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Integration of the Social System: An Approach to the Study of Economic Growth

Published online by Cambridge University Press:  03 July 2024

John Friedmann
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The usual practice in contemporary literature is to treat of economic growth by way of an analysis of the several factors whose joint operation is thought to issue in an expansion of the productive powers of society. There are, for instance, the factors of saving and investment; investment leads to an increase in the social product and, if sufficiently large, to a rise in per capita income. Around this central mechanism of growth, many authors group a variety of contributing factors which perform a more or less decisive role in raising a country from poverty to riches. Those usually discussed include population, entrepreneurship, technology, resources, and a somewhat loosely defined category of social and institutional factors.

Type
Research Article
Information
Diogenes , Volume 9 , Issue 33 , March 1961 , pp. 75 - 97
Copyright
Copyright © 1961 Fédération Internationale des Sociétés de Philosophie / International Federation of Philosophical Societies (FISP)

References

1 This is probably more necessary today than during previous historical periods when growth was more sporadic, more limited, and due less to technologi cal innovations than to market speculation, monopoly gains in trade, and similar factors.

2 The reader may feel that by starting with the familistic economy, a somewhat over-simplified view is proposed. For certainly, the sudden rise of the western European economies from the latter part of the 18th well into the 19th century began from a social base quite different from the one alluded to here. This is true. But it may be argued in partial refutation that the rapid tempo of European development during this period was made possible by the fact that a large measure of social, political, and economic integration already existed, particularly, of course, in England, so that economic growth could be attributed to a significant extent to innovations and the propensities for saving and organization management. Neither Italy nor Germany could make much progress until they had achieved a certain degree of internal unification, and their subsequent growth served to stimulate further this cohesion. But all three of these countries, particularly England and Germany, enjoyed rather comfortable levels of living prior to the industrial revolution which indicates the considerable growth (and integration) that must have taken place during earlier periods. On the other hand, a majority of today's so-called under-developed countries is far more primitive than England, Holland, Germany, or France were at the time of their own more recent economic push, and are thus starting with a severe handicap, i.e., with an almost total lack of social and economic integration.

3 The same reasoning applies to a society which is divided into a subsistence and a money economy. The former must be absorbed into the latter if a single economic space is to be formed.

4 It is, of course, also conceivable that the creation of an economic space precedes political and social integration, though such procedure would be tempo rary only, the tendency being for economic unities to require political and social unities as well.

5 Perhaps the most far-reaching of socialist institutions to obtain maximum economies of scale (as well as to reach other important social and political objectives) is the People's Commune recently introduced by Communist China as the basic social unit for "industrial and agricultural production, exchange, and cultural, educational, and political affairs." One of the principal provisions for their establishment is that the property of members, either privately or coopera tively owned, is to be turned over to the Communes for its more efficient management under a system of "centralized leadership and decentralized control." The modern, rationalist character of the Commune, as contrasted to the tra ditional forms of management common particularly in the rural areas of China, becomes readily apparent from the following requirements (quoted in part):

"Art. 23. The Commune shall introduce planned management and work out long-term construction plans and annual plans in the light of the State economic plans and the concrete conditions of the Commune….

"Art. 25. The Commune must carry out the principle of industry and thrift. It should set the masses in motion to produce and work hard, make full use of its own strength and overcome difficulties. It should practice rigid economy, reduce production costs, combat waste and unnecessary spending of money, cut non-productive equipment and structures and make do with available things where possible.

"Art. 26. The Commune must institute a strict system of fiscal control. All accounting units must work out budgets of receipts and expenditure on time, observe the system of formalities concerning the use of cash and settle accounts on time…."

From "Provisional Regulations of the Sputnik People's Commune" (Suip'ing hsien, Honan Province), as reported in Current Affairs Newsletter, Publication of the United States Information Service, vol. II, no. 3, March 1959, Seoul, Korea.

6 For an elaboration of this concept of "maturity," see the author's, "Lo cational Aspects of Economic Development," Land Economics, August 1956, pp. 213-27.