Equality, the Third World, and Economic Delusion
by P.T. Bauer
Harvard University Press, 293 pp., $17.50
Peter Bauer is one of the most distinguished development economists in the world, and undoubtedly the foremost conservative one. His pioneering study of the rubber industry—published in 1948—established him as an applied economist of exceptional skill. He has written on a vast range of topics, including the market mechanism, the nature of West African trade, abuses of planning, and occupational statistics. There are few branches of development economics in which Bauer has not had something interesting and important to say. And he has gone beyond development economics into the study of comparative economic systems, international economic relations, and general political economy.
This book, consisting of a collection of Bauer’s essays (most of which were published elsewhere earlier), gives an excellent account of his main theses on development policy and international relations. It also presents his approach to economic equality and inequality in general, and places his discussions of development against the background of some of the broadest issues of political economy. It is an exciting book. It is also extremely provocative—Bauer is no compromiser—and I have to confess to being suitably provoked. I shall argue that Bauer’s approach—in spite of its power and appeal—is fundamentally flawed, and that his analysis cannot bear the weight of the conclusions that he rests on it.
Bauer sees himself as standing very much against the current. The “economic delusion” he refers to in the title of the book is, he argues, shared widely. “The poor are seen,” he complains, “as passive but virtuous, the rich as active but wicked.”
This picture is painted by certain groups who regard themselves as standing apart from rich and poor, and perhaps as above both. They are, in the main, politicians, social reformers, welfare administrators, social scientists, writers, artists, media people, churchmen and even entertainers. As noted in the Introduction, they now form much of what was once called the political nation.
It is certainly true that the views that Bauer attacks are widely shared. But Bauer isn’t particularly isolated himself. His arguments develop and reinforce deep-seated conservative beliefs. Also, as it happens, both in Bauer’s own country—Britain—and that of his publisher—the United States—the governments in power share Bauer’s economic outlook, even though that outlook is rarely defended as fluently and cogently as Bauer defends it. Bauer is, in fact, an eloquent, original, and influential member of the powerful conservative tradition in political economy. He may be facing a multitude of opponents, but he is also leading a large group himself. It is best to get this straight if his book is to be seen in perspective. If Bauer sees himself as David facing Goliath, then David has come to the battleground on the shoulders of a second Goliath—one that rules much of the world. Bauer’s arguments not only attack widely held views; they also provide justification for some of the most entrenched beliefs underlying official policy in such countries as …
'Just Deserts': An Exchange June 10, 1982