ABOUT THE CONCEPT OF ECONOMIC DEVELOPMENT
I would like to examine the concept of development in order to explain and describe, as clearly as possible, a fundamental feature of the variable that an attempt should made to increase and improve in the economy in order to achieve authentic growth. When such a variable is characterised, it can serve as an indispensable reference for validity and success in the orientation of different tactics and strategies of individual, family, managerial, national or international economic policy.
Although the concept of integral development embraces as much the economic as the cultural, political and simply human, I refer particularly to economic development which has to do with material goods. The variable that should be increased that I indicated previously refers to worth and utility, “for the whole man and for all men,” of material goods. In any case, it is necessary to be aware of the intrinsic interdependence of the different types of development.
To carry out such a descriptive work I take advantage of the wealth that the concept of the relationship taken from classic realistic philosophy contains since I understand that the worth of goods is a relationship of convenience to the human objectives of whoever is valuing. Many economists, especially the pioneers of marginalism, understood the worth and utility of goods as a relationship, although maybe they did not draw all the conclusions implied in such a statement.
Lime Menger, founder of the more and more influential Austrian School, expressed himself in this way in his Principles of Political Economy:
«Those items that have the virtue of being able to enter in a causal relationship with the satisfaction of human necessities, are called utilities, useful items. (…) So that an item converts into a good, or in other words, so that it reaches the quality of a good, the following four conditions should converge:
1 – a human necessity.
2 – that the item has qualities that give it the capacity to maintain a relationship or causal connection with the satisfaction of this necessity.
3 – man’s knowledge of this causal relationship.
4 -power of disposition on the item, in such a way that it can be used in fact for the satisfaction of the mentioned necessity.»
Jevons and Walras as well as a Spanish predecessor, Balmes, all coincide in pointing out that the utility and worth of goods consists of a relationship between the good and human necessities. Therefore the variable to increase to achieve greater economic development, is that relationship of convenience. This relationship of convenience derives from the inverse relationship of dependence that man has regarding material goods, even extending to immaterial goods (which is a consequence of his mixed material and spiritual nature).
We can say again that economic value, as regards relationship, is an order from one thing to another. An order, as a last resort, of a thing to man, to his necessities and objectives. He does not have anyone else to head towards his conclusion; it is the mere orientation towards man, it is a “towards man,” a tension. One can say that the value of something is its degree of humanity. Value is not the subject of the relationship or its conclusion, but rather something that man is guided towards.
A widespread confusion with practical, and theoretical effects, in our daily economy, is the one of identifying the relationship with the original object that we value. Such confusion leads to identifying growth and economic development with quantitative and indiscriminate increase of products. The greater the production of goods, the more use they will give us. The greater the quantity of goods at our disposition, the better our welfare and situation will be.
Economic occurrences are presented as an uncontrollable race towards the production of greater and greater quantities of physical goods without taking into account too much their degree of order for authentic human purposes, in short their degree of humanity. In production, quantitative factors prevail over qualitative ones. The life cycle of produced goods is increasingly shorter. We find ourselves in the civilization of the ephemeral, as Bertrand de Jouvenel indicated, where production does not take place with a character of permanency nor with future meaning but rather with the sole objective of satisfying the desires of consumer trends, unproductive many times, that destroy the previous production quickly, demanding a renewed impulse of ephemeral production.
This attitude so widespread in our societies that confuses the relationship with the product is denounced by Rubio de Urquía Of all the substantive characteristic values of the system one stands out in excellence: possession and consumption of any goods in a growing quantity. (..) Another value that stands out is the freedom of production and consumption, and the positive valuation of success in general and especially of success in the achievement of objectives in each moment considered by “the opinion” to be “more desirable», highlighting at all times the successes related to “material” production and consumption activities.
The same name that is assigned to the index usually used as a measurement of well being “Gross Domestic Product” leads to error. Instead of speaking about the “value of the product,” simply the » product » is spoken about. It seems then that the GDP is a measurement of the physical production of goods, when, in fact, we are speaking about the value, expressed in exchange values of the goods and services produced in one year. In the less developed societies, where the most urgent necessities, materials, are not covered sufficiently, a greater parallelism between physical production and economic value is made.
These more peremptory material needs are an estimate for the superior, less material, more sophisticated needs. In these less developed economies the quantitative growth of goods production is a more approximate indicator of the standard of living although it is not exempt from multiple nuances. When the situation is reached where primary needs are covered, it is no longer important to grow in terms of physical goods. Importance begins to be given to the what, how and for what reason those goods are used, the quality and the greater or lesser adaptation to the authentic objectives. It is not about producing more, but producing better, and of using what is produced suitably. The most important is not how much but for what purpose. The truly important thing is the way we use what we have.