Title page book Een leefbare aarde

Een leefbare aarde ---- The mistake of Tinbergen

Publication: N.V. Uitgeversmaatschappij Agon Elsevier (1970, Amsterdam/Brussels)

First insertion on Heterodox Gazette Sam de Wolff: 10 august 2015

E.A. Bakkum is a blogger for the Sociaal Consultatiekantoor. He loves to reflect on the labour movement.

The book Een leefbare aarde is the fifth publication of the famous Dutch economist Jan Tinbergen, which is discussed here on the Heterodox Gazette1. This book differs from the previous ones, because the argument is more political than economical. In 1955 Tinbergen has left the Centraal Planbureau, and since that moment he increasingly works for the United Nations (in short UN). He becomes a valued consultant. In 1965 he becomes the chairman of the committee for development planning of the UN, which is in essence a political function. In fact, at the time the UN is torn apart by a power struggle between at least three blocks, namely the capitalist industrial states, the Leninist people's republics, and the remaining group of independent states. Then the Third World is still in the periphery of one of the three blocks. In retrospect it is an absurd and surreal epoch2.

Tinbergen in his position of chairman of the committee has become a spokesman of the UN. This requires the utmost of his political skill and flexibility, so that he must struggle to remain above the parties. The book Een leefbare aarde is the final proof of his political skills, because in essence it is a popular version of the UN report, which has been published in 1970 by his committee. In the report an analysis is made of ways to further the development of the poorest states (commonly called the Third World). In his book Tinbergen often refers to this as poverty relief, although strictly speaking this does not necessarily coincide with development. He acknowledges, that his committee is quite divided, so that the report becomes rather incoherent, "and not (although sometimes) in the form of a compromise, or in the form of a synthesis" (p.169).

Preceding his description of the UN report, Tinbergen presents his own views about some conditions for economic development of the Third World. Fascinating is especially chapter five, which describes the human behaviour that is required for the economic development. Essential is that the society values entrepreneurship. This includes properties such as the thrift spirit, and the willingness to invest in the distant future. There must be a conscience, that the material improvement of the personal life is possible, and that moreover it contributes to happiness. The ordered benevolence begins at the personal level. Whereas the west has realized its advantages since centuries, the Third World states are still stuck in a feudal attitude, mixed with destructive traditions and structures. The traditional way of life is an obstacle for democratization, for cooperations and for making compromises.

On p.67 Tinbergen states that a national culture can be modernized, and he is undoubtedly right. Both the state and the industries can contribute to this by establishing schools, in combination with compulsory education. Change is essential. Besides, the growth of the population must be curbed by means of family planning. In East-Asia this modernization has succeeded, incidentally mainly after the publication of this book. Now Tinbergen and his committee demand, that the west will subsidize the facilities in the Third World. This is evidently not a surprise, because the Third World has a majority in the committee. Tinbergen adds, that poverty is a source of conflicts and violence, which will also hurt the west. Your reviewer sees also the reverse causality: a violent rule is an obstacle for development. Central Africa is a clear example3.

Tinbergen believes that states, which have plenty of raw materials, must partly save the yield in order to invest (p.45). That is also a form of thrift spirit. At the time there is still the idea, that development must necessarily include a phase of industrialization. Tinbergen demands also here, that the west provides the capital goods. Unfortunately the Third World states will not benefit from them, as long as they have insufficient trained personnel4. Tinbergen proposes as the solution the use of simple techniques, which mainly use the factor labour5. Furthermore he makes the radical proposal to regulate the internal division of labour at the central level, by means of global agreements (see p.106 and further, as well as p.164). Then the free markets are eliminated. In a table Tinbergen already makes suggestions for this division (p.108)6.

Tinbergen also likes to flatten the economic conjuncture. Especially the prices on the markets of raw materials are quite capricious. Tinbergen even calls these markets unstable, and demands that henceforth they are controlled by means of plans in commodity agreements. It has already been remarked, that Tinbergen also advocates a capital transfer from the modern west to the Third World. For this purpose he wants to establish a global ministry of finance (p.192)! These proposals can probably be explained by his intense fear for a war. Tinbergen wants to build a bridge between capitalism and Leninism. For this reasons he once developed the convergence theory, which expects in the future an economic convergence of the two rivaling systems (p.122). It must be concluded, that Tinbergen exhibits enthusiasm for excessively dismantling western capitalism. This does not serve the common good.

It is obvious that Tinbergen has principally always been a propagandist for central planning. However, in 1970 it was already apparent that planning is not the hoped wonderful remedy. It is regrettable that nonetheless the scientist Tinbergen sticks to the formation of plans, and even becomes more dogmatic. The committee pleads in favour of a capital transfer from the western states of 0.75% of the gross domestic product (so independently of the investments by western enterprises; p.165). On p.180 he voices his opinion, that 2% GDP is also conceivable. Nevertheless, his underpinning for this enormous transfer is poor. And he certainly does not consider, that development aid might be counter-productive, for instance because the beneficiaries may become lazy7.

Although his UN report has been passed by the General Assembly of the UN, Tinbergen must state indignantly that most western states do not believe in such rigorous capital transfers. The proposal is not executed. Nonetheless, in his final chapter he presents a blueprint for a world government. That government must dispose of a "peace corps", although it is unclear what exactly Tinbergen wants to do with this (p.200). Your reviewer believes that here the text loses touch with the earthly reality, and becomes purely utopian - even when it is taken into account that later the Leninist ideology collapsed. It is all too phantastic.

It is a rather sad end of a book, that now and then excels more by indignation and good intentions than by practically usable solutions (see also the footnotes of this review). Anyway, your reviewer is glad, that the proposed measures of Tinbergen have never been executed. They are unsound. Tinbergen naturally remains a talented economist, and Een leefbare aarde contains many useful insights and arguments. But as a political document (which it mainly is), it was already outdated at the moment, when it was published.

  1. Just like many other books of Jan Tinbergen, the Erasmus University in Rotterdam offers also Een leefbare aarde as a free download. (back)
  2. Absurd situations are often a bit hilarious. It is incidental, that the career of the cabaret performer Wim Kan peaks at approximately the same time as the career of Tinbergen, with as a welcome consequence that there are relevant jokes about foreign developments. Already in 1956 Kan mocks: "There are so many Chinese. You can eat chinese two times each week, but that does not help". The black-and-white television emerges, and brings the world in the living room. In 1958 Kan ponders in his radio performance: "Is TV able to make us happier? It enriches family life? It enrages it! 350.000 watchers and no seers. All waiting for the fun". In 1973 the Netherlands is in the middle of the oil crisis. According to the Arab states in the OPEC cartel, the Netherlands is too pro-Israel, and the OPEC calls an oil boycott. There is a shortage of oil, and the economic dependence of the Third World becomes apparent. On New Year's Eve Kan, now on TV, says: "Sparingly passing the threshold. When they in the east would see us merrily drinking to our health, we do not get another drop. (...) Adult people afraid in the dark. Camels on the wallpaper. (...) Do we bow in the white sand for the magic monopoly? Or do we say, Jan de Wit [Dutch hero EB] never got a drop of oil?". And he mocks: "Belgium has renamed the national monument into Little man Sheikh" [this pun fails in English EB]. Nevertheless the Leninists remain the biggest threat for the west. Kan stresses this: "Marcus Bakker [the then leader of the Dutch communist party EB] says: sheikhs do not exist. It are agents of Shell". Fortunately, the oil supply is soon resumed, but the oil prices remain excessively high. Therefore Kan says on New Year's Eve 1976: "In the past the wise came from the east, now it is the prices". And he states about the Russian (Leninist) threat, again topical: "I do think that the Russians will come, but one by one". In 1979 Kan mocks the minister of development cooperation, Jan Pronk, who at the time was known for his consumption of alcohol: "Pronk was the minister of development conspiracy. In Africa he was welcomed like a pope. Sometimes he was carried out of the plane!". (back)
  3. On p.33 Tinbergen states that people in poor living conditions are more inclined to choose a career in the army. This argument does not really convince. On the contrary, development aid can maintain violence. For, the development aid is often skimmed by the domestic elite, which subsequently uses these funds for armament. Unfortunately, the arguments of Tinbergen are regularly unsound; for instance, on p.41 he states that money for space research can better be spent on combatting poverty. On p.198 he calls economists "lackeys of the politicians", because they have made proposals for the structure of a war economy. All such phrases are worthless, and they are unexpected, considering the rational nature of Tinbergen. Your reviewer believes that he may have been shocked by his experiences during his UN working visits. (back)
  4. This problem has occurred in practice, when during the seventies there was an abundance of oil dollars. Then the South-American states have lent capital on a large scale in order to industrialize rapidly, but subsequently they did not succeed in making their industries profitable. It is a good illustration of the high priority, that must be given to a good governance and a sound organization. They are indispensable for the success of investments. (back)
  5. This indeed often happens, for instance when on a conveyor-belt for bottling the caps are screwed on the bottles by hand. Nevertheless, sometimes the factor labour will not be capable of realizing the product quality, which is possible with the factor capital. Thus the proposal of Tinbergen sounds logical, but it may be difficult to realize in practice. (back)
  6. Previously Tinbergen had supported the common standpoint, that the international division of labour will be realized by means of the market forces. See International economic integration (1954, Elsevier). (back)
  7. The mistake of Tinbergen can partly be explained by the success of the American Marshall aid, which in Europe has contributed to a rapid economic growth. Tinbergen could observe this process at a close distance, as the then director of the CPB. Later it was understood, that the success is mainly due to the availability of human and social capital in Europe. Therefore the capital goods are immediately highly profitable, and it is done. Unfortunately the Third World does not have these vital ingredients. One may wonder, whether the plea of Tinbergen to use a 0.75% GDP norm would have caused an immense waste of capital. In the Netherlands the 0.7-0.8% GDP norm was even an almost inviolable dogma for a long time. But what is primarily needed, is a domestic government, which is willing to be efficient and to create modern institutions. Change must be supported. Only in such a society the citizens of the Third World will be able to determine their own fate. Besiders, it irritates, that the western citizens were hardly informed about the actual destination of their obligatory remittance. The expenditure of financial aid often lacks transparency, although it is known that here corruption is not an exception. (back)