During the height of Bretton Woods, the 1950s and 1960s saw the rise of national independence movements seeking to break away from the European colonial empires. These movements knew that because the Hitlerists had considerably weakened them, the British, French, Dutch, Belgian, and Portuguese Empires will have neither the Kapital nor the manpower and resources nor the political support of their domestic populations to quell their activities. The same can also be said about the Italian and Japanese Empires, as they too had their own colonial holdings which were seized from them after 1945. Thus, the early half of the “Cold War” was characterized by the emergence of new nations among colonies in Africa, the Middle East, and Asia. These new nations, constituting themselves as the “Third World,” appeared open to aligning themselves with the Jeffersonians or the Soviets.
To deter the Soviets from driving them out of the Eurasian landmass, the Jeffersonians sought to bring the Third World into their sphere of influence, their Empire of Liberty. They knew that these new nations lacked the ability to emulate Liberal Capitalism, which made it difficult for them to apply the ideology and integrate themselves into the Empire of Liberty. A different kind of economic ideology, one that made them more susceptible to Liberal Capitalism, was needed. Such an ideology would allow a developing country to grow dependent on the Bretton Woods System, on Free Trade Agreements (FTAs), on the IMF and the World Bank. That ideology in question, which grew up alongside the Bretton Woods System, is called “Developmentalism.” All that which is wrong with Globalization began with that ideology.
Developmentalism places great overemphasis on Kapital Accumulation under the guise of economic development. Since many of these new nations that applied it were relied on agriculture and raw materials for much of their economic activities, the next step was to have a “Developmental State” industrialize the developing country. This Developmental State, which may or may not be a Parliamentary Democracy, would enact tariffs and quotas as Protectionist measures intended for the creation of a Market/Mixed Economy before later opening it to Free Trade Agreements. It would then develop a dependency on foreign Kapital from the Empire of Liberty through the IMF and World Bank, have the value of its currency inferior to that of the US Dollar, and acclimatize the Totality to Liberal Capitalist socio-political conditions. In essence, the Economic Liberalization is meant to later enable the subsequent Political Liberalization and Social Liberalization, which will allow the Totality of that nation to later adopt Liberal Capitalism. Using The Work-Standard as a general reference, Developmentalism will lead the to following results:
- Instead of Planned/Command Economy, the Developmental State creates a Market/Mixed Economy.
- Instead of Socialist Student Economy (SSE), the Developmental State creates an OECD-Type Student Economy.
- Instead of Reciprocal-Reserve Banking, the Developmental State introduces Fractional-Reserve Banking.
- Instead of Council Democracy, the Developmental State implements Parliamentary Democracy.
- Instead of a National Intranet, the Developmental State connects its digital infrastructure to the World Wide Web (WWW).
There are plenty of countries that went down this particular path. Brazil, Chile, Taiwan, and South Korea are four well-known historical examples. Their relevance is beyond the focus of this particular post. Thus, the countries that adopted Developmentalism or exhibited characteristics of Developmentalism will be the topic of relevant entries in “Economic History Case Studies.”
For now, the problem with Developmentalism is that it was a promise too good to be true and too unsustainable insofar as it was only made possible by Bretton Woods. Its practicality was dependent on Bretton Woods existing from the very beginning. When the Death of Bretton Woods happened, Developmentalism went into decline and Neoliberalism was then introduced as the suitable replacement. Rather than industrial manufacturing as primary source of Kapital Accumulation, Neoliberalism focused more on financial markets as its primary source of Kapital Accumulation. Even though Neoliberalism remains as the dominant political-economic model of the Empire of Liberty, the aims have remained the same despite massive changes to methodology. What has changed, however, is the trend of industrialization was replaced by de-industrialization, by the need to create a “post-industrial society” whose economic activities stem from commercial services and technologies which are designed to supplement the capabilities of the financial markets. The rise of the World Wide Web and social media are only the latest developments as of late.
The characteristics of Developmentalism, much like the Neoliberalism that would later replace it in the 1970s, are reminiscent of the critique of Liberal Capitalism from Marx and Engels in The Communist Manifesto. In it, Marx and Engels argued the Capitalist Mode of Production, like Liberalism itself, relies on constant, one-tracked, unyielding and senseless development in the name of so-called “Progress.” This is because Developmentalism was focused on trying to develop a country for the sake of adopting Liberal Capitalism:
“The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first condition of existence of all earlier industrial classes. Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses, his real conditions of life, and his relations with his kind.”
There is a convincing argument which has yet to be given its own Marxist-Leninist interpretation. If the goal of Developmentalism is to facilitate the eventual establishment of a Market/Mixed Economy and Fractional-Reserve Banking System, could these capabilities cooperate with another, non-democratic political system? Is it possible for a developing country to establish an “Authoritarian Capitalism” in a manner comparable to the Philippines during the Marcos era or a “Kuomintang-State Capitalism” like in Taiwan around the same time? Would the political system be the next logical step for Neoliberalism or an aberration from Neoliberalism? If it is the latter, is this aberration a temporary measure or a legitimate deviation and a sign of future opposition to the Empire of Liberty?
A research article entitled “Authoritarian developmentalism: The latest stage of neoliberalism?” seeks to ascertain such questions in connection to the populist surge among various countries during the 2010s. Back in the 1990s, there was a belief that the process of Economic Liberalization will be enhanced by the absence of the Soviet Union and Eastern Bloc countries, allowing Political Liberalization and Social Liberalization to occur faster among the developing countries. This particular belief was also the case in Mainland China for a time, in addition to Post-Soviet Russia and the former Eastern Bloc countries. What has happened instead was a failure of those expectations to become reality; as stated earlier, Developmentalism’s promises were always too good to be true. Countries like Russia, Egypt, Turkey, Brazil, Hungary, the Philippines, and India adopted increasingly Authoritarian political systems despite maintaining more Liberal economic systems.
The authors of this research article insisted that the contradictions of Economic Liberalization have led to measures within those countries to curb the advancement of Political and Social Liberalization. Due to the fact that the Planned/Command Economy have yet to be refined along with the formal introduction of a Reciprocal-Reserve Banking System, tolerance of Economic Liberalization proved to be preferable than the wholehearted acceptance of Liberal Capitalist ideology. Where this author disagrees with the research article’s conclusions is that such decision-making does not necessarily entail a logical development of Neoliberalism. More specifically, a better contextualization would be to interpret those decisions as a growing skepticism and perhaps even disillusionment with Neoliberalism itself. Whether those countries will abandon Economic Liberalization, like they did with Political and Social Liberalization, is a phenomenon that has yet to be reported.