Kalyan Sanyal, Rethinking Capitalist Development: Primitive Accumulation, Governmentality & Post-Colonial Capitalism, Routledge, 2007.
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Kalyan Sanyal’s Rethinking Capitalist Development is widely cited for its view that informality tends to persist. But to my limited knowledge nobody who cites it pays close attention to the central argument advanced – an argument that not only is demonstrably false, but also betrays a fundamental lack of understanding of the political economy of development. It is that in the 1970s the idea of development as ‘planning for accumulation’ gave way – apparently for ever - to a focus on the part of the relevant international organizations on the promotion of welfare through direct intervention, in a project of ‘legitimizing capital’s existence by resorting to a reversal of primitive accumulation for providing entitlements to the dispossessed’ (191):
‘I … claim that the development discourse in this era of capital is reorganizing itself entirely in relation to the world of the dispossessed produced by capitalist accumulation, and now it is governmentality in a form that is far more complex, with far greater material effectivity, than before. Its goal is to constitute an economic space outside and alongside capital, for its castaways, rather than to create entitlements for them through redistribution of income. Development is very much alive and kicking; only instead of identifying itself with capital, it now seeks to create the conditions of existence of the latter on the basis of an agenda of its own' (ibid, emphasis mine).
The White Queen urged Alice (in Wonderland) to believe six impossible things before breakfast. Sanyal does the same: first, that international organizations led by the World Bank came to the view in the 1970s that the bulk of the world’s poor were effectively denied any prospect of economic progress within the capitalist world economy; second, that this was seen to represent a threat not to the expansion of capitalism per se, but to its global political and ideological legitimation; third, that this made it essential that the process of ‘primitive accumulation’ should be reversed; fourth, that a separate ‘needs-based’ economic space had therefore to be created and maintained; fifth, that Robert McNamara’s 1973 Address to the Governors of the World Bank in Nairobi marked the public announcement of this project; and sixth, that subsequent World Bank policy advice (specifically, the 1980 World Development Report) advanced it.
The first two chapters trace the steps that lead Sanyal to this point. First, capitalist development does not erode non-capitalist economic processes, but rather brings them into existence in its own course (7): ‘While on the one hand, the process of primitive accumulation … leads to the destruction of the pre-capitalist sectors, on the other, it simultaneously produces a space that necessitates the recreation of those sectors’ (39). Second, ‘post-colonial capitalism’ is a stable complex of capital and non-capital, already in place, and not subject to further transition (40). Third, taking Foucault’s ‘Ship of Fools’ as a metaphor, capitalist development shapes a ‘wasteland’ inhabited by the marginalized and dispossessed (45), a ‘structural unity’ (47) of capital and the sub-economy of the marginalized, from which there is no escape:
‘Primitive accumulation of capital … produces a vast wasteland inhabited by people whose lives as producers have been subverted and destroyed by the thrust of the process of expansion of capital, but for whom the doors of the world of capital remain forever closed’ (53).
Fourth:
‘What is to be noted is that here Marx defines self-subsistence [of capital] entirely in terms of the economic requirements, i.e. the requirement of labor power and capital - both constant and variable. The implicit assumption is that when capital’s economic conditions of existence are created and can be reproduced, the political and ideological conditions of existence are automatically ensured. But once we take into account the wasteland and its inhabitants as an outside of capital, the latter ceases to be self-subsistent even though it is capable of creating and reproducing its economic conditions of existence on its own. For its political and ideological conditions of existence, capital is not self-constituting and to secure the legitimation of its existence, it has to address the outside in politico-ideological terms’ (59).
Fifth:
‘In other words, capital’s political and ideological conditions of existence require that the dispossessed producers inhabiting the outside be reunited with means of labor so that they can subsist by engaging in economic activities outside the domain of capital. What follows is a process whereby the means of labor are made to flow from the domain of capital to its outside where producers are reunited with the means of production to engage in non-capitalist production. More specifically, a part of the surplus produced in the capitalist sector is not transformed into new capital but transferred to the surplus population to constitute the conditions of existence of non-capitalist production. While primitive accumulation seeks to transform the means of labor into capital and subsume them within the domain of capitalist relations, this process of transfer is a reverse flow that extricates them from the space of capital and reunites them with labor. I characterize this decapitalization of means of labor as a reversal of primitive accumulation' (ibid, emphasis original).
And sixth (the clincher)
'The result is a need-based economy in which the dispossessed are rehabilitated in non-capitalist production activities; and the rehabilitation, I further argue, is made possible by interventions brought about by the discourse of development' (ibid, emphasis original).
I imagine Sanyal gleefully smacking his palm with his fist, and shouting, ‘Yes!! Brilliant!!”. Or words to the same effect. And in what follows, he is precise in his interpretation of the discourse of development: ‘development does not see the solution to the problem of poverty necessarily in terms of an overall capitalist transformation; its emphasis rather is on re-energization of traditional non-capitalist institutions and forms of production to be used as effective instruments for achieving the goal set in terms of consumption or standard of living of the marginalized and the dispossessed’ (65); this task is allocated to ‘a global project to be undertaken, planned, and executed by global developmental organizations and footloose NGOs’ (77); and specifically:
‘In the early 1970s, this view of development as an all-encompassing, macrolevel transformation yielded place to a different notion of development that aimed at meeting the needs of the poor of the third world - needs defined in terms of nutrition, shelter, health, and education - in direct ways that are not necessarily mediated by a program of overall “transformation” of the traditional order’ (88).
Sanyal seeks to highlight this shift in three successive moments of the discourse of development (97-8): the first, in which accumulation serves as its nodal point, and the process of development is identified with the process of primitive accumulation of capital (Chapter Three); the second, in which the continued existence of absolute poverty necessities a ‘de-essentialization’ of development (Chapter Four); and the third, ‘where a complex form of hegemony is discernible within which the reproduction of post-colonial capital, and its dominance, are assured’ (Chapter Five). In accordance with my focus here, I pass over the (fairly conventional) third chapter to focus on the detail of the moment of ‘de-essentialization of development’ as set out in Chapter Four.
Here Sanyal claims that World Bank President Robert McNamara’s 1973 speech in Nairobi to his Board of Governors inaugurated a new strategy of ‘alleviation of direct poverty as a goal distinct from accumulation and growth’ (169, emphasis mine); that this strategy brought to the fore ‘the state’s welfarist role’ (170; cf. 172-3, emphasis mine); that as the ‘arising of capital’ leaves in its wake a surplus population who constitute a space outside capital’s own realm, development can now claim the legitimacy of capital’s existence only by ensuring subsistence to the dispossessed inhabitants of the wasteland that surrounds the world of capital, so that development now means ‘a reversal of primitive accumulation’. So, ‘the discourse distances itself from the (sic) capital’s own agenda, and the space of development emerges as a space distinct from the one in which the story of the modes of production and capital is inscribed’; and development ‘is no longer synonymous with the project of an overall capitalist transformation of the economy’, but ‘these interventions in turn legitimize the existence of capital by “taking care of its castaways”’ (174-5). In short, Sanyal produces a dualist model in which capital voluntarily accepts a welfare programme outside its own space in order to legitimize itself, at the very same time that it was leading the charge to do away with the welfare state in its own. New ‘nodal points’ (need, entitlement, and capability, taken from Amartya Sen) ‘discursively reconstitute the state and represent it as an active agent engaged in designing and implementing welfare promoting redistributive policies’ (180, emphasis mine).
There is not a shred of evidence anywhere to support this admittedly ingenious argument. Sanyal himself makes brief reference to McNamara’s 1973 speech and to the 1980 World Development Report, but in neither case does he find anything remotely to the point, and he has not read either source with care. If he had, he would have noticed this from McNamara, for a start, under the heading of ’The Trade Problem’:
The core of the trade problem for the bulk of the developing countries is that they cannot expand their exports rapidly enough to pay for their essential imports. These imports are themselves often the key to greater export capability - and higher foreign exchange earnings - and thus the dilemma of trade imbalances in these countries tends to become self-perpetuating. The problem is compounded by the delay of the wealthy nations in dismantling discriminatory trade barriers against the poor countries. Our studies indicate, for example, that if the affluent nations were gradually to reduce their present protectionist trade restrictions against agricultural imports from the developing world, the poorer nations could, by 1980, increase their annual export earnings by at least $4 billion’ (McNamara 1973: 5).
The Bank retained a liberal commitment to free trade, and was seeking in this period, as was the OECD, to persuade the advanced economies to remove protection that hindered its development on a global scale. At the same time, it fully embraced the incipient (neo-)liberal turn away from a strategy of development of the modern urban sector subsidized by adverse terms of trade imposed on the rural sector (Bhagwati and Desai 1970; Little, Scitovsky and Scott 1970; Belassa 1971). So when McNamara turned to the alleviation of absolute poverty, he committed the Bank to ‘far greater emphasis on policies and projects which will begin to attack the problems of absolute poverty to which I referred earlier - far greater emphasis on assistance designed to increase the productivity of that approximately 40% of the population of our developing member countries who have neither been able to contribute significantly to national economic growth, nor to share equitably in economic progress’ (ibid: 9-10; emphasis mine). Specifically, ‘the poverty problem revolves primarily around the low productivity of the millions of small subsistence farms’, and therefore ‘there is no viable alternative to increasing the productivity of small-scale agriculture if any significant advance is to be made in solving the problems of absolute poverty in the rural areas’ (ibid: 13, 14, emphasis mine). And this in turn was the basis for long-term stable economic growth that could significantly reduce levels of absolute poverty:
‘it is obvious that no attempt to increase the productivity of subsistence agriculture can succeed in an environment of overall economic stagnation. The small farmers cannot prosper unless there is significant growth in other sectors, both to provide the development resources they will require, and to create the demand for their additional output - The point is that the reverse is also true – and it is time we recognized it. Without rapid progress in smallholder agriculture throughout the developing world, there is little hope either of achieving long-term stable economic growth or of significantly reducing the levels of absolute poverty’ (ibid: 14).
Contrary to the claims made by Sanyal, this was explicitly a strategy for growth based on increased productivity in the small rural sector, not at all a welfare programme aimed to support subsistence outside the market. And it was one which envisaged greater engagement in the world market, rather than isolation from it. In short, it was precisely a project for ‘an overall capitalist transformation of the economy’ of the kind that Sanyal claimed had been abandoned. McNamara described it as an effort to ‘duplicate the conditions which have led to the very rapid agricultural growth in a few experimental areas and in a few countries so as to stimulate agricultural growth and combat rural poverty on a broad scale’ (ibid: 16); and he proposed a target growth rate of 5 per cent per year within ten years. Detailed recommendations for implementation followed, beginning with land and tenancy reform and better access to credit.
Sanyal took another wrong turn when he interpreted the Bank’s concern with providing health care, housing and education for the poor as evidence of a ‘welfarist’ role, rejecting at the same time an alternative perspective that made much more sense. So, he began a short section on ‘capital and governance’ by asking: ‘What then is the relationship between governmentality and capital? Is the promotion of welfare an end in itself? Or does the state govern on behalf of capital?’ (173). He then asserted that Foucault ‘does not relate the new conceptualization of power to the question of the reproduction of capital’s conditions of existence’, suggested that the connection between governance and the hegemony of capital ‘remains invisible’ (174), and went on:
‘One can search for this connection in the context of the advanced capitalist societies of the West, explore how governmental interventions in the sphere of health, education, employment, sexuality and so forth converge to consolidate the rule of capital. But that is not what we want to pursue here. We would rather place the idea of governmentality as a form of power in the context of post-colonial capitalist development and the hegemony process—the narrative we are trying to build in this book—to bring this connection into visibility’ (ibid, emphasis mine).
This was a big mistake. First, despite his heavy reliance on Foucault throughout, he was apparently unaware of the latter’s explicit identification of investment in health, nutrition, education and the like as a policy of growth based on the building of human capital:
‘On the basis of this theoretical and historical analysis we can thus pick out the principles of a policy of growth which will no longer be simply indexed to the problem of the material investment of physical capital, on the one hand, and of the number of workers, [on the other], but a policy of growth focused precisely on one of the things that the West can modify most easily, and that is the form of investment in human capital. And in fact we are seeing the economic policies of all the developed countries, but also their social policies, as well as their cultural and educational policies, being orientated in these terms. In the same way, the problems of the economy of the Third World can also be rethought on the basis of human capital. And you know that currently an attempt is being made to rethink the problem of the failure of Third World economies to get going, not in terms of the blockage of economic mechanisms, but in terms of insufficient investment in human capital’ (Foucault [2004] 2010: 232, emphasis mine).
Second, the perspective he rejected was exactly the perspective of the World Bank, in the 1970s and ever since. And as it happens, even the minimal reference he makes to the 1980 World Development Report contradicts his persistent assertion that accumulation in the developing world has been abandoned as an objective:
‘Thus the discourse first produced its own critique of “growth essentialism” and then restructured the space of development on the basis of this auto-critique to posit the eradication of absolute poverty and accumulation as its dual objectives, with profound implications for the post-colonial developmental states’ (184, citing p. 36, emphasis mine).
So it was. The World Bank consistently advances the argument, in fact from its very first World Development Report, produced under the presidency of McNamara, that human development produces capitalist growth. Allow me, for convenience, to draw at length on the relevant section of The Politics of Global Competitiveness (Cammack 2022: 76-9):
‘The 1978-89 World Development Reports consistently condemned the protectionism and destabilising economic policies of the industrialised countries; on domestic policy, they consistently urged developing countries to focus on improving the productivity of the poor; and the thematic chapters included from 1983 complemented this central core. The very first report urged developing countries to consult with ‘an international forum such as the OECD’ on the policies required to facilitate the changes in industrial structure that shifting comparative advantage would require, and underlined in its closing sentence that ‘the current need to adjust is not a transient problem: it reflects a continuing, long-term, structural shift. It is important, therefore, that the implications and benefits of global interdependence be fully recognized. It will be to the advantage of all countries to sustain an international environment that supports the efforts of developing countries to sustain rapid growth and alleviate poverty as rapidly as possible (World Bank 1978: 66, 68). … The Bank’s position on developing the world market was identical to that of the OECD: it argued from the first that developed countries should not resort to protectionism to keep out manufactures from developing countries, as they would be ‘delaying some of the difficult structural adjustments that are necessary if there is to be a return to a higher growth path’. Open trade policies, in contrast, would contribute to growth by ‘fostering a division of labor that accelerates the upgrading of skills and labor productivity in industry, encouraging technological progress’, providing an inflow of manufactured articles at lower prices that would reduce inflation, and ‘stimulating growth in the developing countries, causing a further expansion in the markets for the industrialized countries' exports’ (ibid: 14). …
Against this background, it was the need to improve the productivity of the poor that was the dominant theme. ‘Progress in the developing countries,’ the first report stated, ‘will require a combination of three elements: maintaining high rates of growth in incomes; modifying the pattern of growth so as to raise the productivity and incomes of the poorer sections of the population; and improving the access of the poor to essential public services’. It drew attention to the need to raise the productivity of ‘those who have some access to productive assets such as land, even if only as tenants’, and to ‘increase employment opportunities in both urban and rural areas, particularly by encouraging more labor-intensive patterns of production’. And it went on to spell out further what would be its constant message: ‘the employment problem in developing countries is not long-term joblessness as conventionally understood, but absence of productive earning opportunities, so that long hours of hard work yield only small incomes’. At the same time, the poor ‘suffer not only from low incomes but also from inadequate access to public services essential to their health and productivity’ (ibid: 26). As a consequence, it promoted from the start strategic intervention rather than laissez faire:
Because the poor tend to share less than proportionately in growth, since they have only limited access to productive assets, education, and employment, deliberate action is necessary in areas that affect the distribution of increases in income. These include the structure of economic incentives, the allocation of investments, and the creation of special institutions and programs to increase the productivity of the poor and their opportunities for employment (ibid: 65).
Successive reports elaborated extensively on this theme. The 1979 report identified labour and land as the productive assets owned by the poor, and argued that the most desirable approach to eliminating poverty was to augment and encourage their productive use, in part through land reform (World Bank 1979: 91, 93), and in 1980 the Bank expanded on the issue of poverty and human development, the latter term embracing education and training, better health and nutrition, and fertility reduction (World Bank 1980: 32, 46-70):
Economic growth comes about in two ways, both of which can be powerfully influenced by government policy. One is building up a larger stock of productive assets and human skills. The other is increasing the productivity of these assets, skills, and the country's natural resources. This involves moving capital and labor between sectors, developing new institutions, inventing and introducing new techniques of production and new products, making better choices among existing techniques, and taking steps to cut costs and eliminate waste. Growth thus involves continuous change – it has aptly been described as a process of perpetual disequilibrium (ibid: 36). ...
The focus throughout was on producing productive workers for capital: ‘Many of the noncognitive effects of schooling – receptivity to new ideas, competitiveness, and willingness to accept discipline – are directly relevant to productive economic activity,’ it suggested, while others, such as tolerance, self-confidence, and social and civic responsibility, were ‘more personal or political in nature, but may also affect economic performance’ (ibid: 47). It stressed the importance of primary education, for girls in particular, in part on account of its impact upon the next generation’s health, fertility and education (ibid: 49, and box, p. 50). The underlying formula was simple: ‘human development increases productivity, reduces fertility, and thus promotes long-term growth in average incomes’ (ibid: 81); or alternatively, in the 1981 report: ‘Human development links the creation of productive work opportunities for the poor with the provision of goods and services to meet their essential needs’ (World Bank,1981: 97).’
The conclusion is inescapable. ‘Development’ may not necessarily see the solution to the problem of poverty in terms of an overall capitalist transformation, but the World Bank certainly did, and it shaped its global project accordingly; and a ‘notion of development that aimed at meeting the needs of the poor of the third world—needs defined in terms of nutrition, shelter, health, and education’ might address them ‘in direct ways that are not necessarily mediated by a program of overall “transformation” of the traditional order’ – but the World Bank’s notion of development did not.
On this evidence, then, Sanyal’s attempt to ‘extricate the post-colonial story entirely from the historical materialist framework’ (38) did not go well. Take what he says about ‘development discourse’ away, and not much remains by way of explanation for the persistence of informality. And as Gidwani and Wainwright (2014) pointed out a decade ago, his reading of Marx and his argument for an ‘inescapable dualism’ that constitutes the ‘post-colonial economic’ (212, cf. 251) are no more persuasive. He is right, of course, that capital in its process of accumulation continually produces and reproduces a surplus of workers, and Martha Gimenez and I (2024) have recently explored this theme. But the direction he takes from there is burdened with such glaring errors and contradictions that his work provides an unsound platform on which to build.
References
Balassa, Bela. 1971. The Structure of Protection in Developing Countries. Baltimore: Johns Hopkins
University Press.
Bhagwati, Jagdish, and Padma Desai. 1970. India: Planning for Industrialization. New York: Oxford
University Press.
Cammack, Paul, and Martha Gimenez. 2024. ‘The permanent global crisis of working-class social reproduction: ten propositions’, Global Political Economy, Early View.
Foucault, Michel. [2004] 2010. The Birth of Biopolitics. New York: Picador.
Gidwani, Vinay, and Joel Wainwright. 2014. ‘On Capital, Not-Capital, and Development’, Economic & Political Weekly, 49, No. 34, 40-47.
Little, Ian, Tibor Scitovsky, and Maurice Scott. 1970. Industry and Trade in Some Developing Countries. Oxford: Oxford University Press.
McNamara, Robert. 1973. Address to the Board of Governors, Nairobi, Kenya, 24 September. Washington DC: IBRD.
‘I … claim that the development discourse in this era of capital is reorganizing itself entirely in relation to the world of the dispossessed produced by capitalist accumulation, and now it is governmentality in a form that is far more complex, with far greater material effectivity, than before. Its goal is to constitute an economic space outside and alongside capital, for its castaways, rather than to create entitlements for them through redistribution of income. Development is very much alive and kicking; only instead of identifying itself with capital, it now seeks to create the conditions of existence of the latter on the basis of an agenda of its own' (ibid, emphasis mine).
The White Queen urged Alice (in Wonderland) to believe six impossible things before breakfast. Sanyal does the same: first, that international organizations led by the World Bank came to the view in the 1970s that the bulk of the world’s poor were effectively denied any prospect of economic progress within the capitalist world economy; second, that this was seen to represent a threat not to the expansion of capitalism per se, but to its global political and ideological legitimation; third, that this made it essential that the process of ‘primitive accumulation’ should be reversed; fourth, that a separate ‘needs-based’ economic space had therefore to be created and maintained; fifth, that Robert McNamara’s 1973 Address to the Governors of the World Bank in Nairobi marked the public announcement of this project; and sixth, that subsequent World Bank policy advice (specifically, the 1980 World Development Report) advanced it.
The first two chapters trace the steps that lead Sanyal to this point. First, capitalist development does not erode non-capitalist economic processes, but rather brings them into existence in its own course (7): ‘While on the one hand, the process of primitive accumulation … leads to the destruction of the pre-capitalist sectors, on the other, it simultaneously produces a space that necessitates the recreation of those sectors’ (39). Second, ‘post-colonial capitalism’ is a stable complex of capital and non-capital, already in place, and not subject to further transition (40). Third, taking Foucault’s ‘Ship of Fools’ as a metaphor, capitalist development shapes a ‘wasteland’ inhabited by the marginalized and dispossessed (45), a ‘structural unity’ (47) of capital and the sub-economy of the marginalized, from which there is no escape:
‘Primitive accumulation of capital … produces a vast wasteland inhabited by people whose lives as producers have been subverted and destroyed by the thrust of the process of expansion of capital, but for whom the doors of the world of capital remain forever closed’ (53).
Fourth:
‘What is to be noted is that here Marx defines self-subsistence [of capital] entirely in terms of the economic requirements, i.e. the requirement of labor power and capital - both constant and variable. The implicit assumption is that when capital’s economic conditions of existence are created and can be reproduced, the political and ideological conditions of existence are automatically ensured. But once we take into account the wasteland and its inhabitants as an outside of capital, the latter ceases to be self-subsistent even though it is capable of creating and reproducing its economic conditions of existence on its own. For its political and ideological conditions of existence, capital is not self-constituting and to secure the legitimation of its existence, it has to address the outside in politico-ideological terms’ (59).
Fifth:
‘In other words, capital’s political and ideological conditions of existence require that the dispossessed producers inhabiting the outside be reunited with means of labor so that they can subsist by engaging in economic activities outside the domain of capital. What follows is a process whereby the means of labor are made to flow from the domain of capital to its outside where producers are reunited with the means of production to engage in non-capitalist production. More specifically, a part of the surplus produced in the capitalist sector is not transformed into new capital but transferred to the surplus population to constitute the conditions of existence of non-capitalist production. While primitive accumulation seeks to transform the means of labor into capital and subsume them within the domain of capitalist relations, this process of transfer is a reverse flow that extricates them from the space of capital and reunites them with labor. I characterize this decapitalization of means of labor as a reversal of primitive accumulation' (ibid, emphasis original).
And sixth (the clincher)
'The result is a need-based economy in which the dispossessed are rehabilitated in non-capitalist production activities; and the rehabilitation, I further argue, is made possible by interventions brought about by the discourse of development' (ibid, emphasis original).
I imagine Sanyal gleefully smacking his palm with his fist, and shouting, ‘Yes!! Brilliant!!”. Or words to the same effect. And in what follows, he is precise in his interpretation of the discourse of development: ‘development does not see the solution to the problem of poverty necessarily in terms of an overall capitalist transformation; its emphasis rather is on re-energization of traditional non-capitalist institutions and forms of production to be used as effective instruments for achieving the goal set in terms of consumption or standard of living of the marginalized and the dispossessed’ (65); this task is allocated to ‘a global project to be undertaken, planned, and executed by global developmental organizations and footloose NGOs’ (77); and specifically:
‘In the early 1970s, this view of development as an all-encompassing, macrolevel transformation yielded place to a different notion of development that aimed at meeting the needs of the poor of the third world - needs defined in terms of nutrition, shelter, health, and education - in direct ways that are not necessarily mediated by a program of overall “transformation” of the traditional order’ (88).
Sanyal seeks to highlight this shift in three successive moments of the discourse of development (97-8): the first, in which accumulation serves as its nodal point, and the process of development is identified with the process of primitive accumulation of capital (Chapter Three); the second, in which the continued existence of absolute poverty necessities a ‘de-essentialization’ of development (Chapter Four); and the third, ‘where a complex form of hegemony is discernible within which the reproduction of post-colonial capital, and its dominance, are assured’ (Chapter Five). In accordance with my focus here, I pass over the (fairly conventional) third chapter to focus on the detail of the moment of ‘de-essentialization of development’ as set out in Chapter Four.
Here Sanyal claims that World Bank President Robert McNamara’s 1973 speech in Nairobi to his Board of Governors inaugurated a new strategy of ‘alleviation of direct poverty as a goal distinct from accumulation and growth’ (169, emphasis mine); that this strategy brought to the fore ‘the state’s welfarist role’ (170; cf. 172-3, emphasis mine); that as the ‘arising of capital’ leaves in its wake a surplus population who constitute a space outside capital’s own realm, development can now claim the legitimacy of capital’s existence only by ensuring subsistence to the dispossessed inhabitants of the wasteland that surrounds the world of capital, so that development now means ‘a reversal of primitive accumulation’. So, ‘the discourse distances itself from the (sic) capital’s own agenda, and the space of development emerges as a space distinct from the one in which the story of the modes of production and capital is inscribed’; and development ‘is no longer synonymous with the project of an overall capitalist transformation of the economy’, but ‘these interventions in turn legitimize the existence of capital by “taking care of its castaways”’ (174-5). In short, Sanyal produces a dualist model in which capital voluntarily accepts a welfare programme outside its own space in order to legitimize itself, at the very same time that it was leading the charge to do away with the welfare state in its own. New ‘nodal points’ (need, entitlement, and capability, taken from Amartya Sen) ‘discursively reconstitute the state and represent it as an active agent engaged in designing and implementing welfare promoting redistributive policies’ (180, emphasis mine).
There is not a shred of evidence anywhere to support this admittedly ingenious argument. Sanyal himself makes brief reference to McNamara’s 1973 speech and to the 1980 World Development Report, but in neither case does he find anything remotely to the point, and he has not read either source with care. If he had, he would have noticed this from McNamara, for a start, under the heading of ’The Trade Problem’:
The core of the trade problem for the bulk of the developing countries is that they cannot expand their exports rapidly enough to pay for their essential imports. These imports are themselves often the key to greater export capability - and higher foreign exchange earnings - and thus the dilemma of trade imbalances in these countries tends to become self-perpetuating. The problem is compounded by the delay of the wealthy nations in dismantling discriminatory trade barriers against the poor countries. Our studies indicate, for example, that if the affluent nations were gradually to reduce their present protectionist trade restrictions against agricultural imports from the developing world, the poorer nations could, by 1980, increase their annual export earnings by at least $4 billion’ (McNamara 1973: 5).
The Bank retained a liberal commitment to free trade, and was seeking in this period, as was the OECD, to persuade the advanced economies to remove protection that hindered its development on a global scale. At the same time, it fully embraced the incipient (neo-)liberal turn away from a strategy of development of the modern urban sector subsidized by adverse terms of trade imposed on the rural sector (Bhagwati and Desai 1970; Little, Scitovsky and Scott 1970; Belassa 1971). So when McNamara turned to the alleviation of absolute poverty, he committed the Bank to ‘far greater emphasis on policies and projects which will begin to attack the problems of absolute poverty to which I referred earlier - far greater emphasis on assistance designed to increase the productivity of that approximately 40% of the population of our developing member countries who have neither been able to contribute significantly to national economic growth, nor to share equitably in economic progress’ (ibid: 9-10; emphasis mine). Specifically, ‘the poverty problem revolves primarily around the low productivity of the millions of small subsistence farms’, and therefore ‘there is no viable alternative to increasing the productivity of small-scale agriculture if any significant advance is to be made in solving the problems of absolute poverty in the rural areas’ (ibid: 13, 14, emphasis mine). And this in turn was the basis for long-term stable economic growth that could significantly reduce levels of absolute poverty:
‘it is obvious that no attempt to increase the productivity of subsistence agriculture can succeed in an environment of overall economic stagnation. The small farmers cannot prosper unless there is significant growth in other sectors, both to provide the development resources they will require, and to create the demand for their additional output - The point is that the reverse is also true – and it is time we recognized it. Without rapid progress in smallholder agriculture throughout the developing world, there is little hope either of achieving long-term stable economic growth or of significantly reducing the levels of absolute poverty’ (ibid: 14).
Contrary to the claims made by Sanyal, this was explicitly a strategy for growth based on increased productivity in the small rural sector, not at all a welfare programme aimed to support subsistence outside the market. And it was one which envisaged greater engagement in the world market, rather than isolation from it. In short, it was precisely a project for ‘an overall capitalist transformation of the economy’ of the kind that Sanyal claimed had been abandoned. McNamara described it as an effort to ‘duplicate the conditions which have led to the very rapid agricultural growth in a few experimental areas and in a few countries so as to stimulate agricultural growth and combat rural poverty on a broad scale’ (ibid: 16); and he proposed a target growth rate of 5 per cent per year within ten years. Detailed recommendations for implementation followed, beginning with land and tenancy reform and better access to credit.
Sanyal took another wrong turn when he interpreted the Bank’s concern with providing health care, housing and education for the poor as evidence of a ‘welfarist’ role, rejecting at the same time an alternative perspective that made much more sense. So, he began a short section on ‘capital and governance’ by asking: ‘What then is the relationship between governmentality and capital? Is the promotion of welfare an end in itself? Or does the state govern on behalf of capital?’ (173). He then asserted that Foucault ‘does not relate the new conceptualization of power to the question of the reproduction of capital’s conditions of existence’, suggested that the connection between governance and the hegemony of capital ‘remains invisible’ (174), and went on:
‘One can search for this connection in the context of the advanced capitalist societies of the West, explore how governmental interventions in the sphere of health, education, employment, sexuality and so forth converge to consolidate the rule of capital. But that is not what we want to pursue here. We would rather place the idea of governmentality as a form of power in the context of post-colonial capitalist development and the hegemony process—the narrative we are trying to build in this book—to bring this connection into visibility’ (ibid, emphasis mine).
This was a big mistake. First, despite his heavy reliance on Foucault throughout, he was apparently unaware of the latter’s explicit identification of investment in health, nutrition, education and the like as a policy of growth based on the building of human capital:
‘On the basis of this theoretical and historical analysis we can thus pick out the principles of a policy of growth which will no longer be simply indexed to the problem of the material investment of physical capital, on the one hand, and of the number of workers, [on the other], but a policy of growth focused precisely on one of the things that the West can modify most easily, and that is the form of investment in human capital. And in fact we are seeing the economic policies of all the developed countries, but also their social policies, as well as their cultural and educational policies, being orientated in these terms. In the same way, the problems of the economy of the Third World can also be rethought on the basis of human capital. And you know that currently an attempt is being made to rethink the problem of the failure of Third World economies to get going, not in terms of the blockage of economic mechanisms, but in terms of insufficient investment in human capital’ (Foucault [2004] 2010: 232, emphasis mine).
Second, the perspective he rejected was exactly the perspective of the World Bank, in the 1970s and ever since. And as it happens, even the minimal reference he makes to the 1980 World Development Report contradicts his persistent assertion that accumulation in the developing world has been abandoned as an objective:
‘Thus the discourse first produced its own critique of “growth essentialism” and then restructured the space of development on the basis of this auto-critique to posit the eradication of absolute poverty and accumulation as its dual objectives, with profound implications for the post-colonial developmental states’ (184, citing p. 36, emphasis mine).
So it was. The World Bank consistently advances the argument, in fact from its very first World Development Report, produced under the presidency of McNamara, that human development produces capitalist growth. Allow me, for convenience, to draw at length on the relevant section of The Politics of Global Competitiveness (Cammack 2022: 76-9):
‘The 1978-89 World Development Reports consistently condemned the protectionism and destabilising economic policies of the industrialised countries; on domestic policy, they consistently urged developing countries to focus on improving the productivity of the poor; and the thematic chapters included from 1983 complemented this central core. The very first report urged developing countries to consult with ‘an international forum such as the OECD’ on the policies required to facilitate the changes in industrial structure that shifting comparative advantage would require, and underlined in its closing sentence that ‘the current need to adjust is not a transient problem: it reflects a continuing, long-term, structural shift. It is important, therefore, that the implications and benefits of global interdependence be fully recognized. It will be to the advantage of all countries to sustain an international environment that supports the efforts of developing countries to sustain rapid growth and alleviate poverty as rapidly as possible (World Bank 1978: 66, 68). … The Bank’s position on developing the world market was identical to that of the OECD: it argued from the first that developed countries should not resort to protectionism to keep out manufactures from developing countries, as they would be ‘delaying some of the difficult structural adjustments that are necessary if there is to be a return to a higher growth path’. Open trade policies, in contrast, would contribute to growth by ‘fostering a division of labor that accelerates the upgrading of skills and labor productivity in industry, encouraging technological progress’, providing an inflow of manufactured articles at lower prices that would reduce inflation, and ‘stimulating growth in the developing countries, causing a further expansion in the markets for the industrialized countries' exports’ (ibid: 14). …
Against this background, it was the need to improve the productivity of the poor that was the dominant theme. ‘Progress in the developing countries,’ the first report stated, ‘will require a combination of three elements: maintaining high rates of growth in incomes; modifying the pattern of growth so as to raise the productivity and incomes of the poorer sections of the population; and improving the access of the poor to essential public services’. It drew attention to the need to raise the productivity of ‘those who have some access to productive assets such as land, even if only as tenants’, and to ‘increase employment opportunities in both urban and rural areas, particularly by encouraging more labor-intensive patterns of production’. And it went on to spell out further what would be its constant message: ‘the employment problem in developing countries is not long-term joblessness as conventionally understood, but absence of productive earning opportunities, so that long hours of hard work yield only small incomes’. At the same time, the poor ‘suffer not only from low incomes but also from inadequate access to public services essential to their health and productivity’ (ibid: 26). As a consequence, it promoted from the start strategic intervention rather than laissez faire:
Because the poor tend to share less than proportionately in growth, since they have only limited access to productive assets, education, and employment, deliberate action is necessary in areas that affect the distribution of increases in income. These include the structure of economic incentives, the allocation of investments, and the creation of special institutions and programs to increase the productivity of the poor and their opportunities for employment (ibid: 65).
Successive reports elaborated extensively on this theme. The 1979 report identified labour and land as the productive assets owned by the poor, and argued that the most desirable approach to eliminating poverty was to augment and encourage their productive use, in part through land reform (World Bank 1979: 91, 93), and in 1980 the Bank expanded on the issue of poverty and human development, the latter term embracing education and training, better health and nutrition, and fertility reduction (World Bank 1980: 32, 46-70):
Economic growth comes about in two ways, both of which can be powerfully influenced by government policy. One is building up a larger stock of productive assets and human skills. The other is increasing the productivity of these assets, skills, and the country's natural resources. This involves moving capital and labor between sectors, developing new institutions, inventing and introducing new techniques of production and new products, making better choices among existing techniques, and taking steps to cut costs and eliminate waste. Growth thus involves continuous change – it has aptly been described as a process of perpetual disequilibrium (ibid: 36). ...
The focus throughout was on producing productive workers for capital: ‘Many of the noncognitive effects of schooling – receptivity to new ideas, competitiveness, and willingness to accept discipline – are directly relevant to productive economic activity,’ it suggested, while others, such as tolerance, self-confidence, and social and civic responsibility, were ‘more personal or political in nature, but may also affect economic performance’ (ibid: 47). It stressed the importance of primary education, for girls in particular, in part on account of its impact upon the next generation’s health, fertility and education (ibid: 49, and box, p. 50). The underlying formula was simple: ‘human development increases productivity, reduces fertility, and thus promotes long-term growth in average incomes’ (ibid: 81); or alternatively, in the 1981 report: ‘Human development links the creation of productive work opportunities for the poor with the provision of goods and services to meet their essential needs’ (World Bank,1981: 97).’
The conclusion is inescapable. ‘Development’ may not necessarily see the solution to the problem of poverty in terms of an overall capitalist transformation, but the World Bank certainly did, and it shaped its global project accordingly; and a ‘notion of development that aimed at meeting the needs of the poor of the third world—needs defined in terms of nutrition, shelter, health, and education’ might address them ‘in direct ways that are not necessarily mediated by a program of overall “transformation” of the traditional order’ – but the World Bank’s notion of development did not.
On this evidence, then, Sanyal’s attempt to ‘extricate the post-colonial story entirely from the historical materialist framework’ (38) did not go well. Take what he says about ‘development discourse’ away, and not much remains by way of explanation for the persistence of informality. And as Gidwani and Wainwright (2014) pointed out a decade ago, his reading of Marx and his argument for an ‘inescapable dualism’ that constitutes the ‘post-colonial economic’ (212, cf. 251) are no more persuasive. He is right, of course, that capital in its process of accumulation continually produces and reproduces a surplus of workers, and Martha Gimenez and I (2024) have recently explored this theme. But the direction he takes from there is burdened with such glaring errors and contradictions that his work provides an unsound platform on which to build.
References
Balassa, Bela. 1971. The Structure of Protection in Developing Countries. Baltimore: Johns Hopkins
University Press.
Bhagwati, Jagdish, and Padma Desai. 1970. India: Planning for Industrialization. New York: Oxford
University Press.
Cammack, Paul, and Martha Gimenez. 2024. ‘The permanent global crisis of working-class social reproduction: ten propositions’, Global Political Economy, Early View.
Foucault, Michel. [2004] 2010. The Birth of Biopolitics. New York: Picador.
Gidwani, Vinay, and Joel Wainwright. 2014. ‘On Capital, Not-Capital, and Development’, Economic & Political Weekly, 49, No. 34, 40-47.
Little, Ian, Tibor Scitovsky, and Maurice Scott. 1970. Industry and Trade in Some Developing Countries. Oxford: Oxford University Press.
McNamara, Robert. 1973. Address to the Board of Governors, Nairobi, Kenya, 24 September. Washington DC: IBRD.