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The Millennium Challenge To Economic Theory
Dr.Akmal Hussain
Dated: January 9, 2000


At the end of the twentieth century, neo-classical economics once again holds unquestioned sway as the basis of economic policy, just as it did at the end of the nineteenth century. The belief in the efficacy of the free market which had received a jolt during the Great Depression of the 1930's was set aside in favour of state intervention for the next fifty years: In the Keynesian form in the capitalist countries and central planning in the socialist countries. Mainstream economics has now returned to the elegant certainties reminiscent of an earlier period. Yet new doubts are beginning to emerge whether this theoretical edifice is sustainable in the face of the problems of intolerable debt burdens in some countries, persistent poverty in many countries, and environmental degradation worldwide. In dealing with these problems the doorway of the next millennium may well open into a new way of looking at the relationship between the individual, state and the market. This paper attempts to critique neo-classical economics from the vantage point of some of the challenges that economic theory confronts as we stand at the threshold of a new millennium. Section I presents a critique of some of the key concepts in neo-classical theory to show how both the living individual and history are systematically excluded from its domain. Section II examines some of the issues of development policy in the context of the weaknesses of both state interventionist policies as practiced in the post war period, and the neo classical policy framework. Section III examines the architecture of neo-classical economic theory to show how it was paradigmatically incapable of coming to grips with the key issues of the relationship between man, nature and economic growth that emerged in the twentieth century. Section IV outlines some of the challenges confronting economics in the twenty first century.



Neo-classical economics the dominant orthodoxy in the subject today, sees economics as essentially concerned with the allocative problem: i.e., How to combine available inputs (resources) for maximizing the production of that particular basket of goods which would maximize the satisfaction of consumers.1 This is expressed in the proposition that:

"Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses."2

Out of this approach has emerged a conceptual apparatus designed to show that the process of production and distribution of goods is determined by immutable and neutral laws of the free market. Output is supposed in this scheme to be generated on the basis of three resources or "factors of production"" Land, Labour and Capital. Each factor of production has a price; rent is the price of land, wage the price of labour and profit the price of capital. The crucial proposition that serves to enclose economics within a purely technological, hence "value free" realm is that under conditions of market equilibrium, the price of each of these "factors of production" is equal to its "marginal product". The marginal product is defined as the addition to total output brought about by applying an additional unit of that factor of production, other things remaining the same. Now since the addition to output induced by an additional unit of a particular factor of production is technologically determined, the equivalence of marginal product to factor price means that the distribution of income between social groups has a technological rather than a social basis. Thus rent, wage and profit express not a relationship between people in the course of human history but between inputs (units of factors of production) and outputs.

Let us examine two fundamental concepts, wage and profit to understand how orthodox economics excludes both people and history from its domain. Consider the concept of wage. As Paul Sweezy3 has argued, the non-economist would have a perfectly sensible definition of wage. He would say that wage is an amount of money paid by an employer to an employee, at regular intervals of time. In terms of this common sensical understanding, wage clearly cannot occur in all periods of history and all forms of social organization. Wage is only possible at that particular period in history, and within that particular society where employers and employees exist as distinct social groups. But this is not the way contemporary economics conceives the concept of wage. Here wage is seen as the marginal product of labour, i.e., it is an output produced by a unit of activity. Thus Neo Classical economics fails to make a distinction between the proprietor of a workshop operating his own lathe machine and a worker employed in a factory or between an owner cultivator and a serf. Since each of these individuals engages in labour, therefore the argument goes, each has a marginal product that is technologically determined.

Let us take profit as another example. Now the overall rate of return on capital in the economy is defined as the profit rate. In Neo-Classical theory, the profit rate is supposed to be the price of capital. This is again technologically determined because under conditions of equilibrium it is argued the marginal product of capital (in the aggregate) becomes equal to the profit rate. As Cambridge economists like Joan Robinson and Pasinetti have shown, there is an inherent inconsistency in this explanation of profit.4 If profit is the marginal product or the price of capital then the aggregate amount of capital in the economy must be capable of measurement independently of the profit rate. This of course is not possible. Let us see why this is so. What is capital? It is machines and productive assets of various types in the economy. How are machines of various types to be added up? This obviously cannot be done by simply adding up the number of machines. Adding up for example a machine producing cloth with a machine producing steel would be like adding mangoes and apples. So the only other way is to find out the prices of machines and add those up. Therein lies the contradiction, for inherent in the price of the machine is a profit rate. Thus the contradiction of the Neo-Classical Theory of profit as the price of capital may be stated as follows: In order to estimate the overall profit rate it is necessary to measure the value of capital in the economy. But in measuring the value of capital a profit rate has already been assumed. Thus Cambridge economists have shown that in fact Neo-Classical economics does not have a credible explanation of how profit arises in the economy. The professed argument that profit is the marginal product of capital, and hence purely technologically determined does not stand up to scrutiny. So we are obliged to seek an explanation of profit in the dialectic of power which emerges in history when the owners of the means of production become a social group distinct from those who use them.

If we take off our Neo-Classical glasses for a moment, a simple but important perception becomes apparent: The human enterprise of producing and distributing goods involves essentially a social relationship between people as they interact with each other and with nature. The form of this relationship is historically specific. Thus for example, the social relations between landlord and serf that were involved in production in sixteenth century Europe, were quite different from those prevailing between capitalist and labourer in the twentieth century capitalist West. The former were determined by extra economic coercion, or the terror of tradition, while the latter are conditioned by the hidden hand of the market. Similarly, the relationship between the ruling elite in Europe and the peoples of the periphery was structured by the coercive apparatus of the state in the nineteenth century, while in the late twentieth century, this relationship is determined amongst other factors by international financial institutions such as the IMF and the World Bank through the leverage of loan conditionality.5

Yet what is a historically specific relationship between people is inverted by Neo-Classical Economics and presented to us as a universal and ahistorical relationship between goods: Between inputs and outputs.

The problem with such an inverted and abstract specification of "economic reality" is that since the relationship between people are filtered out, ethical and emotional responses to this economic reality are also precluded. Both the brutality of the oppressor and the cry of the oppressed creature that actually echo through history are concealed under the coverlet of an "objective" or "neutral" logic. The essential feature of such a neutral logic is the underlying premise that the "social scientist" is divorced from the reality he is describing. Consequently, in the Neo-classical paradigm both the individual and the world he inhabits are deprived of ontological status, thereby converting both into abstractions. Thus, the actual actions of people in history find no place in such a scheme: The passion that charged Dullah Bhatti's resistance against the Moghul establishment, the longing for freedom that filled the hearts of those who fell at Jallianwala Bagh or the struggle for democracy in Pakistan would be beyond the scope of a "neutral" logic. Thus, various forms of resistance and struggle in history can be seen as affirmations of our humanity that condition and in turn are conditioned by economic processes. Yet to the Neo-classical economist they appear as mere anecdotes quite beyond the pale of his discipline. It is not surprising that in a methodology where the human presence is systematically excluded, human history is also absent from its desolate terrain.



Development economics in the post war period emerged from a recognition that the free market mechanism by itself was not an adequate framework for ensuring the development of underdeveloped countries. The structure of the world economy at the end of the colonial period was characterized by the developed countries specializing in manufacturing and the underdeveloped countries specializing in the production and export of primary commodities. A whole range of economists and political activists from Raul Prebisch6, Myrdal7 at one end, and Paul Baran8, A.G. Frank9, Emmanuel10, Samir Amin11, Rosa Luxembourg12 and Lenin13 at the other end of the theoretical spectrum were able to show that the so called free market in the twentieth century on a world scale operated as a mechanism of real resource transfer from the under-developed to the developed countries. They showed that the prescription of comparative advantage based on the world market mechanism would simply reinforce the economic structure of raw material exports that was inherited from the colonial period, and which was the fundamental cause of under-development. Out of this charged intellectual atmosphere emerged a consensual view that industrialization was a necessary condition for self-reliant development and this required conscious state intervention.

In those heady days of intellectual ferment while the argument for state intervention in the economy of an under-developed country was formulated with admirable rigour what was not systematically specified was the particular form that such intervention should take. Even less thought was given to the impact on development of a large bureaucracy that was not only inflexible, corrupt and incompetent to "deliver" the results in most cases, but was culturally conditioned to further the metropolitan economic interests rather than the interests of the poor in their own countries.

The economies of most Third World countries continued to be structurally integrated with the global capitalist economy and no fundamental change took place either in the internal distribution of productive assets or in the social basis of the power structure. Therefore, it was eminently predictable that non-productive expenditures and income inequality would increase rapidly. Moreover, it was only a question of time before loan dependence and endemic poverty emanating from these trends would threaten both economic sovereignty and political stability of these states. Thus large budget deficits, heavy debt and growing poverty which are today causing such anxiety in the world community were actually inherent in the form of intervention adopted by Third World regimes in the post war period, i.e., intervention by centralized state structures allied with traditional economic elites on the one hand and locked into the global market on the other. Of course, intervention by centralized states did produce dramatic results in a few countries but these were mostly restricted to cases where traditional economic elites had been overthrown through revolutionary upheavals and where there was a structural delinking from the economies of the advanced capitalist countries. Thus the Soviet Union and China achieved self-reliant industrialization and alleviation of poverty within a relatively short period of time. But even in these countries the inefficiency of centralized bureaucracy resulted in such large resource losses that by the 1980's they were obliged to seek a decentralization of economic decision making. The Soviet Union through Perestroika, and China through the Four Modernization Programmes. In the capitalist Third World too there were success stories such as the NICs. (New Industrializing Countries) of South Korea, Taiwan, Hong Kong and Singapore. However, because of their small size and massive inflow of multinational capital and technology, their impressive economic performance can be attributed essentially to the phenomenon of internationalization of production and finance rather than an indigenous economic base constructed by the policies and institutions of the Nation State.14 Japan is a great success story of state intervention, but that experience cannot be included in the category of Post Colonial Third World development effort for two reasons:

a) Japan's industrialization drive spanned over more than hundred years: from the middle of the nineteenth century at the time of the Meiji restoration to the 1960's.

b) Japan's industrialization drive was based initially on investable resources and cheap raw materials obtained from its own colonial empire in the Pacific region.

India is the only remaining country in the Third World with a semblance of success in terms of the establishment of a heavy industrial base through centralized state intervention and national planning. Yet, after forty two years of development, over 30 percent of its people continue to live below the poverty line. Many more are deprived of basic necessities such as sanitation, health, education. Although through its technological base it has developed the military muscle of a regional super power, yet this posture can only persist by writing off the bottom 50 percent of its people. This is clearly not sustainable even in the eyes of some of their own leaders. The political pressures emanating from regional economic disparities, huge military expenditures and endemic poverty may well constitute fetters to the fulsome flowering of its democracy. Apart from this we find that inspite of achieving a heavy industrial base, India has yet to reach its growth potential, while the huge military and bureaucratic establishments are generating intolerably high budget and balance of payments deficits.15

Notwithstanding the relative success of NICs, so far the post war development attempts in much of the Third World, have succeeded neither in overcoming poverty nor in establishing a sustainable basis for rapid economic growth. What then is the solution? It is clear that the radical alternative of state ownership of the means of production by regimes claiming to represent the proletariat, can by no means be propounded with the same confidence that marked the first half of the twentieth century. However, what is equally clear is that the solution does NOT lie in the other extreme of laissez faire. This view is rooted explicitly in the nineteenth century theory that the free market mechanism is the best framework of resource allocation. There is no doubt that some of the logical creases in Neo-classical theory that became apparent in the early twentieth century have now been smoothed out by a number of brilliant mathematical formulations. They range from Samuelson's factor price equalization theorem,16 to the theory of rational expectations of Lucas17, Friedman and others.18 The essential question from the view point of economic policy, however, is not whether the free market mechanism in theory is the most efficient allocator of resources. The question rather is, that in a real world where perfect markets demonstrably do not exist and have in fact never existed, will policy prescriptions based on the presumed efficacy of free markets merely produce "second best" results or persistence of unacceptable levels of economic deprivation.

The recent experience of Third World countries of producing according to the policy of "comparative advantage" within the framework of IMF loan conditionality, points to the potentially devastating consequences of such a policy. For example, the IMF pressure on African countries to service their heavy debt through the export of primary commodities, forced these countries to over-use their fragile soils resulting in rapid desertification. According to the United Nations Report of the World Commission on Environment, the consequence was that almost one million people died of famine and the survival of 35 million people was put at risk during the period 1984 to 1987.19 The report indicates that this "recent destruction of Africa's dry land agriculture was more severe than if an invading army had pursued a scorched earth policy". Similarly, in Latin America the debt servicing obligations through primary exports has resulted in a situation where "the region's natural resources are now being used not for development but to meet financial obligations of creditors abroad." The Report goes on to show that such a policy requires "relatively poor countries simultaneously to accept growing poverty while exporting growing amounts of scarce resources".29

With the lowering of tariffs on imported manufactured goods under the WTO agreements, many developing countries will be unable to face the challenge of international competition due to poor governance and inadequate infrastructure: They are consequently likely to suffer a sharp slow down in economic growth, increased poverty and intensification of their debt servicing problem. Under these circumstances, IMF stabilization programmes which while pressurizing borrowing countries to cut down public expenditure (which often translates into reduced development expenditure), without specifying policies for accelerating GDP growth, may push such countries into deeper recession, poverty and debt. Such narrowly conceived IMF "Structural Adjustment Programs" can be regarded neither as a prescription for economic efficiency nor of economic stabilization.



From the perspective of development, twentieth century mainstream economics has four major features:

1. Preoccupation with Resource Allocation

It is essentially concerned with the allocative problem, i.e., Organizing most efficiently available resources for the production of precisely that combination of goods that consumers demand with their income. Of course, the question of why some people are rich and others poor, i.e., how a particular distribution of income came about is not adequately explained by mainstream economics (as we have argued in Section-I of this paper). Similarly unexplained is how the preference for certain goods is determined, and how the presumed consumer psychology of desiring an unlimited volume of goods regardless of the deprivation of others comes about.21

These questions were swept under the carpet by means of two assumptions:

a) The consumer is sovereign, i.e., his tastes and preferences are internal to him and influenced neither by other consumers, nor by the market.

b) The larger the quantity of goods a consumer has, the greater is his satisfaction regardless of what happens to others. (this is part of the so called consumer rationality assumption).22

2. The Hidden Hand of the Market

The second major feature of Neo-classical or mainstream economics is that it sees the free market mechanism as the framework for the most efficient allocation of resources for the production of goods, and the most efficient distribution of these goods amongst consumers with pre-determined income. The market according to Neo-classical theory mediates between competing consumers and producers to determine a set of prices. Once prices are fixed they act as reference points for two sets of actors: Prices guide producers to allocate their given resources to produce just the right combination of goods which will maximize their profits; prices also guide consumers to select with given incomes just the right combination of goods that will maximize their satisfaction.23

Having developed an argument for the efficacy of the market on the basis of highly restrictive assumptions, Neo-classical economics then proceeds to apply it on a global scale. It takes the world market as it existed at the height of the colonial period in the late 19th century, and sees it as the ideal framework for the most "efficient" production and distribution of goods on a world scale. Having conceived of the world market in an abstract and a historical way it then prescribes the theory of "comparative advantage". Simply put this theory suggests that each country should specialize in producing goods in which it is "relatively efficient", and through free trade import goods which it cannot produce at competitive prices at home. This way the theory argues, national and world income would be simultaneously maximized. Of course the theory neatly ignores the question of how it came about that in the nineteenth century (when this theory was first propounded by David Ricardo) some countries had become more efficient in industrial manufactured goods and others in agricultural goods; or why over time the income gap between industrial countries and agricultural countries has been growing rapidly.24

3. The Divorce between Man and Nature

The third major characteristic of Neo-classical economics is that it regards nature as a set of "resources" divorced from man to be "exploited" by him in the process of making profit. As we have seen in Section I, this economics sees individuality to be prior to society, rather than being constituted in society. The concept of the individual thus deprived of sociality becomes atomized. In the same way, this theory sees nature in terms of its component elements that are to be exploited, rather than as an organic wholeness that is in a delicate ecological balance within itself and with humans.

The consequence of this approach to nature was that market or profit criteria began to be applied to nature at the level of individual project selection. The problem in this case is that private profitability only takes account of the "private" costs and benefits of the project concerned and not those for society as a whole, or for the next generation.25 Thus, for example, a pesticide manufacturing plant that throws toxic waste into the rivers, does not count as part of its cost, the loss of fish species downstream. Similarly, the wood contractors who cut trees in river water-shed areas, do not include in the sales price of wood the social cost of flooding and soil erosion caused by their tree cutting. Again, manufacturers of aerosol sprays which emit chlorofluorocarbons do not include in the price of the product the damage to the ozone layer of the earth and the consequent increase in skin cancer frequency in the world.

The conflict between private gain and social or ecological loss that is inherent in the market criteria for project selection has over the years brought devastation to the earth's environment. It has initiated processes of desertification and resultant famine in sub-saharan Africa, global warming associated with carbon dioxide emissions from industrial plants and depletion of the ozone layer of the earth.26 These processes which are the uncounted aggregate cost of individual investment decisions are now beginning to undermine the delicate ecological balance of our planet and hence threatening life on earth.

4. State Intervention in Market Economies

The fourth main feature of a market economy and one that Neo-classical economists have not sufficiently recognized is the discovery by Keynes27 and Kalecki28 that the market mechanism on its own cannot ensure full employment. This important contribution laid the theoretical basis for state intervention in the advanced capitalist economies in the period following the Great Depression of the 1930's. Although Keynes demonstrated the possibility of market equilibrium at less than full employment, he was concerned with a short-run situation where productive capacity in the economy was fixed. Subsequent economists like Harrod29 and Domar30 showed that even when productive capacity was changing the market mechanism could not ensure economic stability. Harrod showed that the steady growth path, (or the warranted growth path as he put it) was one where starting from a full employment situation, investors' expectations of demand were fulfilled.31 Such a growth path requires a unique relationship between investment decisions, the savings rate and the capital output ratio. The 'steady growth' path is possible if and only if the growth rate of output expected by investors is equal to the ratio between the savings rate and the capital required to produce a unit of output.32 Such a unique combination of circumstances is unlikely in a free market economy where investment is the aggregate result of a large number of individual investment decisions based on individual expectations. Harrod showed that even if such an equilibrium growth did occur by some accident, it would be an unstable one. If expectations of investors diverged from the "warranted growth rate of output", the market mechanism would set in motion forces that would cumulatively shift the actual growth path away from the "steady growth" path, if (as Joan Robinson adds) future expectations are based on present experience.33

While the theoretical basis for state intervention was being attempted, the instrument of this intervention was conceived in terms of a centralized nation state through monetary and fiscal policy. In the contemporary world, monetary and fiscal interventions are being done at an even more centralized level than the nation state. For example, the economic stabilization programmes being imposed by the IMF and World Bank today, constitute massive interventions in the economies of Third World countries, by supra state institutions that are centralized at a global level. Yet it is precisely these global institutions of economic intervention that are propounding the ideology of the free market mechanism at the level of the nation state.



Today as we stand amidst the global economic and ecological crisis, it is evident that twentieth century mainstream economics needs to be transcended by a new economics for the twenty first century. This economics would contribute to achieving a new relationship between human beings, nature and growth. Such a relationship would be sought in a world where nations struggle to achieve a decentralized democracy within states, local communities are empowered, and global cooperation is undertaken to preserve the ecology of our planet, to maintain peace and to overcome poverty.

1. Human Community as the Focus

The focus of economics must shift from mere resource allocation and higher GNP as the end product. Economics will need to focus on the problems of fulfillment of the human potential, within the context of culture, social organization and environmental conservation. The emphasis would therefore shift away from short term profit maximization at the micro level and value indices of GNP at the macro level. Instead the new performance criteria would be the quality of life within an inter-generational perspective.

Recently the Human Development Report34 (UNDP, 1990) has proposed a Human Development Index (HDI) in an attempt to improve upon GNP per capita as a measure of development. The HDI is composed of three quantitative indices: Life expectancy, literacy and purchasing power. This new index, apart from having the same shortcomings as income measures (such as ignoring the distribution of purchasing power) is narrow in its scope and static. It ignores the dynamic processes which enable a community to achieve sustainable development over time.

What is needed is a more wide ranging measure that takes account of specific features of the quality of life and the mechanisms of change. For example, how many more people have been provided with clean drinking water, what is the state of housing, transport and education, what new forms of production organization and cultural norms have emerged that unleash the creative possibilities of the individual and which enable control by the local community over its economic, social and ecological environment? Some theoretical work on the environmental preservation and irreversibility has been done by Vandana Shiva and also by Arrow and Fisher.35 Much more work lies ahead in this field and in the cultural dimension.

2. New Project Evaluation and Measurement of Sustainable Development

Project selection would be done not just in terms of static social cost benefit analysis (as in work done by Dasgupta, Pearce,36 Little and Mirelees37, and Sen38) but would take account of two vital dimensions of sustainable development: The capacity of a particular project to further the goal of an integrated and self-reliant community on the one hand and conserving the ecological balance on the other. These concerns must be brought into a new calculus of project evaluation at the micro level and measures of sustainable development at the macro level. Work done in Towards a Theory of Rural Development, by G.V.S. de Silva, P. Wignaraja and others, has made a beginning in this direction.39 A concept of development project has been proposed by them in which the emergence of group identity, the level of community participation in project formulation and implementation is an integral element of project design and evaluation. Work done by Hicks, Hartwick and Solow is the first step in measuring sustainable development as one where GDP growth does not lead to a net reduction in the capital stock.40 Here the notion of capital stock has been enlarged to include not just man made machines but also natural capital and human capital.

3. Interlocking Crises and the need for New Finance Concepts

The new economics must come to grips at the global level with the interlocking crises of economy and ecology. Mechanisms of finance, production and distribution must be found, which can enable nation states to achieve a selective delinking from the current centralized processes of finance and accumulation. At the same time forms of international finance must be developed that ease the capital constraint of Third Wold countries without locking them into a crippling debt trap. The debt write off scheme for HIPCS (Highly Indebted Poor Countries), devised by the advanced industrial countries is a recognition of market failure for such countries. Yet the scheme itself only provides in effect a one time grant. It addresses neither the structure of international finance and capital flows, nor the economic structure of developing countries, which reproduces the problem of intolerable debt burdens. International financial relations must reflect our awareness that the systematic transfer of non-renewable resources from the Third World to the First World and the endemic poverty crisis will have adverse repercussions at a global level for the preservation of peace and ecology.


The paradigm of mainstream economics during the twentieth century has conceived of the individual in isolation from his social and natural environment: It has understood development to be the result of economic interventions conceived by paternalistic (sometimes rapacious) policy makers divorced from the people, and implemented by a centralized bureaucracy. Such an approach has not only failed to ameliorate the conditions of "underdevelopment" but has locked these economies into a permanent poverty trap. There is a growing transfer of non-renewable resources, environmental damage, perpetuation of poverty, growing budget deficits, rising debt and intensifying dependence. The new paradigm of policy must be premised not on the atomized individual but an organic community. It must involve decentralizing the state, and empowering the people. The state and the multilateral institutions must facilitate the more efficient functioning of markets where such functioning enables human development. At the same time they must intervene in pursuit of human development in cases either of market failure or where the functioning of markets leads to affluence of the few at the expense of the many, or where environmental degradation threatens the welfare of future generations. Development must become part of a new praxis whereby people would become both the subject as well as the object of development: Knowledge and action would be integrated into a new dialectic at the local, national and global levels. Economic theory in the new millennium must address the emerging new relationship between human beings, nature and growth. In doing so it will have to think anew, concepts of the individual, state and the market.


1. For an excellent presentation of the Market Efficiency argument, see: Tibor Scitovsky, Welfare and Competition, Unwin University Books, London 1968.

For an analysis of the conditions of market failure see: F.M. Bator, "The Anatomy of Market Failure:, The Quarterly Journal of Economics, Harvard University Press, Cambridge, Mass, August 1958.

2. L. Robbins, The Nature and Significance of Economic Science, London 1932.

3. P.M. Sweezy, "The Theory of Capitalist Development", Monthly Review, Modern Reader Paperback, New York 1968.

4. G.C., Harcourt, Some Cambridge Controversies in the Theory of Capital, Cambridge University Press, Cambridge 1972.

5. M. Guitian, Fund Conditionality: Evolution of Principles and Practices, IMF, Washington D.C. 1981.

Also see: Tony Killick (ed), The Quest for Economic Stabilization: The IMF and the third World, Heinemann, London 1984.

Cheryl Payer, The World Bank: A Critical Analysis, Monthly Review Press, New York and London 1981.

For a good case study of the role of IMF/World Bank conditionality at the country level, see: V.R. Jose, Mortgaging the Future: The World Bank and IMF in the Philippines, Foundation for Nationalist Studies, 1984.

For other country experiences see:

Akmal Hussain: "Through the Economic Minefield", Economic and Political Weekly, Bombay, February 1989.

Tony Killick (ed), The IMF and Stabilization: Developing Country Experiences.

6. Paul Prebisch, "Towards a New Trade Policy for Development:, Report of the Secretary General of UNCTAD, United Nations 1984.

7. G. Myrdal, Asian Drama, Vintage Books, New York 1970.

8. Paul Baran, The Political Economy of Growth, Monthly Review Press, New York 1957.

9. A.G. Frank, "The Development of Underdevelopkent:, in Latin America: Underdevelopment or Revolution, Monthly Review Press, New York and London.

10. A. Emmanuel, Unequal Exchange, Monthly Review Press, New York and London.

11. Samir Amin, Unequal Development, the Harvester Press, Sussex 1976.

12. Rosa Luxemburg, The Accumulation of Capital, Monthly Review Press, New York and London 1968.

13. V. I. Lenin, "Imperialism the Highest State of Capitalism", in Collected Works, 4th ed. Vol 22, Foreign Languages Press, Moscow 1964.

14. E. Lee (ed), Export Led Industrialization and Development, ILO, Geneva 1981.

15. P. Patnaik, "Recent Growth Experience of the Indian Economy. Some Comments", Economic and Political Weekly, Bombay, May 1987.

16. P.A. Samuelson, Foundations of Economic Analysis, Harvard University Press, Cambridge 1955.

17. R.E. Lucas (Jr.), "Optimal Investment and Rational expectations", in Lucas and Sargent (ed), Rational Expectations and Econometric Practice, University of Minnesota Press, Minneapolis 1981.

18. M. Friedman, "the Role of Monetary Policy", American Economic Review, No. 58, 1968.

19. World Commission on Environment and Development, Our Common Future, Oxford University Press, Delhi 1987.

20. Ibid.

21. See: T. Vestergaard and K. Schroder, The Language of Advertising, Basil Blackwell, Oxford 1985.

22. Scitovsky, op.cit.

23. Ibid.

24. Phyllis Deane, "The Long Term Trends in World Economic Growth", Malayan Economic Review, October 1961.

25. E. J. Mishan, The Cost of Economic Growth, London 1969.

26. World Commission, op.cit.

27. J. M. Keynes, The General Theory of Employment Interest and Money, Macmillan, London 1963.

28. M. Kalecki, Theory of Economic Dynamics, Allen and Unwin, London 1954.

29. R.F. Harrod, Towards a Dynamic Economics, Macmillan, London 1948.

30. E.D. Domar, Essays in the Theory of Economic Growth, Oxford University Press, Oxford 1957.

31. Harrod, op. cit.

32. See: A.K. Sen (ed), Introduction, Growth Economics, Penguin Modern Economics, England 1970.

33. Joan Robinson, "Harrod's Knife Edge", in Collected Economic Papers, Vol. 3, Basil Balckwell, Oxford 1965.

34. Human Development Report, 1990, UNDP, Oxford University Press, 1990.

35. i) Vandana Shiva, Staying Alive - Women, Ecology and Development, Zed Books, London 1989.

ii) Arrow and A.C. Fisher, "Environmental Preservation, Uncertainty and Irreversibility", Quarterly Journal of Economics, May 1974.

iii) A.C. Fisher, "Environmental Externalities and the Arrow Link Theorem", American Economic Review, 1974.

36. A. Dasgupta and D.W. Pearce, Cost Benefit Analysis: Theory and Practice, Macmillan, London 1972.

37. I.M.D. Little and J.A. Mirelees, Project Appraisal and Planning for Developing Countries, Heinemann, London 1974.

38. A.K. Sen, "Control Areas and Accounting Prices: An approach to Economic Evaluation", Economic Journal, No. 82, Special Issue, 1972.

39. G.V.S. de Silva, W. Haque, N. Mehta, A. Rahman and P. Wignaraja, Towards a Theory of Rural Development, Progressive Publishers, Lahore 1988.
40. (i) David Pearce and Giles Atkinson, Measuring Sustainable Development, in David Bromley (ed.): The Handbook of Environmental Economics Blackwell, Oxford, 1995.
(ii) Hartwick, J.M., National Income Accounting and Economic Depreciation, Journal of Public Economics, 1990, No. 43.
(iii) Solow, R.M. An almost practical step towards sustainability, Paper presented to Resources For the Future (RFF), Washington, D.C., 1992.

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