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C, or D. Forecasting is historical and empirical, and hence subject to tremendous variety and error. However, we can abstract certain characteristics for theoretical examination.

Neotraditional Equilibrium

We can state, for example, that one type of change that occurs from the base of traditional stationary economies is a change into another stationary economy. In other words, in neither A nor B is a characteristic increase in per capita consumption or production associated with existing social processes. Most of the changes between A and B have been concerned with kind or quality, or the ways in which resources are used. It is of course unlikely that such change will not involve quantity—of satisfactions obtained, or of this resource used as against that. It is a one-step operation, with an equilibrium achieved at B such that no further steps need be taken until new, inescapable factors of change come on the scene.

To examine why some changes are of this step-by-step nature, and others dynamic, would lead us too far afield. A vast number of the changes taking place throughout the newly developing world are of this step-by-step nature. Accounts of the "new conservatives" in modified traditional society are legion. There are, for example, the Northwest Coast Indian or New Guinea villagers living according to patterns set as a response to Victorian missionary culture, and the Melanesian village communities supplying migrant plantation labor instead of becoming peasant proprietors.

It appears that for many newly developing economies the movement from one stationary equilibrium to another constitutes the first stage. For this reason entering the market was distinguished from per capita increase in our opening definitions. In New Guinea it is possible to distinguish several distinct levels of equilibrium, each involving a different kind of relation to the market economy. At each point of change a new culture is formed, with new quantities and kinds of consumption and production. But the quantities alter only at the time of change, and not during the sometimes lengthy period when equilibrium has been established.

During the period of change the individual producer must decide at what point and to what degree he will follow the trend. Although

7 Cyril S. Belshaw, In Search of Wealth: A Study of the Emergence of Commercial Operations in the Melanesian Society of Southeastern Papua, American Anthropological Association Memoir No. 80 (February 1955).

considerable variation is possible, we are still dealing with a homogeneous traditional society, and the producer must act on the assumption of shared values. His personnel policy must be entirely congruent with this modified traditional culture. Once the change has been completed, it is possible to describe in static, repetitive, and predictive terms what each producer will do. We do not (or should not) expect the peasant copra producer in such a society to employ wage labor, maximize monetary profit, and reinvest capital as would the Western industrialist. We would expect that the labor supply would relate to kinship obligation and be rewarded by feasting or reciprocal duty, and that many laborers would also be entrepreneurs, since the two roles would be interchangeable during the course of the season.

Transition to Continuous Change

The state of society that is most significant for economic growth is one in which the step-by-step process has been left behind, and production or consumption increase shows a continuous, though perhaps fluctuating, progression. It seems likely that the most significant difference is that in the growing economy the entrepreneur has a new attitude toward the size of his organization. He is interested in doing more with what he has, in moving into new fields of endeavor, in expanding his land, his plant, and his labor supply. There is some reason to believe that this interest in physical and organizational growth is an especially important incentive in itself and an intellectual challenge to the entrepreneur. Such growth is probably a function of capital reinvestment, which may in part be interpreted as an increased demand for labor productivity.

Viewed in this way, labor commitment is a cultural phenomenon, and its development is a process of culture change. It has been indicated that the forms of economic growth can be multifarious and can be predicted only if we know the specific limiting conditions in each case. Statements such as "Societies of Type A will develop labor commitment and take off into economic growth more readily than societies of Type B" are of dubious value, since the structure of society is only one among a number of sets of variables. Instead, we must seek variables that apply to social and economic change in general; this implies the need for analysis of changes in the nature of rewards and punishments and human reactions to them, of the cultural content of goals and aspirations, of ways in which the costs of change are assessed, of ability to use resources, and of alteration and stability in human relations.

The temptation is to believe that growth behavior in all significant respects must be the same as growth behavior in our own society. The argument would run that the entrepreneur must hire and fire freely and impersonally, must translate rewards into money wages, must provide material and social services at his plant in order to add to the income of labor in accordance with its demands, must be prepared to see the growth of labor organizations parallel that of industrial organization, and so on. The entrepreneur must come to terms with labor to get the most out of it in productivity and profit. However, it may also be argued that these are not necessary conditions of growth, and that we may conceive of alternative institutional patterns that are compatible with growth. If analysts such as W. A. Lewis are correct, the rate of capital investment is the factor that governs growth. We may then ask to what extent institutional changes have to take place to permit capital investment at the required rate? And this leads to the central question of this paper: What are the likely or necessary labor adjustments?


In many newly developing areas, units of production such as the factory or the firm have yet to make their appearance or else are still a relatively small part of the total productive economy. The commitment of labor to improvements in agriculture or to work with small productive units that, while expanding, have not achieved a fully "rationalized" work organization should be borne in mind throughout the discussion.

Types of Entrepreneurs

The entrepreneur committed to growth through productive expansion and capital investment can be thought of as occupying a variety of social roles. He may be a cultivator producing new crops and using more land, labor, and equipment. He may be a proprietor operating a taxi service or constructing cane furniture. He may be a go-between, marketing produce for persons who feel unable to cope with commercial techniques. He may be a village official or cooperative leader guiding a community enterprise, or a state politician heading a ministry of public works. The entrepreneur's interest in labor and the way in which he conceives of its manipulation are obviously highly variable, even

8 W. A. Lewis, The Theory of Economic Growth (London: Allen and Unwin, 1955).

within the same society. Each role poses many similar questions, but the answers differ.9

The first questions might be: What is his need for labor, and how does it relate to his goals? The entrepreneur who is simply seeking and acquiring greater control over more and more labor is not contributing to economic growth in general, although he is increasing the size of his own establishment. He is just concentrating existing work under his own management. Such expansion is seldom a completely isolated factor. Increases in size often suggest new economies and methods. To the extent that the entrepreneur attempts to put labor to new uses, to rearrange or regroup it in more productive organization, or to enable it to use new and more productive techniques, he may be said to be investing in increased productivity and contributing to growth. Thus it may be concluded that the entrepreneur committed to growth must be interested in committing his labor force (a) to work for an employer, (b) to work for him instead of for someone else, and (c) to contribute to economic growth through adjustable productivity. Each of these points may be examined in turn.

Commitment of Labor to Work

Working for an "employer." The most overlooked element in motivating labor to work for an employer probably has been the continuance of modified traditional rewards and organization-so much so that the very existence of an "employer" can be obscured. In South Eastern New Guinea, for example, there are men who mobilize labor for boatbuilding, copra production, or commercial agriculture by holding out promises of nonmonetary rewards and work in a traditional organization. Men offer their labor in return for a feast, or a distribution of trade goods, or because they have access to the stores and hospitality of the "employer." Where the entrepreneur is not too specialized and a significant number of persons in the community can perform his functions, the old principle of reciprocity in sharing labor through work teams sometimes continues as an effective method of getting agricultural work done. Even where there are relatively few "managers" in a community—say, one executive for each lineage—it is quite likely that they will be operating not on their own account, but as coopera

• An analysis of the relationship of the entrepreneur to society in newly developing economies is contained in Cyril S. Belshaw, "The Social Milieu of the Entrepreneur: A Critical Essay," Explorations in Entrepreneurial History, 7:146–163 (February 1955).

tive leaders for their kinsmen. In such a case, semitraditional organization is used to focus individual production, and what to the outsider might appear as a firm using labor is in reality a cooperative group of peasants delegating managerial responsibilities to one of their number. Working for wages. One does not have to go far into the literature to realize that the operation of wage rates as a force securing the commitment of labor is an elusive variable. The point has been made that where the variety of things that money can do is limited, the marketing of products (including labor) can reach a point at which the income earned can be distributed not only with optimum marginal satisfaction but with maximum total satisfaction, so far as money use is concerned. In other words, the attractiveness of earning more money is negligible. This I believe to have been the case throughout Melanesia up to World War II, and it carries the implication that monetary inducements to increase labor supply and productivity are not likely to be successful. These particular premises of course are not the only ones leading to such a conclusion. One merely has to assume the more common condition that even with a wide variety of uses of money, the disutility of work is such that the elasticity of the supply of labor is very great.

The statement that labor works for wages conceals the whole range of things for which wages are wanted. Here economic analysis and cultural analysis come into sharp contact. In the old days the demand for money was enforced through taxation. Today money has percolated throughout traditional cultures, so that it can be used for traditional purposes such as marriage exchange, potlatching, purchasing foods for feasts, setting up a household, and even rewarding the diviner or sorcerer.10 The definition of limitations on the uses of money is almost entirely cultural, although in some cases the organization of the supply of goods is involved. Thus, one Melanesian community limits itself to the goods available in the trade store; another community only a few miles away has developed uses for bicycles, has learned about cameras, and, being literate, demands pen, paper, and books. One Northwest Coast Indian group, despite the fact that mail-order resources are available in all their plentitude, limits its demand to basic foodstuffs, clothing, and trapping equipment. Some distance away another community has learned to invest in mechanical equipment, domestic lighting, and 10 Cyril S. Belshaw, The Great Village: The Economic and Social Welfare of Hanaubada, an Urban Community in Papua (London: Routledge & Kegan Paul,

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