Socialism and Economic Development in Tropical Africa Author(s): Giovanni Arrighi and John S. Saul Source: The Journal of Modern African Studies, Vol. 6, No. 2 (Aug., 1968), pp. 141-169 Published by: Cambridge University Press Stable URL: http://www.jstor.org/stable/159464 . Accessed: 14/02/2011 13:02 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at . http://www.jstor.org/action/showPublisher?publisherCode=cup. . Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]. Cambridge University Press is collaborating with JSTOR to digitize, preserve and extend access to The Journal of Modern African Studies. http://www.jstor.org The Journal of ModernA frican Studies,6 , 2 (I968), pp. I41-69 Socialism and Economic Development in Tropical Africa by GIOVANNI ARRIGHI and JOHN S. SAUL* A noted economist (Perroux) has defined socialism as 'le developpement de tout l'homme et de tous les hommes'. Providing the motor for a drive towards socialism there is generally to be found a conviction that man's creative potential can only be fully realised in a society which transcends the cultural centrality of 'possessive individualism' and in which a signal measure of economic and social equality, the preconditions for genuine political democracy, are guaranteed. In the best of socialist intellectual work, however, socialists have been equally interested in economic development and in the full release of the potential for growth of the productive forces in a society. Within this tradition it was perhaps Marx who most dramatically fused the concern for economic develop- ment and the concern for the elimination of class inequalities in his presentation of the socialist case. He argued that the inequalities of the bourgeois society of his day increasingly meant that the potential of the available industrial machine would not be realised: inequality and muffled productive forces thus went hand in hand.l Certain class inequalities have sometimes proved to be historically necessaryt o foster the full release of the potential for growth of the social productive forces; this is too obvious a fact to require emphasis. But the existence either of some necessary dichotomy between 'development' and 'equality' or, on the contrary,o f some necessaryl ink between the two cannot be postulated apriori.I t has to be ascertainede mpiricallyt hrough an analysis of the relationship between the class structureo f a society and its economic development at each historical juncture. A sophisticated socialist case in contemporaryA frica must therefore fuse a concern for an increased rate of economic development with a perception of the role * G. Arrighi is Lecturer in Economics, andJ. S. Saul Lecturer in Politics, at the University College, Dar es Salaam. An earlier version of this article was presented to the plenary session of the University of East Africa Social Science Conference held in Dar es Salaam in January 1968. 1 On the continued validity of a much refined Marxist critique of contemporary capitalist society along similar lines, see P. Baran and P. M. Sweezy, MonopolyC apital( New York, 1966). 10-2 I42 GIOVANNI ARRIGHI AND JOHN S. SAUL played in the development equation by the existence and emergence of classes and groups with differential interests and access to benefits. Moreover, as will be argued in this article, one does in fact find the pro- ductive potential of African societies, and therefore their development and structural transformation, constrained by the present pattern of world and domestic economy and society; the available surplus is ill utilised- drained away, for example, as the repatriated profits of overseas firms or consumed by self-indulgent domestic elites-and the generation of a larger surplus from, for example, an aroused and mobilised peasantry discouraged. As this suggests, it is the pattern of current inequality, in particular, which tends thus to hamper a rise in productivity. A viable socialist strategy directed towards these twin concerns will have to face dilemmas of choice in three closely related policy areas. On the level of the international economic and social system, one con- fronts the spectre of international capitalism and a grave inequality of financial power, realities which, as will be shown, can be major con- straints on general development. On the domestic scene, one faces the problem of the relationship between 'town', the centre of administra- tion and of such industrialisation as takes place, and 'country', an interaction from which real development could spring but which all too often defines the split between unequal and unconnected spheres of a society falling short of genuine transformation. Finally, one has the problem of agricultural development itself in a rural sphere where inequalities can and do begin to emerge, although, at least in the short run, these have a rather more ambiguous impact on the pace of develop- ment than the other inequalities already hinted at. It is the absence of a really hard-headed look at the actual pattern of inequalities within contemporary Africa and in the world at large and at the direct relationship of this pattern to the trajectory of growth and development itself which explains the superficial character of much of the gloss on 'African Socialism' presented by its practitioners. To this point we shall return. This failure of analytical nerve also explains the generally unsatisfactory character of the bulk of academic commentary on the phenomenon of African Socialism. Perhaps the locus classicus of this body of work is a much-cited article by Elliot Berg entitled 'Socialism and Economic Development in Tropical Africa'.1 Berg makes much of the failure of the Guinean experience, as well as several points 1 E. Berg, 'Socialism and Economic Development in Tropical Africa', in The Quarterly Journalo f Economic(sC ambridge, Mass.), November 1964. For typical citations seeJ. S. Coleman, 'The Resurrection of Political Economy', in Mawazo (Kampala), i, I967; and C. Anderson, F. Van der Mehden, and C. Young, Issues of Political Development( Englewood Cliffs, New Jersey, I967), ch. Io. SOCIALISM AND ECONOMIC DEVELOPMENT IN AFRICA I43 of general interest, culminating in a swingeing dismissal of the pre- tensions of a 'socialist case' for tropical Africa. But his analysis is under- mined by a seeming disinterest in defining or taking seriously the real dilemma of development common to all African states, or the relation- ship of a socialist strategy to them. To Berg we shall also return-by way of a brief conclusion. The purpose of this article is limited, as, at the present stage of the debate, we can merely hope to raise some neglected questions, juxta- posing them with the theory and praxis of African 'socialists'. The fuller elaboration of a socialist strategy, on the other hand, can only emerge at a more advanced stage of debate and research. In section I we examine the relationship between current class formation in tropical Africa and economic development, focusing on the involvement of international capitalism in the area and on the emergence of what we shall define as the 'labour aristocracy' of tropical Africa. In section II we shall look, first, at the ideology of'African socialism' and, secondly, at the policies of African 'socialists', subjecting both theory and praxis to careful critique. From this exercise the reader should gain a broader perspective on the problem of socialism in contemporary Africa; we shall conclude with some brief remarks on the future course of socialist debate and strategy in Africa, making some reference to the Tanzanian experience (section III). I. CLASS FORMATION AND ECONOMIC DEVELOPMENT The vast majority of the population of tropical Africa consists of independent producers who do not depend upon wage employment for their subsistence.' Any discussion of economic development in tropical Africa must therefore begin with a general description of African pre- capitalist or, as they are more often referred to, traditional economies. This is extremely difficult, in view of their heterogeneity;2 but some common features of particular relevance to our discussion can be singled out. Individuals can customarily acquire land for homestead and farms through tribal or kinship rights. Only comparatively rarely is land 1 K. C. Doctor and H. Gallis estimate that the proportion of the labour force of tropical Africa in wage employment is, on average, I I I per cent. However, migrant labour, charac- terised by partial dependence upon wage employment for its subsistence, is included in the estimate, so that the proletariat proper accounts for a lower percentage than the above. The estimate is in 'Size and Characteristics of Wage Employment in Africa: statistical estimates', InternationaLl abourR eview (Geneva), xcIII, 2, February 1966. 2 For a bibliography on traditional African systems, see J. Middleton, The Effect of EconomicD evelopmenot n TraditionalP olitical SystemsS outh of the Sahara (The Hague, I966). I44 GIOVANNI ARRIGHI AND JOHN S. SAUL acquired or disposed of through purchase or sale, though the com- mercialisation of agriculture has often been followed by a marked expansion of private land ownership. The specialisation of labour has generally not gone very far in traditional African economies; a rela- tively small range of commodities is produced and few full-time special- ists are to be found. In addition, the technology is rather rudimentary from the point of view of the tools used, storage and transport facilities, the control of plant and animal disease, and the control of water storage. Market exchanges were-and still are in many areas-peri- pheral, in the sense that most producers do not rely on exchange for the acquisition of the bulk of the means of subsistence. Thus the high depen- dence on the physical environment, due to the rudimentary technology, is matched by a relative independence from market fluctuations. Social cohesion is fostered by obligatory gift- and counter-gift-giving between persons who stand in some socially defined relationships to one another, and/or by obligatory payments or labour services to some socially organised centre which re-allocates portions of what it receives. Security of subsistence is therefore generally guaranteed to the indi- vidual in two ways: through socially structured rights to receive factors of production and through emergency allotments of food from the chief and gifts from kin. It is widely accepted that African peasants have, in general, been highly responsive to the market opportunities that have arisen through contact with European capitalism. This responsiveness has manifested itself in the labour migration system and/or in the rapid expansion of production for the market of both subsistence and cash crops. It seems that this responsiveness was made possible by the existence in traditional African economies of considerable surplus productive capacity in the form of both surplus land and surplus labour-time.l This means that the confrontation of a traditional economy producing a limited range of goods with the sophisticated consumption pattern of an advanced in- dustrial system led to a re-allocation of labour-time from unproductive traditional activities to the production of a marketable surplus.2 It has been pointed out, however, that the increase in peasant pro- duction for the market has had the character of a 'once and for all' change (though distributed over a number of years), as witnessed by the characteristic growth curve of such production; a curve, that is, rising 1 Cf. H. Myint, The Economicso f Developing Countries( London, I964), ch. 3, and also D. Walker, 'Problems of Economic Development of East Africa', in E. A. G. Robinson (ed.), EconomicD evelopmenfot r Africa Southo f the Sahara (London, I964), pp. I 1-14. 2 The adjective 'unproductive' has, of course, no negative implication concerning the rationality or the necessity within the traditional society of activities so characterised. SOCIALISM AND ECONOMIC DEVELOPMENT IN AFRICA I45 steeply in the early phase and tapering off gradually.' This phenomenon can be accounted for by the fact that the social structure of the tradi- tional economies favours, by maximising security, the adoption of a short 'time horizon' in the allocation of whatever surplus might have been produced as between consumption, unproductive accumulation, and productive accumulation.2 In other words, peasants still largely involved in a pre-capitalist mode of production are likely to have a strong preference for present consumption and often for unproductive accumulation, which, by maintaining or strengthening social cohesion, preserves the security afforded by the traditional system. This preference is likely to be strengthened by the confrontation of the peasants with the sophisticated consumption pattern of advanced industrial systems men- tioned in the previous paragraph. It would seem, therefore, that we have two problems involved in promoting the growth of productivity of the African peasantry: (a) the problemo f creatingi ncentivest o exploit whatevers urplusp roductivec apacityi n the form of surplus land and surplus labour-timem ay exist; and (b) the problem of raising the productivea bsorptiono f the surplusp roducedi n the traditional sector in order to engendert he steady growth of the productivityo f labour. The first problem concerns the relationship between the modern and the tradi- tional sectors; that is, it concerns the pattern of surplus absorption in the former which is likely to maximise the incentives to increase pro- ductivity in the latter. The second problem, on the other hand, relates to the type of organisation of production and institutions in the traditional sector which is likely to guarantee the desired responses to the stimuli transmitted by the modern sector. In tropical Africa the first problem seems of primary importance because population pressure on the land, though growing, is generally not yet severe, so that most traditional economies still have some surplus productive capacity. For this reason we shall focus our attention on the development potential of the pattern of surplus absorption in the modern sector. The 'ideal type', in Max Weber's sense, of surplus absorption in the modern sectors of present-day tropical African economies is charac- terised by three main forms of surplus absorption: the export of profits 1Cf. Myint, op. cit. and Walker, op. cit. 2 We define 'surplus' as the difference between the aggregate net output produced (net, that is, of the means of production used up in the process) and the means of subsistence consumed by the community, both referred to a given period of time. By 'subsistence' we understand goods that are socially recognised as necessities, so that they exclude what may be called 'discretionary' consumption. On the concept of the surplus see P. A. Baran, The Political Economyo f Growth( New York, I967), ch. 2; and C. Bettelheim, 'Le Surplus econo- mique, facteur de base d'une politique de developpement', in his Planificatione t croissance accilere( Paris, 1965). Our definition is closer to Bettelheim's than to Baran's. I46 GIOVANNI ARRIGHI AND JOHN S. SAUL and investment income in general; discretionary consumption on the part of a small labour aristocracy, as defined below; and productive investment, embodying capital-intensive techniques, mainly concen- trated in sectors other than those producing capital goods.1 In order to understandt he relationshipb etween these three forms of surplusa bsorp- tion, it is convenient to begin by examining the causes and implications of the sectoral distributiona nd factor-intensityo f productive investment. The use of capital-intensive techniques of production in tropical Africa is not only the result of technological factors. Two other factors seem equally relevant: the investment policies of the modern inter- national corporationsi n under-developed economies and the wage and salary policies of the independent African governments,w hich, in turn, depend upon the character of their power base. With regard to the former, the modern international corporations tend to adopt capital- intensive techniques mainly because of managerial constraints and because of their strong financial position. Techniques of management, organisation, and control have evolved in the technological environment of the industrial centres and cannot be easily adapted to the conditions obtaining in under-developed countries. In consequence, the spectrum of techniques taken into con- sideration by the corporations may not include labour-intensive tech- niques. An equally and probably more important factor seems, however, to be the financial strength of these corporations, which they acquire through their pricing and dividend policies in the industrial centres as well as the periphery.2 The international corporations apply to all their branches technical methods corresponding to their capital;3 as a result, capital-intensive techniques are adopted in tropical Africa irre- spective of the situation in the territories where the investment takes place. But capital-intensity of production is also favoured by the salary and wage policies of the independent African governments. The salary structure of the independent African states remained as a colonial heritage and, as Africans gradually entered the civil service and the managerial positions in large foreign concerns, they assumed the basic 1 This 'ideal' type is analysed in greater detail in G. Arrighi, 'International Corporations, Labour Aristocracies and Economic Development in Tropical Africa', in D. Horowitz (ed.), The Corporationasn d the Cold War (London, forthcoming). The category 'capital goods' must be understood in a very broad sense as including all those goods which directly increase the productive capacity of the economy. 2 The concepts of 'industrial centres' and 'periphery' have been introduced by Raul Prebisch to designate the advanced industrial economies and the relatively under-developed countries, respectively. 3 F. Perroux and R. Demonts, 'Large Firms-Small Nations', in Presencea fricaine( Paris), x, 38. I961, p. 46. SOCIALISM AND ECONOMIC DEVELOPMENT IN AFRICA I47 salaries attached to the posts.1 This unquestioning acceptance of a colonial salary structure brought about a huge gap between the in- comes of the elites and sub-elites in bureaucratic employment and the mass of the wage workers. Thus the whole level of labour incomes, from the unskilled labourer upwards, came into question and, given the political influence of urban workerso n African governments, the major employers of labour, a steady rise in wages ensued. This steady rise is also favoured by, and tends to strengthen, the capital-intensive bias of investment, discussed above. Capital-intensity generally means that labour is a lower proportion of costs, so that the individual concern is more willing to concede wage increases (especially foreign oligopolies which can pass on cost increases to the consumer). However, this rein- forces the tendency towards capital-intensive (or labour-saving) growth and a 'spiral process' may ensue.2 With regard to the sectoral distribution of productive investment, besides obvious technological factors (economies of scale, advantages of operating in an industrial environment, etc.) there seem to be three main reasons for the observed under-investment in the capital-goods industries of tropical Africa. In the first place, the very bias in favour of capital-intensive techniques discussed above tends to promote the use of highly specialised machinery and consequently restrains the growth of demand for capital goods that could be produced locally. Other reasonsr elate more directly to the behaviour of the modern international corporations. In non-industrialised economies the market for capital goods is small; for such goods to be produced there must be good reasons to believe that the whole economy will develop in such a way as to nourish a market for capital goods.3 This fact was no serious obstacle in the nineteenth century, when competitive entrepreneursa nd financial groups often undertooki nvest- ment which was 'unjustified' by market conditions, thereby fostering the industrialisation of less developed economies. Nowadays the great calculating rationality, care, and circumspection in approaching new developments which characterise modern corporations prevent that processf rom taking place. As Sweezy has remarked,i t is one of the many contradictions of capitalism that better knowledge may impair its functioning. Finally, the lack of investment in the sector producing capital goods is also determined by the oligopolistic structure of ad- vanced capitalist countries because this implies that producerso f capital 1 P. Lloyd (ed.), The New Elites of TropicalA frica (London, I966), pp. Io-i I. 2 H. A. Turner, Wage Trends, Wage Policies and CollectiveB argaining: the problemsfo r under- developedc ountries( Cambridge, 1965), p. 21. 3 M. Barratt Brown, After Imperialism( London, I963), p. 419. 148 GIOVANNI ARRIGHI AND JOHN S. SAUL goods, in deciding whether to establish, or to assist in establishing, a capital-goods industry, will generally take into account the effect of the decision not only on their own and their competitors' export interests but also on those of their customers. The lack of development of the capital-goods sector has important implications for the growth of the modern sector. For such a develop- ment, when it does occur, can perform the dual function of expanding both the productive capacity of the economy and the internal market. This latter function, too often disregarded, was emphasised by Lenin, who argued that the development of the internal market was possible despite restricted consumption by the masses (or the lack of an external outlet for capitalist production) because 'to expand production it is first of all necessary to enlarge that department of social production which manufactures means of production, it is necessary to draw into it workersw ho create a demand for articles of consumption. Hence " con- sumption" develops after "accumulation".'l Thus under-investment in the capital-goods sector restrains the expansion not only of the pro- ductive capacity of tropical Africa but also of its internal market, perpetuating the dependence of the economy on the growth of world demand for its primary products. It is not surprising,t herefore,t hat the economies of tropical Africa have been unable to grow faster than their exports. In the period I950-65 real product seems in fact to have grown at an average compound rate of 4-2 per cent per annum,2 which is about I per cent lower than the rate of export growth. Given the high rate of population growth, per capitar eal product has increased at an average rate of 2 per cent per annum in the same period. This relatively low rate of growth, combined with the effects of the 'wage-mechanisation' spiral discussed above, has resulted in a decrease in the proportion of the labour force in wage employment in most countries and has been accompanied by a widening gap between urban and rural incomes.3I t is far from correct, however, to assume that all classes in the urban areas have benefited from this widening gap. A large proportion of urban workers in Africa notoriously consists of semi-proletarianised peasants, periodically engaged in wage employ- ment. This migrant labour force is not 'stabilised' and in general does not acquire that specialisation needed in industrial enterprises which use capital-intensive techniques. These labourers as a class, i.e. as peasants temporarilyi n wage employment, cannot gain from the 'wage- 1 Quoted in H. Alavi, 'Imperialism Old and New', in The SocialistR egister1 964 (London), pp. Io6-7. 2 Cf. O.E.C.D., National Accountso f Less DevelopedC ountries( Paris, I967), preliminary. 3 Cf. Arrighi, op. cit. and Turner, op. cit. pp. I2-I3. SOCIALISM AND ECONOMIC DEVELOPMENT IN AFRICA I49 mechanisation' spiral we have been discussing, since higher individual incomes are matched by a reduction in their wage employment opportunities. The higher wages and salaries, however, foster the stabilisation of the better-paid section of the labour force whose high incomes justify the severance of ties with the traditional economy. Stabilisation, in turn, promotes specialisation, greater bargaining power, and further increases in the incomes of this small section of the labour force, which represents the proletariat proper of tropical Africa. These workers enjoy incomes three or more times higher than those of unskilled labourers and, together with the elites and sub-elites in bureaucratic employment in the civil service and expatriate concerns, constitute what we call the labour aristocracy of tropical Africa. It is the discretionary consumption of this class which absorbs a significant proportion of the surplus pro- duced in the money economy. The third significant form of surplus absorption is the profits, interest, dividends, fees, etc. transferred abroad by the international corporations. It seems a well-established fact that foreign private investment in less developed economies (far from being an outlet for a domestically generated surplus) has been, in the recent past, an efficient device for transferring surplus generated abroad to the advanced capitalist countries.1 It is a highly plausible assumption that, at least with regard to tropical Africa, this transfer of surplus is bound to increase in the future, for two main reasons: the high rate of profit expected by foreign corporations and the relatively slow rate of growth of the economies of tropical Africa. It appears that returns in the order of I5-20 per cent on capital, usually on the basis of an investment maturing in about three years, are required in order to attract foreign capital to tropical Africa.2 The implication is that, in order to offset the outflow of profits, foreign investment in the area must steadily grow at a rate of I I-I4 per cent, which seems impossible of attainment in economies growing at a rate of 4-5 per cent. Thus, while the transfer of surplus has been somewhat contained during the present phase of easy import substitution, the outflow can only become more serious in the years ahead as that phase comes to an end. 1 In the case of the U.S.A., for example, figures contained in the Surveyso f CurrenBt usiness of the U.S. Department of Commerce show that total direct investment abroad, for the period I950-63, amounted to $I 7,382m. against a total inflow of investment income of $29,416m. Cf. Baran and Sweezy, op. cit. p. I07. Data derived from the same source show that, in the period I959-64, U.S. direct investment (excluding oil) in Africa amounted to $386m. and investment income to $6Iom. 2 Cf. D.J. Morgan, British Private Investmenitn East Africa: reporto f a surveya nd a conference (London, 1965).