By Kenneth E. Boulding
I. Economic development is a social system, and cannot be understood except as a social system. Physical and biological systems only become significant for economic development insofar as they participate in social systems. The physical environment clearly sets the limit within which social systems can function, and in part determines the nature of the social system which will emerge. Thus the social system of the Eskimo or of the desert nomad will be very different from that under irrigated agriculture or even under non-irrigated agriculture. Nevertheless, in the developmental process, the social system and the human person as the essential component of the social system, is dominant. Every physical manifestation of economic development implies a social system of which it is a part, and the more explicit we can be about the nature of these social systems, the more likely we are to be successful.
II. Insofar as the social sciences consist of the specialized study of social systems, they are obviously central to the problem of economic development. Unfortunately, the social sciences themselves have only recently been getting around to what might be called the developmental point of view. In the socialist countries, the social sciences have been paralyzed because they have had to conform to a dialectical philosophy which represents only a partial view of the developmental process. The identification of dynamics with dialectics is a real disaster because of the fact that many dynamic processes are essentially non-dialectical. They are non-conflictual; they do not involve thesis, antithesis, and synthesis; they are continuous and accumulative rather than cyclical; they are evolutionary rather than revolutionary. And even though dialectical processes do exist and are frequently important in social dynamics, a philosophy which concentrates on them to the exclusion of all others leads into grievous mistakes.
III. On the other hand, western social science has been handicapped by its obsession with equilibrium. Anthropologists on the whole have concentrated on the study of what they thought at any rate were reasonably static societies and have neglected the whole problem of social dynamics.
IV. Economists have built a magnificent edifice of theory around the concept of general equilibrium. From Adam Smith to Mill, indeed, there was a great deal of interest in economic dynamics, but from 1870 to 1940 or even later, the emphasis was wholly upon equilibrium, and it is only in recent years that economists have begun to give attention once again to problems of economic change and development. It is quite depressing to go back to Adam Smith and to find how little progress we have made since 1776 in this regard. On the other hand, the economists' contribution to economic development cannot be neglected. Exchange is a very important social- organizer of dynamic systems, and if the price system becomes diseased, either through deflation., inflation, or price control and quantitative restrictions, the whole process of development can be interrupted. The economist, furthermore, has a few simple truths, mostly in the form of identities, which can be neglected only at our peril, such as, for instance, that accumulation is the excess of production over consumption. The law of diminishing returns and the Malthusian specter are still highly relevant to this problem.
V. Sociology, like economics, has been guilty of obsession with equilibrium conditions and with stability. The whole structural-functional approach, indeed, is derived almost explicitly from the theory of economic equilibrium. Nevertheless, a dynamic sociology somewhat along the lines of the theory of ecological succession should not be impossible, and one would certainly like to see the sociologists encouraged to move in this direction.
VI. Psychology is perhaps the social science which should make the greatest contribution to economic development, simply because it is supposed to study the learning process, and learning in the human being is by far the most important single factor in a developmental process of any kind. Economic development does not simply mean the piling up of old kinds of people and old kinds of things. It does not mean simple accumulation; it means a restructuring of persons and of a society. It means people doing different things from what they did before with different things from what they had before. This means, essentially, a learning process. Unfortunately the psychological concepts of learning have been so dominated by experimentation with animals and with a kind of behavioral self-crippling that the results to date are not very helpful. The essence of learning is the cognitive process, and psychologists have tended to sweep this under the rug as an intervening variable. In human learning, however, the cognitive process is all-important. Learning is the growth of knowledge, and the problem of how knowledge grows has been scandalously neglected. I cannot think of any more fruitful or more needed field of basic research in the social sciences than research into the cognitive process. Up to date this has been the province of a mere handful of workers.
VII. Social psychology from its very beginnings has been interested in dynamics rather than equilibrium. The whole problem of the transmission of culture in the family, for instance, is absolutely crucial to economic development, and is one point where perhaps social psychologists have something important to offer.
VIII. Psychoanalytic ideas may also have something to contribute to this point. One of the most interesting works in this field in recent years, for instance, is Everett Hagen's Theory of Social Change, which is the result of a certain cross-fertilization of economics by psychoanalysis. The problem here seems to be one of sectarianism. Psychoanalysis overemphasizes, perhaps because it had previously been so neglected, the impact of the family environment and the early years of life. From the point of view of the formation of the explicit image of the world, however, the adolescent years and the school may be just as important, and even adult learning in the mass media school should not be neglected. Here is a field which requires much further study.
IX. Political science, which has long been the Sleeping Beauty of the social sciences, is showing some signs of arising out of its 2500-year sleep. Up till very recently, it was almost entirely descriptive, historical, and philosophical. It had not even got to the point of equilibrium theory, let alone dynamics. Thanks perhaps to cross-fertilization with the other social sciences, it is now showing strong signs of life. Certainly the political problem cannot be neglected in economic development. The power structure and the centralized decision-making process are critical, and any developmental theory which neglects them is bound to fail.
X. Finally, let me argue for a General Systems approach to this whole problem. We need to see development as a general system, involving both physical, biological, and social elements, and elements drawn from all the social sciences. Unless a constant attempt is made at synthesis, the efforts of the individual sciences are likely to be less productive. What I am arguing for here is a point of view rather than a body of doctrine. Indeed, general systems is not a body of doctrine; it is a point of view. It is a point of view, however, which attempts to visualize a dynamic system as a whole which includes the physical or biological habitat and potentials, social institutions, and human learning and motivation. I am not sure that at this point we can ask for a unified theory. What we can ask for is specialists who will listen to each other, and who will be sensitive to the fact that the parameters of their system can easily be the variables of another. The gravest weakness of all dynamic theories is the constant temptation which they have to mistake parameters for variables and to assume that certain things are constant which are, in fact, not so. We can avoid these errors only if we look upon the whole process as one of structural learning in which the structure of today is applied to building the more elaborate and complex structure of tomorrow, both in the physical world, where capital is only frozen knowledge, and in the cognitive content of the persons who comprise a social system.