From Subsistence to Exchange and Other Essays

by P.T. Bauer, Peter Tamas Bauer, Peter Bauer

Book Overview

Peter Bauer, a pioneer of development economics, is an incisive thinker whose work continues to influence fields from political science to history to anthropology. As Nobel Laureate Amartya Sen writes... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 0691006679
• ISBN13: 9780691006673
• Release Date: March 2000
• Publisher: Princeton University Press
• Length: 168 Pages
• Weight: 0.95 lbs.
• Dimensions: 0.8" x 6.0" x 9.0"

Customer Reviews

The perfect intro to Bauer's work

Bauer's writings range from the economic to the political. Being a black sheep in the development community meant he was often his own apologist: spilling lots of ink to justify his assumptions as well as speak out on what he saw as being wrong with the development literature of his time. "From Subsistence to Exchange" is a great intro to Bauer's thought, with a tight collection of short essays /lectures spanning the range of his concerns, and a bibliography detailed enough to guide further reading. The preface by Amartya Sen gives a brief snapshot of the man and his place in development economics from one of the discipline's greatest living authorities. At 148 pages you get a feel for him quickly and can decide for yourself if he warrants further study. The book is not as useful for those who know him already through his more detailed studies but for the newcomer this is simply a great place to start.

An unsurpassed introduction to the economics of development

Peter Tamas Bauer, later made Baron Bauer by a grateful British government, was an unlikely, and in my opinion heroic, economist. Baron Bauer was born in Habsburg Hungary, and emigrated to Great Britain when its political climate became uncongenial. After some years of working for banks in the third world, he returned to England, where he somewhat reluctantly became a professor of economics, and the Diogenes of development economists. At the time, economics was still greatly influenced by the economic theories advanced in the 1930s, when FDR for somewhat complicated reasons preferred to use fiscal rather than monetary policy to resolve the Great Depression. Economists were getting away with saying that less developed countries had no chance of becoming more developed unless they, the economists specialized in development, were given carte blanche to transfer significant sums of money to the third world, and allowed them to manage the economy. This, of course, provided them and the politicians with whom they had allied themselves, with many sinecures, and numerous sources of patronage and graft. Peter Bauer didn't go along with this, and for many years was a voice in the wilderness, lamenting that economics had been taken over by a claque of charlatans. This book, with its introduction by a Nobel Prize winning economist, is one of his many books that are critical examinations of the dogmas of the economics of development, in which he expounds, in wonderful prose, on why many of the claims made by these economists defy common sense, and cannot be true. For example, he explains why the theory that the developing nations cannot develop without outside capital cannot be true; if outside capital were a condition sine qua non for economic development, the developed countries would never have been able to develop. I could go on and on. To read Bauer's writing today, when China is growing rapidly is to read the work of a vindicated economical heretic. Nevertheless, the clarity and elegance of his prose, many of his insights into human nature, and the arrant arrogance of many politicians and economics are as timely as ever. His calls for responsible behavior, and emphasis on the fact that history is nothing less than the consequences of our actions are as timely as ever. If your child is interested by politics or economics, or you are an academic wondering if it's not worth selling out to the erroneous party line, this book is well worth your while. Bauer was once a voice in the wilderness, today he's vindicated, and his ideas have done so much to advance the plight of the world's poorest, which, I suspect, is why Baron Bauer didn't pursue a more lucrative job in the business world. Contrary to the claims of another reviewer, this is not the work of a reactionary; Baron Bauer was deeply skeptical of nation/building, imposing solutions from think tanks continents away, and the very idea that the English-speaker knows best, ideas which have

Beyond the economics of self-denial

"We have sunk to such a depth that the restatement of the obvious has become the first duty of intelligent men." So wrote George Orwell, whom Peter Bauer quotes approvingly. Indeed, "From Subsistence to Exchange" is little more than an attempt to dispel popular misconceptions in the conventional wisdom of development economics. The heart of Lord Bauer's argument is to take issue with the widespread excuses that have been put forth to explain why certain countries seem unable to prosper. Writing in times when state planning was in its intellectual apogee, Lord Bauer offered an alternative where the role of the individual and the market were central.From this basic outlook follow many attacks on the fallacies of development economics. Lord Bauer dismisses with great ease the assumption that countries are poor due to the lack of adequate resources: at some point, he writes, every country was poor; if infusion of capital was a necessary condition for growth, then the West would still be living in the Stone Age.But Lord Bauer does not stop there. He takes on other issues such as foreign aid. Not only is foreign aid based on the false premise of the vicious cycle of poverty, but it also creates a mentality of dependence. Even worse, the result in the recipient countries is the emergence of powerful interests whose sole purpose is to obtain a bigger piece of the aid cake.Why then do rich countries offer so much aid? The answer for Lord Bauer is simple: guilt. Western and African intelligentsia does what it can to cultivate the belief that Africa's evils are of European doing. No matter that the evidence for this claim is scant or non-existent. After all, Lord Bauer writes, Africans were poor before Europeans got there and remain poor for long after they have left. In the end, the message is clear. The legacy of post-war development economics was to construct a distorted image of why some countries are rich and some poor. At the basis of the convolution was the desire to find excuses for the failure to grow economically. "From Subsistence to Exchange" is a collection of essays that have rescued us from this intellectual trap.

Enlightening

The other reviewers are generally spot on with their comments about this collection of Bauer's works: wonderful, even if a little repetitive. I myself found the repetition useful for most of the book, even if the feeling of déjâ vu came over me once in a while. I'll thus say nothing more in general except that his writing style is erudite and fluid but gets a little arcane at a few points (especially in the first few essays).As for the essays themselves: they're all great. My favorites were "Subsistance to Exchange," "Western Guilt," "Hong Kong," "Class on the Brain" and "Egalitariansim." These are penetrating in their analysis and effective in their prose. The last was truly inspirational as an attack on the foundations of egalitarianism."Eclessiatical Economics" was an interesting demonstration of the contradiction of the Vatican's position on development, but lacked some of the oomph of the others. "Liberal Death Wish" had the oomph and was interesting, but seemed a little of a diatribe, but can serve as an effective summary to most of the entire collection of essays. The title is a little misleading too, as Bauer doesn't discuss either classical-liberals or how left-"liberals" might have a death wish, except for western guilt. The others are almost too short to call essays, but still worthwhile.While Bauer doesn't set out to expound the free-market or classical-liberal policies, per se, it's clear he feels that they are more likely to hold the keys to economic development than the vicious-cycle-of-poverty theory or western guilt.Bastiat would be proud that classical-liberals can still write like this.

Excellent introdiction to Bauer and great as a stand-alone

"From Subsistence to Exchange: and other essays" (FSE), is a wonderfully insightful little book that throws light on the problems of the Third World economies, egalitarianism, the "mathematized" economics profession, and, among other things, offers rigorous arguments against foreign aid and Western guilt (for allegedly causing Third World poverty).I found this book to be both a great introduction to development economics and Peter Bauer, as well as a handy catalog of refutations of popular economic myths. Additionally, the critical essay on the mathematization of the economics profession is valuable: It helps to buttress Bauer's thesis that economics is not an "ivory tower profession" (my words): It is a social science that must rely heavily on historical investigation and direct observation; it is not, nor can it ever be, like the natural sciences of physics and chemistry. The attempt to make it more "respectable" by hiding simple truths among complex formulae, or worse, by deriving conclusions from mathematical models that do not resemble the real world, has resulted in putting elaborate clothes on a non-existent emperor (Bauer's words). It has also fueled fallacious attacks on the entire field and reduced both public understanding of and respect for economics. Bauer's essay on that topic is a breath of fresh air. In discussing popular myths, Bauer tackles the "viscous circle of poverty," among numerous others, e.g., that the West is rich because the Third World is poor. Often these myths are based on similar false premises. For example, the refutation of the vicious circle argument also undermines the exploitation one (noted above). Here's how: If the vicious circle of poverty is correct, then this statement is also: Without outside investment, third world countries cannot break out of the circle of poverty, because they can not save in order to invest in capital, because they live at a subsistence level and (usually) produce only enough to meet short-term needs. Bauer states it better, but that's a decent summary. Bauer takes this to the limit of its logic: If the above were true, then the human race could never have left the stone age: the world never received capital (or any) investment from outside of itself. The vicious circle argument ignores the factors that Bauer notes are crucial to finding answers to economic problems: namely, "that economic performance depends on personal, cultural, and political factors, on people's aptitudes, attitudes, motivations, and social and political institutions." That kind of outlook, intuitively valuable, is inimical to modern applied "mathecomics," the practitioners of which typically deride an outlook like Bauer's as mere "empiricism." Indeed, Bauer discusses just such a caricature. The argument against the circle of poverty implies that there is no fixed amount of income to be distributed. Again, for someone with an eye on economic history, that should be intuitively true. Yet if there is no fixed