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Revolutionary change and the Third World city : A theory of urban involution / LE


Author(s): W. R. Armstrong and T. G. McGee
Source: Civilisations, Vol. 18, No. 3 (1968), pp. 353-378
Published by: Institut de Sociologie de l'Université de Bruxelles
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and the ThirdWorld city:
A theoryof urbaninvolution
W. R. Armstrong and T. G. McGee

" One feature all modernizing

of virtually nationsis thegrowth
of political demandsas mass participationincreases. The
modernization process,by increasingeducation,mass commu-
nicationsand urbanization createsconditionsformasspolitical
participation.Indeed,it is now commonlyarguedby most
studentsof modernization thatpoliticalprotest,violenceand
extremist politicalbehaviour typicallyaccompanymoderniza-
tion. Discontentis often great not because a societyis
stagnant,but becauseit is changing."


Two undebatablefactscharacterize the majorityof the countriesof the

Third World (2). First,in the last decade theircities have been growing
massively;secondly,this city growthhas not been associatedwith a rate
of economicgrowthwhich is fastenoughto provideemployment opportu-
nitiesforthe rapidlyincreasingpopulationsof thesecities (3). In the face
of this situation,the frequently
reportedoutburstsof sporadicviolenceand

" Urbanization and Political Protest

(1) Myron Weiner, ", Civilisations, 1967,
Vol. XVII, Nos. 1 and 2, p. 44. It should be made clear that we begin our pape*r
with this quotation not because we agree with it; indeed much of the evidence of
this paper invalidates its assertions,but because it representswhat may be labelled as
the " conventional wisdom " of the Western social scientistswho are attemptingto
create a rationale for the processesof change occurringin the Third World.
(2) Excluding the Communist societies of China, Cuba and North Vietnam; as
defined by Peter Worsley, The Third World, 1964.
" "
(3) McGee has labelled this process pseudo urbanization in another publication.
See T. G. McGee, The Southeast Asian City, 1967, pp. 15-22.


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riotingare hardlysurprising. (4) What is inexplicableis thatgivena situa-

tionin whichmanyof thesecitypopulationscontinueto existat whatappear
to be sub-marginal levelsof existence- underconditionsof chronicunem-
ployment underemployment; facedby physicalproblemsof overcrowding
and inadequatehousing,and continually remindedof theirsub-humancon-
ditionby the affluenceof the only too observablecityelites - that they
have not yet proved the base for a successfuland genuine revolutionary
movement (5).
It is the purposeof this paper to examinesome of the reasonsfor this
lack of revolutionary activityin the largercities of the underdeveloped
world. In the firstpartof the paper,we put forwarda staticmodelof the
Third World city economicstructure which partlyexplainshow the per-
sistenceof " traditional " in the ThirdWorld
economicsystems cityacts as
an inhibitorof revolutionary change. In the secondpart of the paper,we
set the factsof this model withinthe dynamicanalysisof the penetration
of capitalism,attemptingto assess what implicationsthis mighthave to
predictions of revolutionarychange.(6)
It is our preliminary contentionthat a basic reasonfor the slownessof
revolutionary changeis the persistence traditional
of labour-intensive econo-
mic systemswhich, while characterised by low productivity and under-
employment, servea vitallyimportant function(fromthe point of view of
" sense of
maintainingthe social and politicalsfiatusquo) of providinga
employment" many to Third World citypopulations. These labour inten-
sive activitiesoccurprimarilyin the tertiary or servicesectorswhich form
such a large proportionof the Third World cities' occupations.(7) It is
(4) For instancesee : Peter C. W. Gutkind, The Energyof Despair : Social Orga-
nizationsof the Unemployed in two AfricanCities : Lagos and Nairobi ", Civilisations,
1967, Vol. XVII, No. 3, pp. 186-214.
(5) There are, of course, obvious reasons for this lack of success. The physical
concentrationof population in the city allows theoreticallyat least easier surveillance
and militarycounteraction. Discontentedgroups are more easily manipulatedfor politi-
cal ends; for example, the studentsgroups in Djakarta. But as the Negroes of the
United States and the Tet offensivein South Vietnam illustratewell enough, neither
of these reasons has universal validity. '
(6) It is necessaryto point out that we mean revolutionary in the sense of
genuine revolutionarychange designed to overturnand replace the institutionssubor-
dinating the neo-colonial states to internationalcapitalism. It should also be made
" " " "
clear that we use traditional and preindustrial as explanatorytermsfor econo-
mies which are practices characterized by labour-intensive,low capital investmentand
comparativelypoor technology. The firm-centredis equated with capital-intensive
(7) Adequate figures on the proportion of tertiaryworkers in the cities of the
Third World are not easily available. For some informationthe reader is referred
to Philip M. Hauser (ed.) Urbanization in Latin America. 1961, p. 120; Roy Turner
(ed.) India's Urban Future,1962, p. 166. T. G. McGee, The SoutheastAsian City, 1967,
" Social
p. 89; and for a more general coverage see UNESCO, Implications of the
Industrializationand Urbanization in Africa South of the Sahara ", 1964, pp. 21-23,
26-34. Labour intensiveforms also persist in cottage industrybut this has difficulty
persisting in the face of the capital intensive sector's industrial competition. In
some cases cottage industryis surprisinglyresilient. See Jacques Dupuis, Madras et
le Nord du Coromandel, I960, Chapter IX.


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necessaryto clarifythe meaningand role of this sectorin the

economicstructureof the Third World cities.

1. A PreliminaryDefinition of the TertiarySector (8) of the Third

World City.
While therehas been a considerabledebate among Westerneconomists,
a broadconsensusappearsto have been reachedon the subjectof the defi-
nitionof "tertiaryoccupations",definedby Lampard(9) as the " ...activi-
ties producinga non-material output". Most of theseauthorities agree that
these activitieshave proliferated as a resultof the increasedtechnological
productivity of the agriculturaland manufacturing sectorswhich" ...allowed
a growingproportionof the labor forceto be freedto engage in tertiary
occupations". In a passagewhichhas considerablerelevanceto the Third
World,Lampardmakesthe followingsignificant point about the industrial
revolution in Europe:
" But if some such transferof workersinto the
tertiaryarea had not
occurredin the past, the worstpropheciesof the early machine-breakers
mighthave been fulfilled.The numbersof technologically-displaced persons
wouldsoon have hobbledlabor-saving innovation and lessenedthedesirability
of ' progress '. That our societyhas neverbeen whollydisenchanted with
' '
progress is due, in largepart,to the proliferation of tertiaryemployments.
The shiftfromagriculture and manufacturing has no doubt been painful
forthosecaughtin timesof rapidtechno-organizational change,but the great
increasesin wealthaccruingto communities fromtheirenhancedproductive
capacityhas providedboth a cushionand a rationalefor the change. It
is preciselythis prospectof greaterproductivity which draws people of
under-developed areas towards the industrial revolution. One hopes that
the social costsof industrialization will not prove a rude awakening. "
The evidence for this patternbeing repeated in the under-developed
societiesis not strong(11), and one is inclinedto wonderin societieswhere
technological-displacement is a sectorally-imbalancedphenomenon- thatis,
it is occurringin manufacturing but not in agriculturalsectors- why
" "
manyof these societiesdo not become disenchanted with progress,at
least in the Westernmodel and revertto some otherkind of model'sfor
development. Indeed,one can find the more intelligentof the economic
plannersadvocatingformsof"investment thatwould avoid labourredundancy.
Thus such people advocate intermediate technologyand investmentin
agriculture which aims at
largely increasingproductivity throughthe use
of betterseeds,pesticides,etc.,so avoidingthe problemof unemployment

(8) One of the earlier attemptsto define the tertiarysector is that of Colin Clark.
See Colin Clark, The Conditions of Economic Progress. 1940.
(9) Eric E. Lampard, The History of Cities in Economically Advanced Areas ",
John Friedmannand William Alonso, Regional Development and Planning. A Reader
1964, p. 340.
(10) Ibid., p. 340.
(11) See for instance,S. G. Trantis The Economic Progress,Occupational Distri-
bution and InternationalTerms of Trade ", Economic Journal,LXIII, 1953, 6270637.


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and under-employment. (12) But in mostsocietiesof the Third World,a

gap stillremainsbetweenthe logic of such advocacyand the abilityto put
theseplans intopractice.
The reasons for this vary fromsocietyto society. In some societies
the plannersand politicianshave been so mouldedand influencedby the
Westernmodel of the industrialrevolutionthat theyare incapableof re-
thinkingthe problemsof development withinthe unique conditionsof their
own society. One mightadd that the problemcan apply equally to the
socialistsocietiesas well as those within the capitalistframework. In
othersocieties,problemsof economicdevelopment have barelybeen touched
becauseof the pressureon the politicalelites to establishcustodyof their
newly-independent nationstates. Thereare two reasonswhythisre-thinking
of economicpolicyhas not occurred.First,and mostsignificant, is the fact
thatthe majorityof the ThirdWorld societieshave emergedas independent
nationsembedded»ina systemof international capitalism. Paul Baran and
GunderFrank(13) argue effectively that it is the subordinatepositionof
theThirdWorldnationswithinthissystemof international capitalismwhich
is thefundamental reasonfortheirfumbling effortsat economicdevelopment.
But to thisfactmustbe added the important variableof population,forthe
majorityof these societies,such as India, are undergoingrapid population
increase. We do not intendhere to adopt a Malthusianpositionfor after
all, the experienceof the Western European countries,and indeed the
United States, is one of exceptionallyrapid population growth after
industrialtakeoffand duringtheirperiods of theirmost rapid economic
growth. However,when such populationgrowthin the under-developed
countriesis associatedwitha failureto reformthe structure of the country
in sucha way as to utilisethe availablelabour- a failurewhichprimarily
stemsfromthe interlocking natureof international capitalism- population
growthsimplybecomesa drag on investment.This situationwe can see
only too clearlyin the contextof societiessuch as India and Indonesia.
Despite thepessimismof thesecomments, is thereanyreasonto believethat
such situationsinherently will bringabout conditionswhichwill precipitate
radicalchangein the immediatefuturein thesecountries ?
We believenot,and the reasonforour viewpointstemsfroma pragmatic
investigation of the economicstructure of the ThirdWorld cityand its rela-
tionshipswith its ruralhinterland and international capitalism. It is only
by settingthe tertiary sectorwithinthe totalcity'seconomicstructure thai»'
one can understand its extremely complex nature and its One
mightadd at thispointthatthe problemsof definingthe tertiary sectoron
the basis of employment in the ThirdWorld contextare exceptionally diffi-
cult. The mostambitiousattempthas been made by Maunder(14) in his
" in Developing Countries ", The world
(12) See Sir ArthurLewis, Unemployment-
Today, January 1967, No. 1, pp. 20-21.
(13) See Paul A. Baran, The Political Economy of Growth, 1957, and Andre Gunder
Frank, Capitalism and Underdevelopmentin Latin America, 1967.
(14) W. F. Maunder, Employmentin an UnderdevelopedArea. A Sample Survey
of Kingston, Jamaica, I960.


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studyof Kingston,Jamaica. Even this excellentattemptto come to terms

with the problemfails because of the theoretical misunderstanding of the
structureof the city'seconomy.Until adequatestatisticsare collectedon the
basis of a revisedconceptualunderstanding of the economicstructure, it
is impossibleto arriveat trulyaccurateestimatesof employment in this
sector. In thispaper no attemptis made to define" tertiary sector" rigo-
rously. We consider the adequatelyexplained seen in the
characteristics as
total economicstructureof the Third World city.

2. The Economic Structureof the Third World City.

In describingthe economicstructure of the Third World city,we have
drawnextensively on Geertz' (15) analysisof Modjukuto,an anonymously
namedtown in Java,Indonesia. It may be thatin utilizingan Indonesian
townas the basis fora generalization on the economicstructure of a Third
World city,we are utilisingan aberrantexamplewhichis not applicablein
otherunder-developed countries.Of course,a greatdeal dependsupon what
" "
maybe labelledas the economicbase of the townunderdiscussion. In
some cases there may be towns in under-developed countries,generally
single-functioncentred;such as oil towns,whichare totallywithinthe orbit
economy.In othercases,theremaybe different
of a capitalist-centred func-
tioningcentres,such as Kudus, described by Castles(16) where the economic
base of the town is almost totallyconcernedwith the manufactureof
,butthetownlies almostentirely
cigarettes withinthe labour-intensive sector.
Despite these our
differences, argument is thatthe majorityof towns in the
ThirdWorld,particularly thelargeprimatecities,have an economicstructure
similarto thatdescribedby Geertz (17).
In Modjokuto,Geertz(18) pointsout thatthe economicstructure of the
townis dividedinto two parts- a firm-centred "
economy ...where trade
and industry occur througha set of impersonally-defined social institutions
which organizea varietyof specialisedoccupationswith respectto some
particularproductiveor distributive end." The secondpart is made up of
the bazaar economywhich is based on " ...the independentactivitiesof a
set of highlycompetitivecommoditytraderswho relate to one another
mainlyby meansof an incrediblevolumeof ad hoc acts of exchange" (19).
On the face of it, this distinctionbetweenthe two sectorsof this city's
economymight be said to approximate the modelof the dual economy(20).

(15) See CliffordGeertz, Peddlers and Princes. Social Change and Economic Moder-
nization in Two Indonesian Towns, 1963; and The Social History of an Indonesian
Town, 1965.
(16) Lance Castles, Religion, Politics and Economic Behaviour in Java: The Kudus
(17) Another excellent descriptionof the economic structureof the Third World
city is that of Jacques Dupuis, op. cit.
(18) Geertz (1963), p. 28.
(19) Ibid, p. 28.
(20) See J. H. Boeke, Economics and Economic Pokey of Dual Societies, 1953.


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Certainlyit has affinitieswith the model of technologicaland economic

dualismput forwardby Higgins (21), to the extentthat the firm-centred
economyis clearlycapital-intensive and the bazaar economyis labour-
intensive,utilizingvery differenttypesof technologyand capital. But it
mustbe madeclearthatthe acceptanceof such a viewpointdoes not inhibit
theview of the city'seconomyas a whole (22), forthesetwo sectorsdo not
fall into distinctboxes; indeed theyare interlaced. The manufactureand
flow of goods and serviceswhich are both createdand pass throughthe
city,are generatedin each of the sectors. Diagram 1 shows the kind of





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i i
V [I j


" The ' Dualistic

(21) Benjamin Higgins, Theory' of Underdeveloped Areas ",
Economic Development and Cultural Change, Vol. 4, No. 2, January 1956.
(22) In this respect one may be sympatheticwith Frank's criticismof the concept
of the dual economy,but not take his extreme viewpoint that the concept is totally


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patternwhich such goods and servicestake (23). This diagrammakes it

clear that employment in the tertiarysectorwould originatein both the
bazaar and the firm-centred economicsectors. There are, of course,certain
employment categorieswhichare difficult to place withinone or the other
of thesetwo sectors. Most obvious is the problemof placinggovernment
employees, most of whom are employedin " service" industries.In some
countries,most government employment could usefullybe fittedinto the
firm-centred sector,but in general,if one looksat thepatternsof government
employment in underdeveloped countries,one is more inclinedto say that
the patternsof bureaucracytend toward labour-intensive practiceswhich
are essentially
a reflection of the bazaar-economy principles.Excellentexam-
ples can be foundin Indonesia,India and the Philippines. Despite such
difficultiesof classification,the most obvious difference betweenthe two
sectorsis in termsof the " quantity " of
employment theycan offer. In
the capital-dntensive sector,where productivity is high, the possibilities
for employment are limitedby labour-destroying innovations;on the other
hand,in the bazaar-type economy, the possibilitiesforemployment are much
greatereven thoughreturnsare much smallerand the end-product of this
situationis frequentlywhatWertheim(24) has calleda conditionof " shared
poverty",and Bréese (25), less satisfactorily, "subsistenceurbanization".

Finally,one may be criticalof the model of thesetwo sectorsin that it

presentstoo simplea division;forinstance,thereappearsto be, particularly
amongstimmigrant groupsin ThirdWorld citiesand the countryside, forms
of economicorganization whichcombine,in an intermediate fashion,elements
of boththe firm-type economyand the bazaar economy(26). Despite these
suggested it
limitations, is our argument thattheydo not invalidatethemodel
used. Indeed,an understanding of the tertiary
of the role and characteristics
sectorin the Third World citydoes aid in the criticalevaluationof some
predictivemodelsof social and economicchangewhichhave been developed
by Western theorists;which we shall analyselater. At this point, it is
possibleto in thelightof themodelelaborated,
consider, the criticalquestion
of the role whichthe tertiary sectorin the Third World citycan play in
creatingemployment opportunities forthe city'spopulation.

invalid. See André Gunder Frank, 1967, and Sociology of Development and
Underdevelopmentof Sociology ", Catalyst,No. 3. Summer 1967, pp. 18-73.
(23) It is interestingto note that after the constructionof this model we found
similar models, devoted to particularproducts,in a study of marketingin Madagascar.
G. Donque, " Le Zoma de Tananarive. Etude géographique d'un marché urbain ",
Madagascar, Revue de Géographie, No. VIII, ianvier-juillet, 1966, pp. 93-273.
(24) W. F. Wertheim, East-West Parallels : Sociological Approaches to Modern
Asia, 1964, pp. 165-81.
(25) Gerald Bréese, Urbanization in Newly Developing Countries, 1966.
(26) See G. William Skinner,Chinese Society in Thailand: An Analytical History,
1957. For an example in the rural contextsee D. W. Fryerand J. C. Jackson, Chi-
nese Smallholdersin Selangor ", Pacific Viewpoint, September 1966, pp. 198-228.


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3. The Role of the TertiarySector.

The firstpoint to clarifywith respectto the questionof the provision
of employment opportunities, is the supposed employment limits of the
tertiarysector,forit is in thefinitequalitiesof the employment in thissector
thatthe major dangersfor the stabilityof the cityeconomiesand political
structures are said to exist. If one accepts,followingMaunder (27), that
there are only three categoriesinto which the employablemay fall -
employed,unemployed,and non-employed - then one has to ask the
question : Do the same concepts which lead to the formulation of these
categories operatein bothsectors"of theThirdWorldcityeconomicstructure ?
On the face of it,one mustsay Yes ", forthereare only,it would appear,
two typesof employment - full-time and part-time.But, with respectto
the formsof under-employment, there is a wide range of possibilities;
indeedwe would suggestsome distinction betweenthe typesof unemploy-
ment in the firm-type sectorand those in the bazaar economy. First,it
wouldappearthatunder-employment definedas " a situationin whichthere
' '
are manymorepeople employedthanis necessary on a rational basis" (28)
is far more commonin the bazaar sectorthan in the firm-type economy.
On the otherhand,unemployment definedas a conditionin whichlabour
is activelyseekingwork,but unemployed full-time,is far more commonin
thefirm-type structure.This is not to arguethatthe two typesof unemploy-
mentareexclusively confinedto " sectors", butsimplyto saythatthemajority
of cases of each typeoccurin them(29).
Broadlyspeakingthen,it can be arguedthatthereare different patterns
of unemployment and under-employment, as well as of employment operating
in the two economicsectorselaborated. If this is the case, we can now
extendthis argumentto investigatethe role the tertiarysector plays in
absorbinglabourwithinthe citystructure.It shouldbe clear by now that
it is the bazaar economywhich is the most absorptive.
The questionis, "Why?". Geertz's(30) descriptionof the economic
characteristics of the bazaar economyof the Indonesiantownof Modjokuto
providessome of the answer. It is quite clear that he is referring to the

(27) W. F. Maunder, op. cit., p. 16. "

(28) Wertheim,op. cit., pp. 173-4. Cf. Maunder's definition (Underemployment
is) ...defined to exist when labour can be withdrawnfroma certainline, leaving all co-
operativefactorsunchanged withoutcausing any decrease in final output ", p. 11.
(29) The argumentcan be carried a step furtherif we accept that the characteristics
of the economyin each of these sectors,followingMaunder, are that the firm-type eco-
nomy is dynamicand the bazaar economyis largelystatic. The typesof unemployment
which are brought about in the firm-typeeconomy can be induced by the logical
frictionaland structuralconditions in the economy. On the other hand, far more
common in the bazaar sector are seasonal patternsof employment. Thus, for example,
Castles explaining the labour employmentpattern in the cigaretteindustryof Kudus,
points out that workersin the industrytend to fluctuateoccasionallyin times of peak
labour demand in agricultureby not coming to work at all. The close relationshipof
the agricultural and urban sectors has important ramifications,to be dealt with
later, for the employmentpatternsof the city.
(30) Geertz, 1962.


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totalbazaar economyincludingthe productionand sales sectorsas part of

" comprehensive, economicinstitution"(31). Centralto this system
is the marketor pasar whichis the focusand centreof the tradingpatterns
which permeatethe whole hinterlandof the town. But as Geertz (32)
pointsout,the termscan be applied in a muchbroadersense:
" Thus the
by pasarwe meannot simplythatparticular squareeighthof a
set apartin the centerof the town,where
mile or so of shedsand platforms,
(as someonehas said of theclassicalemporium)men are permitted each day
to deceive one another,but the whole patternof small-scalepeddlingand
of the Modjokutoarea generally".
The understanding of the systemrestson a knowledgeof threeof its
aspeas :
(1) the flow of goods and services
(2) the set of economicmechanisms whichsustainsand regulatesthe flow
of goods and services,and
(3) thesocio-culturalroleof thepasarsystem.
Fromthe pointof view of the firstof theseaspects- the flowof goods
and services- Geertzindicatesthatthe mostimportant is the
typeof goods whichflowthroughthe market. In general,the small,easily
storableproductsallow a flowthroughthe marketwhichtends
to move in circles,passingfromtraderto traderover an extendedperiod.
As Geertz(33) says:
" Like
Javaneseagriculture, Javanesetradingis highlylabor intensive;and
perhapsthe best,if slightlycaricatured imageforit is thatof a long line of
men passingbricksfromhand to hand over some greatlyextendeddistance
to build,slowlyand brickby brick,a largewall".
The regulatory mechanismswhich controlthis systeminclude a sliding
pricesystem, a complexbalanceof carefully-managed creditrelationships,and
an extensivefractionalizationof risksas a corollaryof profitmargins.These
regulatorymechanisms tend to have the effectof fractionalizingthe trading
activitythusallowingthe introduction of more individualsinto the system.
role of the bazaar system.Here Geertz(34)
Finally,thereis a soc'o-cultural
stressesthatthepasarsystemoperatesin an impersonalmanner;forinstance,
he comments :
" A man and his
brother,a son and his father,even a wife and her
husbandwill commonlyoperateon theirown at the bazaar and regardone
anotherwithinthat contextwith nearlyas cold an eye as theywould any

(3D Geertz,1962, p. 32.

(32) Geertz,1963, p. 30.
(33) Geertz,1963, p. 31.
(34) Geertz,1963, pp. 46-7.


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This statementis importantfor it would appear to indicatethat total

labour commitment withinthe economicunit of the family(35), is not
operatingin the system. Belshaw (36) is criticalof Geertz'sviewpoint,
" There is no such
thingas an enduringnon-personalistic relationship,
and no economyin the world can be based entirelyor even largelyon
non-personalisticrelationships for this would be the negationof continuity
and securityand would be atomisticgroupbehaviourratherthanbehaviour
in a society".
It would seem that he is being less than fair to Geertz because the
latterdoes admitthatwhat he calls " particularistic "
relationship do exist
in the marketplace, althoughhe arguesconcretely that theyare not the
most significantrelationship. There appears to be some confusionover
the questionof the actual labour and the institutional organizationwhich
appropriates profits of the labour. While the members of a family
may competein the marketplaces,this does not conflictwith the taking
of the profitsby the head of the household. Thus, as Geertzpointsout,
a man who wishes to introducehis son to the pasar tradingsystemwill
not alwaystake him out as an apprentice, but simplygive him goods on
creditand let him peddle themas best he can. In our opinion,this does
not, however,negate the principleof total labour commitment.By the
provisionof goods the householdhead presumably acceptsthis principle.
These then are the major aspectsof the bazaar economy. It is now
possible to summarisethe major reasons why it can absorb increasing
labour- or, to borrowyet anothertermfromthe fertileimaginationof
Geertz (37), why the pasar sectorhas the capacityto "involute". In
attempting to explain the extraordinary capacityof the peasantagriculture
of Java to absorb increasinglabour as population grows, Geertz has
emphasisedthe significantrole of wet-ricecultivationwhich seems to
allow marginallevels of labour productivity to be maintaineddespitethe
working-inof additionallabour. Four featurescharacterisethe process
of involution : (1) a tenacityof basic pattern;(2) internalelaboration
and ornateness;(3) technicalhair-splitting; and (4) unendingvirtuosity.
All these characteristicsoccur within the bazaar sector of the Third
World city structure which has the capacityto undergoa similarprocess
of involutiondespite its radicallydifferentecological base. What are
the reasons for this? First,the institutional basis of the enterprisein
the bazaar economyis still the family,even though membersof the
familymay operate independently in the market-place, and the major
labour commitment is still total; thus the head-of-the-houseis committed

" : Systemsof Appropriation

(35) See S. H. Franklin, Systemsof Production ",
PacificViewpoint,Sept. 1965, Vol. 6, No. 2, pp. 145-166.
(36) Cyril S. Belshaw, Traditional Exchange and Modern Markets, 1965, p. 80.
(37) CliffordGeertz, AgriculturalInvolution. The Processes of Ecological Change
in Indonesia, 1963, p. 82.


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to ensuringmembersof his familyentranceinto this system. Secondly,

the systemsof flow of goods and serviceswhich characterisethe bazaar
systemallow the introduction of more labour. Thirdly,the bazaar system
has somethingof a self-inflationary quality. Thus the more people who
enter the system,the greaterthe market. The simplestexample is the
proliferationof prepared-foodvendors whose numbers increase as the
populationof the citiesincreases(38). The fourthfactoris the relationship
of thebazaarsectorto thepeasanteconomy.The populationmovementand
the flow of goods and servicesbetweenthe two sectorsis common,thus
allowinggreaterflexibilityboth in termsof seasonallabourand longer-term
employment.Finally, thereis the relationship of the bazaar sectorto the
sector. Here the siphoningdownwardsof the greater
profitsearnedin the lattersector,whetherit be in wages forservants, or in
employment on construction of prestigeprojects, or in forms of welfare,
enablesthe bazaar sectorto absorbgreaterpopulation.
These,then,are themajorfeatures of the bazaareconomyand its relation-
ship with the other sectorsof a country'seconomy,which enables it to
absorblabour. We can now turnto thelastof our questionsand considerthe
implicationsof this analysisfor the problemsof the futureof economic
growthand revolutionary changein the Third World countries.

4. The Implicationsof " Urban Involutions" for Models of Economic

and Political Growthand RevolutionaryChange.
We have looked so far at the tertiarysectorof the Third World city
of the answers
and at the role it plays,and we have set out the implications
to these two questionsfor the problemsof economic developmentand
employment in under-developed countries.Having reachedtheseconclusions,
our intention now is to set themagainstthe predictivemodelsof a number
of Western-centred theoristsin an endeavourto establishthe validityand
realityof opposingviewpoints.
For most Westernsocial scientists, the emergenceof the servicesector
to a positionof importance,evendominance, industrial
in thehighly-developed
nationshas been acceptedas an integraland naturalpart of the natural
evolutionof these economies. Not only does the servicesectorprovidea
significantpart of urban employment; it is frequentlythe largestsingle
employerof labourin the whole economy.
It has been shown that this high proportionof tertiaryemployment is
positivelycorrelatedwith a high level of urbanizationand a considerable
degreeof economicdevelopment(39). It seems logical that in countries
with such high levels of urbanization mostof the tertiary employment will

(38) See Richard W. Redick, A Demographic and Ecological Study of Rangoon,

Burma, 1961. Unpublished Ph. D. thesis, Universityof Chicago, for a discussion of
this phenomena.
(39) See C. Clark, The Economic Functions of a City in Relation to its Size ",
Econometrica,XIII, 1945.


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be concentrated in cities,if onlybecausemost of the populationis located

there. Lampard(40), forinstance, arguesthat, The cityis the onlyfeasible
locus forthe mass of that... its productis closely
tied to the consumingpopulation which is overwhelmingly urban or
suburban ". The market,of course,is only one of the attractions for ser-
vicingindustries; the whole rangeof attractions associatedwith the external
economiesprovidedby cities exertat least as stronga pull for servicing
activityas it does for manufacturing.The propositionis not universally
exclusivehowever. In some countrieswhichrelyheavilyon tourism,much
of the tertiaryemployment is located in semi-ruralareas where tourists
attemptto escape the overcrowded metropolitanareas of the restof Europe,
and, indeed,of the UnitedStates. Such examplesare usuallyexceptionsto
the generalrule. In fact,the continuedconcentration of serviceindustry
in the citiesof the economically advancedcountrieshas been attackedon
the groundsthatit is not in the interests of social or regionalbalancein a
society(41). But mostempiricalevidencein developedcapitalistsocieties
certainlysupportsthe assertion(42) that the high proportionof tertiary
employment in the capitalistcity can be regardedas a sign of economic
growth,if not social wellbeing.
In thecontextof theThirdWorld countries, similarhighlevelsof tertiary
employment in their cities have not always been regardedin the same
favourable light. One writerhas arguedthatthis" ...gross inflationof the
tertiarysector" (43) will have disastrousrepercussions on the stabilityof
the societylargelybecause it leads to the creationof an " ...impoverished
and explosivelumpen-proletariat" (44). The concentration of such a group
in the cities,arguesTangri (45), providesa politically-malleable and revolu-
tionary-oriented population. The most vigorousexpositionof the revolu-
tionarypotentialof this group has been outlinedby Fanon (46) who sees
thelumpen-proletariat as forming elementin theeventualoverth-
a significant
row of the existinggovernments." The constitution of a lumpen-proletariat
is a phenomenonwhich obeys its own logic, and neitherthe brimming
activityof the missionaries nor the decreesof the centralgovernment can

(40) Eric E. Lampard,op. cit.

(41) See Paul Goodman,Like a conqueredprovince : the moralambiguityof Ame-
rica. 1967.
(42) For instance,see EdwardL. Ulman RegionalDevelopmentand the Geo-
graphyof Concentration ", J. Friedmanand W. Alonso,op. cit., pp. 153-172,for
strikingevidenceof this"processof concentration in the United States.
(43) KeithBuchanan, Profilesof the ThirdWorld ", PacificViewpoint, Vol. 5,
No. 2, p. 107.
(44) Ibid., p. 108. "
(45) ShantiTangri Urbanization, PoliticalStabilityand EconomicGrowth" in
Roy Turner(ed.) India's UrbanFuture,1962, pp. 192-212.
(46) See Franz Fanon,The Damned, 1963, pp. 121-163. We would add that
Fanon'sfaithin the lumpen-proletariat is scarcelysharedby Marx and Engels. See
Marx's description of the manipulation by the bourgeoisie
of the lumpen-proletariat
in the 1848 Parisrevolution: " The Class Strugglesin France1848-1850 " : in Karl
Marx and Frederick Engels,SelectedWorks,Volume I, Moscow 1951, p. 142.


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checkits growth. This Uwnp en-proletariat is like a hordeof rats;you may

kick them,throwstonesat them,but despiteyourefforts, theywill go on
boringat therootsof thetree" (47). Otherwritershave criticisedtheproli-
ferationof thetertiarysectorsof theThirdWorldcitieson economicgrounds,
arguingthatthegrowthof thissectoris bothunproductive and economically
irrational(48). AndréGunderFrank(49) sums up this attitudewhen he
describesthe proliferationof workersin the tertiary sectorof Chilean cities
in the followingterms:
" Far from as a readingof Sir WilliamPetty
beinga markof development,
and Colin Clarkmightonce have led us to believe,thisstructure and distri-
butionare a reflection of Chile's structural underdevelopment : 60 per cent
of the employed, not to speak of the unemployed and underemployed, work
in activitiesthatdo not producegoods - in a societythatobviouslyin a
high degreelacks goods".
But opposingviewpointshave been put forthby otherwriterswho have
arguedthatthisgrowthof tertiary servicesin the citiesis an understandable,
indeeda necessary, phenomenon. For instance,Ginsburg(50) has pointed
out thattheconcentration of servicesis a reflection of thebasicruralstructure
of mostof the under-developed societieswherethereare " ...only a limited
numberof servicesperformed by the cities". Otherwriterssuch as Morse
argue that the excessivenumbersemployedwithinthe servicesectormay
nothave unhappyrepercussions.He goes on to say," The questionoccurs,
do not people generallyseek out the most advantageousemployment, and
wouldnot thosewho are in ' pettyservices tendto be less productivein the
otheroccupationsopen to them? May not Latin Americancitygrowthbe
reallocatingtheworkingforceintomoreeffective occupational patterns?"(51)
This kind of reasoningraisesmorequestionsthan it answers- do people
seek out theirmost advantageousemployment in a labour-surplus situation
or do theytake what is offering ? What is a more effectiveoccupational
pattern? Moreeffective to whom? The employer, theemployee, the nation's
economy? (52)

(47) Ibid, op. 104. "

(48) Richard M. Morse, Latin American Cities : Aspects of Function and Struc-
ture ", in Friedman and Alonso, op. cit., p. 379.
(49) André Gunder Frank, " op. cit., 1967, p.
(50) See N. S. Ginsburg, The great City in SoutheastAsia ", AmericanJournal of
Sociology,March, 1955, Vol. 60, No. 5, p. 457. Also see Brian J. L. Berry,Geography
of Market Centersand Retail Distribution,1967, especially Chapters 5 and 7.
(51) Morse, op. cit., p. 379; citing Simon Rottenberg, Note on the Economics of
Urbanizationin Latin America ", United Nations Document E/CN-^-URB/ö-UNESCO/
SS/URB/LA/6 (30 Sept. 1958), pp. 8-11.
(52) Is the labour intensivetraditionalurban servicesector,in fact,acting as a training
ground, establishingcommercial and urban attitudes,and reallocatingthe labour force
more efficientlyin Western terms? If it is, then it is acting as intermediarybetween
the traditional and modern sectors. But, this presupposes that the bazaar sector in
most Third World cities has significantelements of capitalist attitudes built into its
structure. We have seen, however, that by its nature, it is an integral part of the
traditionalsector. The pasar systemcannot then be relied upon to act as a technolo-
gical, social or cultural bridge between the traditionaland capitalist sectors. Although


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Yet anotherwriterhas indicatedthat the tertiarysectorhas the function

of a " residualemployertakingup the slack fromothersectorsat timesof
economicstagnation.Its capacityis aided by the " low investment necessary
for the initiationof the activities. Neither complexphysicalplants nor
prolongedperiodsof education,and training
need to be undertaken in many
of the serviceand commerceoccupations (53). If the views of the latter
group of writersare accepted,then it may be possibleto agree with the
" of
economistHirschman'spositionwhich would regardthis " infiltration
tertiaryservicesas a necessaryimbalancing partof the processesof economic
growth. His argument based on the propositionof unbalancedgrowthand
the executionof bottlenecksis as follows: As part of the processof
economicgrowthwithinwhatone wouldlabel the capitalist-penetrated struc-
turesat certainstagesof economicgrowth,the opportunities foremployment
in the " capital-intensive" industriesdo not increase at a fast
rate despiteoverall increasesin productivity in this sector. The surplus
labour is thus absorbedinto the small-scaleindustryin the tertiary sector
wherewages are low and only small capital investment is needed. This
situation,however,is only temporary, for the growthof the " capital-
intensive sectoris eventually to ironout the unbalancingeffects
of retardation in the tertiary
and agriculturalsectorsof the economy.There
is some evidenceforthispatternoccurringin the case of Japan (55). Sir
ArthurLewis (56) is lessoptimistic.He pointsout thatalthoughKarl Marx's
belief "...that in the capitalistsystememployment-destroying innovations
would alwaysbe excessiverelativeto employment-creating innovations, and
he therefore predictedan ever-growing armyof unemployed ", may not be
trueforthe advancedcountriesof WesternEurope,the statement mayprove
to be correctin the contextof the underdeveloped societiesof the contemp-
" " based on importedplantis
oraryworld. A capital-intensivedevelopment
forcedon thecountriesof the underdeveloped worldbecauseof theirtechno-
logicallag and theirdistorted pricestructures; the result,saysLewis,is that

it operates cheek-by-jowlwith the capitalist systemin the cities, the pasar is in most
cases as culturally insulated from the modern sector as the peasant sector in the
countryside. Its values, like those of the peasant sector,as we have seen, are at least
as solidly based on social and community factors as on commercial. There are,
however,varyingdegrees of this insulation within the Third World - in fact as we
shall see, in some countries, the labour-absorptivetraditional urban sector scarcely
exists as an independent entity.
(53) Bruce H. Herrick,Urban Migrationand Economic Development in Chile, 1965,
p. 67.
(54) See A. O. Hirschman, The Strategyof Economic Development, 1958, for a
discussion of this position.
(55) See G. C. Allen, A Short Economic History of Modern Japan. London,
" Economic
Unwin UniversityBooks, 1962, p. 125, Also see Tsunehiko Watanabe,
Aspects of Dualism in the IndustrialDevelopment of Japan ", Economic Development
and Cultural Change, April 1965, Vol. XIII, No. 3, pp. 293-312. His statementthat:
" In
general,the combinationof dualism with adoption of capital-usingtechniques in
the industrialdevelopmentof Japan, could be identifiedas one of he key explanations
for her rapid growth", (p. 308) would appear to broadly support the Hirschman
(56) Sir Arthur Lewis, op. cit., 1967, pp. 21-22.


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despiteindustrialdevelopment, unemployment increases. While not stating

it specifically,he infersthat such a situationmay be disastrousfor the
stabilityand futureof thesecountries. One furtherviewpointof the ter-
tiarysectorsof thesecitiesneedsto be expressed.Some writers, forinstance
Keyfitz(57), have pointed out that at least employment in the tertiary
sector,even if it is not fullemployment, fulfilsthe functionof " ...quieting
the claims of those who would otherwisebe left out of the divisionof
wealth", thus at least provingto be politicallystabilising,if not always
economically rational.
In summary then,one can broadlydividetheseviews about the roles and
characterof the tertiarysector in the underdeveloped countryinto two
groups: first,those writerswho regardthe presentinflatedtertiarysector
of theThirdWorld citiesas indications of the failureof a particularformof
economicdevelopmentand as in-builtdangerpoints for the futureof the
presentpoliticaland economicsystems of thosesocieties;and secondly, those
writerswho regardthepresent, unstablesituationas one whichwill eventually
be correctedwith overalleconomicgrowth. It is possibleto illustratethe
predictivecharacteristics of thesemodelsby the use of diagrams. Diagram
2 indicatesthe firstschoolof thought.In this diagram,the changeswhich



«■"""!« Zři***" «HCENTAGEOf TOTAl


A » TIME »• В A » TIME ►Ь
(A) City labour force (B) Total labour force

- ^- _^_ Tertiary
«■■ ^шт ^м Manufacturing

the cityemployment will undergoare illustrated.It assumesan

overallconditionof economicequilibriumin a societywhich affectsboth
and theurbansectors.The inabilityof the agricultural
to absorbincreasing
labourforcesthislabourintothe towns,but employment

(57) Nathan Keyfitz, Political-EconomicAspeas of Urbanization in South and
SoutheastAsia ", in Philip M. Hauser and Leo F. Schnore,The Study of Urbanization,
1965, p. 296.


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is not available in manufacturing;

consequently,it flows into the tertiary
sector.At point" X2 " (arbitrarily
chosen)thereis a conditionof unemploy-
ment,and finallythe lack of employmentcreatesthe explosiverevolutionary
in the lumpen-proletariat
characteristics which enables it to overthrowthe
existingentrenchedforces. Diagram 3 representsthe other school of





A ». riMt ,, g д ^ TIMf ^ e

(A) City labour force (B) Total labour force

_____ Tertiary
_ ... ... Manufacturing

thoughtwhichsees thisinflationof the servicesectoras purelya temporary

phenomenon, and thelackof employment in manufacturing as a phenomenon
which will be ironedout with increasingproductivity and wealth in the
society. At the same time,the populationin the agricultural sectorwill
declineand overallurbanizationin the societywill increase.
Despite the wide disparityin theiranalysisand conclusions, both groups
have one facetin common- theyregardemployment in the tertiarysector
of the cityeconomyas finite. The sectoris capable of absorbingonly so
muchlabourat a particularstageof economicdevelopment; afterthatlabour
will becomeunder-employed, unemployed or will be forced into some other
sectorof the economy. It is the writers'assertionthat this view stemsto
a large extentfromwhat we may label a Western- centric(58) viewpoint
whichregardsthe tertiarysectoras relatedto the level of economicdevelop-
ment,despitethe veryobviousfactthatthisis not the case in the majority
of countrieswhichtheyare investigating.In otherwords,all thesewriters
havecertainbuilt-inpreconceptionsaboutthe form,functionand role of the
sectorwhichtheyhave formulated
tertiary on thebasisof studiesin the deve-

(58) A reading of Chayanov,A. V. Chayanov, The theoryof peasant economy ",
edited by Daniel Thorner (et al.), Homewood, Illinois, American Economic Association,
1966, makes it clear that this' problem
stems from the inability to develop new
conceptsfor the studyof these peasant systems. See also S. H. Franklin,1965, op. cit.


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loped worldwhichare not applicablein everysenseto manyunder-developed

economies. It is because of theseWestern-centred preconceptionsthat the
predictivecapacities,based on such arguments, may be invalidated. We
argue,therefore, thatthe actualcharacteristicsof the tertiary
sectorin each
underdeveloped country shouldbe closelystudied and evaluatedbeforepre-
dictivemodels are attempted. In advocatingthis,we are aware that the
modelestablishedin thispaper is neitherunique nor unchanging.In setting
out a case studyof a traditional
systemof an urbanpasarpeasantagricultural
sector- a traditionalsectorwhich has a labour-absorbing functionwhich
slows or deflectsthe emergenceof a revolutionary explosionfor a time
(existingalongside the modern capitalistsector) - we realise that other
situationsexistor may developin otherThird World countries.
In the firstplace, a changein the structure of the urban-bazaarsystem
itselfcould take place if the capitalistsectorfoundit worthwhile particif>
ating in the economicactivitiesof the bazaar - on its own termsand
usingits own methods,of course. The significant aspectof this change is
not just that the commercialand organisationalactivitiesof the bazaar
systemare penetrated, but thatthe attitudesof thosein the sectorare per-
meatedas a resultof such penetration.This crackingof the culturalinsu-
lationis perhapsthe mostsignificant and devastating breachof the dividing
line betweenthe capital-intensive enclaveand the traditional sector.
Geertz(59) discussestheprocessof transformation of Modjokuto's" would-
be entrepreneurial "
class (60) as the town's social structuretransforms
" froma
compositeof self-containedand sociallysegregatedstatusgroups
to a more broadlycomprehensiveset of across-the-board social classes.
At the top of this hesitantly emergingclass systemare the leadersof the
variouspoliticaland quasi-politicalaliran organisations; at the bottomthe
steadilyexpandingurbanproletariat"(61). And as theseattitudeschange,
a concomitant changetakesplace in the commercialformsand institutions
of exchange:
" This intimate betweena well-administered businesscommu-
nity and a modernized urban social structureis, in fact,fairlyclearlyreco-
gnized,at least on the commercialside, by the people of Modjokutotown
themselves.They too... distinguish betweenthe pasar tradingcomplexand
the toko storecomplex,and theydo so mainlyin termsof contrastbetween
' '
modern (moderen)and ' old-fashioned(kolot) " (62).
It can be assumedthatthe gradualchangefrompasar to toko formsof
tradingwill bringin its trainconsiderable changesin organisation.The most
crucialof thesewill be :

(59) CliffordGeerts,Peddlersand Princes,op. cit.,p. 48ff.

(60) Ibid, p. 48.
(61) Ibid, p. 49.
(62) Ibid., pp. 49-50 (footnote).


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(a) thegrowthof largerscale operations;

(b) a greaterconcentration of capitalin the handsof the toko entrepreneur;
(c) the reluctance of the new-styleentrepreneur to spreadhis businesswidely
among his fellow traders- as is of
typical the pasar system. This is
then associatedwith an increasedwillingnessto take greaterrisksfor
largerreturnswhich in turnwill be ploughedpartiallyinto organisa-
tional or technologicalinnovation;
(d) a reductionin theflowof goodsin hundreds of littletrickles,
throughan enormousnumberof transactions (63), whichcharacterise
the absorptivepasar system;and so, finally;
(e) a declinein labourinputand a tightening reinplaced on thecapacityof
thedwindlingpasarsystemto absorblabourand keep an under-employed
(in Westernterms)urban work forceat an acceptable,if subsistence,
standardof living.
It cannotbe emphasizedtoo much thatthe effectiveness of this formof
capitalistpenetration of the traditionalsectorlies not only in the influence
it has on themethodsof carrying out urbaneconomicactivity.More invidious
forthe " old-fashioned " structure
is the way it changesattitudesand creates
a new and expandingrangeof feltneeds- forshoes,bicycles, manufactured
furniture, ready-made clothing and so on - as Geertz himself points out.
All thesewants,as he says,are " directlyadjustedto the Western-influenced
revolution in tasteswhichthe emerging urbanclassesare experiencing"(64).
In theThirdWorld,then,Geertzargues,economicdevelopment is tending
to take a classicalWeberian form," ...a generallydisesteemedgroup of
smallshopkeepers and pettymanufacturers arisingout of a traditional
classis attemptingto securean improvedstatusin a changingsociety" (65).
The emergenceof this group means thatthereis now the prototype of a
Western- of
type petty commercial(and, to a much smaller extent,industrial)
capitalistin ThirdWorld cities. But of even greatersignificance, the very
existenceof thisgroupnot onlyleads to the reductionof traditional modes
of productionand exchange;it also facilitatesthe subversionof the pasar
systemand the takeoverof muchof its activityby the large-scaleenterprises
in the capital-intensive
In acknowledging thatthisprocessis occurringin manycitiesof theThird
World,and has proceededso far in some thatthe bazaar structure has been
largelydestroyed,the writerswish to emphasize that thereis still a majority
of citiesin whichthe pasar systemis dominant,and in which such direct
capitalistpenetrationhas not proceededfar. Nevertheless, the stand taken
by the firstgroup of theorists
may in the longer termbe valid and their
Western-centric point of view become more relevantas the cities of the

(63) Ibid., p. 31.

(64) Ibid., p. 49 (footnote).
(65) Ibid., p. 50.


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Third World become increasingly penetratedand Westernised. Further

strength is given to theircase - again in the longerterm- if we take
intoaccountanotherprocessof capitalistpenetration whichhas been occurring
in countriesof the Third World.
As we statedearlier,the traditionalsystemof economicactivityconsists
of an interlocking urban-bazaar, rural-peasantagriculturalstructurein which
theformer depends to a considerable degreefor its good supplieson the latter.
In turn,the urban sectorfunnelsnon-agricultural supplies to the peasant
sector,as well as absorbingthosewho migratefromthe ruralareas. The
functionof the urban tertiary sectoras a safetyvalve is therefore heavily
dependenton the close ties it has withthe peasantsector. Consequently, its
capacityto absorb labour and to act as the cushion against urban and
ruraldiscontent dependsto an important extenton the continuedexistence
of itspeasant-agricultural resourcebase.
This raises a highlysignificantquestion. What happens when, as in
some Caribbeancountries,the capitalistsystemeffectively penetratesthe
whole economy? In examplessuch as pre-revolutionary Cuba and contem-
poraryPuertoRico, it is no longerpossibleto talkin termsof a dual society,
in the definitions outlinedearlierbecausecapitalistpenetration has been so
comprehensive that the areas left outside the commercialised, marketeco-
nomyare minute. Here the ruralsectorhas been as thoroughly commercial-
ised as the urban. By the earlydecades of this century,the agricultural
sectorsof both countrieshad been predominantly gearedto capital-intensive
cash-cropproduction in the company estates which also controlledthe
commercialcrop-growing peasantsproducing for the sugar centrales- the
' "
companies factoriesin the field".
In circumstances such as these thereis likelyto be littlesurplusin the
way of food or handicraft productsto supportthe bazaar systemsin the
cities.The subverting of the peasantsystemtherefore has muchwidereffects
thanin the ruralarea. It is likelyto cause a breakdownof theentirerural-
urban traditionalstructureby limitingdrasticallythe volume of produce
exchangedin the bazaar,and perhapseven hastenthe adventof discontent
by throwingdispossessedpeasantsinto citiesin whichthereare few outlets
forbazaar-type subsistenceeconomicactivity(66).
Cuba is the extremecase of this process. By the end of the 1950s, the
entireeconomyhad becomean almostclassicalMarxistexampleof a 19th
centurycapitalistentitywith class polarisationin the cities and the rural
areas - and therewas littleeasing of the disparitiesbetweenthe classes
in either. In thismilieutherewere few outletsto absorbdisaffection or to

(66) This does not mean that no outlets existed in the Cuban - and other Latin
American-citiesin the service sector. However, the proliferationof occupations within
the sectorwas based not on traditionaltertiaryactivity,but on Western-orientedgoods,
services and other needs - bellboys, taxi-drivers,touts, prostitutes,shoe-shine boys
and so on - and did not create the great number of consequent labour-absorbing
activities as in the traditional pasar. See also Oscar Lewis, La Vida, 1967, for a
descriptionof the way of life of people employed in these occupations.


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satisfyfelt needs. Because the nationwas so permeated- economically,

socially,culturally- by Westerncapitalism,and because no indigenous
urban-rural involutionwas possible,the ideal situationfor social revolution
was reached(67).
Othercountries, especiallyin LatinAmerica,are showingsimilarsymptoms
though not as acute yetas in Cuba. Some countriessuchas PuertoRico and
Jamaicahave had a safetyvalve providedby labour absorptionthrough
externalmigration(thoughthisis drastically reducedin Jamaicanow). But
in most countriesof Latin America,the penetrative processis continuing.
Two conclusionsarise out of this. The firstis thatthe traditional urban
servicesectoris heavilydependentupon the existenceof a traditional rural
productive base. When (and if) thatbase is penetrated and largelyreplaced
by anothersystemof production, theurbanbazaar,lackinga sourceof supply
for greatpart of its activity, weakenedif not destroyed
is as an indigenous
involuted system. The secondconclusion follows from this: the growthof -
or even the continuedexistenceof - the urbanbazaar systemin the Third
World cityis not a .self-contained process. It is ultimately dependentupon
the activitiesand policies of the capitalistsector. Under conditionsof
continuedpenetration of the traditionalstructure - whetherin the cityor
the countryside - by capitalistmodes of productionand/orappropriation,
traditionallabourabsorptivecapacitywould fall and thepolarisation between
the moderncapital-intensive sectorand the unemployedurban lumpen-pro-
letariatwouldcome out into the open.
If we expressthe above discussionof capitalistexpansionary movementin
diagrammatic form, we have a diagram showing the roles played in the
economyof an under-developed countryby the capitalistand traditional
systems. Diagram 4 shows the gradualexpansionof the capital-intensive





IA) (B)
____ Bazaar - Peasant
- - ... Capitalist
Total Employment


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systeminto the agricultural, manufacturing and service sectors of the

economy, and the consequentincreasein the proportioncontributedby it to
G.N.P. (Or, to put the emphasison the more important partof the process,
the proportionof G.N.P. appropriatedby the capital-intensive sector).
the resultin termsof employment.As the
This diagramalso illustrates
formsof production
capital-intensive move intoagriculture,
mechanisedtechniquesdrivelabourfromthe land. Here, as in othersectors,
labour inputsaxiomatically are reduced. Even wherepeasantsare left on
the land, less labour is usuallyrequiredfor commercialcroppingexcept
forsomecropsat seasonalpeak periods.
With itsproductsupplybase reduced,thebazaarsector'sactivitiesdecrease.
At the same time,landlesspeasantspour into the cities lookingfor work,
whichneitherthecapitalistnorweakenedbazaarsectorscan providein suffi-
cientquantity.This processhas been expressedvisuallyin Diagram 5 which
is basicallythe same as Diagram 3, but with " change" built in to take
account of the gradual transformation of the indigenouseconomyfrom
traditionalto capitalistmodesof production.

The latterpartof thisdiscussionshouldnot be seen as a contradiction of
theoriginalpropositionof thearticle. Rather,it has been an attemptto see
theprocessesof changeoperatingin the economiesof under-developed coun-
triesover a time span. To fall back on the diagrammatic we
have takenthe originalDiagram 3 of an under-developed economywith its
sectorsand the capitalistenclaveoperatingside by side. We have
then injectedthe dynamicof capitalistexpansioninto the model to allow
us to determinewhat the likelyresultsof thisprocessmightbe. We have

(67) It is not easy to quantify this argument. Even in the 1953 Cuban Census,
occupation figures are not broken down in sufficientdetail for conclusive argument.
The census shows that 47 per cent of the active Cuban population were in agricultural
jobs; 18 per cent artisans and machine operators; 8 per cent sellers of goods (some
of whom were possibly in the traditionalsectors); 5 per cent supervisorsand executives;
4 per cent professional groups. The census also looked at employmentin broader
sectoral groups. According to thij breakdown, 4l per cent Nvere in agriculture;
17 per cent in manufacturing;12 per cent in commerce (shops, warehouses, banks,
etc.); 20 per cent in other services and government; 10 per cent in construction,
transportand communications,other public utilitiesand mining. Figures from Censos
de Población, Viviendas y Electoral, Oficina Nacional de los Censos Demografico y
Electoral, 28 February 1953, La Habana, 1955, pp. XLI-XLII.
Neither division appears to leave much room for traditionaltertiaryurban activity
" sellers of " - a mere
except perhaps in the categoryof goods 6 per cent of all
occupations. The evidence is not conclusive, but the conjuncture of a number of
featuresof the Cuban economy - the extremelyhigh proportion of commercialised
farming centred around sugar; the low level of subsistencecrop production and the
high level of food imports;and finallythe small number engaged in traditionaltertiary
activity- seem to supportthe argumentof this paper.


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i ii i
- -^- - '



come to the conclusion that, in the long term, the predictions of the first
group of writersare likely to have the greater validity because of the type
of change taking place.
But this does not in any way invalidate the original proposition which
establishes the model of an under-developedeconomy at a certain period of
time. Diagram 6 illustratesthe point by settingout the two static models -
one which we mighttermthe " Indonesian" example with only partial infiltra-
tion of the still largelytraditionalurban/ruralsector by the capital-intensive
" "
sector; the other the Cuban model in which the penetrationhas continued
to such a degree that almost the entire economy has been Westernised by
the capitalistsector. These are the two poles. What we have been discussing
in the latter stages of this paper is the process which could lead from the
one to the other.


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I 1__ [


l: L rrfH|
»-••■Г" T---^~ Countryside ■■-il J :

INDIGENOUS (V-PiTAL-iNUNSIvE I 1RA-A^ ' с -■-' ■t гтпрс.
pi >«„~ч
BA> UK К .-.LiUKb

Of course it is not inevitablethat capitalistpenetrationwill invariably

convertthe " Indonesian" model into the " Cuban" - the involutionof
internationalcapitalismthat seems to be emergingwith the ever closer
commercialcontactsamong the advancedindustrialnationsmay slow the
process,or cause it to be divertedin someway- but recentcase studies(68)
seemto showthattheprocessof agricultural commercialisation
is proceeding
steadilyin certainunder-developed countries.
In concluding,then,the writersre-emphasize thatthe propositionestablis-
hed in the firstpart of this paper has value in its analysisof the urban
economicstructuresof manyunder-developed countries.But of muchgreater
are the implications
significance whichderivefromthis analysisconcerning
in the ThirdWorld. The resultsof this
the impactof capitalistpenetration
are,we argue,farless homogeneous
penetration in theireffectsthanthe pre-
dictivemodelswe haveevaluatedwouldhavelead us to believe,simplybecause
theThirdWorld is not the homogeneous entitytheysupposeit to be. More

" Reflections
K. B. Griffin, on Latin AmericanDevelopment",
(68) For instance,
OxfordEconomicPapers,Vol. 18, No. 1, March1966 and A. GunderFrank,op. cit.,
pp. 248-54;


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precisely, of theThirdWorld are at differentstagesof develop-
ment- or under-development - as a resultof theirvaryinghistoricalexpe-
riencesof capitalism,their indigenoussocio-economicstructures, and the
interactionof the one on the other. Althoughin the long termthe first
groupmaybe provedcorrectin its predictions, revolutionarychangewill not
proceedalong a broad frontin the shortor even mediumterm. Rather,it
appearsmore logical that the revolutionarychangeswill be delayedlonger
in countrieswherethe traditionalstructures are more resilient,and where
thereare social and economicoutletsforthe indigenouspopulation,than in
countries have been subvertedby capitalistpenetration,
or whereno effective traditional
ever existed.


Deux faitsindiscutables caractérisent les pays du Tiers Monde : la crois-

sancemassivede leursvilleset la lenteurde leurdéveloppement économique.
Il en résultel'impossibilité de donnerdu travailà une populationurbaine
en augmentation rapide.Cet état de déséquilibredonne lieu à des troubles
sporadiqueset parfoisà des manifestations de violenceparfaitement expli-
cables.On en vientà se demanderpourquoiles conditionstrèsdéfavorables
que connaissentla plupartdes centresurbains- chômage,sous-emploi,
surpeuplement, insuffisancede logements» contrasteavec les élites citadines
- n'ontpas crééun véritableet efficacemouvement révolutionnaire.
L'objet de la présenteétudeest précisément d'analyserles raisonsde cette
absenced'activitérévolutionnaire dans les principalesvilles du Tiers Monde.
L'analysese divise en deux parties: elle ported'abordsur un typestatique
de structureéconomiqueurbaine,dans lequel la persistancedes systèmes
économiquestraditionnels freinele mouvementde transformation révolu-
tionnaire.Elle s'appliqueensuiteau dynamisme de la pénétration du capita-
lisme, tendantà rechercherce que cette pénétrationpourraitimpliquer
dans l'annonced'une transformation de caractèrerévolutionnaire.
C'est dans la persistancedes systèmeséconomiquestraditionnels à travail
intensif qu'il fautvoirla cause de la lenteur du mouvement de transformation
révolutionnaire. Or, ces activitésintensivessont surtoutcelles du secteur

(1) Le mot « involution » employé dans le sens botanique dans le texte anglais ne
peut guère se traduiredans le texte françaisque par le mot « intégration», bien que
le terme « involution » implique en plus une notion de reploiement d'une activité
à l'intérieur d'une autre activité, comme la croissance des feuilles à l'intérieur d'un


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lequel est extrêmement

tertiaire, développédans les villes du Tiers Monde.
Il sembleraitdonc nécessairede tenterau préalablede formuler une défini-
tion de ce secteurtertiairequi, commeГа rappeléLampard,ne vise aucune
opérationde productionmatérielle.Dans le présentétat de choses et avec
le peu de donnéesstatistiques dont on dispose,une telle définitions'avère
impossible.En considérantle secteur dans l'ensemblede la structure
économiquede la ville,on ne pourraque se rendrecomptede son extrême
complexitéet de la diversitéde ses caractéristiques.
Dans la description de la structureéconomiquede la ville du Tiers Monde,
on peut se référerà l'analyseeffectuéepar С Geertzde la ville javanaise
de Modjokuto.On y trouveun dualismebien accentué,soit,d'une part,une
économieaux mainsde sociétésde productionet de distribution, et d'autre
part,une économied'échange,dite économiede bazaar,tenuepar des com-
merçantstravaillanten régime de forte concurrence.Si différents qu'ils
soientl'un et l'autre,ces deux typesd'économies'influencent mutuellement.
Les possibilitésqu'ils offrenten matièred'emploisontvariées,mais générale-
ment plus larges dans l'économiede bazaar. Celle-ci,axée sur le marché
centralou « pasar», présentetroisaspectsprincipaux : 1) le mouvement des
et des
produits l'opération services;2) le mécanisme économiquequi anime
l'un et l'autre;3) le rôle social et cultureldu « pasar». Tout commel'agri-
culturejavanaise,l'économiede bazaar est capable d'intégration (2), c'est
à-dire qu'elle peut assimilerune main-d'œuvrecroissantavec l'augmen-
tation de la population.Cette capacité est due aux caractèresmêmes de
ce typede structure économique,à base familiale,à extensioncontinue,et
qui se rattache d'une partà l'économiepaysanneet d'autrepartà l'économie
capitalistede productionet de distribution.
Si l'on considèreles implications de Г « involutionurbaine» dans l'avenir
de la croissanceéconomiquedu Tiers Monde et dans les possibilitésde trans-
formation révolutionnaire,on se trouveen présencede théoriesà tendances
occidentalesassez divergentes.Ainsi, le développementconsidérabledu
secteurtertiairedans les centresurbainsest jugé défavorable par les uns et
tenupournécessairepar les autres.Certainsvoientdans ce secteurun élément
d'équilibre,absorbantla main-ďœuvrequi n'a pu trouverďemploi ailleurs.
Cependant,toutes ces théoriesreposentgénéralement sur une conception
du secteurtertiaireparfaitement admissiblepour l'Occidentévolué, mais
qui ne peut s'appliquerà la plupartdes pays sous-développés. Pour arriver
à formulerdes propositionsréalistes,il faut analyserminutieusement les
caractèrespropres au secteurtertiairetel qu'il se présente dans chaque pays
du Tiers Monde. Etudiantle cas particulierde Modjokuto,CliffordGeertz
commentele processusde transformation de la ville, qui s'effectueà partir
d'un ensemblede groupessociaux isolés les uns des autres,pour aboutir
à une collectivitéplus largede catégoriessocialesmoinsencloses.

(2) Voir note précédente.


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Dans l'analysedes structures

économiquespropresà un grandnombrede
villesdu Tiers Monde,il importede considérer l'étatde développement,ou
de sous-développement de chaque pays en question.On a trop tendanceà
voirdans ce TiersMonde un univershomogèneaux caractères uniformes.En
conclusion,il apparaîtque le mouvementde transformation révolutionnaire
seralentdans les paysà structurestraditionnellesrelativement
soupleset qui
disposentde moyensd'absorption, sociaux et économiques,favorablesà la
populationautochtone.Le mouvementsera plus rapide dans les pays dont
les structures ont été bouleversées
traditionnelles par la pénétration


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