Date: Tue Apr 04 2006 - 09:05:39 EDT
EPW Commentary March 25, 2006 Tribute: Hans Singer (1910-2006) Doyen of Development Economics Hans Singer's seminal work on the terms of trade was the fulcrum of several interrelated concerns he took up with a view to secure distributive justice for developing countries. In the death of this pioneer development economist, the third world countries have lost a close friend and a mentor. Rameshwar Tandon With Hans' death on February 26, 2006, the world has lost one of its most respected development economists whose professional career lasted 70 years. For several decades Hans worked with great energy and commitment in the interests of the third world both as an economist and as an UN official. He was a pioneering thinker of astounding productivity and extraordinary creativity and had an unshakeable commitment to the third world. He is regarded as one of the great innovators in development economics, whose name is linked with Raul Prebisch for the documentation of the declining terms of trade of primary commodities. For me, it is a proud privilege to have been associated with him for various studies for the past two decades. With his collaboration, New World Order Series was launched in mid-1980s and this summer its 25th volume will be released. Development Economist Hans described himself as an aspirin product, to use a phrase of his, because his father was a doctor and his mother a nurse who met in connection with medical research at Bayer. He belonged to a Jewish minority in a protestant enclave in the catholic Rhineland and was a witness to the German defeat in the first world war, Ruhr occupation, the German hyperinflation and the great depression. These economic shocks turned Hans Singer's interest towards economic and social problems. It is from Joseph Schumpeter in Bonn that he learnt those first lessons which helped him as a development economist; in part, the emphasis on the importance of technology and innovation and partly viewing development as a dynamic and revolutionary force - "the creative destruction". Early in l933, Singer received a warning from Spiethoff that the Nazis were planning to raid the faculty of economics at Bonn. Singer first fled to Switzerland, then to Turkey and finally in early 1934 reached Cambridge and was granted a stipend to begin his life as a doctoral student officially under J M Keynes. In Singer's words, there was never any doubt that Cambridge was the intellectual centre of the universe. While the inner circle around Keynes comprised such brilliant economists as Colin Clark, Richard Kahn, Austin Robinson and Piero Sraffa; an outer circle consisted of such research fellows as V K R V Rao, Alec Cairncross and Singer himself. When asked what he learnt from Keynes, Singer's unhesitating response was everything; more precisely, the macroeconomic view, the importance of thinking in real as well as in monetary terms, an emphasis on demand, the desire to put human resources in the centre and an implicit belief in man's ability to control his destiny (planning). How Singer began his career as a development economist at the United Nations is an interesting story. He attributed it to his sources of inspiration - Spiethoff, Schumpeter and Keynes - and his abiding interest in the study of unemployment and backward areas. On his arrival in New York, Singer was received by David Weintaub; he knew that in Great Britain, Singer worked at the ministry of town and country planning. Since in American vocabulary, country planning meant planning for whole countries, Singer was given the job of doing just that. Within the UNDP, Singer had two responsibilities - to study the terms of trade in the developing countries and to organise soft aid. For the latter, Singer organised the United Nations Fund for Economic Development (UNFED), an unfortunate choice of acronym which was fortunately changed to SUNFED by adding a "special". Essential Life As John Shaw tell us in his biography1 there have been three main epochs in Singer's long and eventful life: first, the period as a student and young economist up to the age of 27, second period, working at the UN between l947-69 and the third period, as a professorial fellow in the Institute of Development Studies (IDS) and as an emeritus professor of economics at the University of Sussex, UK from l969 to 2006. He was a prolific writer; as John Shaw lists 450 books, reports and articles, backed by innumerable number of newspaper articles, letters and reviews. His archives are in the IDS, Sussex library. Those who believe in destiny will be fascinated by what John Shaw calls the "twists of fate" that led Singer to leave the mainstream of economists and join the then tiny band of development economists: his decision in 1929 to switch from study of medicine to economics at Bonn University in Germany, where he came under the spell of Joseph Schumpeter and his economics masterpiece, The Theory of Economic Development; the award of a scholarship to finish his PhD work at King's College, Cambridge University, where he came under another spell of J M Keynes, precisely at the time when Keynes was producing his masterpiece, The General Theory of Employment, Interest and Money; his first employment after Cambridge on the Pilgrim Trust Unemployment Enquiry in the depressed areas of UK (l936-38); his friendship with David Owen who, nine years later, managed to lure Singer away from Glasgow University to the Department of Economic and Social Affairs of the newly created United Nations, of which Owen was the head. During his 22 years at the UN, Singer held many different positions, helped initiate several new UN programmes and led many UN missions to developing countries. Among many major initiatives in which he was involved were the UN Fund for Economic Development (SUNFED), which led to the creation of International Development Association (IDA), the soft loan arm of the World Bank; the UN World Food Programme; the United Nations Development Programme, the UN Research Institute for Social Development, the UN Industrial Development Organisation, the African Development Bank and helped change the focus of UNICEF from an emergency fund to an organisation concerned with long-term interests of children. Singer was involved in the establishment of the World Employment Programme at the UN International Labour Office, launched in l969 and co-led the ILO employment mission - Kenya in l971-72, during which he produced his concept of "redistribution from growth" as a means of reducing poverty, which (in modified form) became the signature concept of the World Bank's approach to poverty alleviation under the presidency of Robert McNamara. As a dissenting economist, Singer differed from the popular view that food aid was counterproductive because it discouraged domestic production, disrupted trade and reinforced governments' neglect of agriculture. As he put it, there is nothing innately wrong with food and like other forms of aid, it all depends on how food aid is provided and used. Prebisch-Singer Thesis Hans Singer is internationally known for his landmark analysis of terms of trade between industrialised and developing countries carried out between l948 and l950. Raul Prebisch used his work in what later became known as the Prebisch-Singer thesis, which showed that the net barter terms of trade between primary products and manufactures have been subject to a long-term downward trend. Singer's original paper was based on a paradigm of the commodity markets in which less emphasis is placed on traditional neoclassical competitive markets and more on the bargaining and financial power and control of marketing, processing and distribution. He argued that economic history had been unkind to developing countries, since most of the secondary and cumulative effects of investment from the developing country in which investment took place went to the developed country. He emphasised the structural differences between the countries where increased efficiency of production led to higher incomes, and those where it led to falling product prices. Singer later had "revisited" his pioneering distribution of gains from trade and investment thesis on several occasions when he gave more emphasis to relations between different types of countries, rather than types of commodities and to the distribution of "technological power". Hans Singer argued that the character of technology available on the world market was a major obstacle to the unleashing of multiplier effects from local investment because it was neither labour-intensive nor did it employ much local labour in investment goods production. The Prebisch-Singer thesis has created a growth industry in the development economics studies. Being in direct contradiction with the prevailing orthodoxy, it is not surprising that the thesis has attracted criticism from a number of quarters, but subsequent studies have largely upheld Singer's work, leading to the conclusion that there can be few hypotheses in economics which have stood the test of time. Singer's seminal work on terms of trade has been the fulcrum of several other and interrelated concerns he took up with a view to secure distributive justice for developing countries. Throughout his long career, his concern was with what he called the "seven pillars of development", which were included in his Dean Hudson Memorial lecture at Long Island University as long ago as in l964 and should be underlined again: (1) Industrialisation, as means of breaking out of the trap that concentration on primary production has created for long-term development; (2) Science and technology, from capital-intensive to labour-intensive, to take account of the structural differences between developed and developing countries; (3) Investment in human capital and children, with the realisation that the capacity for advancement and to create wealth lay inherently in people; (4) Planning, in order to utilise the scarce resources of developing countries effectively, by the governments with the capacity to carry out realistic programmes with achievable targets; (5) Trade and aid, including technical assistance, food aid and pre-investment to maintain investment in development in the face of unsatisfactory export earnings, and to release many latent investment opportunities in developing countries; (6) Regional cooperation, as many developing countries are too small to create viable economic entities and their borders were determined by political and diplomatic history rather than by economic factors; and (7) International economic order with multilateral global governance, which could ensure a fair distribution of fruits of progress in the realisation that the elimination of poverty and a better distribution of well-being are in the enlightened self-interest of all. For all of us in the third world, his death has taken away a close friend and mentor - who, no matter how busy, was somehow always able and willing to find time for others, especially students and younger colleagues. He lived a life that only a few have - escaped from Nazi Germany, studied under Schumpeter and Keynes, his pioneering career as a development economist and as an institution-builder within the UN. The story of his life could be called as "from the Third Reich to the Third world". Email: email@example.com Note 1 Sir Hans Singer: The Life and Work of a Development Economist by D John Shaw, Palgrave-Macmillan, London, 2002.
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