I've been doing some really interesting modules this semester, especially Finance and Development as one of my economics modules and State and Society in Europe as one of my politics ones. I'll get to how they are linked later, but I've been doing a lot of reading around the subject matter in both, and my existing opinions on some of the issues have been challenged a little (which I suppose is part of the purpose of higher education after all!).
For example in international development, thinking of the "free trade neo-liberal" model versus the arguments of its detractors, if the terms of trade between two countries, say, are asymmetrical because of any government influence on either side, it's not free trade. If the organisations engaged in trade are somehow privileged, either now or in the past to get to where they are now, by any government action, it's not free trade. And I realise that that amounts to claiming that there has never been a free market. But more important perhaps is how, if privilege extends so deep and wide how would we ever get rid of it?
And not only is it about asymmetries between market participants today, but about asymmetries is how they got to where they are today. So if the capitalist mill-owner's great-great-great-great-grandson has benefitted over the mill-worker's great-great-great-great-grandson because the latter's ancestor was thrown off his land by an enclosure and sold as a parish pauper to the former's ancestor (who thereby gained benefits from two state actions - the enclosure and the parish pauper system), then it's still an injustice today. The question for designers of alternative non-state institutions is how much of that historical "privilege" should, or could, be compensated for, or how quickly would it disappear if all the elements of state privilege were simply no longer effective.
When land is free, labour is dear, someone said (Henry George?). Just as in the British Industrial Revolution when various types of people were pushed off the land, either through enclosures, clearances and the like, so in the two-sector model of international growth developed initially by Arthur Lewis, almost by definition the traditional economy at the start of the process must be one in which land is free. If the "modern" part of the economy also involves squeezing people off the land, for example, one foreign agribusiness investor does a deal with the government to throw thousands of subsistence farmers off their insecurely held tenancies to make way for lettuce growing for western consumers whilst a Chinese state owned enterprise opens a factory to suck up those squeezed off the land at subsistence wage levels that is a continuing injustice caused by state action. Action both present, in the LDC's deals with foreign investors, and past in the subsidies and privileges both the agribusiness and the state owned enterprise have received from their respective governments to help them get to the sort of influence that can move even governments to do privileged deals with them.
So to Scandinavia, more of a question than an opinion. The other week we were looking at the Scandinavian social democratic model and I was idly wondering how workers and industrialists ever got together in the first place to agree labour market policies. And I mentioned in the seminar that perhaps it could be something to do with the relative strengths of the working classes versus the boss classes in Scandinavia when industrialisation really took off there. If you're not thrown off your land, but have to be attracted to work for someone else by the benefits, you're going to be in a stronger position to negotiate those benefits. And since Scandinavian countries appear to have transitioned to a modern economy later, their potential working class, enticed out of the traditional sector at a time when working class consciousness was already growing, would also have been in a position of relatively more strength to negotiate terms that were more mutually beneficial. Or in other words, does the development of the extraordinary consensus between boss class and worker class show that when the two are unprivileged by previous state action, a more just distribution of returns to labour, capital and land will happen naturally.
And so back to international development. The conclusion I take from this ramble around seemingly unconnected leaps from Africa to Sweden and back is that first and foremost in a traditional economy, pre-modernisation, it is crucial to uphold the institution of private property. This is not to exclude the possibility of traditional cultures holding property in common amongst a village or tribe, but to exclude the possibility of a government simply turfing people off the land leaving them in a situation where the soon to start developing modern economy can sweep them up as destitute cheap labour. If the American agribusiness really wants the land, it should have to assemble it, bit by bit, dealing with those who are the homesteaders directly and voluntarily. And if the Chinese state owned manufacturer wants a factory there it's going to have to entice labour off its free land by the benefits it offers, not because they've been manipulated into destitution by state policy.
Really just some random thoughts I wanted to write down before I fell asleep and would have forgotten them. More things for me to follow up really. But I thought I might as well post my ramblings to share for what they're worth.
UPDATE: Just to add to my aide memoire really, that what is described here is similar to the contrast Oppenheimer made between different colonies - such as New Zealand (wealthiest country in the world when he was writing in terms of PPP GDP Per Capita - and still, today, 5th in the Mercatus Centre's Prosperity Index) and South Africa still struggling, though perhaps not as much as some of its sub-Saharan African fellows. Colonisation in New Zealand took place against a background of a relatively well informed and motivated indigenous population who were in a relatively strong position to get a decent deal such as, say, the Treaty of Waitangi. Slavery never existed in New Zealand. Land was suffiecient and there was not a destitute indigenous population for newcomers to press into service in their extractive industries. Contrast with South Africa where this was still happening 100 years after Waitangi.