Economics and the problem of development

Inaugural lecture--Department of Economy, Rand Afrikaans University, 5 October 1970Despite the increasing attention given by economists to the problem of development since the Second World War, there is as yet no clarity about the nature of the contribution that economics can make to an understanding of the problem. Economics should not be expected to lend support to value judgements in favour of or against material progress. However, since the classical economists did not have the advantage of modern analytical approaches, and in any event were faced with a different type of situation than obtains in present-day underdeveloped countries, and since later generations of economists did not concern themselves in particular with the development problem, there is a need for the present generation of economists to pay specific attention to this problem. Development economics should, however, not be seen as a functional area of specialization at the same level as such sub-fields as price theory, or international economics, but rather as a specialized applied field of economics, similar to agricultural economics, transport economics, labour economics, and certain aspects of money and banking. Macro-economic development theories cannot be expected to yield sharp predictions, but may nevertheless have explanatory value; and, even if a theory has explanatory value only for development situations other than the one being studied, it may still have instrumental value relative to the given situation through revealing those changes in the behaviour of economic subjects at the micro-economic level that are required, if the theory is to be used as a basis for policy formulation. From an academic as well as a policy viewpoint, the study of the underdeveloped sector of the South African economy is likely to be rewarding, but the labour market for economists functions in such a way that the problems of the developed sector receive far more attention, while those of the underdeveloped sector have until now been severely neglected