Don’t you like the new header images? In any case, there it is. Now that the blog has a new cap, it is time to write a new post. So I was thinking about development in general. After all that’s the idea, isn’t it? The idea I was turning over in my mind is this: what comes before development?
Good governance definitely comes before development. Also, literacy precedes development. Property rights come before wealth creation. Production comes before distribution. The market system precedes development. Development comes before popular democracy. Urbanization comes before development. Literacy comes before education. People come before processes. Culture comes before development. Sanitation comes before development. Infrastructure precedes development. Agriculture comes before industrialization. And quite surprisingly, technology comes before science. Equally surprisingly, one can argue that development comes before growth. Actually, come to think of it, most of the processes of development — and we must remember that development itself is process and not an end state — involve feedback loops. Feedback mechanisms have to have initiating events. Once a feedback loop is started, the dynamics of the process keep it going.
Positive Feedback Mechanisms
Positive feedback mechanisms proliferate in development. To be sure, the adjective “positive” here is not normative but positive. Here I use the word “positive” in two different senses. Sounds funny to say that positive is used in the positive sense here. Confused? Let’s distinguish between the “normative” and the “positive” first. Economists make that distinction for distinguishing between analyses that are objective (positive) from those that are subjective (normative.) One way to think about the distinction is that positive analysis essentially says “the way it is“, as opposed to normative analysis which says “this is how it should be.” The words “is” and “should” indicate the distinction.
So when one says “positive feedback” one is not making a value judgement. The effect of a positive feedback loop can well be negative in the sense that it leads to something that we don’t like. Conversely the effect of a negative feedback loop could well be positive in the sense that we value the end result. Positive feedback mechanisms lead to amplification, and negative feedback leads to dampening.
Alright, back to feedback loops. Feedback mechanisms come in only two different flavors (compare that to Baskin-Robbins’ 28 flavors of ice cream.) Positive feedback means that the material of interest (a reactant) keeps going up in concentration as the process proceeds. So if you start with, say, the system having 10 percent of a reactant, the feedback mechanism increases its percentage to more than 10, which in turn increases the rate of the reaction, which then goes on to further increase the concentration of the reactant, and so on till the reactant reaches it full concentration and the feedback process stops. A negative feedback loop works the other way: the process continually reduces the concentration of the reactant, eventually reducing it to zero and that stops the mechanism.
Development Feedback Loops
Now that we have agreement on the vocabulary, we can get back to “Positive feedback mechanisms proliferate in development.” Consider urbanization. Urbanization leads to development and the positive feedback is that the more urbanized a country is, the faster its economic growth, and the faster its economic growth, the faster it urbanizes. Urbanization is both a cause and consequence of development. Every country that has developed has done so after the process of urbanization got started. Moreover, the more it urbanized, the more it developed. I have explored urbanization on the blog here. So I will say no more about it.
Urbanization — the process that requires an educated population — is necessary for industrialization. You need a lot of people to work in factories. All these people have to be literate. Farming does not require one to be literate but working in a factory does because manufacturing needs the worker to know how to follow written instructions and learn. Manufacturing is more cognitively demanding than farming. Literacy therefore is a prerequisite to being able to work in a factory. If you follow the logic of industrialization, it becomes obvious that literacy affords a person to move out of subsistence agriculture and on to working in a factory.
Agriculture Precedes Industrialization
You may ask, why agriculture precedes industrialization. Because agriculture is what produces the food that we all depend on. Agriculture is the foundation on which the entire economy depends. If all of the labor were to be engaged in farming, there would be no labor available for manufacturing. Therefore the first thing we need is to produce food efficiently enough that only a small percentage of the labor force is enough to get the job done. Increase in farm labor productivity means it releases labor for the manufacturing sector. But this labor has to be literate to be absorbed in manufacturing.
The sequence therefore is first literacy. This increase agricultural productivity and also simultaneously makes the labor released from agriculture suitable for manufacturing. Labor moves to dense urban agglomerations we call cities. Cities manufacture stuff we call wealth. That increases agricultural productivity, further releasing labor. That released labor moves to cities, thus increasing urbanization. Greater urbanization leads to more manufacturing that further increases agricultural productivity. Ultimately, this process which started with literacy ends up with about one or two percent of the population engaged in farming (the US is a good example), and the rest of the labor force in manufacturing and services. The positive feedback mechanism is complete.
We need to take a break here before we examine the other feedback mechanisms I mentioned at the start of this piece. But the lesson I want to conclude with is that the first thing an economy needs to get the process of development started is near-universal literacy. The more literate the population is, the more literate it becomes. A literate population is capable of being educated. An educated population is capable of creating and using technology. Technology leads to production. In the next, we will discuss technology.
Be well, do good work, and keep in touch.
Post Script: May 13.
I have continued this piece in “Universal Literacy” because literacy comes before development.
Categories: Random Draws