Iwrite to correct certain major errors of analysis and of emphasis in the review of H. Myint’s book with the above title that appeared over my name in nlr 31. These errors result in part from the fact that the review was so heavily edited as to amount almost to a complete re-write; but they also arise from my own failure to appreciate Myint’s general purpose and framework of reference. This should have been clear to me had I recalled Myint’s very valuable article in Oxford Economic Papers of June 1954. My attention has been drawn to these errors by R. H. Green and G. B. Kay, recently of the Economics Department of the University of Ghana. I am most grateful to them and hope that they will contribute a full statement of their views in a future issue of nlr. In the meantime the following errors require correction.

First, and foremost, I was quite manifestly wrong in not recognizing the importance of structural analysis in Myint’s work and in associating him with the school of Bauer, which Dudley Seers was attacking in his article on ‘The Limitation of the Special Case’ (Oxford University Institute of Economics and Statistics Bulletin, May 1963). At the same time, Myint’s disenchantment with grandiose economic plans and prestige projects leads him to speak of ‘subjective discontent concerning “foreign economic domination” and “colonial exploitation”’ (pp. 27–8: his quotation marks; my emphasis) and of ‘economic development plans creating dislocation, discomfort and deprivation for the people, without producing quick benefits’ (p. 20). The result is to create in the reader a sense of despair at the possibility of structural change.

Secondly, I was wrong in criticizing Myint’s emphasis on the importance of developing countries raising their agricultural productivity and so stepping up their exports of primary products. They have no alternative. At the same time, Myint’s references to people in the developing countries ‘feeling’ that the ‘present economic structure of their countries, characterized by a large proportion of the total working force in primary production, is somehow lopsided and unbalanced’ (p. 129) and his subsequent criticism of ‘this bias for manufacturing industry’ brings him perilously close to Bauer’s position that primary production is in itself sufficient to lead to development. There is no reference to the studies in comparative agricultural and industrial productivity (particularly A. Maizels Industrial Growth and World Trade cup 1963) or to those on Income Demand Elasticities (culminating in Dudley Seers article in the Economic Journal of March 1962 on ‘A Model of Comparative Rates of Growth in the World Economy’), both of which reveal the weak position of primary producers.

Thirdly, I was wrong to be so critical of Myint’s emphasis on non-economic reasons for cheap labour policies in colonial mining and plantation companies. I had in fact made the same emphasis in my book (After Imperialism p. 319 in a footnote in criticism of Paul Baran). At the same time, there can be no doubt that restriction of colonies to primary production not only provided markets for metropolitan manufactures but also high profits from cheap labour in mines and on plantations at a certain stage of the development of the colonial economic relationship. It was the central theme of my book that the advantages to the metropolitan lands in both respects are now largely played out, in the one case because of the impoverishment of the market, in the other because of the high cost of inefficient, unmechanized output dependent on cheap labour. Again, the danger is of exaggerating, as Myint seems to me to do, the opportunities for the developing lands of concentrating on primary production for export, without developing local industries and reversing the outward movement of capital.

Fourthly, I under-estimated Myint’s positive strategy for industrialization based on deliberately unbalanced sectoral growth and the use of the price mechanism. At the same time, Myint’s scepticism concerning the role of the public sector (p. 173) under-rates its importance in doing something to correct the ignorance of entrepreneurs of future demand, when the price mechanism alone is relied upon. Moreover, Myint’s support for the retention of foreign enterprises in the developing countries for their market opportunities, technical skills and capital (pp. 6 and 41) is offered without any discussion of the concomitant outflow of profit. And his enthusiasm for Indian development of capitalist agriculture (p. 135) is not qualified by any warning of the dangers of the resultant increase in unemployment.

Fifthly, I may have exaggerated the possibilities of increasing investment without cutting current consumption. At the same time, Myint’s critique of the concept that there is not any social cost involved in employing the unemployed is a bash at an Aunt Sally of his own erection. The point is that the employment of the unemployed can provide social benefits that far outweigh the social costs involved and does not simply constitute a diversion of resources.

Finally, it may be that I am unduly optimistic about the possibility of the rich countries recognizing not only their responsibility for aiding economic growth in developing countries but also of their economic interest in doing so, on the basis of an international Keynesian policy maintaining world purchasing power in order to sustain their own growth rates. At the same time, I am sure that Myint is unduly pessimistic about this possibility, and that much of the language and some of the analysis of the book serve only in effect to divert attention from the necessary study of ways to promote the common interests of the peoples of the developed and developing lands.