that colonialism represents a long history of exploitation, and in order for Ghana to develop, it will be necessary to sort of break away from the free trade, liberal world economy in order to develop as sort of more autarkic↗, self-directed economic zone.

[62:49]

Nkrumah is never sort of a crude nationalist; however, he's a strong believer in Pan-Africanism↗. Besides sort of wanting to establish sort of greater political coordination among the states of independent Africa Nkrumah also hopes to accomplish some economic integration. It was to Nkurmah's and Ghana's disadvantage, as well, arguably, to Africa's disadvantage that this economic integration proved in practice to be impossible to accomplish, at least in Nkrumah's lifetime.

[63:24]

Within Ghana, however, Nkrumah undertakes an ambitious modernization program. As elsewhere, capital is forcibly mobilized. The state assumes responsibility for the construction and operation of large sort of public sector projects: dams, factories, and so on. As elsewhere, there is a focus on projects that sort of serve as literal embodiments of the state's developmental ambitions.

[63:54]

There are also kind of political aspects to Ghana's history of economic modernization that are worth pointing out. In some respects, Ghana's experience parallels that of Indonesia. It's not quite as bleak as Indonesia's but it's not particularly good either.

[64:14]

Nkrumah, who becomes prime minister as a sort of prime minister of a democratic country descends fairly quickly into sort of authoritarianism. Nkrumah invokes the imperatives and challenges of development in order to justify the consolidation of his own personal power. In 1960, he becomes self-appointed president for life. He doesn't quite transform Ghana into a dictatorship. I think that would be too strong a word. But Ghana becomes increasingly authoritarian during the 1960s. The imperatives of modernization are probably the most frequently invoked rationalization for political centralization and, ultimately, authoritarianism, too.

[65:01]

But there are important accomplishments: in education, in the creation of a transportation infrastructure through the building of roads, in the provision of public health and so on. Nkrumah's government attempts to do a lot.

The Akosombo Dam

[65:17]

But probably the single sort of most powerful symbol of Ghana's modernization ambition in the Nkrumah era is the dam at Akosombo. The Akosombo Dam↗ project, which is constructed in the early 1960s, marks the climax of Nkrumah's development agenda. This dam becomes an exemplar of modernization not only in Ghana but also on sort of the global scale. It is an absolutely gigantic project. It provides enough electricity to be able to supply Ghana, at least in the early 1960s, as well as neighboring countries. The dam, which is sort of down river on the Volta River, creates Lake Volta, shown here in a satellite image. Lake Volta is the largest manmade reservoir in the entire world. So, this is a serious public engineering project, and it attests to the reach of Nkrumah's ambition.

[66:19]

The accomplishment, of course, entails substantial human and environmental costs. Creating the world's largest reservoir displaces a large number of people. About 80,000 people sort of lose their homes to the dam because it floods sort of the valleys that lie behind it. And the dam's also created a host of environmental problems as large hydro engineering projects are prone to do. But it, nonetheless, represents sort of an exemplary instance of state-led economic development.

[66:58]

Who pays for the dam? Financing comes, in large part, from the United States, Great Britain, and the World Bank. So, the history of development is never sort of exclusively a national history. It's also a history in which international actors are intimately involved. In other context, the Soviet Union will provide sort of financing for hydroelectric projects in the developing world, in Egypt, for example.

The Divergence Between Ghanaian Economic Development and Chinese Economic Development

[67:27] Why does this sort of intense promotion of development in Ghana not reap better dividends over the long-term? It's a really interesting question. I don't have a good answer to it. I can simply point out the divergence in Ghana's and China's economic trajectories over the second half of the 20th century. This is a provocative comparison. Let's remember that in 1957, the moment when Ghana becomes independent, the average Ghanaian is worth twice as much as the average Chinese person. Ghana's GDP per capita is about $1,000.00. China's is about $500.00. In relative terms, Ghana is not so badly off at the moment of independence. The problem for Ghana is that Ghana doesn't really develop much over the next 50 years. We do see sort of in very recent times some indications that Ghana's economic prosperity is beginning to take off, but it's nothing compared to what China has experienced since the 1970s.

[68:38]

Explaining sort of the divergence between developing economies that do take off and those that don't is one of the really big, really difficult challenges that we encounter as we think about the history of development in the second half of the 20th century. I'm not going to try to explain this because I don't know that I have a good answer myself. What I can do instead is talk a little bit about the history of Chinese development, at least as a way of providing a counterpoint.

Development in China after the Communist Revolution

[69:08]

China, in 1949, at the beginning of the communist era, is a very poor country. In global standards, China is just about as poor as anywhere. Average GDP per capita is about $500.00 per head. This is sort of essentially what GDP per capita would be in the absence of modernity.

[69:35]

So, the challenges that the communist regime that comes to power under the leadership of Mao Zedong↗ in October 1949 faces are really, really substantial. How to make China prosperous and modern? Mao, as a committed communist, seeks to accomplish a sort of transformation to socialism. Mao has no inhibitions about using the power of the state that he now commands to direct, plan, and to transform China's economy and society.

[70:13]

Yet, the history of Communist Party planning and direction in China goes through a number of different distinctive stages, some of which we should try to consider today.

Land Reform in China in the Communist Era

[70:22]

At the very outset Mao is committed to land reform. China, like most traditional societies has patterns of land ownership in which most land is owned by a very small number of people. Absentee land holding is common. Peasants, for the most part, labor on land that is not their own, but which belongs to other people. The patterns of land ownership are sort of grotesquely unequal at the beginning of the Communist Era.

[70:50]

One of the first things that Mao tries to do is to reform patterns of land holding in China. About 40 percent of all of China's land –-and this is a lot of land because China is a big country –- is redistributed in a single 1950 land reform.

Attacking the Interests of the Landlord Class and the Bourgeoisie

[71:05]

Besides redistributing land, the Chinese Communist Party utilizes the power of the state to assault and break up the old landlord class. Even as Mao attacks sort of rural land owners, he uses the power of the state to attack and sort of breakup the urban bourgeoisie↗.

[71:29]

There are a series of campaigns fairly early on that become sort of vehicles for attacking the vested economic interests of the middle classes. The Three-antis↗ campaign focused against corruption, waste, and bureaucracy. The Five-antis↗ campaign focuses on bribery, theft of state property, tax evasion, cheating on government contracts and stealing state information. In theory, these sound like fairly innocuous objectives for the state to pursue. They have to do with sort of efficiency and honesty. But the campaigns become sort of proxy vehicles for attacking the interests of the bourgeoisie.

China and the Soviet Union

[72:11]

Meanwhile, China is pulling towards Moscow in its international relationships. The Sino-Soviet Alliance↗ which is concluded in the winter of 1950 provides some Soviet commitment to facilitate and aid China's economic development. So, Mao, in the early years of the revolution, leans fairly heavily on the Soviet Union for advice, encouragement, and even material assistance.

[72:40]

The Korean War, which breaks out in the summer of 1950, has the effect of drawing Moscow and Beijing even closer together. Thereafter, the Soviet Union will provide a variety of different but very important forms of assistance to China's socialist project.

[72:57]

Besides sending large quantities of material aid, China will dispatch sort of legions of technical advisors and scientists to facilitate the developmental project in China. One historian, Odd Arne Westad↗, has sort of characterized the expanse of Soviet assistance to China after 1950 by describing Soviet assistance to China as the Soviet Union's Marshall Plan.

[73:26]

And it's actually a pretty good analogy if you want to gauge the scale of what the Soviet Union does for China in the early 1950s. Of course, one of the most notorious examples of Soviet assistance to China will be the assistance that the Soviet Union provides to the development of a Chinese atomic bomb project during the 1950s. But we'll talk about that a little bit more in due course.

The First Five Year Plan

[73:52]

In 1953, China launches its first five year plan. The objectives of the first five year plan are rapid industrialization and capital accumulation. As elsewhere, Mao believes that increasing the savings rate, investing in the future, is the key to development over the long-term.

[74:16]

Of course, because China is a very authoritarian communist community, capital accumulation can be done more forcibly than elsewhere. It's not just high rates of taxation but also the direct expropriation of property that will sort of contribute to capital accumulation in the Chinese case. Implementation of the plan draws heavily on Soviet models. China seeks in the first five year plan to accomplish an industrializing transformation that is substantially modeled after the examples that Soviet history has set. The economy will be centrally planned. Vast, industrial, agglomerations will be constructed, all owned and operated by the state.

[75:02]

What does the first five year plan accomplish? As you can see, the early 1950s produces an impressive increase in China's overall GDP. The plan certainly does succeed to a substantial extent in promoting growth, much as industrialization led by the state had done in the Soviet Union in the 1930s.

[75:31]

China developed sort of a large-scale industry for the first time in its history. But by 1956 Mao is himself concerned that Soviet style industrialization does not represent socialism with Chinese characteristics. It is not the socialism that Mao wants for China. Mao is beginning to sort of conceive of something far more ambitious than a mere emulation of the Soviet Union's developmental successes.

The Hundred Flowers Campaign

[76:01]

In 1956, '57, Mao sort of, for a period of time, relaxes the discipline of the revolution. He speaks of allowing a hundred flowers to bloom, encourages free thought, dissent, and even criticism of the communist project in China.

[76:22]

The Hundred Flowers Campaign↗ gives rise to a memorable phrase, "Let a Hundred Flowers Bloom," but it is mere prologue. It's prologue to the second five year plan which begins in 1958.

The Great Leap Forward

[76:40]

Better known as the Great Leap Forward↗, the second five year plan represents an attempt to break with the Soviet model and to construct an indigenous Chinese version of socialism. Its developmental objectives are even more ambitious than those of the first five year plan or, indeed, those of Soviet modernization in the 1930s had been. Mao speaks of rivaling the West within 15 years, a very short span of time. Mao believes that China can become a modern industrial country within it.

[77:15]

How is this to be accomplished? Modernization is to be waged as a military campaign. Labor is to be forcibly mobilized if necessary at the barrel of a gun. The countryside is to be transformed. This is one of the key sort of distinguishing characteristics of the second five year plan, by the way.

[77:36]

Whereas the first five year plan works to promote urban industry, the second five year plan will try to industrialize the countryside. Private property will all be sort of nationalized. Even traditional family structures will be assaulted. Peasants will be forced to live in sort of collective communal housing on collective farms in which they will turn their labors not only to the growing of crops but also to the production of steel. The introduction of small-scale so-called backyard steel furnaces on collective farms is one of the distinguishing characteristics of the Great Leap Forward.

The Failure of the Great Leap Forward

[78:13]

What are the consequences of this? Well, if peasants are smelting steel, what are they not doing? Growing crops. That's right. The Great Leap Forward produces a crisis in agricultural production. There is a famine that kills about 30 million people. Grisly as the history of communism in the 20th century was, this is probably its single most atrocious episode. There's an absolute catastrophe in the countryside in China that claims up to 30 million human lives.

[78:46]

What about the political consequences? What does the catastrophic failure of the Great Leap Forward mean for China? What does it mean for the communist world? Helps to precipitate the Sino-Soviet split. After all, China has gone off and pursued its own version of socialism repudiating the example and the leadership of the Soviet Union. We'll talk much more about the Sino-Soviet split↗ in due course.

[79:11]

Within China, the excesses and the failure of the Great Leap Forward help, at least temporarily, to discredit Mao Zedong. Mao Zedong, the singular, symbolic figurehead leader of the revolution retreats, for at least for a period of time, from public view. In his sort of temporary absence, new leaders emerge who try to sort of begin to undo some of the damage that the Great Leap Forward has done. Preeminent among these is Deng Xiaoping ↗, a man who sort of comes to the fore of Chinese politics in the early 1960s, then goes away for almost two decades and comes back in the late 1970s.

[79:55]

But the experience of the early 1960s is really importive to Deng's political and intellectual development. Deng sees the failures of the Great Leap Forward and he comes to sort of question the capacity of tightly centralized state-led planning to produce sustainable economic growth.

[80:15]

At the Party Congress in 1961, Deng sort of famously declares that results are ultimately more important than methods. What Deng is arguing for when he makes the statement is for the sort of restoration of a limited market in agricultural products. Deng argues that farmers need to have market incentives in order to raise output to grow more crops.

[80:39]

He famously says, "I don't care if it's a white cat or a black cat. It's a good cat as long as it catches mice." This is sort of an appropriate point to conclude a discussion of development in the 1960s. In a realization that marks that crisis of China's developmental project under Mao and which prefigures the subsequent history of Chinese development in the last decades of the 20th century.