Consumerism and Development:
Dilemma of the Third World
Development contributes to the well-being of
the society. Through development members of the society are provided with
articles of consumption. Development can get sidetracked by consumerism.
The difference between development and consumerism is not a question of
degree but of basic approaches to social organization. Development is a
fundamental need, consumerism is an aberration of capitalism. Consumerism
has supplanted sound market economy as a sinecure for creating jobs and
keeping people entertained and busy.
Developing countries have to cope with the
complex of universal free trade, volatile international capital markets,
permeation of cultures by globalized media, and the apparent triumph of
consumerism. Yet, in that global context, they need to balance their development
with the constraints of environmental protection and take into account
pressures for human rights and workers' rights.
These intertwined factors put Western post-industrial
consumerism at odds with Third World development needs and can cause serious
international crises. They must be examined and mediated.
What is development? It is the process of growth : from the Latin words de + velo: to open up, to unwrap. The
acorn opens up into a tree. The human individual turns from embryo into
child, adolescent and adult. In that process, development is both physical
and mental. A community (country) develops as it provides the means and
processes for its members to develop: adequate food, housing, health care
and education. The country is made up of its individual members who partake
in it. They organize themselves in different ways to provide for their
needs. The means that are provided and the processes that are elaborated
reflect the nature and composition of a country's population, the relationships
of its members with each other and with their environment, and their view
of life and standards of living.
Whatever those standards, and they shall be reviewed
later, for the country to maintain its standards of living at a constant
level, it should keep its GDP in step with its population growth. The country
may develop or decay if its GDP and population are at variance. The effects
of the variance will not only be quantitative but also qualitative. If
the population grows rapidly and the economy of the country does not keep
up with it, there will be less overall nourishment, health care and education,
resulting in the deterioration not only of the standards of living but
also standards of behavior: discontent, social conflict, hoarding, theft,
repression etc. During rapid population growth the variance in population
and production arises from the fact that the young, who have needs, cannot
contribute to the production before a certain age.
A rapid increase in a country's GDP in relation
to the rate of population increase can also disrupt heretofore established
patterns of distribution -- and justification of wealth -- transform social
relationships and bring about behavioral, social and political changes
and upheavals. Rapid increase in production may be caused by discoveries,
innovations and a society's inclination towards progress -- the process
of moving from one standard of living to another which is assumed to be
Developmental variations within a country have
international dimensions. When a country's economy deteriorates, the crisis
can spill over into other countries. The country may no longer be able
to provide its goods and services to other countries. Its trade and current
account can suffer. And its population may migrate to countries where better
opportunities and employment are available, providing cheap labor, but
also creating cultural and social problems for the host country.
When a country's economy has an expansive and
accelerated rate of development it can provide a bigger market for other
countries and/or it can attempt to penetrate more aggressively into other
markets. Depending on the stage of its development, a country may suck
in capital and run up international debts and balance of payment deficit,
or it may generate a foreign currency surplus and invest its capital in
other markets. Its development may burden the environment with adverse
effects for other countries such as air and water pollution or excessive
exploitation of international public resources such as the oceans.
While through the ages discoveries, innovations
and inventions -- from the discovery of fire to tool-making, to agricultural
revolution, urban revolution, industrial revolution, nuclear revolution
and now electronic revolution -- have been at the root of changes in perspectives
on standards of living and value systems, the greatest impacts for change
have come from interactions between cultures. Take, for example, the invention
of gunpowder and the compass by the Chinese, their transfer to the West
and their use in war and as instrument for high seas navigation by the
West. Most isolated people, whether in Amazona, Africa or Australia, kept
unchanging living standards and patterns of development for millennia.
The degree of impact of different developmental
patterns have thus had to do with the degree of communication, intercourse
and penetration of different cultures into each other. When the industrial
revolution began in the West, its early impacts were among countries with
cultural affinities, close to and interacting with each other. Those affinities
and interactions facilitated adaptations to change but also resulted in
competition, rivalry, conflict and upheavals within and among the Western
The industrial revolution permitted European cultures
to develop their means of communication, which they used for expanding
beyond their own part of the world. Originally those expansions were not
aimed at the export of industrial revolution and transfer of technology
to other parts of the world, but at the use of those areas for further
development of the industry, the standards of living and power structures
in the West. The result was colonialism: extraction of raw material, creation
of markets and settlement of territories for the more efficient use of
conquered lands. As Westlake put it a century ago: "In the early times
of international law, when the appropriation of a newly discovered region
was referred to the principles which were held to govern the so-called
natural modes of acquisition, the occupation by uncivilised tribes of a
tract, of which according to our habits a small part ought to have sufficed
for them, was not felt to interpose a serious obstacle to the right of
the first civilised occupant. The region was scarcely distinguished from
a res nullius". Thus the
non-Western countries could not keep on a traditional track and sit on
their natural resources which the West could develop more efficiently and
In its expansion the West came in contact with
cultures which, although not having experienced the Western industrial
revolution, had their own civilized patterns of traditional development.
But as these cultures were not party to the Western international law,
which regulated the relations of the Western powers among themselves, Western
powers often applied the notion of res nullius to those cultures: territories
and peoples outside the law which the first Western power imposing itself
on them could claim as its possession. Of course, from there on, those
possessions became subject to arrangements and conflicts among Western
powers according to their international law. So the British eventually
claimed India, the Dutch Indonesia, the French Indochina etc.
Three aspects of this process are of interest
to the present study:
1. The resentment of the non-Western civilizations
and eventually their clashes with the West. Due to Western superior fire
power and technology, overall, the early clashes ended in Western powers'
victory. But their defeats awakened the non-Western cultures to their need
for national identity. Such were, for example, the Opium War of 1839 and
the Sepoy (Delhi) Mutiny of 1857.
2. The tendency in non-Western civilizations to
emulate Western industrial culture -- and sometimes its institutions. At
times adaptations permitted the non-Western culture to thwart Western penetration
as after the Meiji Restoration in Japan. At other times, the attempts failed
to stop the Western sway because the culture held onto its traditional
ways which were not compatible with industrial patterns, as was the case
of the Zeng Kuofan's "T'ung Chih Restoration" -- which attempted to graft
Western technological "functions" onto the Confucian "substance." As time
went by, however, the exploited countries, while resentful of Western penetration,
caught on to the ideas of modernization and development.
3. The overseas possessions of the Western powers'
enhanced competitions and rivalries among them. Latecomers to the colonial
game like Germany wanted their share while the United States, with its
own vast territory, but an expanding economy, was eager to open the doors
of the overseas colonial markets closed to them by the European powers.
European rivalries and conflicts eventually ended
in the two World Wars. In WWI, while European powers were fighting with
colonial goals in mind, the United States' entry into the war with her
Open Door Policy, the Bolshevik Revolution in Russia causing the collapse
of the Russian Empire, and the creation of the League of Nations after
the War altered the Western powers' approach to the development of non-Western
territories. There developed, on the one hand, the principle of recognizing
non-Western countries as parties to the international law, albeit an international
law elaborated by the West; and, on the other hand, a Mandatory System
calling on the "advanced nations" to engage in the development of the "peoples
not yet able to stand by themselves under the strenuous conditions of the
modern world. Rather than
economic development per se, the Mandate System aimed at 1) creating political
and administrative mechanisms for independence in some territories lost
by the Central Powers as a consequence of their defeat in WWI, 2) recognizing
the control of Western powers over their overseas territories, and 3) securing
trade opportunities in those territories for other members of the League
such as the United States. Thus, the Mandate System was not altogether
an abandonment of the idea of colonialism but its modification. It was
neo-colonialism, and in its confused state was sending mixed messages to
disgruntled powers which were still actively seeking territorial expansion:
Italy invaded Ethiopia, Japan invaded China and Nazi Germany sought Lebensraum
within Europe. The League of Nations' failure to provide adequate frameworks
for peace, control and satisfaction of its members contributed to the advent
The consequences of the Second World War made
development an imperative and a universal economic principle. The post-WWII
development ideas and processes were influenced by the interactions of
two divarications: I. the distinction between developed and underdeveloped
economies, and II. the divergence between socialist and capitalist ideologies
and methods of development. The interactions gave rise to different patterns
There were, of course, the Western European countries
and Japan which had been devastated by the war and needed reconstruction.
They had a modern "model" of development. Their economies, levels of education
and available skills and aptitudes permitted them to soak in assistance
programs and take advantage of market economy favors provided by the United
States as well as the financial structures put in place by the International
Bank for Reconstruction and Development (IBRD - The World Bank) and the
The Soviet Union did not join the IBRD and the
IMF. The Iron Curtain soon descended over Eastern Europe and the Soviet
Union pursued the socialist path for its own reconstruction and the edification
of communism by tying its satellites into its own economy. China, with
the end of the civil war in 1949 and an underdeveloped economy, chose the
socialist road to development, inspired by Mao Zedong's experimentations
of the Hundred Flowers Campaign of 1957, the Great Leap Forward of 1958-60
and the Cultural Revolution of 1966-76.
In its Charter, the United Nations Organization
(UN) set itself the goal of promoting: "higher standards of living, full
employment, and conditions of economic and social progress and development."
It is notable that the criteria were not the maintenance of traditional
economic and social patterns but the universal application of Western concept
of progress. As distinct from the developed Western capitalist democracies
and the Soviet socialist world, the UN program was primarily concerned
with the underdeveloped countries which came to be known as the "Third
World." Of course, if the UN were to achieve within a reasonable time a
certain well-being in the Third World as well as peaceful and friendly
relations among nations, the transition of the Third World from traditional
to modern cultures could neither take as much time as it took the West,
nor could Third World countries go through the trials and tribulations
and wars and revolutions which befell the developed world as it transformed.
To accelerate the process, the UN needed to bring technical assistance
and financial and logistic help to the Third World. The UN was a universal
organization and both capitalist democracies and socialist countries were
its members. Its technical assistance and development programs had to be
multilateral and not under the control of either camp. That did not greatly
motivate the ideologically-oriented member states to make substantial contributions
to those programs. The areas where the UN could be effective without controversy
were those covering humanitarian and health programs. Indeed, UN programs
of the fifties and the sixties greatly contributed to the eradication of
some diseases, reducing infant mortality and increasing life expectancy
in the underdeveloped countries, exacerbating the discrepancy between population
increase and GDP growth. The developed countries which could afford (those
which were not in dire need for reconstruction) or had an ideological design
to help, preferred to control their technical assistance and aid through
bilateral government to government programs rather than through contributions
to UN. And they did so for different rationales corresponding to their
The Soviets saw in aid to the developing countries
an opportunity to industrialize them and thus create a proletariat which
would bring about the proletarian revolution.
Initially, their aid went to regimes which professed socialism. But eventually
some Soviet aid went also to countries which were not aligned with the
Soviet ideology. The Soviet assumption being that regardless of current
tendencies of the regime, the ultimate goal was the creation of a proletarian
Capitalist democracies' aim in bringing aid to
the Third World countries was to make the latter complements and partners
of Western economies. Creation of jobs and raising the standards of living
in the Third World would bring about a large middle class which would constitute
the core of a bourgeois liberal democracy.
In the complex of development, however, other
factors were involved which produced outcomes not corresponding to the
capitalist and socialist designs. Many Third World countries were busy
nation-building. Their leaders, most of whom had been educated in the West,
could see colonial patterns in the efforts made by the "North", whether
capitalist or communist. The consciousness of the underdeveloped countries
about their identity as the "Third World" gave rise to political developments
such as the Bandung Conference of non-aligned nations and economic thoughts
such as dependency theory.
The early attempts of some of the Third World
nations to shed Western hegemony over their economy encountered stiff reactions
from the West. Such were Ho Chi Minh's war of independence, Mossadegh's
attempt to nationalize the Iranian oil or Nasser's nationalization of the
Suez canal. But the fact that these events were taking place set the course
towards new economic arrangements. To defuse potential crises in oil production,
for example, oil companies, in exchange for compensation and new concessions,
recognized the national ownership of the oil resources by the oil producing
countries and entered in new partnerships with them.
THE NEW WORLD ECONOMIC DISORDER
By the early seventies the stage was set for a
turning point in the economic relations between the North and the South.
The Vietnam war had glaringly demonstrated the cost-noneffectiveness of
gunboat diplomacy. The ruinous effects of that war on the American economy
contributed to Nixon's decision in August 1971 to close "the gold window"
which pegged major currencies to the dollar and the dollar to gold. That
decision was the beginning of the end of the Bretton Woods system. In 1972
the Chicago Mercantile Exchange began the International Money Market trading
in currencies. Currencies, instead of being means of exchange, were thus
turned into commodities -- the dollar, no longer convertible into gold,
was considered overvalued and futures in currencies were deemed speculatively
profitable. By March 1973
exchange rates were officially left to float in the open market.
The pivotal event, however, was later that year
when Arab oil producing countries put an embargo on the supply of oil to
the West and it worked. The Third World had stood up to the West and closed
the faucet, oil companies had abided by that decision and the West had
sent no gunboats to stop it.
The price of oil quadrupled. That caused economic
crisis in the West and put a heavy burden on underdeveloped countries which
had no oil resources of their own. Oil producing countries were getting
rich beyond their capacity to absorb their new riches for the development
of their own economy. Excess petrodollars were going to flood the floating
exchange markets. Suggestions for control of that flood through international
institutions lost to the American preference for letting the financial
markets take care of the situation. Commercial banks became involved in
the business of lending to the Third World countries for their development
programs, and Walter B. Wriston, the then chairman of Citicorp proclaimed
that "sovereign borrowers do not go bankrupt!" The funds available were
much more substantial than what had been offered by international organizations
and government to government grants. But the nature of the funds and their
liabilities had also changed. Loans from commercial banks to sovereign
borrowers were not new, but not at those levels. As we shall see later,
the financial capital that was eventually generated went beyond the bloated
price of oil.
For the developing countries, as the source of
capital for development was an international debt, the deal was feasible
if the capital borrowed could produce internationally marketable goods
which would permit the borrowing country to generate foreign exchange in
order to pay back the principle and the interest on the debt. Development
was thus geared to exports rather than providing food, housing, health
care and education for the population. The assumption was that as the economy
developed, the free market economy would meet the needs of the population.
If the flow of foreign capital into the developing
countries were to finance efficient production of goods marketable in the
North and on international markets, it had to be accompanied by transfer
of technology. Some countries with social philosophies more adaptable to
Western cultures and with longer associations and greater exposure to industrialized
economies were successful in combining international finance and technology
transfers to develop modern industrial infrastructures such as Singapore,
Hong Kong, Taiwan and South Korea. Other countries, notably in Latin America
and Africa had greater difficulty in putting international capital to productive
use. In some cases much of the foreign currency coming in as loans was
turned around and deposited in numbered accounts in foreign banks by unscrupulous
leaders and businessmen. In other cases the developing countries catered
too much to the needs of the North and international markets and specialized
in exportable commodities to the detriment of their own agricultural needs,
or developed tourist industries with only trickling benefits for their
own population. Within these countries the rich became richer enjoying
some of the fruits of progress and the poor masses became poorer losing
the care of their traditional cultures.
Some oil producing countries in the Middle East
such as Kuwait adopted programs of development to achieve higher standards
of living while keeping some of their traditional cultures. Their progress,
however, was soured by their neighbors' approaches to development and progress,
notably Iran and Iraq.
The Iranians, under the Shah, attempted to push
for modernization without adequate preparation for change at the traditional
base and with little mechanism or regard for the distribution of wealth.
The discrepancy between classes increased. A small modern middle class
had emerged, but the traditional masses resented the alien nature of the
progress and did not see its benefits. The transfer of technology was in
many cases controlled by foreign management and was taking place at a rate
disproportionate to the preparation of the people. The end result was the
overthrow of the regime by the Mullahs. The fundamentalist approach of
the Islamic regime in Iran disturbed the amalgam of traditional and modern
patterns of development in the neighboring Gulf states.
Iraq, with its oil money, embarked on a military,
socialist and nationalist path for progress. To the intrusions of the Iranian
Mullahs it responded by invading Iran. By building a military power, Iraq
was adopting an unrealistic policy of conquest. It became a threat to its
neighbors and Western interests in the Persian Gulf. Its aggression against
Kuwait brought upon it the "Desert Storm" of 1991 -- a new version of gunboat
diplomacy financed by the Persian Gulf states to maintain the status quo.
NEW FINANCIAL RISKS
Looking at the developing countries' efforts towards
progress outlined so far, one finds that their salient characteristic has
remained the overwhelming influence of the "North" -- a fact which presently
has yet greater potentials to destabilize the developing societies. With
the events of the early seventies noted above, a new era had begun. The
particularity of the new era was that while financial ingredients remained
the same, their characteristics underwent dramatic change. Money, which
as means of exchange was assumed to have an intrinsic value corresponding
to its purchasing power, was turned into a commodity subject to speculative
fluctuations on the international markets. Capital, classically assumed
to represent accumulated labor and means of production, bloated on the
international financial markets -- initially due to petrodollars -- with
no reference to tangible productive assets. There had been windfall increases
in capital on international financial markets in the past, but the range
of operations afforded by petrodollars to the financial institutions pointed
to them the way for the creation of financial capital beyond productive
financial bases and in critical proportions. The lines between traditional
banking, speculation and usury began to blur.
As of the late seventies in the West -- mainly
in the Anglo-Saxon countries -- finance companies, insurance companies,
money market mutual funds, pension funds and investment funds became major
players in the financial markets. Together with commercial and investment
banks they began trading and offering new deals and financial arrangements
which they marketed as "products". These "products" include futures and
options on currencies, commodities, bonds, stocks, stock indexes, treasury
bills and interest rates. They are traded through such techniques as "matrix
trading", "pairs trading", "cross trading", "straddles", "swaps", "as-you-like
option", "barrier options", "down-and-out call/put", "up-and-in call/put",
"collar", "contango", "quanto option" etc.
These "products" are appropriately called "derivatives" -- they are derivatives
of real capital. In the volatile market they have created, derivatives
have appropriately also created their own raison d'être: that
of permitting those who actually traded in commodities and stocks or needed
foreign currency for their productive business to hedge their risks. But
it has been impossible to stop derivatives from becoming major instruments
of speculative finance. For example, of the daily $800 billion to a trillion
dollars traded on the international currency markets, it is estimated that
only a fraction -- in the order of $25 to $30 billion, i.e., about 3% of
transactions -- is exchanged to cover global trade in goods and services.
One of the symptomatic aspects of these capital creating processes were
junk bonds. Again, the fact of taking risks by borrowers and lenders with
high interest rates for questionable investments was not new in itself.
What was new was the magnitude and liquidity of junk bonds in the financial
markets of the eighties which the changing nature of capital markets had
Financial markets in the Western developed countries
have shown their capacity and flexibility to absorb the non-labor, non-productive
and non-asset based capital that is churned out every day -- every moment.
The rapidity of electronic transfers and their extended networks have changed
the nature of the risks involved. With the development of such instruments
as money market CDs, mutual funds, deposit insurance and electronic networking,
panic runs on commercial banks for cash can probably be more easily met.
The insolvent bank may eventually collapse, but the ripple effects of its
collapse are more likely to be controlled. Financial systems now have other
vulnerabilities such as downward spirals and panic sell commands on the
stock market triggered by program trading. Some controls have been put
in place to serve as floodgates. Some speculation and securities regulations
have been set up and there are mechanisms to secure orderly markets and
suspend operations when things get out of hand. But even without crisis,
in the everyday fluctuations of the financial markets enormous gains and
With the globalization of financial markets, the
IMF and World Bank policies to push developing countries to privatize their
industries, and the opening of stock exchange markets in developing countries
connected to the international financial network, the volatility of international
finance can creep into and jeopardize the development projects of developing
countries. A privatized industry in a developing country may suddenly see
its capital base collapse because its shares on the international financial
market lose their value (an operation which may have even been triggered
to force that industry to call on new international financing and control).
Economies such as those of Japan, Hong Kong or
Taiwan, even though at times jolted by stock market crises, can afford
to be integrated in the global financial network because they have already
put in place stabilization mechanisms and also have substantial financial
investments abroad which could provide them with a cushion in times of
crisis. That is not the case of developing countries like India, China,
Indonesia or Malaysia with weak international financial infrastructures.
Hasty liberalization of these economies can put them at risk in the volatile
international financial markets.
Presently world finance is in flux. International
debts of many sovereign states, for example, will obviously not be paid
in any foreseeable future. But in many ways that fact has become irrelevant
because those debts have become part of the electronic financial process
subject to swaps, baskets and other derivatives. Banks in developed countries
have, over the years, with the acquiescence and help of central banks and
manipulation of interest and exchange rates, set aside reserves for cases
of default. International
debts are now diluted into the future and the banks periodically reschedule
and refinance them against hefty fees.
Another example of the financial flux is the global
currency market which since the events of the seventies has had little
internationally organized control. It is evident that the central banks,
even collectively, do not actually have sufficient foreign currency reserves
to intervene effectively and either change the direction or halt an ascending
or descending exchange market. Their interventions have only a psychological
effect signalling to the financial markets that the wishes of the governments
are to slow or reverse the trend, asking the financial institutions to
apply self-control. Sometimes it works, sometimes it doesn't. Financial
institutions live, and speculators thrive, on fluctuations of interest
rates, yields, currencies and prices (inflation). Too much stability is
not in their interest and now they have a global network to play in; and
that network, to a large extent, escapes the control of any single country.
The central banks' monetary policies or manipulation of interest rates
play into the hands of global financial markets which ride the waves of
those policies and manipulations and shift the focus of their transactions
to take advantage of them.
Political and economic systems of countries, however,
are dependent on, and influenced by, the international financial network.
Governments of developed countries in the North are too much involved in
that complex to be able to effectively create international mechanisms
and institutions for the control of speculative capital. Some of the major
developing countries which as yet are not overwhelmed by the international
financial network are in a better position to spearhead an international
movement for the creation of institutions and mechanisms to stabilize and
regulate international financial markets. It is in their interest to do
so. Globalization of financial markets is a good thing insofar as it represents
stable capital. But it should have an international regulatory framework
and controls on speculative encroachments on currencies which should be
given sound exchange bases. Volatile speculative capital which appears
on the computer screen on the same footing as labor- and industry-generated
capital bloats the market, enhances inequalities around the globe and handicaps
long term development projects. Speculative capital's chase after instant
optimum profit through program trading, constant evaluations of P/Es and
growth rates, and volatile manipulations of stocks and currencies become
particularly detrimental to long term development projects when put in
the context of other post-industrial evolutions in the West. Those evolutions
include, notably, the rapid globalization of the entertainment industry
due to advances in electronic and space technologies, growth of the service
sector and, the drive towards ever greater consumption. These are distinct
but intertwined aspects of post-industrial West which we need to and can
best examine under the title of consumerism.
Consumption was recognized as an integral part
of the economy from the inception of capitalism. It was part of the loop
of enterprise, investment, production, distribution, sale (for consumption),
profit and on back to enterprise. In different epochs and depending on
prevailing ideologies, different segments of the loop have been considered
crucial. Western post-industrial culture today emphasizes consumption.
Consumerism, however, is not simply the rush of customers to shops. It
covers a whole evolution of the capitalist culture. Consumerism is the
fulcrum for jobs which keep people busy and permit redistribution of wealth.
Consumerism stimulates the use of speculative capital and is promoted through
ever more refined and enticing marketing and conditioning methods by the
vast and expanding media networks.
Consumerism modifies the criteria for development
outlined at the beginning of this paper. Consumerism does not only jolt
a developing society out of its traditional groove, it also alters the
society's perspective on progress.
Permeated by prints, waves and beams of the media penetrating across the
border, a developing country may have its population exposed and enticed
to superficial aspects of the Western way of life which are not in synch
with its own stage of development. Fashion catalogs and shows may make
a population crave for fancy clothing and cosmetics before caring about
replacing their outhouses with indoor plumbing. Rupert Murdoch may be pleased
to claim that "the satellite TV is an unambiguous threat to totalitarian
regimes everywhere". However, the purpose of his enterprise is profit:
attracting commercials for mass consumers requires broadcasting programs
with the lowest common denominator to appeal to the masses -- a fact which
does not develop social responsibility among the viewers but rather their
appetite as consumers.
Where to draw the line between actual legitimate
needs and consumer cravings is not always easy. One can even make a case
for the production and marketing of an electric toothbrush which may be
the legitimate need of a person with an arthritic wrist. By and large,
however, distinctions between needs and cravings can be established. According
to statistics the average American consumes 3,700 calories a day which
is 1,000 calories more than what he needs. The American is enticed to eat
and then is offered programs and products to lose weight. The process is
similar to the behavior of the Romans at the height of their imperial prosperity
who, in order to continue a gluttonous feast, stuck a feather in their
throat to activate vomiting in order to eat more.
How much more can be done to promote consumerism
in the West is an open question. A recent article in American Demographics
underscored the want that can be created by retailers through the exploitation
of the "whine factor" in children, obliging parents to make purchases.
Credit cards, once the privilege of a few but popularized in the West in
the seventies, are still proliferating and are great contributors to consumerism.
The "buy now and pay later" motto of credit cards in the West at once creates
the incentive to buy and contributes to velocity and liquidity in the market
place. The motto, of course, results in relatively high rate of defaults.
But again, the developed financial structures in the West have been able
to set up mechanisms to absorb the losses.
While consumerism in the West is still in flux,
its international sustenance depends on the evolution of the relationships
between the developed and the developing countries. Consumerism is accelerated
in the West by the globalized economy. The "whine factor" is made possible
by the toys made in China. Credit cards can proliferate as long as consumer
goods are made abundantly available by Newly Industrialized Countries (NICs).
The relationship between Western consumerism and developing economies is
complex and has its paradoxes.
While infrastructure projects of developing countries
find limited and controlled financing through loans and bonds backed by
international financial institutions, their market economy, as it is liberalized
and becomes integrated in the global economy, is funded by international
free market capital to adapt itself to the broad patterns of Western consumerism.
International free market capital flows in to cater to the wants created
in the developing countries due to exposure to international media -- fast
food chains, cosmetic boutiques and shopping malls sprout -- and to produce
goods appealing to the international market.
Developing countries' industries also become cogs
in international globalization of production, building parts of wholes
-- cars, TVs, computers, airplanes, factories etc.
That development is in itself a welcome evolution towards an interdependent
world where conflicts will become harder to sustain. But the desirability
of interdependence will depend on the way capital, technology, management,
labor and raw material are meshed together. It is assumed that the flow
of foreign capital into a country is good because it creates jobs. That,
however, depends on how the proceeds of the enterprise are distributed.
Therein, in fact, lies part of the developed/developing country relations'
paradox. If the labor in the developing country is adaptable but cheap,
foreign capital flows in. While the workers who may have had marginal traditional
occupations will find jobs and their living standards fractionally improve,
it is the foreign capital which benefits the most. The low cost of labor
permits its products to be competitive on the international markets and
bring in good profits for the investors. But that hurts labor in the developed
countries. The labor unions in the developed countries will ask for protective
barriers and within democratic systems like that of the United States will
push the government to address the issue of workers' rights in its foreign
policy. The idea is to make labor in the developing countries claim more
benefits and thus become more expensive and less competitive. But that
would make enterprises in the developing countries -- their earnings and
therefore their P/E -- less attractive to the international capital which
would then look for greener pastures.
The competitiveness of an exploitation in the
developing country may also be due to access to untapped natural resources
and/or industrial techniques using less sophisticated and less expensive
methods and sources of energy. The extraction and depletion of the natural
resources -- such as forests -- and the pollution caused by fuel and waste
can become an issue for environmental protection. Stringent application
of environmental protection measures may again render the products of the
developing country less competitive on the international markets and cause
the flight of international capital.
Workers rights, development of social programs
and environmental protection are, however, essential and worthy goals which
a developing country should pursue. But although in the long run projects
aimed at such goals make a society more efficient -- providing better health,
education and quality of life -- they are costly and not profitable measures
in the immediate. Above all, the premature liberalization of a developing
country's markets will make development of social programs more difficult.
Health care, social security and education will be harder to finance. If
the economy is taxed heavily for that purpose foreign capital will flee.
If those programs are left to the market forces, inequalities will increase,
handicapping a country's efficient use of its human resources for development.
What is striking in the review made so far is
the constant lopsided image of development presented to the developing
countries by the West. In the colonial and neo-colonial periods when the
West was imposing development on non-Western cultures, it transferred its
technology, industry and administration to those regions to the extent
which made those cultures appendages of the West. Except for proselytism
by different Christian churches, Non-Western cultures were not exposed
to the philosophies and value systems which had launched the West into
its modern age. In the present post-colonial era, developing countries
are exposed to and are emulating a phase of Western evolution which, in
many ways, is an aberration of the traditional philosophies which served
as the bedrock of capitalism.
For those philosophies and traditional value systems
one needs to go back at least to thirteenth century Europe when major Christian
constituencies like Franciscans and Dominicans who were, up to then, upholding
spiritual growth and despising material gain, began to support reasonable
and justified returns on labor and capital. With the Reformation and Calvinism
developed what was later euphemistically labelled "Protestant ethics,"
but which, in reality, permeated the whole of Western culture: that of
"moral duty of untiring activity, on work as an end in itself, on evils
of luxury and extravagance, on foresight and thrift, on moderation and
self-discipline and rational calculation".
That was the moral fiber of Western development. It was oriented towards
production, not consumption. The psyche of the Western man, of course,
like every other human being, resisted those harsh precepts and sought
easy profit and pleasure. Not all rich Western men were pious. But the
moral fiber inculcated by the emerging bourgeoisie made them feel guilty
and fall in step with the prevailing social standards. The moral fiber
and social standards provided discipline and guidelines for the Western
evolution into capitalism, material and technological perspectives and
Ironically, the moral fiber of dedicated hard
work gave the Western man license to exploit his fellow men at home and
abroad. And that was the image which was passed on to the non-Western world.
For most non-Western cultures the West remained a technologically advanced
culture which, by the standards of traditional cultures, if not immoral,
was at best amoral.
One of the more significant features of Western
development was the expected change in the individual's attitude towards
society: from traditional clannish and tribal loyalty and aristocratic
fealty to modern social responsibility and accountability. It was the transformation
of the political institutions and social organization from the "sovereign's
officials" into "civil servants". In the traditional culture, it was assumed
that obtaining services and favors from the prince's vassals and appointees
implied offerings -- payment. After all, they sought their own enrichment
and were tributaries to the prince. The civil society which evolved with
the development of bourgeois capitalism and industrial revolution expected
civil servants to render service impartially and against remuneration by
the socio-political structures. Payment to civil servants for favors could
warp the economic process and thus became an immoral act: corruption. Corruption
could indeed jeopardize competitive free enterprise. Honesty of officials
and their social responsibility and accountability became an essential
expectation in Western culture's moral standards. But the transition was
not altogether corresponding to basic human tendency towards clannish belonging,
the drive for gain and the difficulty to identify with social abstractions;
especially where renumeration was not adequate for a comfortable life --
or so deemed by the recipients -- and solicitations and temptations were
present. The transition had to take place through social conditioning and
inculcation of social moral principles. It was a continuous process and
The emphasis of early Western capitalist ethics
on production rather than consumption produced surplus. Internationally,
the surplus created stronger nations which competed with each other, expanded
and clashed. Socially, concentration of wealth in few hands called for
ways of making redistribution of wealth possible, giving rise to such concepts
as Christian charity, socialism, communism and now consumerism. Each of
these concepts has had its own flaws, generally because of their incompatibilities
with human realities. The current trend of consumerism is expected, as
mentioned earlier, to generate enough circulation of wealth to provide
jobs for people and taxes for the government. The correlation between consumerism
and creation of jobs and distribution of wealth is not obvious. Automation
and computer technology are reducing the need for manpower and pushing
the bulk of jobs to the lower rungs of services, not necessarily providing
equitable distribution of wealth.
Furthermore, consumerism clashes with environmental
concerns. The West had the "good fortune" of spewing smoke out of its high
stacks and releasing its waste into the rivers and seas in the much less
inhabited world of nineteenth and early twentieth centuries, and graduated
from carbon dioxide and industrial waste to carbon monoxide of cars and
CFCs' of refrigerators and aerosol sprays. If the developing countries
with their billions of population were to embark on that same path the
air of the earth will soon become unbreathable and its waters undrinkable.
It is not the developing countries that should emulate the West, but the
West which should review its course of consumerism, derivative bloated
capital and pervasive lowest common denominator entertainment. These are
aberrations of basic Western traditional values. In the long run, these
are not sustainable trends. The idea here is not to suggest that developing
countries should not develop; but that in choosing their course towards
development they could examine the value system that made Western development
possible and by observing the West's mistakes avoid repeating them.
In order to make the point, one last, but by no
means least, underlying aspect of consumerism should be underscored. The
creation of jobs through consumerism is not only for the circulation and
redistribution of wealth but to keep people busy. Many currents in Western
culture are adamant to reduce working hours. In the course of its evolution,
the West has been influenced by a combination of the church's objection
to the rational emancipation of mankind,
capitalism's drive towards useful and functional training rather than well-rounded
intellectual education of the masses, and more recently the extension of
the idea of freedom to the process of learning -- and the option of not
learning -- dispensing with the rigors of classical education. The combination
has also been convenient for the political process permitting simpler levels
of communication for aspirants to power and their constituencies. But the
combination has tainted general education in the West and produced masses
who, no longer enveloped by a traditional culture, do not know what to
do with themselves when out of a job, contributing to the statistical realities
of positive correlation between crime and unemployment.
By addressing the question of education with an
open perspective, rather than emulating Western patterns, developing countries
could lay the foundations for cultures which could improve on Western models.
It is no longer practical to obstruct the tantalizing waves from TV satellites,
but it is possible to sensitize the population and particularly the young
to the environmental, social and cultural dead-ends of consumerism. Most
developing countries still have traditional patterns and the elements of
discipline within their educational systems. Rather than abandoning them
for the more lax but specializing and limiting Western educational methods,
they could adapt their educational systems to include the ideas of enlightenment,
rational thought, the dignity of labor, and social responsibility, not
as a one dimensional straight jacket of a job to keep people out of trouble,
but as a productive process which contributes to the formation of productive
capital and social development. By providing a well rounded education extending
into adulthood developing countries can create the alternative of moderate
consumption and enjoyment of life. It is through education, for example,
that developing countries could drum up support for their public transportation
projects countering the temptations of one person/one car culture which
tends at once to alienate people, congest the traffic, pollute the environment
and exhaust resources.
The reality is that following the consumerism
pattern, the developing countries cannot get there from here. It is neither
feasible nor desirable to provide cars for six billion people on the same
scale as the United States. If the course is maintained, it may lead to
To a large extent the developing countries' crises
of passage from their own non-Western traditional culture to a Western-style
modernism stems from their inadequate exposure to the basic Western traditional
values which permitted the West to develop. Translations of the works of
Western philosophers and thinkers are available in the libraries of the
developing countries and accessible to the intellectuals and the elite,
but that may not be enough. Other than the elite -- whose exposure to Western
values undoubtedly influenced their impact on their non-Western cultures,
such as Sun Yat Sen, Ata Turk or Nehru -- developing cultures, as a whole,
have ignored the Western traditional psyche. The West doesn't have only
gunboats, Star TV and consumerism to offer. Having focussed on those realities
of the West, and having labelled the West immoral or amoral for good, developing
cultures have made Western traditional thought and psyche inscrutable to
As Western experts, engineers, managers, lawyers,
administrators and advisors go about day after day transferring their technology
to the developing countries, it is not only their techniques but their
psyche that the non-Western cultures could delve into. To rationalize an
economy, to make it practical, one does not only use technology but rational
thinking and pragmatism, dedication, motivation and a sense of social responsibility.
These valuational aspects of Western culture are essential components of
development and technology transfer.
Current Western excesses of speculative financial
fluctuations, consumerism and global lowest common denominator entertainment
can handicap the developing countries. Yet, these are aberrations of processes
which are otherwise essential vehicles for development and could be fully
taken advantage of by the adoption of appropriate policies.
Developing countries which are not yet too entangled
in international financial debts and speculative investments could actively
influence international financial organizations to put in place orderly
patterns for the movement of capital and currency exchange guidelines --
not barriers to movement of capital and currencies, but orderly patterns
to avoid economically harmful fluctuations caused by speculation.
Developing countries could reduce the impact of
the permeation of their cultures by global lowest common denominator entertainment,
not so much by physically banning satellite dishes -- hard to enforce --
but by actively engaging their public in critical debate of the life styles
propagated by the media and the environmental, social and cultural flaws
By avoiding recent evolutions in Western educational
methods towards laxity and narrow specialization, by modifying and adapting
the discipline and traditional patterns of their own educational systems,
developing countries could lay foundations for producing well-rounded individuals
free from superstitious beliefs and dogmatic ideologies.
By delving into Western traditional values of
dedicated work ethics, productive labor, motivation, rational thought,
pragmatism, and social responsibility; and emphasizing them in their own
cultural, social and educational processes, developing countries would
make technology transfer and development a coherent whole.
This essay was prepared for the Research Committee on Technology and Development
of the International Political Science Association, Shaanxi Teachers' University,
Xi'an, Peoples Republic of China, November 1994.
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