Short note on the theory of social dualism

Theory of social dualism

Dualism theories assume a split of economic and social structures of different sectors so that they differ in organisation, level of development, and goal structures. Usually, the concept of economic dualism differentiates between two sectors of economy.

The traditional subsistence sector consists of small-scale agriculture, handicraft and petty trade, has a high degree of labour intensity but low capital intensity and little ‘division of labour; the modern sector of capital-intensive industry and plantation agriculture produces for the world market with a capital-intensive mode of production with a high division of labour.

The two sectors have little relation and interdependence and develop each according to its own pattern. The modem sector can be considered an economic enclave of industrial countries, and its multiplication and growth effects will benefit the industrial countries but have little effect on the internal market. Several authors stress the dualism of specific factors.

Eckhaus, for instance, differentiates, in his concept of technological dualism, between labour and capital- intensive sectors. Change explains regional dualism as a lack of communications and exchange between regions, the capital sometimes being an island which, in geographical terms, belongs to the developing country, in economic terms, however, to the industrialised country.

Economic, technological, and regional dualism are often the consequence of a social dualism, the absence of relationships between people of different race, religion, and language, which, in many cases, is a legacy of colonialism.

Development in dualism concepts is the suppression of the traditional sector by concentrating on and expanding the modern sector. In time, it is assumed that the trickle down effects will reduce and abolish dualism. In this line of thinking, the main problem is capital formation because its degree determines the scope and speed of expansion of the modern sector.

In general, agriculture has to provide the resources, labour as well as capital, for expanding the modem sector. Some authors like Lewis and Fei/Ranis assumed that a reduction of the labour force in agriculture, because of the widespread disguised unemployment, would not reduce agricultural production.

The productive employment of these labourers in the modern sector would increase the total production of the economy and hence priority of investment in industry is necessary.

Concentration on the modern sector led to an increasing regional disparity, rural urban migration, urban unemployment, a decrease in agricultural production, and hindrance in industrial development because of a lack of purchasing power in the rural areas.

The anticipated trickle-down effects hardly ever happened. In praxis, development plans following this line of thinking led to failures like the early Indian development planning.

Therefore, other authors, like Jorgenson, Lele, and Mellor, emphasise the important role of agriculture at the beginning of development, i.e., proceeding or parallel to industrial development in order to provide enough internal resources for the development process.

Boeke’s theory:

On closer investigation of Boeke’s argument, the basis for his dualistic theory proves to be a distinction between “economic” and “social” needs. While economic activity in the West, according to prevailing economic theory, was based on the all- powerful stimulus of economic needs, the Indonesian peasant, according to Boeke, was guided fundamentally by social needs.

On this basis, Boeke has evolved a dualistic theory,-the core of which is that the economic laws that were found valid for capitalistic society are not applicable to societies in which capitalism lives side by side with a peasant economy still largely ruled by precapitalistic relationships.

It was Boeke’s view that the introduction of fracture capitalism into a precapitalist peasant economy not only disturbed the equilibrium of the latter economic system, but obstructed the gradual development of capitalistic forms comparable to those in the evolution of the Western economy.

In Boeke’s view, this type of dualism prevailed in politically independent countries outside the Western world as well as in colonial territories. He included southeastern Europe and the whole of Asia, Africa, and Latin America in this dualistic world, not even excepting Japan.

Therefore, even if, in a specific region, an end was put to colonial rule and political independence was achieved, this would not put an end to economic dualism: indigenous capitalists are as far removed from the precapitalist peasant society as foreign ones.