Lecture Presentation on the works and views of Gunnar Myrdal

2. • He was an active leader of the Swedish
Social Democratic Party.
• He was a Senator. A minister of
Commerce.
• After WWII he was executive secretary of
the United Nations Economic Commission
for Europe.

3. • Myrdal’s discussed problems of poor
countries
• It has three major themes:
A. widening gap between rich and poor
countries
B. standard economic theory is
inadequate to narrow the gap
C. governments in poor countries must
play large role in promoting economic
development.

4. Poor Countries
WB, 2012

5. Top 10 Poorest Countries in the
World – 2017 List
1 – Malawi (GDP per capita
of $226.50) . Holding a population of 16
million while also being one of the smallest African
nation doesn’t set you up for accumulation or
distribution of wealth. Arguable the most
underdeveloped nation in the world, Malawi suffers
greatly in essentially all categories available. Access to
education, general standard of healthcare,
infrastructure, and quality of living conditions are all
limited or substandard. Because the nation is unable to
develop in general, they’re for all intents and purposes
stuck with trying to drive their economy using only the
most primitive levels of agriculture. With common
weather variations, as well as injuries and fatalities
facilitated by poor health care, Malawi’s world lowest
GDP per capita of $226.50 doesn’t seem like it will be
rising too significantly any time soon.
http://gazettereview.com/201
6/06/top-10-poorest-
countries-world/

6. 2 – Burundi (GDP per capita
of $267.10) Having suffered from
recurring violence and political disputes, it is
no surprise that Burundi ranks as the
second poorest nation in the world, even
though the country is working tirelessly to
rebuild itself. Aside from the estimated
300,000 civilian casualties resulting in a 67
percent poverty rate, the violent political
rivalries were also detrimental to Burundi’s
agricultural development
Even now, the nation ravaged by war holds very little farmable land, and any land
that may be used for small-scale farming is still fragile due to the vulnerability to
shifting climates and weather conditions. With the population growing rapidly, food
prices rising, and a GDP per capita of $267.10, Burundi places as the second
poorest country in the world.

7. 3 – Central African
Republic (GDP per capita
of $333.20)
Like Liberia, the Central African Republic has in
the past been victim to war and significant political
instability. The landlocked central African nation
also supports very, very poor infrastructure, thus
limiting the efficiency of the distribution of the
nation’s resources. Furthermore, this nation also
shares similarities with most other African nations
in that its economy is mostly directed by
agriculture, although an estimated 45 percent of
the Central African Republic’s export revenues are
from diamonds. However, because of the poor
infrastructure and governance that the nation has
to deal with, only about 4 percent of the actual
arable land that the nation holds is actually used.
As a result, the majority of the working population
that works within the industry suffer immensely,
holding the nation to a GDP per capita of $333.20.

8. 4 – Niger (GDP per
capita of $415.40) Aside from
being one of the world’s poorest, Niger
stands as one of the world’s most
underdeveloped nations across several
categories. Although it continues to make
developments in reducing infant mortality,
and enhancing education, the development
category of poverty has unfortunately
remained rather stagnant, keeping the
nation’s GDP per capita at $415.40.
Niger’s economy is driven by two main
forces: the extraction of valuable natural
resources available within the nation
(including gold, uranium, and even oil), and
small-scale agriculture.
Unfortunately, both of these
economic sources can easily be
devastated by random shifts in
climate and weather, and thus
Niger has struggled in
developing themselves
economically

9. The Second Liberian Civil war was a conflict within
Liberia that lasted from 1999 all the way through
2003. A quick look at history will show that wars
generally don’t leave involved nations economically
intact as a result. Liberia is no exception to this.
Having just been subject to a 14 year-long political
conflict that not only ravaged lands, but also needed
to make use of some of Liberia’s already finite
resources, the nation was left economically crumbled
by the civil war. It is also of no benefit that Liberia is,
once again, primarily reliant on agriculture to drive its
economy. The GDP per capita of the war-torn nation
stands at $454.30, and in 2010, it was estimated that
more than 80 percent of the nation’s people were
living less with less than $1.25 per day. With low
yields due to old farming technologies, as well as
having overall poor infrastructure, Libera only marks
the halfway point down this list of the poorest
countries in the world.
5 – Liberia (GDP per capita of $454.30

10. 6 – Madagascar (GDP
per capita of $463.00)
Although this remains a list of the
world’s poorest nations, some of the
nations on this list are actually making
progress in securing economic stability
for themselves. Madagascar,
unfortunately, is not one of these
countries. Over the last 20 years, the
standard of living within this island
country has declined significantly. With
a population of more than 20 million
people, Madagascar has a GDP per
capita of $463.00, with about 70 percent
of the nation’s people living under the
poverty line.
Once again reliant primarily on
agriculture, the vulnerability of the
industry, lack of potent farming land,
and the growing population only make
their economic situation worse and
worse over time.

11. 7 – Democratic Republic of
the Congo (GDP per capita
of $484.20) Directly juxtaposing the
previous entry in the list, the Democratic
Republic of the Congo is Africa’s second
largest country, holding a staggering
population of roughly 77 million people. A
large population isn’t always a good thing
however, as (especially with poorer nations)
this just means there is less money to go
around. What is even more intriguing about
this case, however, is the fact that the
Democratic Republic of the Congo is actually
very rich in valuable natural resources.
Similarly, the land expands over 2.35 million
square kilometers, much of which is forests,
although it also holds a great expanse of
farmable lands and waters. In spite of all of
these things, the Democratic Republic of the
Congo has been subject to a very unstable,
living conditions.
Congo has been subject to a very
unstable, corrupt political system that
has been holding back the potential of
the nation’s wealth drastically. As a
result of this, with a GDP per capita of
$484.20, a large portion of the nation’s
people remain unemployed, and their
lack of money thus results in their living
within greatly inadequate living
conditions.

12. Next on the list is The Gambia, both one of the
African continent’s and poorest nations. With an
area of roughly 11,000 square kilometers, and a
population of roughly 1.8 million people, The
Gambia struggles immensely with trying to make
economic leaps forward. Although there are multiple
factors to consider, what is likely their biggest
hindrance is the lack of diversity within their
economic system. The Gambia relies primarily, and
almost solely, on farming and fishing to drive their
economy. Both of these are incredibly vulnerable to
poor weather conditions. It also doesn’t help that the
soil fertility of the farming land is typically low, further
decreasing both the quantity and quality of seasonal
yields. These alone causes several ripple effects
towards their economy and the subsequent living
conditions that the people of the nation have to
endure. With a GDP per capita of $488.60, and over
half of the population living well under the poverty
line, the people of The Gambia are subject to such a
poor standard of living that the nation falls into a
“hunger season” when rainfall is at its peak.
8 – The Gambia
(GDP per capita of
$488.60)

13. 9 – Ethiopia (GDP per capita of
$505.00)
Interestingly enough, Ethiopia has historically
been a relatively wealthy nation. Although
today, and throughout recent years, this
really hasn’t been the case. To its credit,
Ethiopia theoretically has the right practices
in place. They’ve been undergoing a large
political reform, one of the benefits of which
is the supposed facilitation of economic
growth and stability. In fact, since 2007,
Ethiopia has places itself above many sub-
Saharan African nations in terms of its
economic performance. Although regardless
of this, it remains one of the poorest nations
in the world, only holding a GDP per capita of
$505.00. This is a result of Ethiopia’s large
population, and dependence on a poorly
funded, underdeveloped, and vulnerable
agricultural industry as a staple in their
economy.

14. Typically, the wealth of a country is measured by its Gross Domestic Product
(GDP) per capita, which is the purchasing power of all goods and services
produced in a country, divided by its population. In essence, this defines the
purchasing power of a single person within the country. To begin this list is
Guinea, with a GDP per capita of $523.10. Guinea hasn’t seen a period of
economic stability since the 1990’s, when their mining and agricultural
industries did them well. Since then however, Guinea has fallen victim to
sever sociopolitical crises, which rapidly decayed the state of their economy.
Much of their economy is still
largely based on agriculture,
which is difficult because
farmers only have access to
outdated information and
obsolete technology, as
investors tend to shy away
from the nation entirely.
10 – Guinea (GDP per capita of $523.10)

15. Rich Nations

16. BRICS Countries

17. • Myrdal argued that the upper class of rich
nations is growing richer with a
momentum that slackens only during
occasional short periods.
• While underdeveloped countries are
moving slowly or not at all.

18. • A widening of markets strengthens the rich
and progressive countries whose
manufacturing industries have the lead
and fortified by external economies.
• While underdeveloped countries are in
continuous danger of having small scale
industry, handicrafts, priced by cheap
imports from industrial countries.

19. • The widening gap between the two groups
can be explained by “the principle of circular
and cumulative causation”.
• Myrdal endorsed Nurske’s analysis by citing
the vicious cycle of poverty and added a
reciprocal relationship of less poverty, more
food, improved health, and higher working
capacity to sustain a cumulative process
upward instead of downward.

20. • The main positive effect of international
trade on underdeveloped countries was to
promote the production of primary
products.
• Such production employing mostly
unskilled labor.

21. • The advice and assistance from the richer
nations to poorer nations is for them to
increase the production of primary
goods for export.

22. • Myrdal second theme was that orthodox
economic theory cannot explain or reverse
the growing gap between rich and poor
countries.
• The doctrine that all men aspire toward
economic equality is the universal idea
that links western philosophies of
conservatives and radicals, liberals and
socialists alike.

23. • He argued that Orthodox economic Theorists
tried to avoid the equality doctrine and
developed certain predilections as antidotes
to this dangerous thought.
• From John Stuart Mill on, leading device for
evading this issue was to draw a sharp line of
demarcation between sphere of production
and distribution.

24. • Since natural laws were supposed to reign in
the sphere of production, policy based on the
equality doctrine was restricted to distribution.
• To avoid exploring the issue, economists
have over a century directed their analysis
almost entirely toward production and
exchange instead of reforms in the
distribution of income and wealth.

25. • A number of ideas were developed by
Orthodox economists to evade the
equality doctrine.
• One was the harmony of interests, which
is “ a comforting thought for those who
have drawn a lucky number in life’s lottery.

26. • A second was predilection was laissez faire.
• A third was the free trade doctrine.
• Which lost its basic validity because of the
unrealistic nature of its basic assumptions-free
competition.
• It provides bad advice for underdeveloped
countries.
• Telling them to avoid tampering with
international trade and payments.

27. • A fourth of the orthodox economic doctrine
is that economy tends toward stable
equilibrium
• Myrdal argued that this is far from the truth
than the idea of circular causation and
cumulative processes.

28. • He argued that standard theory is a
rationalization of the dominant interests of
the industrial countries.
• He further said in general, economic
theory has not been concerned with the
problems of underdeveloped countries.

29. • They should remold this theory to fit their
own problems and interests.
• Myrdal discussed another problem of poor
countries in relations to the Keynesian
theory.
• The idea of distribution within a country.

30. • Conventional theory concludes that
consumption detracts from savings and
investment.
• Substantial improvements in levels of
living must be postponed for some time in
order to permit capital accumulation and
higher productivity and levels of living in
the future.

31. • He argued that unequal distribution of
income affect poor people.
• Therefore, a partial conflict occurs, in the
short run between higher consumption
and higher production.

32. • Myrdal further argued that these ideas are
true in the rich countries because greater
consumption will not promote greater
production.

33. • He cited that in poor countries , improved
levels of living are precondition for higher
labor input and efficiency.
• He proposed that governments in
underdeveloped countries must speed up
development.

34. He acknowledged the followings:
*High population growth in poor countries
*Uncontrolled flow of foreign trade
*Used of foreign exchange for urgent and
important requirements to stimulate growth
* Protection of infant industries

35. *Restriction of import of less necessary
goods
* Government must own and operate
industries such as railroads, highways,
irrigation projects, port facilities, etc.
Government must take loans but must use it
wisely.

36. Myrdal Vision of Harmony of Interests
• He said that peoples of the
underdeveloped world must agitate their
grievances.
• Rich countries don’t have time for their
numerous challenges they faced

37. • He called for a great awakening of the
entire globe on greater equality of
opportunity.
• He said the great awakening is the
victorious spread to the people of the
underdeveloped world by the developed
world.

38. • He argued that western countries must
help poorer countries through the barriers
of opportunistic ignorance.
• He also recommended that poor countries
must on the other hand stop corruption
and encourage the distribution of their
resources to their people.

39. • They must focus on education, social
development, build roads, open highways,
build seaports and airports, etc.
• Poorer countries must encourage
harmony and peaceful co-existence
between it peoples on racial and religious
groups.

40. Gunnar Myrdal and
America's
Conscience: Social
Engineering and
Racial Liberalism
1938-1987

41. Gunnar Myrdal is best
known in the United
States for his book
Dilemma: The Negro
Problem and Modern
Democracy, one of the
most influential works
of social science. The
book remained the
most important study of
the race issue until the
middle of the 1960’s.
Walter A. Jackson (1990)

42. As the civil right
movement gained
momentum, many
educated
Americans turned
to Myrdal’s book in
an effort to
understand the
effects of white
racism on Afro –
American life.
Activists, educators, ministers and
social workers referred to an
American dilemma in campaigns
against segregation and
discrimination. Most significantly,
Chief Justice Earl Warren cited An
American Dilemma in the Supreme
Court’s Brown vs Board of Education
decision to support the view that
segregated schools were inherently
unequal.
Walter A. Jackson (1990)

43. Myrdal turned the conventional
wisdom of white Americans on its
head by arguing that the “Negro
problem” was really a “white
man’s problem”. In analyzing
“America’s greatest failure, “ he
developed a new interpretation of
American race relations that
would strongly influence postwar
racial liberalism. Myrdal argued
that the federal government had
to take action to end racial
discrimination and to establish
equality of economic opportunity.
Walter A. Jackson (1990)

44. Walter A. Jackson (1990)
Myrdal combined appeals to morality
with advocacy of ambitious programs
of social engineering. He saw racial
discrimination as an irrational
aberration from a fundamentally
egalitarian tradition of American life
and believed that educational efforts
would substantially reduce white
prejudice. Moreover, He took a
strongly assimilationists positions on
black culture, emphasizing the
strategic importance of blacks
acquiring the cultural characteristics
deemed valuable by white Americans.

45. Characteristically, Myrdal
supported this argument by saying
that the main danger as he saw it
as an economist was that the
efforts devoted to social reform
might be viewed too narrowly, with
the eyes of traditional prudence in
budgetary matters. Given the rapid
economic growth of the production
sector and induced by the general
economic policy, social reforms
must be viewed on a grand scale to
balance the rapid growth in
production that could be expected
as a result of an economy operating
at full steam. Örjan Appelqvist, 2008

46. Social reforms are not
luxury, a cost, that
the population can
afford only when
resources are
available. Social
reforms are instead
necessary part of a
balanced economic
development.
Örjan Appelqvist,2008

47. Örjan Appelqvist,2008
Myrdal was a pioneer in insisting on the
proactive role of the government on
economic issues. Since anticipation
played a vital role in the dynamics of
the economy. It was essential that the
government could provide
comprehensive and broadly based long
term planning guiding the anticipations
towards an overall ambition for the long
term development. It was geared
towards maintaining full employment of
labour as well as of other productive
forces. It was thus, ostentatiously pro-
growth orientation, growth being
understood as growth of the aggregate
economy and not only in production.

48. • The growth orientation partly
provided a solution to the dilemma
of increased indebtedness caused
by the war. It was not by austerity
measures that the debt towards
creditors should be repaid but in
the longer run by the resources
created through economic growth.
• An interesting feature of the
economic policy proposed was that
it was intended as investment
management, not the demand
management as was usually the
case with “keynesian’ economics.
That is it favoured growth oriented
policies.
Örjan Appelqvist,2008

49. • The insistence on maintaining the high taxation
levels of the war signaled an orientation towards
balanced growth. It was argued by Myrdal that
education might properly be understood as
investment rather than running costs in public
finance. The argument could easily be expanded
towards understanding not only educational
costs but also reforms and health costs, not as
luxury to be offered once the economy permitted
it, but as the necessary reproduction component
of the social growth
• Finally, the international component should be
signaled of society. The political content of
which was yet another attempt transcending
dilemmas'. After the horrendous human losses
and destruction caused by the war it was a
contribution aiming at reconciliation through
complimentary growth
Örjan Appelqvist,2008

50. In the aftermath of 2008, we are now in a radically different
situation. But Myrdal approach to post war economic
policies nevertheless seems to be in need of further
exploration in many areas. Many of those who proclaim
the victory of market economy at the end of the Cold
War now seem to en an disarray after the several
financial crises. Many are now affirming the role of the
State – and the international institution fulfilling a similar
function. However in a situation where indebtedness is
becoming a pervasive phenomenon nationally and
internationally, what should that role ne? how one deal
with debt? Can Myrdal discussion of the debt problem
and of how to transcend the dilemma between financial
“soundness” and welfare after the war also be relevant
today?
Örjan Appelqvist,2008

51. Can there be a complementary way out of
tensions, a new Marshall Plan in view of
increased international tensions in an
economic climate characterized by unequal
growth patterns and dark horizons? Or more
to the point an International, a World New
Deal such as that called by the US liberals
like Lewis Lorwin? This latter question brings
us to the area of international economy and
the development of Myrdal’s theories in that
area, to which we will now turn
Örjan Appelqvist,2008