1963-2013 - 50 years of Research for Social Change

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Back | Programme Area: Special Events (2000 - 2009)

Inequality and Poverty as the Condition of Labour (Draft)

The 1980s witnessed a radical break (at the level of theoretical discourses) with both Keynesianism and structuralist development economics, concurrent with the re-assertion of neo-classical economics. What tied Keynesianism and structuralist development economics together, however, was not just they shared critical views of neoclassical economic theory, but also a number of shared premises concerning economic analysis. While it is true that the most of the early development economists argued that the economies of the Third World were supply- constrained, not demand-constrained this did not mean that development economics not deeply influenced by the mainstream economic discourse at the time with its explicit focus on the macroeconomics of employment and the dynamics of unemployment.

On the contrary, they acknowledge that in developing countries large-scale hidden or disguised unemployment prevailed, but argued that this problem could not be remedied by boosting effective demand. Instead, what was needed – they argued – was a protracted transformation of the developing economy to absorb surplus labour through the expansion of wage labour in the process of industrialisation fuelled by investment.

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