THE DOMINANT strand of bourgeois economics—neo-classical theory—proceeds on the assumption of perfect capital mobility, i.e., as long as there are wage differences across countries or regions, capital will flow from the high wage to the low wage region until these differences are eliminated. The persistence of wage differences therefore can be explained by it only in terms of harries to capital mobility. Eliminate these barriers and wage differences would disappear, i.e., the problem of underdevelopment would be eliminated. Notwithstanding the fact that the entire historical experience of the Third World runs contrary to this theory, bourgeois economists persist in prescribing as a panacea for the problem ofunderdevelopment, a lifting of barriers against capital imports, an open-door poHcy towards multinational corporations and banks. And this in essence is the line advocated by the World Bank, the IMP and other similar agencies.
The recent growth experience of some East and South-East A&ian countries is adduced in support of this position. From the fact that they have witnessed rapid growth whtk catering for the world market tn a range of manufactured goods and pursuing a 'liberal" policy on capital imports, it is concluded that other underdeveloped countries can also replicate their experience, that a strategy of economic 'liberalism' and export-led growth can bring about rapid industrialisation elsewhere as well. The very fact of 16w wages an the Third World countries gives themr a competitive edge on the world market, which they can exploit for promoting export-led indtistriahsati on if only they did away with the whole paraphernalia of government controls and restrictions-on foreign as well as domestic capital.
Oddly engough thfe belief in the possibility, or even imminence, of large-scale export-led industrialisation in the Third World countries under the aegis of foreign capital has of late come to be shared by sections of the Left as well. They of course do not see this as solving the problems of the Third World, but they think that a stage has arrived when capital is increasingly interested in migrating from the developed to the underdeveloped capitalist countries in the quest for low wages, not to nreet l^cal demand but to produce for the world market a range of sophisticated manufactured goods A large-scale reloca.lAon of industry, a new int^rn^tmial division of labour is in the offing. The so-called Scarnberg Group of writers constitute an