• He was an active leader of the Swedish Social Democratic Party.

• He was a Senator. A minister of Commerce.

• After WWII he was executive secretary of the United Nations Economic Commission for Europe.

• Myrdal’s discussed problems of poor countries• It has three major themes:

A. widening gap between rich and poor countriesB. standard economic theory is inadequate to

narrow the gapC. governments in poor countries must play large

role in promoting economic development.

Poor Countries

WB, 2012

Top 10 Poorest Countries in the World – 2017 List

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

http://gazettereview.com/2016/06/top-10-poorest-countries-world/

2 – Burundi (GDP per capita of $267.10)    Having suffered from recurring violence and political disputes, it is no surprise that Burundi ranks as the second poorest nation in the world, even though the country is working tirelessly to rebuild itself. Aside from the estimated 300,000 civilian casualties resulting in a 67 percent poverty rate, the violent political rivalries were also detrimental to Burundi’s agricultural development

Even now, the nation ravaged by war holds very little farmable land, and any land that may be used for small-scale farming is still fragile due to the vulnerability to shifting climates and weather conditions. With the population growing rapidly, food prices rising, and a GDP per capita of $267.10, Burundi places as the second poorest country in the world.

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

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

Unfortunately, both of these economic sources can easily be devastated by random shifts in climate and weather, and thus Niger has struggled in developing themselves economically

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

5 – Liberia (GDP per capita of $454.30

6 – Madagascar (GDP per capita of $463.00)         Although this remains a list of the world’s poorest nations, some of the nations on this list are actually making progress in securing economic stability for themselves. Madagascar, unfortunately, is not one of these countries. Over the last 20 years, the standard of living within this island country has declined significantly. With a population of more than 20 million people, Madagascar has a GDP per capita of $463.00, with about 70 percent of the nation’s people living under the poverty line.

Once again reliant primarily on agriculture, the vulnerability of the industry, lack of potent farming land, and the growing population only make their economic situation worse and worse over time.

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

Congo has been subject to a very unstable, corrupt political system that has been holding back the potential of the nation’s wealth drastically. As a result of this, with a GDP per capita of $484.20, a large portion of the nation’s people remain unemployed, and their lack of money thus results in their living within greatly inadequate living conditions.

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

8 – The Gambia (GDP per capita of $488.60)

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

Typically, the wealth of a country is measured by its Gross Domestic Product (GDP) per capita, which is the purchasing power of all goods and services produced in a country, divided by its population. In essence, this defines the purchasing power of a single person within the country. To begin this list is Guinea, with a GDP per capita of $523.10. Guinea hasn’t seen a period of economic stability since the 1990’s, when their mining and agricultural industries did them well. Since then however, Guinea has fallen victim to sever sociopolitical crises, which rapidly decayed the state of their economy.

Much of their economy is still largely based on agriculture, which is difficult because farmers only have access to outdated information and obsolete technology, as investors tend to shy away from the nation entirely.

10 – Guinea (GDP per capita of $523.10)

Rich Nations

BRICS Countries

• Myrdal argued that the upper class of rich nations is growing richer with a momentum that slackens only during occasional short periods.

• While underdeveloped countries are moving slowly or not at all.

• A widening of markets strengthens the rich and progressive countries whose manufacturing industries have the lead and fortified by external economies.

• While underdeveloped countries are in continuous danger of having small scale industry, handicrafts, priced by cheap imports from industrial countries.

• The widening gap between the two groups can be explained by “the principle of circular and cumulative causation”.

• Myrdal endorsed Nurske’s analysis by citing the vicious cycle of poverty and added a reciprocal relationship of less poverty, more food, improved health, and higher working capacity to sustain a cumulative process upward instead of downward.

• The main positive effect of international trade on underdeveloped countries was to promote the production of primary products.

• Such production employing mostly unskilled labor.

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

• Myrdal second theme was that orthodox economic theory cannot explain or reverse the growing gap between rich and poor countries.

• The doctrine that all men aspire toward economic equality is the universal idea that links western philosophies of conservatives and radicals, liberals and socialists alike.

• He argued that Orthodox economic Theorists tried to avoid the equality doctrine and developed certain predilections as antidotes to this dangerous thought.

• From John Stuart Mill on, leading device for evading this issue was to draw a sharp line of demarcation between sphere of production and distribution.

• Since natural laws were supposed to reign in the sphere of production, policy based on the equality doctrine was restricted to distribution.

• To avoid exploring the issue, economists have over a century directed their analysis almost entirely toward production and exchange instead of reforms in the distribution of income and wealth.

• A number of ideas were developed by Orthodox economists to evade the equality doctrine.

• One was the harmony of interests, which is “ a comforting thought for those who have drawn a lucky number in life’s lottery.

• A second was predilection was laissez faire.• A third was the free trade doctrine.• Which lost its basic validity because of the unrealistic

nature of its basic assumptions-free competition.• It provides bad advice for underdeveloped countries.• Telling them to avoid tampering with international

trade and payments.

• A fourth of the orthodox economic doctrine is that economy tends toward stable equilibrium

• Myrdal argued that this is far from the truth than the idea of circular causation and cumulative processes.

• He argued that standard theory is a rationalization of the dominant interests of the industrial countries.

• He further said in general, economic theory has not been concerned with the problems of underdeveloped countries.

• They should remold this theory to fit their own problems and interests.

• Myrdal discussed another problem of poor countries in relations to the Keynesian theory.

• The idea of distribution within a country.

• Conventional theory concludes that consumption detracts from savings and investment.

• Substantial improvements in levels of living must be postponed for some time in order to permit capital accumulation and higher productivity and levels of living in the future.

• He argued that unequal distribution of income affect poor people.

• Therefore, a partial conflict occurs, in the short run between higher consumption and higher production.

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

• He cited that in poor countries , improved levels of living are precondition for higher labor input and efficiency.

• He proposed that governments in underdeveloped countries must speed up development.

He acknowledged the followings:

*High population growth in poor countries

*Uncontrolled flow of foreign trade

*Used of foreign exchange for urgent and important requirements to stimulate growth

* Protection of infant industries

*Restriction of import of less necessary goods

* Government must own and operate industries such as railroads, highways, irrigation projects, port facilities, etc.

Government must take loans but must use it wisely.

Myrdal Vision of Harmony of Interests

• He said that peoples of the underdeveloped world must agitate their grievances.

• Rich countries don’t have time for their numerous challenges they faced

• He called for a great awakening of the entire globe on greater equality of opportunity.

• He said the great awakening is the victorious spread to the people of the underdeveloped world by the developed world.

• He argued that western countries must help poorer countries through the barriers of opportunistic ignorance.

• He also recommended that poor countries must on the other hand stop corruption and encourage the distribution of their resources to their people.

• They must focus on education, social development, build roads, open highways, build seaports and airports, etc.

• Poorer countries must encourage harmony and peaceful co-existence between it peoples on racial and religious groups.

Gunnar Myrdal and America's Conscience: Social Engineering and Racial Liberalism1938-1987

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

Walter A. Jackson (1990)

As the civil right movement gained momentum, many educated Americans turned to Myrdal’s book in an effort to understand the effects of white racism on Afro –American life.

Activists, educators, ministers and social workers referred to an American dilemma in campaigns against segregation and discrimination. Most significantly, Chief Justice Earl Warren cited An American Dilemma in the Supreme Court’s Brown vs Board of Education decision to support the view that segregated schools were inherently unequal.

Walter A. Jackson (1990)

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

Walter A. Jackson (1990)

Walter A. Jackson (1990)

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

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

Örjan Appelqvist, 2008

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

Örjan Appelqvist,2008

Örjan Appelqvist,2008

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

• The growth orientation partly provided a solution to the dilemma of increased indebtedness caused by the war. It was not by austerity measures that the debt towards creditors should be repaid but in the longer run by the resources created through economic growth.

• An interesting feature of the economic policy proposed was that it was intended as investment management, not the demand management as was usually the case with “keynesian’ economics. That is it favoured growth oriented policies.

Örjan Appelqvist,2008

• The insistence on maintaining the high taxation levels of the war signaled an orientation towards balanced growth. It was argued by Myrdal that education might properly be understood as investment rather than running costs in public finance. The argument could easily be expanded towards understanding not only educational costs but also reforms and health costs, not as luxury to be offered once the economy permitted it, but as the necessary reproduction component of the social growth

• Finally, the international component should be signaled of society. The political content of which was yet another attempt transcending dilemmas'. After the horrendous human losses and destruction caused by the war it was a contribution aiming at reconciliation through complimentary growth

Örjan Appelqvist,2008

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

Örjan Appelqvist,2008

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

Örjan Appelqvist,2008