The Management of Social Transformations (MOST) Programme

Discussion Paper No. 20

Human development: Conceptual issues and foundations

of an economic policy

bY

Sir&on Fongang

UNITED NATIONS EDUCATIONAL, SCIENTIFIC AND CULTURAL ORGANIZATION

l About MOST

MOST is a research programme designed by UNESCO to promote international comparative social science research. Its primary emphasis is on support ing large-scale, long-term autonomous research and transferring the relevant findings and data to decision- makers. The programme operates in three priority research areas:

1. The management of change in mu lticultural and mu lti-ethnic societies.

2. Cities as arenas of accelerated social transformations.

3. Coping locally and regionally with economic, technological and environmental transformations.

0 About the author

Simeon Fongang is a Cameroonian economist with a Ph.D. in economics who has worked at length on the UNDP Human Development index. He is at present a temporary teaching and research assistant at the University of Poitiers (France)

0 MOST discussion papers

The MOST discussion papers series publishes contributions from specialists in the MOST research fields. These papers are prepared as part of the international scientific debate on these questions.

The opinions expressed in this series are those of the authors and do not necessarily reflect the views of UNESCO.

The frontiers and boundaries on maps publ ished in this series do not imply official endorsement or acceptance by UNESCO or the United Nations.

. Currently available

I. Multicultural and Multi-Ethnic Societies. Henri Giordan, 1994. E/F/S.

2. Managing Social Transformations in Cities. W ine Sachs-Jeantet, 1994. E/F/S

3. Differentiating between Growth Regimes and the Management of Social Reproduction. Pascal By& 1994. E/F/S

4. Urban Research in Latin America: Towards a Research Agenda. Licia Valladares and Magda Prates Coelho, 1995. E/F/S

5. Management of Multiculturalism and Multi-Ethnicity in Latin America. Diego A. Iturralde, 1995. E/F/S

6. Lo global, lo local, lo hibrido. Heinz R. Sonntag and Nelly Arenas, 1995. (Spanish only)

7. Reflections on the Challenges Confronting Post-Apartheid South Africa. B.M. Magubane, 1995. (English only)

8. Coping locally and regionally with economic, technological and environmental transformations. S. Jentoft, N. Aarsaether and A. Hallenstvedt, 1995. E/F/S/R

9. Partnerships for Urban /nnovation. Francis Godard, 1996. E/F

10. Management and Mismanagement of Diversity: The case of ethnic conflict and state- building in the Arab world. Saad Eddin Ibrahim, 1996. E/F

11. Urbanization and Urban Research in the Arab World. Mostafa Kharoufi, 1996. E/F

12. Public Policy and Ethnic Conflict. Ralph R. Premdas, 1997. (English only)

13. Some Thematic and Strategic Priorities for Developing Research on Multi-Ethnic and Multi- cultural Societies. Juan Diez Medrano, 1996. (English only)

14. The Information Technology Enabled Organization: A Major Social Transformation in the United States. Thomas R. Gulledge and Ruth A. Haszko, 1997. E/F/S

15. Global transformations and coping strategies: a research agenda for the MOST programme. Carlos R.S. Milani and Ali M.K. Dehlavi, 1996. (English only)

16. The new social morphology of cities. Guido Martinotti, 1996. (English only)

17. Societies at Risk? The Caribbean and Global Change. Norman Girvan, 1997. (English only)

. 18. Replicating Social Programmes: Approaches, strategies and conceptual issues. Nice van Oudenhoven and Rekha Wazie, 1997. E/F/S

19. VIHBIDA et entreprise en Afrique: une reponse socio-medicale B /impact Bconomique? Lexemple de la Cdte dlvoire. Laurent Aventin and Pierre Huard, 1997.(French only).

E = English; F = French; S = Spanish; R = Russian

The MOST publications are also available in electronic form at the MOST Clearing House Web site at www.unesco.org/most

Published by the MOST Programme United Nations Educational, Scientific and Cultural Organization

7 place de Fontenoy, 75700 Paris, France htpp://www.unesco.org/most

0 UNESCO 1998

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HUMAN DEVELOPMENT: PROBLEMS AND FOUNDATIONS OF AN ECONOMIC POLICY

SimCon Fongang [l]

(IERS, UMR 6588-CNRS, Faculte de Sciences konomiques, Universite de Poitiers) 93 avenue du Recteur Pineau: 86022 Poitiers Cedex (France). Tel: (33 5) 49 45 3 1 70:

Fax: (33 5) 49 45 30 97; e-mail: iers@cri.univ-poitiers.fr

The economic and social problems associated with human development are the subject of the Human Development Report [2], which has been published annually since 1990 by the United Nations Development Programme (UNDP). According to its originator, the Report was of a seminal nature and would open the debate through a contribution to the definition, measurement and policy analysis of human development. It is important to set out this methodological thinking, for this three-pronged approach to human development characterizes

. the systems of political economy through the link between problematic analysis and poZicy.

The diagram below shows how the three phases are connected in the real world.

Foundations:

PROBL*mTIC

(goal-oriented and/or normative

Recommendations -^-..----.-----------.--..- _.--_ -_.- __ _____-_____

..-__-__--_-..---- ------_ _- ---.--____-_ -

Concerns

Information Recommendahns

THEORETICAL ANALYSIS (formali&ons, representations)

Diawam of a Svstem of Political Economv

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In the above diagram, the consistent arrangement of the solid arrows denotes a true System of political economy. The recommendations here derive from a general scientific analysis. On the other hand, a non-System approach may be confined to formulating a problematic, on the basis either of current political thinking or of current socio-economic factors, and make direct policy recommendations without any supporting scientific analysis. This approach is represented by the broken arrows connecting the problematic and policy boxes, and correspondents to the triangle Problematic - Policy - Process.

The role assigned by UNDP to the new approach may thus be regarded as pertaining to a systematic rationale. In the case of human development. definition followed by measuremenf and, finally, policy analysis would aim respectively to identify the precise nature of the problematic, namely what is involved (the goal to be achieved); to establish an information mechanism and a framework for mathematically analysing the issues involved; and to draw up policy recommendations in keeping with the two previous steps.

Human development is measured by the human development index (HDI), which combines indicators of education, health and income sufficient to ensure adequate living standards.

We intend to ask the following questions: What are the specific characteristics of this approach? Are there any conceptual issues that might impede its development? What prior conditions and action are needed for a genuine human development policy to be implemented?

In the first part, we will try to show how this problematic seeks to make economics serve people. In the second part, we go on to emphasize the need for scientific rigour in analysing such epistemological issues as human development, however laudable the end purpose.

For the desire to devise a system linking economic efficiency with prosperity for all members of society underpins UNDPs approach to human development even though such a concern is not new [3].

One should therefore be aware of where this new approach is rooted in the development of economic thought, so that we can identify where such an approach to human development extends the scope of contemporary economics, where it conflicts with it, and how far it seeks to supersede it.

PART I - ECONOMICS FOR THE BENEFIT OF PEOPLE

Why do we need to cultivate a concept of human development? The new UNDP approach has both interest and merit because it stresses human well-being as an end for any process of economic and social development. It does so by overturning the view that focuses on material progress as the sole end. Instead, the new approach focuses on the well-being of individuals as the ultimate objective.

In so doing, it prompts us to view the problems differently. For, as UNDP puts it, The implications of placing people at the centre of economic and political change are thus profound . . . They call for nothing less than a revolution in our thinking [4]. According to the Report: . . . the process of development should at least create a conducive environment for people, individually and collectively to develop their full potentiaZ and to have a reasonabze

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chance of leading productive and creative lives in accord with their needs and interests[j] (emphasis added).

Highlighting what underlies such an approach, however, reveals that, from the point of view of the problematic, this concern is not new at all but, on the other hand, looks highly innovative once perceived analytically. In a complete system of political economy, it is on the thrust imparted by the problematic that the scientific analvsis and subsequent policy recommendations depend.

A. The plurality of human problems

A brief look beyond the confines of the discipline, or at the history of economic thought reveals a wealth of opinions on how best to achieve individual well-being.

We shall thus distinguish a human-centred approach and an enrichment-centred approach whose goal is material progress.

The first methodical responses to the issue, according to Professor Alain Barr&e, are to be credited to the physiocrats. But, before them, the concept evolved over a long period from the ancient Greek scholars until the mercantilists, taking in the medieval scholastics on the way. In ancient times and during the middle ages, the writings tended more towards the human-centred approach, while the mercantizist focused on enrichment.

Moral philosophy occupied an important place in the doctrines of the ancient world. According to Adam Smith [6]: Wherein consisted the happiness and perfection of a man, considered not only as an individual, but as the member of a family, of a state, and of the great society of mankind, was the object which the ancient moral philosophy proposed to investigate. In that philosophy the duties of human life were treated of as subservient to the happiness and perfection of human life [7].

How did the ancient scholars respond to the human-centred approach?

l for Greek philosophers like Xenophon, Plato and Aristotle [8], it was in terms of the polis;

l for Greek moral philosophers like Epicurus and Epictus [9] and Roman jurists like Seneca and Marcus Aurelius, it was the individual;

l for the medieval scholastics, in particular Saint Thomas Aquinas, it was in terms of the common good.

Other features the writings of these scholars have in common are:

(a) that they pertain to an overall conception of the human being or of society such as to make this conception its only justification; and

(b) that they emphasize the normative elements by adopting a position on what is right or wrong or good or bad, establishing value scales and expressing preferences.

The fundamental question exercising their minds is: How can individuals achieve perfect well-bein, . 03 (the term bein g a rendering of the happiness, happy life or living well of the classical authors and of the beatitude or bliss of the scholastics).

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This fundamental question gave rise to others intended to guide further reflection on the determinants of individual well-being, which ones should be prioritized and the hierarchical order in which levels of well-being should be arranged.

The fundamental question elicits many answers.

Greek scholars of the Attic period believed that happiness for all could be achieved through a better orgunization of the p&s, or city state. The polis is the quintessential place where the division of labour both frees individuals from material constraints the fastest and gives them easier access to a life where contemplation and intellectual development (in the maieutic sense) are uppermost.

The classical writers mentioned below were to put the emphasis on the individual rather than the city, and on the fulfilment of needs.

Epicurus (341-270 BC) believed the greatest good to lie in seeking for absence of pain and for repose of mind (ataraxia). To this end, he advocated limiting dependence on material possessions and preferrin g those within us that are ever available in unlimited supply.

. Epicurus believed that this happy life could be attained through careful reasoning which, in all circumstances, would enable one to decide the reasons for choosing or not choosing something, and to reject futile ideas serving only to impede ataraxia [lo].

As a Stoic, Epictetus (50-130 AD) had a fatalistic attitude towards the fulfilment of needs. He believed that perfect well-being arose from the con.ormity of the individuaE to nature. Thus, people attain happiness when they regard everything that happens to them as necessarily good. Accordin g to Epictetus, unhappiness comes from (or is gauged by) & disuaritv between the situation actuallv experienced by individuals and their notion of the ideal order of mines. Ivlinirnizing that disparity leads to happiness. To achieve this, people need to accept things as they are, as they naturally occur. An effort of will should enable them to limit the extent of their needs by adjusting their conceptions and desires to the realities of the world [ll].

Seneca (2 BC-65 AD), who was also a Stoic, even went so far as to advise one of his rich followers to accustom himself to spending periods of frugal living, so as not to suffer should he one day come to lack some of the comforts his wealth afforded him.

The response of the scholastic philosophers [ 121, in particular Saint Thomas Aquinas, to the question of individual well-being centred on a search for the common good. The holistic approach espoused by the scholastics allowed them to prioritize the social whole over the part: society takes precedence over individuals. The way in which people live is only approached from an idealistic point of view; one is more concerned with what they should be than with what they actually are, hit et nunc.

According to Thomas Aquinas, accumulation should not be the ultimate goal of human existence [13], particularly since trade seems to have arisen solely from the need to satisfy the murual needs of the parties. On the scale he drew up of possessions likely to lead to a state of bliss, material possessions come at the bottom, because they are only a means of magnifying the higher possessions which he calls the habitus (Aristotle defines them as capacities and natural dispositions) [ 141 and the soul. In so doin,, 0 he advocated the prior development of the habitus (bodily possessions, such as heaZth and education) [15] with a view to developing mental well-being, the ultimate condition for attaining a state of bliss. It is reasonable, he

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writes, to prefer the good of the body to outward possessions, symbolized by money, just as the good of the soul is preferable to any good of the body (emphasis added) [ 161.

With the mercantilists, the principal characteristics of the concept of enrichment, namely acquisitiveness, accumulation and competition again came to the fore. The acquisition of outward possessions became an end in itself. In a reversal of the scale drawn up by the scholastics, material possessions now appeared at the top. Even bodily assets were subject to them, serving only as a means of acquiring material assets. Thus, good health and high qualifications were looked upon as the most productive human capital. Hence enrichment became the watchword of the nascent science of economics.

Systems of political economy continued to develop from the time of Pierre Le Pesant de Boisguilbert, the physiocrats and subsequent writers adhering to the natural law logic.

A complete system of political economy based on the human approach, was formulated by Etienne Bonnot de Condillac [17] in parallel with that of Adam Smith. However, his work never had anything like the same impact.

Following Adam Smith and still retaining the concepts and approach of his system of political economy, later works on the subject gave the system two diverging thrusts. One focused on the tenet of individualistic liberalism, so pursuing Adam Smiths heritage, while the other rested upon a principle of the community, stressing the role of society, history, sociological groups and conflicting interests in the interpretation of economic activity. Other systems of political economy thus evolved, namely the classical system - liberal and individualistic in its approach - and the socialist systems.

However, the systems stopped evolving with the advent of the utility theoreticians, who, by rejecting the goals of the liberal and socialist systems, sought to construct a science without goals or doctrinal issues. Hence the rise of analyses without any avowed problematic. This position, which favoured analysis and rejected any doctrinal or finalistic problematic, developed between 1870 and the first half of the twentieth century [ 181. While pursuing a radition introduced by the physiocrats, namely that of making mathematical formalism the main feature of economics [19], those advocating analysis divested of problematic and finality set the analysis phase on a steadier course, but the guiding hand of doctrine was lacking.

Thus, the possibility of analysin,, 0 formalizing and quantifying the determinants of a problematic constitute the main characteristic of the approach followed in economics (problematic - analysis - policy). It is also the criterion of credibility of any economic approach establishing a logical relationship between the problematic, scientific analysis and the resulting policy trends. The guiding role of the problematic (the doctrinal finality at the outset) in this approach should be stressed: identifying the problematic determines what follows. The same applies to any analysis pertaining to a human problematic.

Economic analysis (formalization and mathematical development of economics) continued to advance along these lines. Doubtless this is why any problematic with a human dimension may look like one (opinion) among others, but suddenly becomes more relevant when the attempt is made to go on to the phase of measurement and analysis (in the sense mentioned above) so as to give it a sound scientific basis. It has to be recognized, however, that the human dimension has not been used in economic formalizations based on a human problematic. The proposals made in this area are thus regarded as being ad hoc, intuitive and unconvincing. In this respect, according to Professor Dasgupta [20], the proposals are

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primarily centred on the policies to be followed, without any sound theoretical basis [21], which, in the authors view, may inform but not necessarily enlighten.

B. Want of a human dimension in economic analysis

It should be clearly stated again that, while admittedly original in present-day terms, this approach (and the intention behind it) consisting in buildin g a complete system of political economy centred on people has nothing new about it.

The desire to shape, measure and use human development as a yardstick of progress is to be seen in a number of authors (some of whom have already been cited).

In the early nineteenth century, Hem-i Starch [22] devoted an entire part of his major work, Cours deconomie politique [23] to his Theorie de la civilisation.

He pointed out, as we have already seen, that the difirent approaches that preceded the emergence of political economy did not develop any analytical principles, and that the human dimension had previousZy been ignored in economic analysis. He believed that political economy is (or ought to be) a combination of an analysis of both problems. For Starch:

The classical authors seem not to have even suspected the existence of principles which, together, constitute what we now call political economy. And when modem thinkers began considering them, they concentrated on the causes of national wealth and quite overlooked the causes of civilization [24].

He spelt out his approach as follows:

The aim of the Theorie de la civilisation is to make known the laws whereby the internal assets or elements of civilization are produced, accumulate and are consumed within the nation . . . This part of political economy has not yet been reduced to a system. It is a new doctrine, for which ancient and modem. scholars have collected some excellent material [25], but which badly needs arranging, completing and assembling to form a whole [26].

Starch, while acknowledging that his work owes much to Adam Smith, Gamier, Say, Sismondi, Turgot, Bentham-Dumong, DIvemois, Steuart and Hume, asserts his own neutral position vis-a-vis the established doctrines.

He distinguishes between material wealth and internal possessions. The former refers to all possessions that are exterior to the human entity, and the latter to those which serve to develop or perfect the human faculties, among which he includes: health, skills, enlightenment (intelligence, education), taste, customs, beZieJI security and leisure all of which faculties are to be found as capabilities or capacities in the human development approach.

In addition to the authors mentioned above, other twentieth-century scholars take up the human development issue (see Rene Gendarme, Novae, Andre Piettre and Daniel Villey). Thus, according to Professor Antonelli [27], any would-be humanist approach to economics must be based, from a physico-anthropological point of view, on the primacy of human beings both as the ultimate goal and as players in any economic activity [28].

From this perspective he rejects any abstract idea of human beings, whether Aristotles zoon politikon (political animal), man in Jean-Jacques Rousseaus social contract, Linnaeuss

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homo sapiens, a representational human being, or the economists homo economicus. For Professor Antonelli, such abstract representations of human beings are only pure ideas, that is, quite other things than human beings. What I call humanist economics deals with real, living people with their joys and pains, happiness and sorrow and a whole material and spiritual existence . . . that is the economics of human services and ties [29].

According to UNDP [30], Sudhir Anand [31] and Amartya Sen alike, far from being a new and simple diversion: the [human development] approach is based on an ancient and well- established tradition . . . The same concerns are expressed in the writings of the founders of quantitative economics (such as William Petty, Gregory King, Franqois Quesnay, Antoine Lavoisier and Joseph Lagrange),* as well as those of the forerunners of political economy (such as Adam Smith, David Ricardo, Robert Malthus, Karl Marx and John Stuart Mill) [33].*

PART II - THE SCIENTIFIC AND POLITICAL SCOPE OF THE APPROACH

After outlining the scope and human goal of human development, UNDP found it essential to establish an index as an analytical and policy-making aid. This was the scientific dimension - formalization and mathematical developments - of the approach. However, its

. methodological implications are considerable, as we shall be seeing.

UNDP therefore laid down a number of requirements or performances expected of sound human development measurement and analysis, including allowance for the needs and potential of individuals.

In this context, potential is taken to mean all human and material means (artificial and natural) available and capable of being the object of a rise.

This acceptation concurs with that of Professor Desai [33] for whom: The ideal would be for one to be able to take account of (all) the resources at the disposal of an individual, including private income as well as access to credit, public services, heZp from fiends and relations, etc. In this respect, the disposition of productive capital is another important aspect[34]. (emphasis added).

However, if a distinction is made between resources used and those kept in reserve, this surplus is also regarded as a potential on account of its passive existence and no more than latent power. To avoid any such risk of confusion, we will use asset, which is becoming increasingly used in the economics literature, to denote goods [35].

A. The methodological implications

We will demonstrate the different methodological implications of an approach based on the market and one based on people.

1. A market-based approach

This approach, in which an invisible hand regulates trade, implies two consequences:

(a) the prime consideration is what the individual has (in terms of consumption and production goods that he or she has to exchange);

(b) the individual is only seen in terms of what he or she has (and, hence, if one has nothing one is nothing from the viewpoint of the market).

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The problem with this approach, as regards the human dimension, is that it excludes from the analysis - and above all from the distribution of wealth - anyone who either has nothing to exchange or has something for which there is no demand. Hence our current problems of exclusion and unemployment. These problems, which neither Adam Smith nor those who followed this line of thought ever envisaged, are now the foremost challenge for economists and remain insoluble so long as we continue to be guided by methodological approaches that lead to a theory based on the market, or exchange.

Furthermore, the distribution criterion that results from this reasoning in essence identifies three classes - entrepreneurs, rentiers and employees. Each class receives one part of the gross product, that is, income in the form of profits, a rente or pay, respectively. The allocation of income to the three classes depends on the competitive conditions prevailing in the different markets. It is also supposed to fulfil the needs of each class, in proportion to its individual contribution to the gross product, taking into account the conditions of supply and demand prevailing in the markets for goods and factors of production. Only participation (in any fomz) in generation of the gross product confers an equivalent right to participate in its distnbution. In this way, individuals (and their needs) are lost sight of in the quest for the highest possible income, given that it will be shared out among the different social classes and will benefit each person taken as an individual. The fulfilment of needs is supposed to follow, logically and naturally, from participation in the exchange. However, the current problem facing economists is that in this reasoning there is no place - or means of catering for - a fourth class, namely the socially excluded.

The existence of a socially excluded class in modem societies is a fact that is well established and recognized, as evidenced by the desire of countries to include a fig,ht against exclusion component in their policies. Although this class is an integral part of society, it deserves its name for several reasons. Its members are:

- excludedfrom any market analysis: the market being a place for exchange, anyone with nothing to offer is logically shut out; this class has only needs, for which there is obviously no market; members of this class whose offer to provide a service in the form of work is accepted are (re)integrated among the employed and become subject to job market analysis;

- excludedfrom distribution and its analysis: no criterion of justice (as originally sought by Adam Smith) gives the excluded any share in the gross product since there is no performance in return; the income meant to meet their needs is thus lacking; only ethical, moral and sentimental considerations are advanced to encourage and/or justify what are termed social transfers and public spending (failing such performance in return). There is also a lurking fear on the part of other members of society of the threat that the socially excluded pose to their security. The problems of the excluded consequently come down to their insolvency or, in other words, a lack of income. Where human development is concerned, this is a worrying matter since, as UNDP observes: Above all, a low income frustrates peoples development, for they simply do not have means to acquire the basic goods they need [36].

There are two possible responses to the problem of individual insolvency:

- The first involves incorporating or reincorporatin, 0 the socially excluded in one of the classes entitled to a share of income, usually the employee class or the entrepreneur class. The crux of the matter of combating unemployment and exclusion lies in the need, on the one hand, to improve human capital (through better training and qualifications for those either currently or

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potentially excluded) and, on the other, to offer incentives to employers, (tax incentives, subsidies, etc.) in order to revitalize the job market.

- Alternatively, this class can be left as it is while its members are provided (directly and indirectly) with the resources to cover their needs, if only the most basic; the most usual methods are to make direct payments through social transfers (including welfare benefits for the underprivileged) and indirect payments through social spending and subsidies.

Both responses, however. have their limitations.

As regards unemployment, the economic situation in the last 25 years does not hold out much hope of endin, 0 social exclusion through paid employment. It is therefore a continuing problem and one that economists and policy-makers see as increasingly urgent [37].

Social spending and transfers, which increase as the number of socially excluded people rises (in conjunction with rising unemployment levels), are financed through direct deductions from the income of other members of society chiefly in the name of national or international (in the case of official development assistance) solidarity. A concern for justice that vetoes force or

. any partisan constraints - even on the part of the state - is thus set aside in response to demands for the practice to be pared down, if not actually abolished, in the name of justice and efficiency [38]. For it is held to be inherently unjust to take resources compulsorily from a relatively richer person (or social category) and hand them to another that is relatively poorer. Furthermore, the budget deficits caused by such spending threaten countries financial stability [39].

We can thus see that the problem of income - for the sake of solvency - and of justice in apportioning global income among the different sections of society could come down to the following fundamental question: How can the well-being of every individual in the group be guaranteed with due regard for justice ?

This question corresponds to the first issue underlying human development. It is also Adam Smiths point of departure. However, the difference - but also the difficulty - in the subsequent analysis lies in the point that the criterion of justice is not respected unless the fruits of the economic g-rowth permitting that well-being are shared out only among the agents who have contributed to it.

This kind of justice is automatically respected under the laws of the market, provided that it is a free market. Yet, including in the analysis individuals unable to operate in the market thwarts the twin requirements mentioned above, so that the issue needs analysing afresh. Given that human well-being is the ultimate goal, would it not be wise to base the analysis on human beings themselves?

2. An approach based on people

This analytical approach corresponds, except in Adam Smiths case, to that adopted by those who, since Aristotle, the scholastics, Adam Smith himself and Condillac, have favoured the human dimension.

Their approach clearly differentiates between people and material goods - goods exterior to people. Using people as their starting point, they all demonstrate that need is the fundamental link between the two poles. From this perspective, before any question of exchange, it is fulfilment of a need that underlies any process of acquisition, production or exchange. While it is

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true that some people may have nothing to offer or have no takers for what they offer, there can be no denying that every human being has needs. In this approach, the notion of need is clearly the common denominator of all individuals. Therefore, if one is really interested in achieving individual well-being, it is from this standpoint that any analysis should be carried out, taking as the principal criterion that above all individuals are human beings. Hence the chronological precedence (in identification and grading) of needs over the means required to satisfy them.

However, no matter how logical such an approach might seem, making human needs the point of departure in economic anabsis gave rise to much debate and even jierce disapproval wtihin the discipline. But, as Professors Braybrooke [40] and Dasgupta suggest, rather than make the scientifically incorrect mistake of adopting, a priori, a rigid stance for or against introducing the idea of needs into economic analysis, it is better rather to address the matter in terms of the place that the idea may occupy in the reasoning.

3. Using the concept of need in economic analysis

It is appropriate to mention the two basic reasons - technical and ideological - for the controversy over whether or not to use the notion of need in economics on the one hand and, on

. the other, their implications for an overall, systematic approach to human development, namely, problematic - analysis - policy.

(a) Technical reasons

This is connected with the type of analysis applied to a given issue. As has already been said, Adam Smiths approach consisted in taking the market as the starting point of the line of reasoning and studying the conditions and methods of exchange prevail.ing in it. Individuals only come into the picture in terms of their capacity to command the work of others, (that is, when they enter the market to offer their surplus in the form of a good or service, whether consumer or producer. Once a direct equivalence has been established between individuals and what they possess (in terms of capacity or purchasing power), it follows logically and naturally that the notion of need has no place in his reasoning. Consequently, in this respect, it is quite natural not to include it in any analysis. Need is antecedent to exchange theory.

Frederic Bastiat (1801-1850) [41] in his Harmonies kconomiques (1850) believed that the domain of political economy encompassed any effort intended to satisfy, on a quid pro quo basis, the needs of a person other than the one having made the effort in question. Emphasizing the reciprocal nature of exchange in this way made if easier to compile an inventory and evaluate the goods and services that each party proposed to exchange. This approach thus dispenses with an evaluation of their respective needs, without prejudice to analysis. From this perspective, only the solvent part of needs, meaning that which offers a performance in return, is of interest in economic analysis: demand supersedes the notion of need. In this respect, on the basis of a technical argument, the notion of demand is seen to be more relevant than that of need: hence demand theories have eclipsed the theory of needs.

Several eminent economists, including Professors Debreu [42] Malinvaud [43], Ferguson and Gould [44], in addition to Varian [45], have set their work in this tradition.

It would seem to justify the fact that, according to Professor Dasg-utpa, the modem theory of allocation of resources makes no essential use of the notion of basic needs and has nothing to offer for analysing destitution (or exclusion) [46].

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Furthermore, still from a technical viewpoint, and as Professor Braybrooke observes, the concept of need appears superfluous when the economist considers that its content can, from an analytical point of view, be accounted for under preferences [47].

It would therefore be rash, in the perspective of such studies, to insert the notion of need in these analyses, for the logic of the reasoning does not lend itself to this. The analyses do not include a human dimension, being concerned rather with a problematic of enrichment.

On the contrary. in an analysis based on human issues, the concept of need u311 be a locus classicus - regarded as ineluctable, as recommended by UNDP. For within the logic of such reasoning ti could not be otherwise. It would also be difJicult - and no doubt&tile - to make people the focus of concern and analysis while simultaneously sidestepping their needs. Hence UNDPs requirement that attention should be centred on peoples needs and potential.

Apart from the obvious methodological implications, however, some authors consider it an omission not to give the concept of need any house-room in economic analysis, while others oppose its inclusion without employing the technical argument mentioned above. Such positions are primarily ideological. When they are attached to liberal orthodoxy and told that

* professional use might be made of the concept of need, Professor Braybrooke says that economists react in the same panicky way as a housekeeper with a flyswat, when a swarm of flies invades the kitchen [48].

(b) Ideological reasons

According to David Braybrooke (1987, p. 9), the supporters of liberal orthodoxy have deliberately condemned and even repudiated the concept of need in a quite unwarranted, casual and uncalled-for manner devoid of substantiation or argument, but merely dismissing any idea of class privilege. The author similarly believes that Marxist theory chose to rely essentially on need, rejecting that of preferences and the idea that they should be allowed to vary freely from person to person and be channelled through a policy based on that freedom of choice.

The ideological rejection of the concept of need, far from being directed against it as such, is more like a rejection of the conclusions that needs-focused theories have so far reached. Such conclusions tend to call for redistribution and derive mainly from distribution appraisals.

In the work of the socialists and neo-Marxists on needs the emphasis has been firmly placed on distribution. As Professor Roscher [49] wrote during the nineteenth century: Most socialists are almost exclusively concerned with peoples needs and think that the means of meeting them scarcely deserve attention; for that surely comes about naturally, so why worry about it? [50].

Since then, this current of thought has recognized the importance of means only with reference to needs. Hence the emphasis on unsatisfied human needs in order to justify redistribution of the fruits of economic growth to the poorest. It therefore follows, in such an approach, that if economic progress does not benefit everybody or enable the needs of every individual to be met, there is not justification for calling it progress [51]. It is the extent to which needs are met which reflects the level of prosperity attained [52]. And if any growth at all can be observed, redistribution becomes the focus again on the grounds that unsatisfied needs and unused surpluses cannot exist side by side. However, it is often hard to establish formal justification for such a step. It lacks credibility because there has been no broad-based theorizing on the subject.

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The invalidation of their work by formal economic analysis because it lacks a formal theoretical framework does not concern the socialists alone but, more generally, anyone whose recommendations are not supported by mathematical models.

Professor Dasgupta observes that the lines of thought followed (by Amiya Dasgupta, Adelman, Streeten, Sen, UNDP, etc.) were not based on models that could be quantatively analysed. Their arguments are therefore not considered really convincing, amounting to no more than an act of faith backed only an unquantified intuition [53].

Professor Sen [54] recognizes this state of affairs 1551, even though he also observes in a general way that effective action by the state is a question not just of analysis but also of resolve and (political) will [56].

No doubt it was such a concern that sparked off the basic needs approach. this example reminds us of the important role of analysis in underpining a new approach, since the basic needs approach was rejected by some economics owing to the lack of a formalization stage and because it advocated the provision (without performance in return) of goods and services to the underprivileged.

The fact that this approach was political from the outset, without any model-based analyses or background clarification, o save rise to a number of difficulties:

- One was that theoretical just$ication prompted a resumption of the enrichment issue. For the approach was presented as promoting investment in people in order to generate, at a later stage, increased labour productivity, which would in turn create more jobs and thus encourage economic growth. The cost of meeting basic needs can thus be looked on as a mere advance of funds. Some writers 1571 denounced this argument. Instead of seeing it as well-intentioned, they found it to be a subtle and paternalistic means (on account of an enumeration of basic needs by Mr Robert McNamara of the World Bank) of dominating and alienating people in the developing countries in particular.

According to Joel Jalladeau [58], following Paul Streeten [59], the theoretical justification consisted in saying that, for a time the level of consumption may be lower than the level which would be attained by a more growth-oriented strate,T. But, when the present generation of children reaches the age where they are productive, and when the investment in human capital begins to produce results [603, the growth generated by the basic-needs strate,qy is faster than in the case of a growth-centred strate,y.

- A further difficulty is that meeting the costs of basic needs requires what is termed social spending, which in fact means transferring resources from the rich, via the state (by means of various levies), to the poorest. This practice is criticized by those authors who, for the sake of individual liberty or of justice, oppose any increase in taxation by the state to cover additional social spending because of the undesirable effects of such practices. (cf. Rawls [61], Nozick [62] and Hayek). Which is a still clearer indication of the quest of the preceding theoretical justification to show the temporary nature of the levies and transfers for the advance of funds even though there is no guarantee that the skills will be used once they have been acquired.

- What is more, using the acquired skills is not the subject of any particular concern in the basic-needs approach. It would therefore seem to presuppose a natural order where it goes without saying that if skills are acquired, it is with a view to their use, which will therefore come about spontaneously and natumlly. Hence, the reaction of authors like Professor Sen and others sharing his viewpoint, who emphasize the need to ensure that the skills acquired are used

- 13 -

efficiently. According to Arnartya Sen, it is not just a matter of acquiring skills, but of applying them productively [63].

All this controversy shows that, on either side, the objection related not to the use of the concept of need as such, but chiefly to the related problems. In any event, ideological rejection of the concept of need in economics seems to be justified by the fact that to the question who, in the final analysis, is going to pay for coverage of the needs, the reply so far has been that it would suffice (at national or international level) to levy resources from the relatively better-off and transfer them, directly or indirectly, to the not so well-off. But this clashes with the concern of the early liberal economists with justice and equity in the matter of distribution, particularly since the taxpayer so called upon is compelled by an authority which, in applying such a policy, has ceased to be impartial.

The ideological adoption of this same concept rests on acknowledging inequality in distribution as a fact of life - causing as it does pockets of poverty in an environment of plenty - and advances the existence of unsatisfied needs to prescribe redistributing the gross product. Its chief defect, however, is that it relies on ethical, moral and sentimental arguments that fall flat on those who only acclaim a rigorous scientific approach.

However, should any approach to human development be strictly aligned behind either of these tendencies? For its part, UNDP states that the concept of human development does not start with any predetermined model [64].

One should rather think in terms of their combination or association, where each makes good the deficiencies in the other. It seems to us important, however, to emphasize that such an association is not intended as a compromise between two opposing theories. It stands out (as a premise) simply by reference to the methodological rigour that characterizes the human development approach regarding the underlying issues. In other words, the goal of human well- being having been admitted, as the approach %nfolds it can be seen that i2 incorporates liberal and socialist elements in the mere quest for an overall logic. For economic thought and analysis evolve with the emergence of new approaches which, resting on those they seek to supersede, incorporate some of their characteristics, either because they are worth prolonging, or in order to oppose them, or a mixture of both.

At the same time, for all the importance attached both to encouraging growth and to the concept of needs, and insistence that the opportunities available to all groups of individuals should be extended, we can agree with Professor Dasguptas assertion (1993), in respect of the rejection of needs on ideological grounds, that it would be surprising to find an economist who was hostile to the elimination of exclusion and destitution just because the approach was based on the concept of needs. He also says that to the best of his knowledge, no one has yet said as much. Thus, just as the lo,oic of an approach muy be questioned if it transpires that the goal or basic principles which underlie the problematic (justice and liberty, for example) are not being adhered to, so will any instinctive and mechanical challenge of a purely ideological nature also be deemed abhorrent. It is in the light of such considerations that economic debate is giving increasing attention to needs.

4. Recent trends regarding the concept of needs in the economics literature

The renewed interest in explicitly accommodating the concept of needs in economic thought nevertheless deserves to be mentioned. UNDP is not alone in recommending that needs should be taken into account when reviewing and gauging economic and social progress. Despite the limited scope and lack of formalization of the essential needs approach, the

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international organizations, some of which are mentioned below, have encouraged its incorporation in economic appraisal.

The Brundtland Report by the World Commission on Environment and Development, which prioritizes needs, states that: Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains . . . two key elements:

the concept of needs, in particular the essential needs of the worlds poor, to which overriding priority should be given; and

the idea of limitations imposed by the state of technology and social organization on the environments ability to meet present and future needs [65].

In its World Development Report 1992, the World Bank also stresses the importance of needs. It reiterates the argument put forward by the World Commission on Environment and Development mentioned above, when it states that such a principle has become widely accepted and is strongly supported in this report [66 3.

Furthermore, in its World Development Report 1993, the World Bank gives the areas through which UNDP accords priority to the indicators included in the HDI. In particular, the World Bank writes: Around the world, much has already been done to enable people to live longer, healthier lives. The achievements of the past point to the requirements of the future - above all, to economic ,growth and the expansion of schooling and health services[67] (emphasis added).

In seeking to give the approach an international dimension, UNDP also suggests the need to focus on the building blocks for a new people-centred world order[68] (emphasis added).

Such official recognition of the importance of the role of needs in evaluating socio- economic progress and quality of life also comes in the wake of resolute work by a number of authors.

Jan Tinbergen believed that in order to progress and optimize social well-being, new institutions and a redefinition of the role of economists would be required. Acknowledging that contemporary economics was ill-prepared to achieve this, he suggested that new tasks should be assigned to economists. On those future tasks, the Nobel prizewinner wrote: we would prefer them to be oriented towards the satisfaction of needs, rather than guided by curiosity alone [69] (emphasis added).

For his part, Francois Perroux emphasizes meeting human costs. The human costs he proposes to meet are, as he sees them, of three types [70]: those helping to preserve human Lie (combating mortality), those affording all individuals a minimum physical and mental Me (medical care, basic hygiene, social assistance and invalidity, old-age and unemployment benefits) and, lastly, those offering access to knowledge and leisure. In other words, for Francois Perroux, the human costs are those that enable peoples existential needs to be met [71].

James Griffin [72], in his definition and measurement of well-being, emphasizes the satisfaction of needs. Bearing in mind both the restrictive nature of the notion of essential needs and the plurality of peoples situations, Griffin holds that well-being is the level at which essential needs are satisfied, provided their importance is acknowledged [73].

- 15 -

Using cultural values as the main determinants of the structure of needs, authors like Joel Jalladeau and Denis Requier Desjardins [74] have centred their work on applied studies in sub-Saharan Africa. This tendency shows how anthropo-cultural vahes conflict with public policies failing to accommodate them. The expected results of these policies are thus skewed, just as pure economic theory of needs and food consumption also turns out to be invalid. In the words of Joel Jalladeau, while if culture reflects the adaptation of human beings to their environment, cultural values impose what is needed in both material and non-material terms [75]. Jalladeau proposes to relocate consumption in the field of social relations in order to give it its full meaning, since it can be argued that needs are not naturally boundless and that consumption behaviour is not as independent as it is supposed to be [76].

The primacy of a cultural rationality is also emphasized by Denis Requier Desjardins in support of his anthropological theory of social change [77 1.

For his part, Professor Braybrooke observes [78] that basic policy issues arise as a result of trying in a general way to reconcile the attention paid to needs with that conferred on preferences. Marxist theory, which is based on needs, resolves the preferences problem in an administrative way whereby needs determine preferences. Liberalism, on the other hand,

. sidesteps the needs issue but addresses preferences, which are made proportional to what the subjects can offer in return for having them satisfied. As a result, Professor Braybrooke proposes that the two approaches should be combined.

According to Professor Dasgupta, by asking what sort of lives people prefer, one is also asking what assets are needed to enable them to lead such lives. From this perspective, he writes, one has in mind needs for basic assets, and the requirements which arise from them [79]. (emphasis added).

Therefore, when it comes to establishing a theoretical base incorporating needs, Professor Dasgupta thinks that it will be important to identify, quanti! and p&e them. In proposing to undertake the scientific and mathematical construction of such a theory, he admits that it will be a difficult task because needs have not yet been included in the modem theory of resource allocation.

As regards designing a theoretical framework that includes needs, this again is virtually unknown territory, though several authors are now venturing into it [80].

Professeur Bar&e (1994, p. 41) is no doubt thinking of the development of a systematic structure when he points out that the current trend in economics is marked by an approach that derives from a conception of people living in society and aims to equip them with the best means for achieving their goals.

Any response to the basic issues - expressed earlier - underlying human development should be along these lines so as to make policy decisions more enlightened. Liberalization and participation must be the principal features of any such policies, to which decentralization, where it is still lacking, should be added.

B. The foundations of a development policy

In view of the globalization of the economy, what are the conditions needed to realize the ultimate goal of human development ? From its Reports it can be seen that UNDP advances as its main policy guidelines Ziberalization, decentralization, and ensuring and safeguarding the

- 16-

participation of all individual members of any group in the common prosnerity and in the benefits of that prosperity.

At an economic level, the liberalization-decentralization-participation triptych is aimed, in short, at the long-term elimination of destitution, poverty and insecurity. It is therefore concerned with economic prosperity. In terms of political philosophy, it appears to relate back to the idea of democracy in its broadest sense, with an underlying idea of meritocracy.

Liberalization involves both the fostering of private initiative and the free fiuzctioning of market mechanisms. It is meant to bring about an optimal allocation of the factors of production, but also an optimal distribution of.goods and services.

Decentralization implies handin g over decision-making powers to local authorities, which are elected and therefore accountable to the communities and people that they are meant to serve. It associates people more closely with the running of public affairs and makes for more eflective public spending and more efJicient taxation.

Participation refers back to the concern that each individual member of a group should . be first of all the principal agent of economic progress and ultimately itsfi& beneficiary. As

we have already said, from a human development perspective, individuals are regarded, above all, as the goal of economic progress, even if they are also the means of achieving it. For this reason, UNDP believes that: Meeting peoples basic needs is important. But the development of people is just as important . . . The emphasis here on meeting peoples needs reflects the Reports participatory approach to development [8 l] (emphasis added).

Thus, a policy for human development would require the emphasis to be placed on guaranteeing satisfaction of the needs and aspirations of all individuals (or groups) through their participation both in the generation and apportionment of income and in guiding their future from an economic, political, social and environmental perspective. This has prompted UNDP to state that: Peoples needs and interests should guide the direction of development, and people should be fully involved in propelling economic growth and social progress [82].

Tying in with current problems of combating social deprivation and unemployment, the important feature of this argument, apart from freedom, is that individuals should have a disposable income giving them an adequate standard of living. This is the main objective of including participation in an (economic) policy for human development.

But what should participation mean for different countries? It could never mean the same thing for them all. Different economic policies are therefore needed that match the specific situation or category of individual countries: rich and industrialized, rich and non-industrialized (those that receive substantial amounts of revenue from oil, minerals or taxes), poor countries, indebted countries, etc. The following theoretical analysis of development identifies the different situations.

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15 S, A

High T

Average

-1: -l-J

BP BM )

/ B dS/dth

+

SP

Fi,oure 5.12: Formal framework for analysing human development,

Source: FONGANG, Sirneon. Lindicateur de dkveloppement humain du PNUD: portbe, limites et dkpassement. Thesis, University of Poitiers, p. 370 [83 1.

All the above recommendations and trends in economic policy for human development must be rationally and logically combined within a policy framework consistent with general human development issues. It is from such a setting that the public authorities should seek to influence the economic process.

Let us recall the distinction needed between the theoretical policy framework and the process, together with the type of links established between them, and, between regulatory policy and steering policy.

The economic process is where individual freedom of activity and initiative are fully exercised. The regulatory policy is that which the state can exercise directly over the process. How well the process functions depends on how well the framework has been designed. A well- des@ed decision-making ftamework will improve the finctioning of the process and give the state less cause to seek to modify the tier.

In a system preaching liberalizaton the state acts through the framework, which serves as a reference and guide for its policies. The steering policy bears on the framework, encompassing as it does all the factors which, while they might not arise spontaneously in economic life, nevertheless have an extraneous effect on economic development. Thus, according to Professor Bilger, the framework contains: elements which, owing to the general interdependence of social factors, determine or, on the contrary, are affected by economic life. They include people and their needs, natural resources, working and non-working sections of the population, technical

- 18-

and scientific knowledge, the political and legal organization of society, intellectual life, geographical factors, social classes and groups, attitudes, etc. [84].

Since these realities undeniably affect economic and social activities, it falls to the state to determine the action to be taken with regard to all the extraneous factors that influence the process. So this means organizing public action on the basis of (and within) the framework in order to ensure that the process achieves the best outcomes, which is where we see the necessary allowance for distinctive human, space and time factors in the determination of a steering policy.

This is what UNDP sought to make clear when stating that: 77ze polic?, enviromzeur is important for the eficient use of investment resources and for adapting to changing world conditions in ways that permit sustained gowth [85]. Such a theoretical policy framework, compatible with the problematic and analysis of human development, that is, aiming to combine economic efficiency and social justice, can quite logically be derived from the theoretical framework for analysis of human development.

Thus, as regards the role of the state in particular, it is not meant to intervene as a player in economic life. This is why UNDP says: What is required is a smaller but more effective public

. sector capable of creating an enabling development framework and guiding private investments into priority areas for human development [86].

In tandem with limiting the role of the state in this way, free enterprise and market deregulation are recommended. However, in the domain of economic policy, the theories and stances of the Abbe de Condillac are more numerous and quite unambiguous, and appear to us to be more relevant to the approach. According to Condillac, when the economy is completely unfettered, wealth increases; everything realizes its true value when individuals fulfil1 their ambitions and engage in activity they have freely chosen. The role of the state - which he calls the sovereign power - is confined to three functions, namely legislative, executive and armed defence; to which Condillac [87], with some reservations, proposes to add a fourth: the priestly function. In his opinion, maintaining order guarantees justice, a task which the power has a duty to take on, but without interfering in economic choices, since the needs of individuals impel them to produce what is most useful to the community. Condillac asserts that, If this power maintains order and freedom, a nation which concerns itself with everything, without exclusive preferences, will be as rich as it can be [88].

Since individual interests do not necessarily and automatically add up to the general interest, individuals must pursue their priva$e interests, but the state must ensure the rea%ztion of the general interest, which should be the ultimate purpose of its action [89].

Condillac envisaged a situation, however, where order and freedom in the economic domain had been voluntarily discontinued, as actually happened in the former communist countries, and their restoration was being sot&. In Condillacs view, it requires time and adequate preparation to restore free trade where it has been destroyed. The inflation (cherti) that ensues once it has been restored, should be blamed not on the re-establishment of freedom but on the methods employed, especially where there has been inadequate preparation [90]. In his own words, Countless precautions are often needed to restore order . . . freedom may have been annihilated by a single word from a monarch; a single word is not going to bring it back, and inflation follows in a matter of months [91].

We have seen how transfers and social spending as ways of combating exclusion have been criticized as partial and therefore unfair. Condillac is of the same opinion. He believes

- 19-

that in society all citizens are bound to each other by a contract, either explicit or tacit, which commits them to mutually contributing to the common good. Each individual must therefore be useful to the others. No citizen should escape from such an obligation since it is the means of ensuring the harmony of the entire social fabric. Whoever withdraws from the obligation should cease to be the responsibility of society. Condillac thus said: A useless person is not a citizen; he does nothing for society and society owes him nothing [92].

However, this somewhat rigid stance by Concillac has more to do with his rigorous analysis since he is not unaware that the situation of the useZe.ss person may be involuntary His reasoning seeks, above all, to reconcile the demnzds ofjustice (in the sense. seen above. namely, with respect for private property and individual freedoms) in distribution with the objective of his analysis, which is the well-being of every citizen. The realization of this well- being, however, involves satisfying needs (and not necessarily through levies on certain people for the benefit of others). Furthermore, unlike Adam Smith who did not envisage the possibility of involuntary unemployment, Condillac was aware of it and blamed the situation on the inefficient running of public affairs. In his view, beggars are only to be found where governments are flawed. This and other situations can leave people with neither resources nor work. Thus, he says: I know it is supposed that all can live by their work; for the rich, who do nothing, tell those unfortunates without enough to eat, simply to go and work . . . luxury, which increases the number of beggars, hardens the heart, and there are no resources left for the destitute [93].

Although Condillac was not in favour of social transfers, he was nevertheless interested in whatever legitimate and worthy means - whether in the form of pay, profits, private income, interest or other - would enable people to meet their needs. He thus stressed the importance of solvency, that is, having enough disposable income to guard against the misfortune of lacking food. Of course, the idle rich are not short of food. However, it would be unjust to dispose of the assets of another, or to hamper the freedom of action of any member of society. The fact that the rich may be hard-hearted should not be an adequate reason for compelling them to show generosity or solidarity through levies on their resources. Other options should be preferred.

Tying in with the current problem of combating social deprivation and unemployment, the important feature of this argument, apart from freedom, is individuals should have a disposable income giving them an adequate standard of living. This is the main objective of including participation in an (economic) policy for human development.

But what should participation mean for different countries? It could never mean the same thing for them all. Different economic policies are therefore needed that match the specific situation or category of individual countries: rich and industrialized, rich and non-industrialized (those that receive substantial amounts of revenue from oil, minerals or taxes), poor countries, indebted countries, etc.

It is in relation to combating distributional inequalities that UNDPs recommendations differ from those of both Condillac and Adam Smith. In the eyes of UNDP: The case is thus strong for making distributional corrections in one form or another. Such corrections are especially important for income, which can grow to enormous heights [94]. However, no technical argument is given to justify such an objective [95].

Still on the subject of inequality and with regard to earnings in particular, Condillac proceeds from the idea that freedom and order allow an optimal market allocation and encourage diversification of activities, and acknowledges that some activities will command higher

- 20 -

earnings than others. But, in his view, any resulting inequality in distribution is not inherently wrong since no injustice is involved. From this perspective he writes: When everything is well ordered, all tasks are useful. It is true that they distribute wealth unevenly, but there is justice in this since more or less rare talents are called upon. Therefore, no one has cause for complaint, and everyone has a place [96]. On expenditure his views are similar [97]. In particular, he believes that the same living standard may be reached by individuals with very different income levels, depending on place and prices; hence it is preferable to consider only the initial objective of individual well-being for everyone through satisfaction of their needs in their social and/or natural environment.

The multitude of real-life situations calls for different but well-adapted instruments and methods in each case. Without overlooking the dynamic character of the advancement of societies, Condillac observes that this advancement comes about via three states. In each of them the activities of individuals are related to the nature and extent of their needs, and this combination characterizes the three states of life, namely, the crude state, the simpZe state and the soft state. The latter is the state reached by a society in which economic progress and development of the arts have produced a large measure of national wealth, but where distribution of the wealth fails to secure prosperity for everyone. Poverty and opulence rub shoulders; luxury increases but is only accessible to a small minority, and global prosperity declines. According to Condillac, Disorder is at its height. As luxury increases, so too does poverty: the towns fills with beggars, the countryside becomes deserted, and the state, which is heavily in debt, seems only to have enough resources to complete its downfall [98].

All the above recommendations and guidelines regarding an economic policy for human development must be combined within a policy framework, in a rational and logical way that takes proper account of the issues underlying human development. The framework should then be used by the public authorities to influence the economic process.

Acceptance ofparticipation, in Condillacs sense of the term, would challenge the current analysis of unemployment in that it fails to deal with the basic problem, namely, the insolvency of those concerned. It therefore seems possible, in this respect and in support of the analytical framework for human development shown in Figure 5.12 above, to demonstrate that if the problem of the insolvency of individuals were addressed rather than unemployment, the latter would be resolved indirectly as part of the solution to insolvency. There are several sources of income and several possibilities of solvency, of which income from peoples (paid) work is but one component. In the past this component was uppermost in the industrialized countries, and still is in the non-industrialized countries. However, with an effort to make people solvent, it is clearly the case that, depending on the situation of particular countries or groups of individuals, income from capital, independent means, or labour can be universally accessible in an environment that respects liberalization, decentralization, the participation of all and the inalienability of private property.

In brief, the thesis to be defended in such an approach is contained in the following steps:

1. Premise: Underlying such social ills, such as deprivation and poverty is insolvency rather than non-work. For example, people who spend their time travelling the world in pursuit of leisure and pleasure, do not pose any problem by not working: they are solvent (because they have independent means or are big investors, international sports or music stars, beauty queens, or whatever). On the other hand, workers complain and demand ever less work and relatively greater access to consumer goods and leisure (hence more solvency). The current debate on a shorter

-21-

working week (with or without loss of pay?) is a perfect example in this respect. Yet, the whole issue of unemployment - and/or job insecurity - concerns insolvent people - or those whose solvency is not guaranteed to last - who are told to look for a job (allocation of a worker to a work station), not as an end in itself, but simply as a means (among others, we have seen) of becoming solvent.

2. Statement of the position: If the well-being of every individual in society is the objective, then there is good cause for saying that the search for solutions to the problem of underemployment of human labour will necessarily result in deadlock or would become a wild-goose chase [99].

3. Method: An alternative approach would be to address the problem of insolvency instead of unemployment. This would extend the frontiers and enable us to see that income from paid employment is not the only solution to insoZvency; depending on the specific situation of the country concerned, other sources of income are as good as, if not better than, human labour for addressing this problem in the light of technological development. It is thus all the means and methods of implementing them to achieve this objective of solvency of all individuals in any human society that it seems we should be seeking, rather than focusing on a single one of these means and trying to put the greatest number of people to work when, increasingly, they are being usefully and inexorably replaced by non-human means (technologies, machines, physical and chemical principles of nature, etc.).

With this in mind, these foundations of an economic policy for human development having been thus determined, work on prolonging this new system of political economy will identify ways achieving the same objective of individual solvency, but in particular country situations: rich and industrialized; rich and non-industrialized; indebted, but with firmly based human development factors (see Fongang, 1997); indebted with low human development potential; intermediate, and poor.

CONCLUSION

In this overview of our approach to human development, we have tried to show the underlying features and implications of each of the proposed stages: a problematic of human well-being, followed by a scientific analysis based on people, and a policy framework directing the economic process towards the final objective.

Thus perceived, this approach to human development may well be regarded as a new Complete System of PoZitical Economy or, in the words of Professor Bat-r&e: a ZogicaZ combination of the economic problematic and analysis leading to an abstract elaboration, offering a synthetic representation of the economy, and Qllowing the impZementaiion of a policy [ 1001.

However, even though all the components of the UNDP system of political economy are known, their arrangement into a truly operafional system is still under way. Hence, there is still plenty of scope for more work on the theme of human development.

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NOTES

1. Paper given at the Colloque international sur le dtveloppement des nations: Poitiers, 28-30 May, 1997.

3 a. Hereinafter often shortened to the Report, or Reports when the reference is to more than

one year.

3. Professor Tinbergen thus wrote that the controversy between East and West . . . is often exaggerated to the detriment of all . . . since the optimum comprises elements of each of the two systems, not so much in the form of a compromise, but rather as a synthesis (Tinbergen, Jan. 1972. Politique economique et optimum social. Paris: Economica: 168). For his part, Professor Bilger3 wrote in 1985: Nowadays . . . it is no longer a question of imitating or adapting, but of innovating. We mustfind a method that is more economically effective and more socially acceptabLe than those that are either currently being applied in the world, or have been suggested. (Bilger, Francois. 1986. Lexpansion dans la stabilite. Paris: Economica: 10).

. 4. UNDP. Human Development Report 1993. New York. Oxford University Press 1993, p. 8.

5. UNDP: Report 1990: 1.

6. Smith, Adam. (b. Kirkcaldy, 1723 - d. Edinburgh, 1790).

7. Smith, Adam. 1776. The Wealth of Nations (Book V, Ch. I, Part III, Art. II). Ed. Cannan. London: Methuen, 1925, Vol. II, p. 259.

8. These philosophers belong to the Attic period (500-400 BC) in the chronology of Greek literature.

9. Epicurus belonged to the Hellenistic period (323-31 BC) and Epictetus to the Roman and Byzantine period (100 BC-400 AD).

10. Epicurus. Letter to Menoeceus. (Trans. from Vergely, Bertrand. 1993. La philosophic. Paris: Larousse: 590).

11. Epictetus. Doing what depends on us. (From Vergely, Bertrand. 1993. Lu philosophic. Paris: Larousse: 577).

12. Scholasticism was developed by Saint Anselm, Peter Abelard and Peter Lombard, reaching its apogee under Albertus Magnus and Saint Thomas Aquinas.

13. Thomas Aquinas (Saint), Somme thtologique [Summa Theologicae], T3, 4.77, Article 1 (Editions de la Revue des Jeunes, Paris).

14. See Aristotle: Metaphsics, A, - 30; The Nichomachean Ethics, I, 6 1098a5; I, 9, 1098b31; II, 4; and Categories. Translation Yvan Pelletier, 1983. Montreal-Paris: Bellarmin-Les Belles Lettres. In the latter work, Professor Pelletier says (p. 67, note 11) that the habitus, or possession: basically means the act of having, then the disposition in which the one who has finds himself. The disposition differs according to the object of the act. So long as the object is material and exterior, the word, possession translates fairly well the state of the person who has the object concerned. But as soon as something

15.

16.

17.

1s.

19.

20.

21.

22.

23.

- 2s -

immanent is involved, affecting the body or the mind, such as health or knowledge (which is the context generally intended by Aristotle), there is no suitable word. We can therefore see no better alternative, when representing the disposition in which one who has science or virtue, for example, finds himself, than to enlist the Latin word habitus. This reflects the position adopted throughout this work.

Dimensions used by UNDP in measuring human development.

Thomas Aquinas (Saint) So77217ze thtologique [Summa Theologicae]. T2. Q.2.. Article 5 (Les Ed. du Cerf, Paris, 1984. p. 38).

Abbe Etienne Bonnot de Condillac (b. Grenoble 1715 - d. Abbaye de Flux, 1780) was elected to the Academic Frangise in 1768 and belonged to the Socittt Royale d Agriculture of Orleans.

A resurgence of the need to establish links between the fundamental principles of ethics and philosophy - which has