Peter T. Bauer’s The Rubber Industry: a Study in Competition and Monopoly (1948) (review: http://www.jstor.org/stable/2226882) is regarded by many historians of colonial economic history as a brilliant application of neoclassical theory to the realities of agricultural development in the tropics. Bauer demonstrated that smallholders in Malaysia were more efficient in producing rubber (Hevea brasiliensis) than large plantations, and that policies designed to support plantation agriculture were not only inefficient, but actively harmful to rural populations engaged in smallholder commodity production.
Bauer’s contemporaries were not as enthusiastic. This morning I was reviewing notes from a 2016 visit to the UK National Archives, and came across P. Selwyn’s report on Bauer’s work for the British Colonial Office in West Africa in the late 1940s (http://discovery.nationalarchives.gov.uk/details/r/C1217567). Bauer advocated a return to free trade for Britain’s colonial empire, decrying colonial and nationalist ideas for planned development. Selwyn thought Bauer was “a monstrous anachronism,” blind to the particularities of colonial capitalism.
Selwyn noted that in many countries, “the automatic working of Mr Bauer’s and Adam Smith’s ‘hidden hand’ have not prevented the emergence of extremes of wealth and poverty – and a poverty which becomes more rather than less acute.” Bauer’s report on West African trade was effectively a piece of neoclassical propaganda: “when he is faced with allegations of exploitation of peasant producers by traders he finds many reasons for doubting whether these can be true, but when … he is faced with allegations of corruption and tyranny by petty Government officials, he is far more ready to believe them.”
Selwyn also had harsh words for Dudley Seers (a founding father of development economics) and C.R. Ross, who had just completed a report on Ghana’s development plan. Seers is remembered today as an early opponent of crude neoclassicism in development economics, but Selwyn was no fan. He argued that the Seers and Ross report “can do positive harm, since it can encourage Governments to put a strait-jacket on the expansion of the economy under the misguided impression that they are protecting it from inflation.”
In effect, Selwyn anticipated the nationalist development discourse of the independence era in Africa, which decried neoclassical gradualism as a plot to keep Africa poor.
Jonathan Robins 