Developing Backward Economies

1960's college paper on economic development based on sources of the time. Paper argues that deveopment from supplier of natural resources to manufacturing economy need not be exploitative, but is in fact a natural form of economic development. Manufacturing requires capital. Better to earn that capital than to borrow it.

Real question concerns labor. Does it fare differently depending on means of economic development? Probably not. In almost all forms of economic development, labor is underpaid as capital accumulates, wheher the capital is private under a capitalist system, or public under a communist or socu=ialist system.

Labor's share can only grow as labor's share grows. It really can't be pushed faster through unionization, because capital is generally free to go to numerous destinations in a global economy.

Would seem better to have the capital at home--via earnings, than with bankers abroad, via borrowing.

Can wealth be subsequently re-distributed, and if so, does speed vary. China, Soviet Union show no faster signs of re-distribution than capitalism in United states, nor any tendency to creat greater competition.

This brings up another point. Unions o\nly work in monopoloistic or oligopolistic economic sectors, or in the government. Only in those circumstances can labor extract more than its competitive value. Someone must be there to be exploited. That can not work well in a developing economy. So it seems that labor must be exploited in a developing economy, and count on government to avoid monopolistic profit, and later to work for distribution compatible with further development.