The Uses of Diversity. David Ellerman

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СКАЧАТЬ specific set of biological or rather ecological analogies that to my knowledge have not been emphasized elsewhere in the economics of development literature. The economic unit for development, for Jacobs, is not a country but a city and its surrounding region. To set up an analogy between a city and an ecological system, she gives a sketch of the energy flows in an ecological system.

      Organized energy comes free from the sun but its trajectory within an ecology will depend on the complexity of the system. The two extremes could be taken as a desert and a rain forest. A rain forest and a desert at the same latitude would have about the same amount of solar energy arriving per unit area. In the case of the desert, it is essentially a sterile conduit; the energy comes in during the day and is dissipated at night. Little is captured; it is a throughput operation. The opposite is the case for the rain forest. Much energy is captured through the photosynthesis of its plants. Then the stored energy is passed around in a complex diversified web of relationships until it is finally dissipated through leakages. Plants die and decay to feed other plants. Plants are eaten by herbivores who are eaten by carnivores. All animals give off waste products and eventually die to feed other organisms directly or through decay.

      At first glance, the economic analogue to incoming energy would seem to be incoming money either as payments for exports, as proceeds in a loan, or as remittances from abroad. The funds would then have a multiplier effect on the local economy seemingly similar to the cascades of energy going from one stage to another until finally dissipated. But Jacobs specifically does not use that analogy.

      Rather, Jacobs constructs the ecological analogy by taking the imports—as incoming bundles of embodied knowledge and know how—coming into an economic settlement as being analogous to the incoming organized energy. If development is conceptualized as a form of social learning, then it is clearer why it is imports—like new useful books arriving in the mail—that are key to developmental learning, not exports. Lacking the free energy of the sun, there must still be some exports of commodities or services to fund the imports. The exports could originally be natural resource based as with oil, gas, or minerals or they could be derived from agriculture. The exports could be manufactured goods that might range all the way from just the assembly of imported parts or kits to goods that result from an extensive chain of domestic value-added operations. Or the exports could be some form of services, as in a community supported by remittances from migrant workers,³ a community supported by tourism, an Indian reservation funded by a casino, a retirement community living off pension income (past services), or a Bangalore-type operation (selling software services) which might be part of a more complex operation of products and by-products. One way or another, an economic settlement needs to fund its imports.

      It is the way imports are used—primary, intermediate, final, or producer goods—that separate the economic “deserts” from the “rain forests.” A settlement is more like a desert when the imports are dissipated in consumption or are incorporated directly into the (enclave) production of what is exported. The settlement is a rather straightforward economic conduit.

      A settlement is more like a rain forest when the imports feed into a diversified web of local value chains—some goods being inputs into many other products or spawning import replacements. The imports spread out like a river delta to directly and indirectly feed a diverse weblike “ecology” of economic activities.

      Jacobs’s vision of a developed economy recalls the famous “tangled bank” (i.e., “bank” of a stream) passage in the closing paragraph of Darwin’s Origin of Species (sixth edition):

      It is interesting to contemplate a tangled bank, clothed with many plants of many kinds, with birds singing on the bushes, with various insects flitting about, and with worms crawling through the damp earth, and to reflect that these elaborately constructed forms, so different from each other, and dependent upon each other in so complex a manner, have all been produced by laws acting around us. (Darwin 2009)

      With the tangled bank image, Darwin surpasses older imagery to arrive at a modern ecological vision of life that Jacobs has reimported into the study of economies (in considerable contrast to the crude competition-as-survival-of-the-fittest analogies that have appealed to so many economists):

      The image of the great Chain of Life if ordered, hierarchic, and static, essentially medieval; the great Tree of Life is ordered, hierarchic, but dynamic and competitive, a Renaissance vision; but the great Tangled Bank of Life is disordered, democratic, and subtly interdependent as well as competitive, essentially a modern vision. (Hyman 1966, 33)

      The most sterile or inert desert-like settlements are the settlements based essentially on direct consumption of imports such as communities living off migrant worker remittances, retirement communities living off pensions (and income from capital invested elsewhere), and military bases. Not far behind are the settlements based on one stage of production with little local value-added such as agricultural- or natural-resource-based towns, tourist centers, casinos on Indian reservations, company towns, and labor-intensive assembly or processing enclaves. These are more like economic deserts—perhaps with one variety of cactus—than economic rain forests.

      Thus, we get a clear contrast in definitions of development. By a living standards or consumption-oriented definition of development (e.g., gross domestic product [GDP]), an economic settlement made rich by pumping out oil would be “developed.” For instance, in the World Bank, the oil-rich Gulf States qualify as Part 1 “developed” countries, not as Part 2 developing countries. But by Jacobs’s productivist definition, such an economy is just a big pipe—an economic conduit—not a tangled bank. The oil exports fund imports which are then consumed, that is, dissipated, rather than feeding into a web of value-added activities and manufactured products some of which might be exported for the oil-independent funding of future imports. A city built in the desert just by oil is still a “desert” from Jacobs’s productivist or capabilities-based viewpoint.⁴

      To become more ramified and complex, an economic settlement should have multiple uses for imports to produce diversified and multistaged products with a significant part for local use. Each specialization to achieve some static efficiency should be accompanied by the diversification of outputs into various product niches, by backward integration to produce previously imported inputs, and perhaps by unexpected recombinant matings with nearby processes and products to produce novel offspring.⁵ These are the innovations from “human capital externalities” that tend to happen when diverse people with various skills and complementary knowledge jostle together in companies and when a symbiotic web of sectorally diverse companies jostle together in cities.

      How Adam Smith Got It Wrong

      The jostling together of diverse people and skills spawns the diversifying sideways jumps from specialized old work to new work in a nearby field. “For instance, making forgings for one purpose develops skills and enterprises that can be drawn upon for other purposes. An economy that can produce improved fish-canning machinery can feasibly produce improved furniture-making machinery” (Jacobs 1980, 60). Paul Bairoch supports Jacobs on this point that “the diversity of urban activities quite naturally encourages attempts to apply or adopt in one sector (or in one specific problem area) technological solutions adopted in another sector” (Bairoch 1988, 336).

      This combinatorial view of innovation⁶ was key to the contagious innovation that made the Industrial Revolution. As one of the leading historians of the Industrial Revolution wrote:

      All these gains, plus the invention of machines to build machines, came together in the last third of the eighteenth century—a period of contagious novelty. Some of this merging stream of innovation may have been a lucky harvest. But no. Innovation was catching because the principles that underlay a given technique could take many forms, find many uses. If one could bore cannon, one could bore the cylinders of steam engines. If one could print fabrics by means of cylinders (as against the much slower block printing), one could also print wallpaper that way; or СКАЧАТЬ