Gerschenkron: Economic Backwardness in Historical Perspective (Chapter 1)

Gerschenkron, Alexander. (1962). Economic backwardness in historical perspective, a book of essays. Cambridge,: Belknap Press of Harvard University Press.

A historical approach to understanding how countries develop written in 1962. There is an explicit call to modesty, and a claim that, “the search is no longer for a determination of the course of human events as ubiquitou8s and invariant as that of the course of the planets” (5). Much of this chapter reads like E.H. Carr.

Many of the characteristics of countries that move suffering from “economic backwardness” to development (should probably be “economic forwardness”) can be mapped following a similar path. However, while these developments are similar, they are not altogether the same. Thus, with the advent of new technologies and advancements in economic ideology, the developments of these less well-off countries can change.

Developments proceeded first in England, and they were spurned on by an increasing labor market, improved technology, the support of the banking sector, the state and the buttress of ideology (Smith, Ricardo, etc.). Economic developments then proceeded in Germany and finally Russia, each with distinct characteristics, though all with the support of the above mentioned institutions.

Additionally, as these three countries developed, the relationship amongst the abovementioned institutions also changed. An example of German banking related to industry is given. Eventually, banking and industry move beyond a “master/slave” relationship and towards something more equal.

Ending this chapter, we look at ideology. The rise of Saint-Simonian ideas is examined. These ideas are explicitly socialist, but they eventually are used to bolster a capitalist system of production. The author notes that development occurs in such strange ways. “Capitalist industrialization under the auspices of socialist ideologies may be, after all, less surprising in a phenomenon than would appear at first sight” (25). I would add that the same may be argued from the opposite perspective.

Concluding, we are offered three ways that the industrial development of Europe can be potentially illuminating vis-à-vis the economic problems of the time: 1.) the conditions on the ground in the backward countries created the desire for this development; 2.) the concentration on technological leap-frogging (not a term used in the text) and mega-building wasn’t for ego, but development; and 3.) while tried and true development tactics are used to move countries out of economic backwardness, these are always coupled with indigenous methods that aid in conforming the development to the specific context.