Amartya Sen- BLAST vs GALA in Development Econ.

 Some 20 years ago, Sen decided that there were two different approaches to Development- the Soviet 'Blood, Sweat and Tears' (BLAST))  approach which built up heavy industry even if it meant using slave labor- and the 'getting by with a little assistance' (GALA) approach which gave more importance to current welfare.

Sadly, Britain itself had to take a BLAST approach to rearmament and thus had to impose quite severe rationing so as to defeat Hitler and do post-War reconstruction. Clearly GALA was not always an option. More importantly, if doing 'catch up growth', it was unnecessary. Essentially, any capital project chosen on the basis of Tardean mimetics- i.e. imitating what worked for a more advanced country- would be eligible for commercial finance provided local wages were low enough and the people had the relevant work skills. In this case 'inter-temporal' decisions which 'frontloaded' welfare gains- in the knowledge that the productivity improvement would soon more than pay for the thing- would already be factored into the investment decision. Thus GALA was otiose. But so was BLAST. The alternative was being conquered and enslaved and then forced to build the industrial base required by the new Master Race.

What about countries which, for balance of power reasons, faced no threat of invasion? The answer is that either this country had the coercive power to itself do BLAST or else only GALA was on the table. The problem was that GALA imposed a fiscal burden. Thus a better solution was not to do GALA and let investors in 'low hanging fruit' type industries do 'frontloaded' welfare improvement because it was in their own enlightened self-interest. The problem here is that nationalists might want foreign MNCs kept out. In that case there might be a bit of 'BLAST' in State supported conglomerates- i.e. Trade Unionists were shot and wages kept low in accordance with the 'Sen-Dobb thesis'- till productivity had risen sufficiently. This was the South Korean approach which did work quite well- probably because the country faced an existential threat. But not all polities can do authoritarianism of this strenuous sort. What about GALA? The problem here, more particularly for 'soft states', is that the 'assistance' which is given is utterly shit. Why? The guys giving the assistance tend to be Sen-tentious cretins. Mother Theresas may be sweet and nice but they aren't interested in giving their clients what they really want. Instead they give them what it flatters themselves to offer or else stuff that is a drug on their own market. 

To be fair, admirers of the Communist 'BLAST' approach were often soft hearted people. Sen quotes Joan Robinson's stricture against Sri Lankan 'welfarism'- 'they are trying to eat the fruit before growing the tree'- and admits that neither Sri Lanka nor Kerala have done particularly well. But he points to Taiwan and South Korea. What is missing here is a recognition that those countries pursued sensible 'export led' growth policies while clamping down on the Left and on 'Civil Society' such that per unit labor costs fell in a reliable manner (though this was not always the case and there was some hidden or not so hidden subsidization and strategic 'dumping'.) 

The problem here is that this is merely good business sense- not development economics- and 'Tardean mimetics' (imitate the superior) rather than Mathematical Growth theory. Indeed, those scholars who toiled, shedding tears and sweat- if not blood- to master the mathematical arcana relating to turnpike theorems and dynamic programming- turned out to be mischievous and useless. Sen himself escaped to the West where with a little assistance from female colleagues or spouses and a bit of affirmative action he was able to do well for himself. Yet his Economics and Philosophy were retarded. Perhaps, had he not started out as a development economist of the mathematical kind, this would not have been inevitable. I'm kidding. The man is a true blue Bengali buddhijivi. It would have been remarkable if he'd ever said a single sensible thing. 

Consider the following-

Thanks to the diamond industry, Botswana- a country with a small population- had 'growth without development'. South Korea's growth rate halved after it became more liberal though it must also be said it was switching from 'catch up' to 'industry leading' growth. However, as Korean brands- e.g. Samsung and LG- rose up the value chain, 'duality' in the economy increased. Still, the Koreans are a remarkable people. Their spirit is indomitable and will prevail- unless they just drink themselves to death on strong spirits which, to my mind, would be equally heroic. 

The plain fact is authoritarian regimes which transfer girls into factory dormitories create a preference for low fertility. The illusion disappears that Nature or the State or God will provide for food and education for extra babies. Instead babies are seen as a costly consumption good which however does yield great utility provided you can pay to give it a good start in life. 

Getting by is cool because it means you don't need to develop. Assistance which lets you 'get by' is stuff which enables you to keep doing stuff you find pleasant enough rather than being able to climb to a new plateau of achievement. 

Of course, this does not mean that no development will occur if there are no development economists or Government departments concerned with such things. The reverse is the case. Spontaneous order is scalable in an imponderable manner.