Toward a Comprehensive Theory
By Garry Jacobs and N. Asokan
Perspective of the Whole
The award of the 1998 Nobel Prize in Economics to Professor Amartya Sen represents a significant departure from the past. In his work on the origin and nature of famine in developing countries, he observed that non-economic factors played the dominant role in determining economic outcomes. By pointing out that no country with a representative government, independent judiciary and free press has succumbed to famine in the past half century, his work placed the economic phenomenon within a wider social and political context.
Taking their cue from the hard physical sciences, social science has long sought for abstract general formulas that accurately describe and predict social outcomes in a manner similar to the way chemists construct formulas for chemical reactions specifying the result of mixing specific molecules of a certain concentration together at a specific temperature and pressure. Economic theories commonly focus on the relationship between two or more economic factors such as supply and demand, inflation and unemployment and attempt to specify the constant conditions under which they will lead to a predetermined outcome.
Sens work highlights the fact that these economic factors always operate within a wider economic and non-economic context. Changes in the context, either spatial or temporal, may radically alter the nature of the observed relationships. In the early 1990s the well documented correlation between economic growth and employment generation gave way to a period of jobless growth in North America that sent economists scrambling to devise new theories about future economies, until a new period of rapid job creation reaffirmed the old relationship. Stagflation in the 1980s posed a similar challenge to the law defining an inverse relationship between inflation and unemployment rates. Explanations for both these aberrations invariably focus on the impact of external factors such as labor saving technologies, social welfare policies, consumer attitudes, speed of information flows, expectations of more educated populations and similar changes in the context for economic activity.
The limitations of narrowly defined economic theory are even more apparent when they are applied to explain the development, rather than mere growth, of economies. Development always involves major, sometimes radical, changes in technology, social attitudes, political structures, administrative systems, public policies, educational content, in addition to substantial changes in the social organization of economic and commercial activities. Theory that regards these factors as external or incidental to the development process misses the point. They are central expressions and determinants of the process.
What is needed are not more adequate economic theories of development but theories based on a wider perspective of the whole in which economies function and develop. That whole must necessarily include political, administrative, scientific, technological, educational, social and cultural factors. The very meager and disappointing results of West Germanys extraordinary $1.1 trillion investment in East Germany since reunificationa sum roughly 10 times in real terms the entire Marshall Plan outlay for all of Europepoints to an obvious, but oft forgotten truth of development. Money is only one aspect of economy, as economy is only a part of the larger social whole.
Our view of development has to encompass a wider whole that includes the potential impact of war or the perceived threat of war, civil unrest, political instability, rapid improvements in health, induction of advanced technology, rising standards of education, rising expectations of the electorate, a sense of social competition with other societies, increasing individual freedom, and greater access to information.
Theories focusing on the contribution of isolated factors have a legitimate place in economics, for the exclusive concentration on the parts helps reveal the degree of complexity needed to adequately qualify simple equations to give them a semblance of validity. For example, each of a half dozen institutional theories of development seem adequate to explain development in a particular group of countries over a particular period of time. But none suffices alone or in combination with the others to serve as a generally applicable theory of the development process.
Focusing on isolated factors gives rise to partial, unidimensional and unbalanced strategies that become the source of development problems. Pollution and environmental degradation arose from the unidimensional application of industrial technology without considering the wider environmental context in which industrial activity occurs. The application of modern medical technology to improve public health in developing countries without proportionate emphasis on public education and raising income levels spurred the population explosion of the 1950s and 1960s.
We may well question whether the construction of such a comprehensive theory could ever be possible or, if possible, fruitful of predictive knowledge. On the surface neither appears likely, because the possible combinations of factors would be nearly infinite. However, if we change the plane of focus of our microscope from the surface to the social depth, from superficial external conditions to the more fundamental human social process that expresses variously in each field of activitypolitical, economic and socialwe may come to a different conclusion. The only conceivable basis for a unifying theory of social development is a common process underlying the advancement of society in different fields of activity.
Development theory needs to examine economic, social, political, technological, and psychological development processes as aspects of a single, common process of human development, a process of social creation.
Human Centered and Human Determined Approach
The need to refocus development thinking on people has gained wide acceptance over the past decade. UNDP has spearheaded the challenge to growth-oriented economic measures of development such as per capita GDP and constructed alternative indices to assess the direct impact of social change on the welfare of human beings as measured in terms of life expectancy, infant mortality, literacy and a growing host of other non-economic factors. This alteration in the way we measure development is the first step toward a human-centered conception of what development is, but it is only a step. Thus far, the effort has been focused primarily on measuring the results of development more in terms of their impact on human welfare, but they have not yet attempted to elucidate the nature of development as a human process.
The human being is not one more vital or extraneous factor in the impersonal equation of social development. People are the foundation, the heart and the driving force of the process. Societies are not impersonal systems. They consist of people. The development of political and legal institutions, advances of science and applications of technology, acquisition of productive and organizational capabilities, and evolution of commercial systems depend fundamentally on human awareness, aspirations, energy, attitudes and skills.
The World Wide Web is a marvel of modern information technology that is rapidly tearing down barriers to human understanding, individual initiative, scientific discovery, technology dissemination, spread of education, free communication, and emergence of a global culture. We may well wonder how far or in what form this system would have advanced if its birthplace had been the USSR during the depths of the Cold War rather than the USA after the fall of the Berlin Wall. More than a mere impersonal technology, the Web is the product of individual human aspirations and collective human values.
Development is the development of human beings, individually and as organized functional social groups. To understand it, we must shift the focus from preoccupation with external ingredients to the human elements of the processthe preparedness of society for change, the catalytic contribution of pioneering individuals, the organized response of the collective, the impact of changing social values, the function of education and the role of family.
Development theory needs to be human centered in several other respects as well. Science seeks for the fundamental, indivisible building blocks of realitythe subatomic particles, atoms, molecules, and genetic sequences of physics, chemistry and biology. What then is the basic building block of social science? To answer this we have to move beyond our fascination with money, markets, and silicon chips to view social reality at a more fundamental level common to all fields of social activitythe individual act. The master word of human life is act. Human acts expressing human awareness, understanding, aspirations, energy, skill and organization are common to all fields. Enhancing the information, knowledge, attitudes, motivation, energy, skill and organization of these acts, by whatever means, enhances social productivity resulting in development.
Human acts span all levels of social organizationindividual, family, corporation, nation and global community. Our thesis is that the same fundamental process governs development at all levels. Development is an upward directional movement of society from lesser to greater levels of energy, efficiency, quality, productivity, complexity, comprehension, creativity, enjoyment and accomplishment. The progressive organization of individual actions that constitute the collective social existence is the essential character of development and makes possible these progressively higher levels of accomplishment.
Determinants of Development
Development is the process by which humanity creates new or improved instruments (money, institution, technology, resources, etc.) and applies them to achieve greater results. But all too often social theory has assumed that the instruments determine humanity rather than vice versa. We are told that money, technology, institutions and resources impose essential conditions that cannot be abrogated. The importance and power of these instruments is not arguable, but the source and extent of their leverage is. All these instruments are human creations--money and resources as much as technology and institutions.
Development theory needs to explain the process by which humanity creates and utilizes all these instruments for its development and how it becomes dependent on and dominated by them. Every social institution and instrument that society creates tries to dominate its whole life. This was true of army, church, money and government. Today it is true of science and technology. Each claims precedence and its right to dominate over the whole. Presently society feels dominated by and dependent on instruments and institutions such as money and markets that it has created, as if these instruments have an independent life and power of their own to which people must be subservient.
Money is a social system and convention based on social trust, confidence in government, political institutions for stability, law and order, and administrative policy. Resources are the product of human imagination applied to discover new applications for naturally occurring and human-made materials. None of these instruments is inherently limited. The productivity and generation of money is enhanced by increasing the speed of transactions and the efficiency of productive systems. The productivity of resources is enhanced by increasing technology and organizational efficiency. Social institutions such as markets are human inventions and conventions capable of potentially unlimited improvement and refinement.
We create rules and allow ourselves to be bound and dominated by them. In the words of Rousseau, Man was born free, and everywhere he is in chains. We have lost sight of the fact that it is the knowledge, attitudes and actions of people that determine the behavior of these instruments. The monetary theorist speaks of external, mechanical laws of economic nature to which people must submit. We docilely accept when we are told that a certain number or percentage of people must be unemployed, because the market has created only so many jobsas if markets really create anything. We reconcile ourselves to tight monetary policies because inflation must be kept under control. We eagerly study the performance of markets to decide what our attitudes should be toward the future, not realizing that it is our attitudes that are determining the performance of the market and our own future. We are dominated and passively carried away by democratic political processes that we have created. There is a sense of helplessness that prevents effective action.
Our thesis is that the laws of development are not of this type. They are inwardly determined by human attitudes and values. Humanity is the chief determinant of development, not the instruments it creates. Human ideas, values, attitudes, aspirations, energy, skill, knowledge and initiative determine the direction, speed and course of social development as surely as the concentration of chemicals, temperature and pressure determine the direction, speed and extent of reactions in a test tube.
Society is approaching the level of self-consciousness at which it can recognize itself as the creator and master of its own institutions and more consciously determine its own environment. Willy Brandt expressed this perspective when he stated in the Brandt Commission Report that the problems created by humanity can be solved by humanity. This self-conscious recognition of our role in the process will dramatically change the equations that govern our lives, shifting the balance of power from our instruments to ourselves.
Relationship between Individual and Social Development
Valid social theory needs also to explain the relationship between the development of the individual and the development of the social collective. Are the principles governing these two similar or different? Do they follow the same or parallel processes? To what extent are they interdependent? It needs also to clarify the role of social organizations or institutions, which appear to be the bridge between individual initiative and collective action.
Our premise is that the process governing development of the individual and the collective is the same process and that the two are intricately intertwined. The preparedness, aspirations and awareness of the collective form the backdrop and launching pad for the emergence of new development initiatives. When the society has achieved sufficient stability and productivity at one level of development, it accumulates surplus energy and spawns initiatives by pioneering individuals who throw up new forms of adaptive behavior. The individual is always the vanguard of future collective action. The pioneers successeswhether the result of private initiative or public programsserve as demonstrations that educate and motivate others to act. The imitation of successful pioneers leads to gradual acceptance by the collective. Often this acceptance leads to organized efforts by society to disseminate, promote and support diffusion of successful adaptive behaviors through legal, organizational or educational mechanisms. For example, the introduction of new commercial practices such as consumer credit, overnight parcel delivery and franchising in the USA was supported by emergence of new laws, credit systems and organizational mechanisms to support their multiplication. The rapid adoption of new agricultural practices during Indias Green Revolution was supported by the establishment of a host of organizational mechanisms for production and procurement of essential inputs, pricing, purchasing, storage, distribution, marketing, research and extension services.
Gradually the new activity becomes integrated with other activities in the society. When it no longer requires the conscious support of the collective to propagate and sustain it, it matures into a social institution. It is carried forward to future generations by the educational system through the transmission of knowledge and by the family through the transmission of values. Thus, the process completes a cycle that began as an individual initiative to influence the society and leads the collective to influence subsequent generations of its individual members.
The establishment of formal social institutions to support a new activity is a critical stage in this process. There is a tendency in current economic theory to regard these institutions as objective elements external to the society that can be created or imposed on it, rather than as organic formations of an indigenous social process. Economic institutions, like political and cultural institutions, evolve out of the social consciousness of a society and reflect its knowledge, its aspirations and its values. The recent attempt to transplant Western institutions in a socially unprepared and culturally distinct Russian society illustrates the disastrous consequences of regarding institutions as impersonal objects rather than as natural formations expressive of the societys energy, aspirations and capacity for organization. New types of organization can be and frequently are borrowed from other societies. But in most cases they undergo a subtle or significant modification in the process of being assimilated.
There is yet another way in which the individual and social processes are related. It is often implicitly assumed that individual human beings represent a theoretical constant in social development, i.e. societies change but individuals remain more or less the same. In describing the transition of society through three major waves from agrarian to industrial to post-industrial forms, Alvin Toffler traces the changes that occur in every field of human activity, but never follows the trail of those changes back to the main actor in the drama, the individual human being. Are we to conclude that the individual human being in post-modern America is largely the same as the feudal serf of the Middle Ages, other than the fact that he or she is better fed, dressed, housed and educated?
Our view is that parallel to the clearly discernable stages of social progression that Toffler and others have described is an equally significant and discernable progression of societys individual members along a continuum from physical to vital to mental consciousness. An inner evolution of human consciousness underpins the external revolution of society. The consciousness of the people and the character of the times progress together.
The feudal stage is one in which both individual and society are physically preoccupied with the quest for survival and physical security. Social energies focus on preservation of what has been achieved rather than expansion or experimentation. Social power is derived from a physical base of land and heredity. The most important resources are physical. The predominant contribution of the human resource is manual labor. The collective asserts complete authority over the individual and suppresses development of individual thought, beliefs and skills, other than those needed for the preservation of the collective.
At a later stage the society acquires greater vital energy and dynamism. Feudalism gives way to a renaissance, reformation, enlightenment, commercial and political revolutions. Traditional beliefs and institutions give way to new sources of power. Society looks for ways to expand its activities through exploration, trade and conquest. New ideas and social institutions emerge. Individual initiative is encouraged and recognized. Traditional barriers to individual advancement break down. Enterprise, commercial skills, money, economic systems and organizational capabilities become more important productive resources than land. Individuals in the vital stage undergo a parallel change. Greater individual energy and initiative is released. They acquire new skills, become receptive to new ideas, enhance their capabilities, more freely formulate and express their own opinions. They may even begin to acquire their own individual values as distinct from those of the society.
At a still later stage mind plays an increasingly noticeable role in the development of both the individual and the social collective. Government actively fosters education and the spread of new ideas. Freedom of choice increases. Science, technology, knowledge and information become more productive and important resources. There is a further shift in balance between the individual and society, still greater freedom for individual thought, beliefs and actions. Society seeks a more healthy balance between individual rights and responsibilities. Social organizations devise new ways to tap the ingenuity and productive potential of human creativity. Societies discover that the ultimate determinant of their achievements is their ability to develop and enhance the capacities of each of their individual members.
It is not only the individual and the collective that undergo a transmutation through this process. The character of the organizations they generate undergoes a parallel change based on and reflective of this changing relationship between the individual and the collective. Autocratic highly centralized organizations directed by a few dominant leaders during the earlier phase gradually give way to more decentralized and distributed forms of organization. As scientific technology and organizational technology develop and as more individuals acquire higher levels of knowledge and skill, some organizations even acquire the character of uncentralized systems based on the authority of impersonal standards rather than personal power.
Every society arrives at some balance between the value of the individual and value of the collective. Historically, the balance has heavily favored the collective at the expense of the individual. In the early stages of development, the collective imposes its will on the individual and its undeveloped members accept this imposition. As society develops, the individual demands and wins greater freedom for variation and initiative in thought and action. The greater the value that society places on the development of each individual member, the greater the overall productivity of the individual and the greater the progress of the society.
This shift in emphasis from development of the collective to development of each individual results in an enormous increase in the speed and extent of social progress. The exercise of individual human choice is, thus, the ultimate determinant of social development. The society that fully educates, releases and constructively harnesses the choice of its members will develop the fastest and the furthest.
We seem to have progressed very far from the days when an individual could be socially outcast or even physically condemned for harboring a different set of religious, political or intellectual opinions and beliefs from that of the collective. But the emancipation and development of the individual which Martin Luther initiated in the realm of spirituality has yet to run its full course. The pressure for conformity in thought and action still maintains strong bastions against the full emergence of individuality. Citizens in modern society, including its intellectual and political leaders, still look obediently to the collective for the cue as to what they can and should say and do, especially in public.
From Subconscious to Conscious Development
Any human-centered theory must account for the central role that mind plays in organizing human activities to fulfill peoples emotional drives. The human being is differentiated from other animals by a greater predominance of the mental element in human behaviorby a capacity for self-conscious and consciously organized activities. But this capacity emerges only very gradually with the accumulation of life experience.
Historically, society has progressed from physical experience to knowledge. It acts first and mentally understands the sources of its success decades or even centuries later. Experience first, knowledge afterwards. We term this process subconscious development because the actions that lead to it do not originate from a fully conscious knowledge of the process for achieving the intended results. Often the results themselves are not clearly anticipated. The knowledge thus acquired is partial, because it is derived from a specific and, therefore, limited context, but it is a knowledge that has power because it is derived from actual accomplishment.
The extraction of the essence of knowledge from accumulated practical experience can ultimately lead to a complete and conscious conceptual or essential knowledge that can then be applied in any context to achieve results. The primary requirement for this knowledge to be effective is that it must consist of a complete knowledge of the whole, not just of parts or factors. In order to acquire power, it must also be embued by values or sentiments that give the emotional force of experience to the concepts.
We refer to the conscious application of complete, conceptual knowledge as conscious development. Mentally self-conscious development can be a much more rapid, efficient and stable process. Because it knows the wider whole in which specific instances occur, it can derive knowledge from a single experience rather than depending on countless repetitions of error to fill in gaps in its understanding. It can avoid the excesses and imbalances commonly resulting from partial knowledge, because it takes cognizance of the wider context and circumstances in which developmental initiatives are carried out.
The rich and varied experience of the past half century coupled with radical improvements in education and access to information provide invaluable material for making the development process more conscious. Society has come to the point where it should be possible to synthesize and consciously apply accumulated knowledge for the systematic development of all its productive activities. The search for better development theory is an effort to acquire an essential knowledge of the whole process of development that can be consciously applied to accelerate social progress and eliminate the errors of subconscious action.
The study of the external factors, strategies and circumstances associated with past development achievements may generate useful insights for future strategy, but it can never give us mastery. For that we need an essential knowledge of the development process, rather than merely knowledge of its ever-changing external forms. Moving from subconscious to conscious knowledge involves a shift from knowledge as experience to knowledge as the essence of experience.
What often passes for knowledge today is mainly the accumulation of facts about past experience. Theoretical knowledge is an extraction of the essential truths that are expressed through those facts. Knowledge based on experience results in skill that gives limited results. Knowledge of the essence reveals the process that gives mastery. In development, the knowledge we need is of the creative social process and the energy that drives it.
The essential knowledge of that process is embodied in social and cultural values. Values represent the essential knowledge of experience condensed into ultimate principles of successful functioning. Values such as discipline, courage, punctuality, cleanliness, honesty, systematic functioning are rooted in a pragmatic understanding of the elements needed to make any activity effective. Presently society transmits these values without being fully conscious of the knowledge of why they are so essential for success. The same knowledge when made fully conscious and consciously transmitted will be far more effective. A theoretical framework is needed that provides this perspective.
Development as a Creative Process
The underlying premises of economics are still determined today by the circumstances in which the dismal science emerged centuries ago. The Newtonian conception of a closed universe of finite energy and mass seemed a fitting description of the economic universe as well, where limited land of limited productivity was accepted as general law. The fact that land is far less limited than envisioned at the time, that the productivity of land and labor have multiplied many times and are capable of still greater enhancement, that in some cases land itself is no longer an essential input for food production, that by some estimates the worlds agricultural resources could support at least four times the peak population it will reach by the middle of the next century, or that living conditions for billions of people already exceed the comforts of great monarchs in the pastnone of these discoveries has led to a fundamental reassessment of the basic premises on which economic science was founded.
Historical evidence overwhelmingly indicates that development is a creative process which is not inherently limited by past experience, present levels of accomplishment or any fixed forms of expression. Yet so long as our knowledge about development is colored by premises that were long ago rejected in physics, we vastly underestimate the opportunities and satisfy ourselves with minimal achievements.
UNDP estimates that the world has made greater progress in eradicating poverty during the past 50 years than it did during the previous 500. Today we are able to identify many of the factors responsible for the phenomenal developmental achievements of the past half centurythe spread of democracy, absence of major international wars, rising levels of education, rapid development of science, application of technology to increase the availability and multiply the productivity of resources, dramatic improvements in access to information, spread of productive skills, greater capacity to build and manage complex organizations, increasing emphasis on development of individual abilities and decentralization of decision-making, greater awareness and openness to cooperation and learning from other societies, and the increasing speed of all types of physical and social transactions.
The most interesting thing about this list of factors is that none of them are subject to any inherent limits that place constraints on further development in the coming century. Democracy is still spreading around the world and may eventually become the norm, but the scope for increasing human freedom has only begun to be tapped. Education is spreading, but there is an enormous gap in the quality and quantity of education available in different parts of the world and in no country has the potential for improvement neared exhaustion. The same is true of science, technology, information, productive skills, organizational know-how and the efficiency of social transactions. All admit of virtually unlimited improvement.
This suggests that the process of social creation may not be subject to any ultimate limits, that the notion of infinity which is a mathematical concept in the physical sciences may need to be recast as a practical concept in the social sciences.
This observation may be to some a rather disconcerting conclusion, disconcerting because it is so different from the premises upon which we have operated until now and the natural pessimism that is a vestige of thousands of years of human experience confronting obstacles, generating problems and facing disappointments. But, at least, as a scientific postulate it is worthy of serious investigation.
The primary obstacle to a rational investigation of this premise is the inordinate value which we place on past physical experience. The physical body represents the sum total of past physical accomplishmentexperience, tradition, status quo. The human mind represents all the possibilities that have not yet been realized. Knowledge derived from the physical data of past experience does not reveal the essential nature of the process that has led to past accomplishments, because that process has been largely an unconscious seeking and finding. Nor does it reveal the greater unrealized potential that remains to be tapped. The practical effectiveness of knowledge derived from past experience is also limited by the narrow circumstances in which the actual events occurred, which may to a large degree be incidental to the basic process. Such knowledge tends to focus on the external conditions in which results were achieved rather than the internal process that led to those results.
Knowledge limited to the data of experience tends to perpetuate past beliefs and behaviors long after they are no longer adaptive. Development experience is replete with examples. The nightmare of hyperinflation in Weimar Germany following World War I has so strongly influenced financial policy that even seven decades later the Bundesbank finds it difficult to entertain measures to stimulate the economy that may generate even inconsequential increases in the rate of inflation. The faith in gold jewelry as the most reliable form of savings persists in some Asian countries long after more productive, stable and lucrative options are available. This had led to the ironic situation of a country like India, which has upwards of $250 billion in the form of gold savings, striving energetically to attract $10 or $20 billion in foreign investment to finance the development of critical infrastructure. The Japanese propensity to save rather than consume, which was so highly lauded in earlier decades as the solid foundation for future prosperity and has resulted in the accumulation of more than $800 trillion in savings, now looms as a major impediment to further economic growth of the country and the region. All three of these antiquated behaviors reflect a Newtonian view of our economic universe in which mechanical laws operate within a closed system.
Development theory needs to recognize that the inherent tendency to repeat past behaviors, to give mental credence only to what has occurred or been accomplished in the past, severely limits present behavior and our perception of future possibilities. A more conscious knowledge of the underlying process of development can help free us from the limitations imposed by past experience and release greater creative energy and initiative in society for accomplishment without limit.
Harlan Cleveland is President of the World Academy of Art and Science. He was formerly Assisstant Secretary of State for International Organizations, US Ambassador to NATO, President of the University of Hawaii, and founding Dean of the University of Minnesota's Hubert H. Humphrey Institute of Public Affairs.
Garry Jacobs is a Director of the International Center for Peace and Development and partner in a California management consulting firm. He was formerly Member Secretary of the International Commission on Peace and Food.
Robert Macfarlane is a management and economic development consultant and a director of the International Center for Peace and Development. He was a founding member of the International Commission on Peace and Food.
Robert van Harten is President of Mira International, a wholesale distribution business based in the Netherlands, and a former member of the International Commission on Peace and Food.
N. Asokan is a research fellow at MSS Research, a social science research institute in Pondicherry, India.
Comments by the following participants in the Vancouver Assembly are noted in chapters 2 and 3.
Heitor Gurgulino De Souza
Comments by the following persons were made in writing or separate conversations.