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Research Outline for Ph.D. Thesis
The South African Development Path
- The Impact of the Idealist Tradition
Arno Mong Daastøl
Arno Mong Daastoel, Doktorand,
Finanzwissenschaft, Universität Erfurt, Nordhaüser Str. 63,
Postfach 900 21, DE-99105 Efurt, Germany
Ph: (prefix 49) (0)361 737 4553 Fax: (0)361 737 4559, Home
(0)361 380 5220 Mob: (0)179 131 3227
Permanent: Utsiktsveien 34, NO-1410 Kolbotn, Norway, Ph: (prefix 47)
6680 6373 Fax: 6699 5325 mob: 9002 4956
Email:
arno@daastol.com
Web: daastol.com , SporTaxi.com , InnoTrans.Net , www.uni-efurt.de
A
short resume PhD Outline: is as follows:
Condensed,
the
logic of the thesis will look like this:
1.
Theory:
2 instances of generalisation
a.
Immaterial production factors –
competence and credit.
b.
Systems analysis (e.g. ”exchange value”
v. ”productive powers”)
2.
Literature: F. List
3.
Practice 1: Southern Africa’s
history
a.
Competence and taxation- related to a &
b above
b.
Economic
integration
- related to b above
c.
Credit - related to a & b above and to a
& b immediately above
4.
Practice 2: Southern Africa’s
future:
as
for point 3.
A short description;
(Focus will be on economic principles extracted from Euro-American
history, South Africa being an interesting case study)
Principal objective and sub-goals
The objective is to find the policies that may lead to success in
socio-economic development. I will therefore sort out the practical policies of historical success
cases in order to understand the economic principles of development. This will be done by studying
the literature of the history of economic development in general, in particular by focusing on the
tradition that developed the so-called European Miracle, Mercantilism. One outstanding author and
politician in this tradition, Friedrich List, will be singled out for more intense scrutiny. I will
then look more specifically at one practical instance, that of South Africa and see how it fits
with the mercantilist strategy and with List's strategy. Finally, the relevance of development
literature will be discussed in the light of the above.
Project summary
The first part will focus on an extraction of the general theoretical
principles of the idea-oriented tradition in economic policy – in essence from times
immemorial, from Hamurabi in Sumeria onwards with Ptolemy, etc. This concerns the Idealist &
State oriented Mercantilism of the prosper thy neighbour type. This part will be both
historical and related to the philosophy of science with special regard to economics.
The second part will be a literature study of the development strategy
of one of the most famous writers and propagators in the history of economic development,
communication, integration and trade, Friedrich List. He is chosen as a clear representative of the
above tradition.
The third part will focus on the impact this tradition eventually had
on the original development of South Africa, or more specifically how the principles extracted in
the first part of the study eventually came to use – or not. Focus will be on public goods
production understood as production of the tightly related fields of knowledge and communication.
In the history of South Africa these themes stand out as related to customs protection (in addition
to education and research, of course), i.e. regulated international trade on the one hand. On the
other hand they are related to transportation and customs unification, i.e. free local trade. A
core part of this study will be the influence of the Boer strategy in the period 1880-1914 on
British economic policy during the period 1880-1914.
The final part will discuss the theory of economic development, i.e.
policy recommendations, In light of the above mentioned historically based studies.
Working plan.
- with Reasons for the choice
of project, Status of preparation, an outline of themes and a timetable.
A) Reasons for the choice of project
In the main, economic
development, in particular of the third world and again particularly after the
60’s, has been faulty and in want of constructive alternatives. This may be
found in the forgotten tradition mainly associated with Friedrich List, often
termed as “economic nationalism“ although liberal in its political tendency.
In this tradition, knowledge
and communication are seen as the main vehicles of progress. The guiding idea is
changing natural resource endowments (or the lack thereof, as in Japan) into
cultural capital: physical and social and spiritual. The purpose of this thesis
is to extract those principles and study their application in some instances.
The theoretical chapter explores
the principal conflicts between the main strategies on the background of the
(convenient) efforts to generalise the experience of certain nations (then UK,
today e.g. USA and EU) to cover quite different circumstances in other nations. The
literature chapter on F.List explores the most obvious literature regarding
this problem.
The
choice of Southern Africa as a historical case study is due to the fact that
1) The development in South
Africa to an amazing degree parallels earlier development in the USA, in Germany
(and later in the EU) regarding core factors such as integration through
currency unification, customs union (“Zollverein”) and railroad construction
as well as protection through the very same customs union.
2) Southern Africa
provides a classical case of the interaction and conflicts of interests between
a national quest for industrial progress on the one side and on then other side
the traditional “colonial interests” of commodity export.
3) South African
economists to an amazing degree understood the basics of List's ideas and
actually refined them in several respects until the present. The fruitful South
African dialogue between this work and the post WW-II mainstream Anglo-American
tendency is perhaps without parallel in the western world.
4) As a by-product,
the case of Southern Africa offers an insight into the nesting ground for the
emergence of a new trade strategy for the British Empire, leading up to WW I.
The choice of
Southern Africa as a present case study is due to the need for an
alternative policy to established mainstream ideas imposed on Southern Africa
after the fall of the Apartheid state in Southern Africa in 1991.
B) Status of preparation (as
of Nov. 2000 )
Chapters
1(methodology in economics) and chapter 2 (Friedrich List’s strategy) are
written, but need polishing. Chapter 3 on South African History has been
outlined and written in the main. Chapter 4 on South African present situation
has not been written. Extensive material has been collected for chapters 3-4.
C) An outline of themes
The
chapters are:
(Drafts to be found at the
listed websites)
1. Theoretical
discussion: Generalisation v. Empirical Diversity
http://daastol.com/artprof/ideal.html
2. Literature Study: F. List v. Adam Smith
http://daastol.com/artprof/list.html
3. Historical Case Study: South Africa’s Development Path 1880-1910
http://daastol.com/artprof/sadp.html
4. Modern Case Study: Southern Africa
1. Theoretical discussion:
Generalisation v. Empirical Diversity
Generalisation
The methodological
focus and core theme of the dissertation is the scientific endeavour of
generalisation (and formalisation) as opposed to the need to be realistic and
thereby practically minded. A core theme of List’s criticism of A.Smith was
the latter’s repeated and (conveniently) faulty generalisations, a matter
repeated with “The Ricardian Vice” and today the methodological core of
mainstream economic science.
a) Immaterial production factors
A first sublevel
methodological theme concerns the core role of immaterial production factors in
economic development and their frequent character as public goods. Examples are
1) Creation of knowledge, productive competence and 2) Establishment of credit
as a catalyst of growth (not as a commodity but a part of infrastructure, as
with e.g. law and taxation).
List repeatedly (somewhat
unfairly) attacked Smith’s generalisation of principles of for instance,
material production factors and production of private goods. This point connects
to the philosophical outlook of economists, more specifically their ontology
–“what to generalise over and to”. The point also connects to:
b) Systems analysis
The second sublevel theme
concerns the methodological question of standard economic materialistic
individualism versus a combination of immaterial individualism and systems
analysis (“methodological collectivism”) as the starting point of economic
exploration. This concerns among other themes the difference between business
economics and national economics or in more modern terms, “shareholder
value” v. “the common good”, “general welfare” . List used his notion
of “productive powers” (systems analysis) to repeatedly attack Smith’s
generalisation of principles of business economics (exchange value).
More practically, this concerns, in particular, promotion of various types of
(interconnected) infrastructure, e.g. knowledge, credit, and transport. The
interconnection for instance consists in the need to direct credit to productive
consumption in areas such as knowledge and transport, i.e. public goods.
2. Literature Study: F. List v. Adam
Smith
3. Historical Case Study: Southern
Africa’s Development Path 1880-1910
The industrialisation of
Southern Africa, around the turn of the 20th century offers an interesting
practical case of the principles mentioned above. Focus is on production of
public goods understood mainly as the tightly related fields of knowledge
(competence) and communication.
a. Competence
In the history of South
Africa these themes stand out as production of public goods as related to, on
the one hand, the creation of industrial competence through regulated trade.
This for instance entailed implementation of various instances of taxation, such
as tariffs and customs protection against foreign industrial supremacy. An
indication of the tightness of the above themes is the fact that custom tariffs
and railroad tariffs were explicitly considered as one and the same question.
The chapter deals with the Boer tariff related industrial strategy in the period
1880-1914 and its influence on global British economic policy during the period
1880-1914 (called “Imperial Zollverein” and “Imperial Preference”) as a
practical strategy to deal with the threat to British hegemony from emerging
industrial powers.
This point relates to the
theoretical chapter’s point of immaterial production factors, but it also
relates to the point of systems analysis, opposing business economics with
national economics by promoting “long-term competence” (cf. “common
good”, “general welfare”) as opposed to short-term gains (“shareholder
value”).
b. Economic
integration
On the other hand these
themes stand out as related to transportation and customs unification,
integrating the former separate provinces and thereby increasing the size of
markets, making economy of scale worthwhile.
This point relates to
the theoretical chapter’s point of systems analysis of opposing business
economics with national economics, namely whether policy (and banking
considerations) should be focused narrowly on shareholder’s value or the
common good through developing infrastructure and accompanying positive
externalities.
c. Credit
As today, anywhere,
financing infrastructure (the railroad structure) and industry is a core
question and connects railroads as one core type of infrastructure with another,
no less important type of infrastructure, namely credit. An “eternal”
question in this regard is whether public goods were financed through debt to
the international “private” capital market (“Dutch speculative banking”)
or through domestic and “social” creation of credit (“Industrial
banking” a la Proudhon and St. Simon). The latter involves utilising the
monopoly power of the state to create and channel credit and enjoy the benefits
of seigniorage. It may also relate to the state’s legal opportunity to
regulate taxation of land and thereby finance infrastructure.
This point relates to
the theoretical chapter’s point of systems analysis of opposing business
economics with national economics, again; namely whether banking considerations
should be focused on shareholder’s value or the common good, in other words if
the banking system has social responsibility.
4. Modern Case Study: Southern
Africa
The last chapter will be
used for a study of modern applications of the above principles, on the basis
that,
“The guiding idea is
changing natural resource endowments (or the lack thereof, as in Japan) into
cultural capital: physical and social and spiritual. The purpose of this thesis
is to extract those principles and study their application in some instances.”
The present
“non-development“ of Southern Africa under the influence of “Western”
economic ideology gives an opportunity to point to an alternative policy with
long and proven success, also in Africa itself.
Of
special interest is the crucial role of infrastructure development as creator of
markets and as prime mover of activity in general. Lessons from former
experience in constructing infrastructure must be drawn (e.g. regimes of
Bismarck, Lincoln, Witte), particularly concerning railroads structure and how
they were financed therefore also involving the credit system.
The
established infrastructure in South Africa regarding transport, law and credit
may be improved and expanded into neighbouring areas with due respect for the
established political circumstances in neighbouring regions. The long efforts to
establish a common market in Southern and Eastern Africa (COMESA) may be a step
in the direction that the USA, Germany and EU have trodden before - and which
MERCOSUR and ASEAN is going as well.