Poor immigrants’ capital accumulation refutes the vicious cycle of poverty theory

Evidence

If the “vicious cycle” argument was correct, formerly poor nations could not have advanced, Bauer argued, nor would the “massive accumulation of capital” by poor immigrants in many underdeveloped areas have been possible. He cited the cash crops of the rubber industry in Malaya and West Africa as examples of rapid—though admittedly uneven—growth spurred by private investment. Bauer warned against identifying low-level development with stagnation because of a lack of industry. Though admitting that industrial investment is measured more easily, Bauer argued that agricultural investment is “highly important in the early stages of economic advance” and essential (food) to the fundamental needs in most countries (Bauer 1958a, 143). — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1317

Categorization

• QUESTION: Does the historical evidence on Malaya and West Africa rubber actually support Bauer, or was growth more state-mediated than he claims?
• XREF: Connects to broader critiques of the ‘vicious cycle’/Nurkse-Rosenstein-Rodan big push models in development economics. — connects to: Poverty and unemployment function as deliberate system solutions, not failures — Clara E. Mattei, Escape from Capitalism, 159