superior in performance to the indigenous equipment. Yet functional advantage by no means assures adoption. Herskovits has reported that the natives of southern Mozambique accepted the plow while other Africans did not, even though draft animals were available." 8 Meager though our knowledge of the development of wants may be, observations of cultural change permit us to draw at least three fairly significant conclusions as to the transmission of consumption patterns to low income countries. First, it is clear that imitative consumption will be practiced most by the industrial labor force, since industrialization, to the extent that it is associated with urbanization, leads to more frequent and intense contact with higher standards of living. Second, the goods and services bought with the new income may be desired less for their functional value than for the prestige associated with them. Perhaps the most important conclusion that can be drawn from our knowledge of acculturation is that imitative consumption can be selfreinforcing. If a community takes on some elements of the consumption pattern of a more affluent culture, it will probably be easier to adopt additional elements of that pattern. In other words, acculturation apparently proceeds more rapidly as the differences between the two cultures are narrowed. One can expect to find, then, that the consumption standards of the committed labor force in newly developing areas may change at an accelerating pace, even though the rate of increase in income and the degree of "culture contact" remain stable.9 COMPOSITION OF CONSUMPTION EXPENDITURES Food Food consumption may be altered by the industrialization process in several ways. The economist looks at once for the effect of the increase in income that presumably is associated with industrialization. Houthakker has recently computed the expenditure elasticity of demand for food from various budget studies; he found expenditure elasticities ranging from .344 to .731, thus supporting Engel's Law.10 We expect 7 Herskovits, ibid., p. 39. 8 See Ralph Linton, The Study of Man (New York: D. Appleton-Century Company, 1936), p. 328. • Yet occasionally cultural contact with a higher income community may not affect the consumption pattern. See Sol Tax, "Changing Consumption in Indian Guatemala," Economic Development and Cultural Change, 5:147–158 (January 1957). 10 H. S. Houthakker, “An International Comparison of Household Expenditure Patterns, Commemorating the Centenary of Engel's Law," Econometrica, 25:532-551 (October 1957). the increase in food expenditures to be less than proportional to the increase in income; history leads us to anticipate also a shift away from the cereals producing energy and toward the protective foods, such as meat, vegetables, fruit, and fish.11 Expenditure or income elasticity estimates are not particularly illuminating in the context of industrialization, however, since so many determinants of consumption other than income are also changing. It is entirely possible that these other determinants are more important than the change in income. For example, urbanization in at least one instance was associated with an increase in the demand for meat products in spite of a fall in real income.12 Diets may be altered even in the absence of income change, as imitative consumption shifts expenditures toward prestigeful foods, including processed or other foods that are less nutritious than those in the original diet.18 A study in Puerto Rico provides a few pertinent insights because it distinguishes between the urban and the rural worker.14 However, since families are classified by money income rather than by real income (money income plus income in kind), it is not possible to identify corresponding rural and urban real-income groups. Nevertheless, at least one set of comparisons is illuminating. In urban families earning less than $500 annually, each member consumed 40 percent more milk, about 50 percent more fat, 12 percent more rice, and slightly more codfish (the main protein source) than did the rural families in the same income class.15 Since the urban families were probably earning less than their rural counterparts in terms of real income, this may be a case of urbanization associated with increased food consumption. The effect of urbanization on consumers' tastes may be reflected, too, in the difference between urban and rural attitudes toward imported 11 P. K. Chang, Agriculture and Industrialization (Cambridge: Harvard University Press, 1949), Chapter 2; W. S. and E. S. Woytinsky, World Population and Production (New York: Twentieth Century Fund, 1953), pp. 297–306. 12 Naum Jasny, The Socialized Agriculture of the U.S.S.R. (Stanford: Stanford University Press, 1949), pp. 91-92, 98-99. 13 Margaret Mead, ed., Cultural Patterns and Technical Change (Paris: UNESCO, 1953), p. 260. 14 Lydia J. Roberts and Rosa Luisa Stefani, Patterns of Living in Puerto Rican Families (Rio Piedras: University of Puerto Rico, 1949); the recent Survey of Ceylon's Consumer Finances (Colombo: Central Bank of Ceylon, 1954) distinguishes between estate and nonestate sectors, but these are not synonymous with rural and urban sectors. 15 Roberts and Stefani, op. cit., pp. 357, 366, 368, and 386. canned fruits. These fruits were preferred over native fruits by 81 percent of the urban families but by only 63 percent of the rural families.16 This difference held for all income groups. Such a difference in preferences probably cannot be completely explained by differences in relative prices in the rural and urban markets. Exposure to higher living standards, to more advertising, and to more accessible retail stocks of the imported fruits must be part of the cause. The effect of this change of preference is of course a decline in the demand for domestic agricultural produce. The imitative consumption which may characterize urbanization can be brought about by what must be called imitative production-local manufacturers or processors may also imitate. The domestic demand for locally produced foodstuffs might be reduced with urbanization not only because of the insertion of processing margins and the shift toward imported foods, but because of a reduction in the money income available for food. Typically the urban migrant must pay much more for housing than he had to pay in the country. So it is possible for a worker to go to the city for a higher money wage that leaves him with less income, after he pays for housing. This puts pressure on his food expenditures. All this points to the possibility that urbanization may require quite a substantial increase in the migrating workers' incomes if a depressing effect on the agricultural sector is to be avoided. But another pressure operates in this direction; industrialization with its consequent centralization of population requires more elaborate marketing channels for that portion of agricultural output consumed domestically as food. The impact of this can be substantial. Suppose the distributive margin is 33 percent of the farm value of the food item.17 If a wage earner moves to the city and buys in the store the same products he once bought directly from the farm, he must spend one third more. The food expenditures of such workers must rise by at least one third as they move to the city unless the demand curve is to shift (ignore for the moment possible change in preferences caused by urbanization). Population growth and the increase in incomes may be sufficient in any given case to affect the forces outlined here, but the problem of the 16 Ibid., p. 383. 17 Margins of this size are probably not unrealistic. See K. C. Abercrombie, "Marketing Margins for Foodstuffs," Monthly Bulletin of Agricultural Economics and Statistics, 3:1-8 (November 1, 1954); and John K. Galbraith and Richard H. Holton, Marketing Efficiency in Puerto Rico (Cambridge: Harvard University Press, 1955), especially Chapters 3-4. marketing margins may be especially significant. Perhaps this underlies the observation by the Economic Commission for Latin America that urbanization and the shift of manpower out of agriculture were "not accompanied by appropriate improvements in the standard of living of the greater part of the population, both rural and urban, and to a considerable extent produced merely a redistribution of incomes." 18 This result occurred in the face of a ratio of gross product per capita in the nonagricultural population to gross product per capita in the agricultural population of 3.6.19 The urbanization movement increases the size of the marketing sector relative to the rest of the economy. Although there may be an ample labor supply for industrialization, the capital syphoned off into trade is foreclosed from aiding industrialization; and trade is favored as an investment since it provides liquidity, quick turnover, and minimum risk.20 Thus urbanization may retard the commitment of the labor force to industrialization in the sense that urbanization brings about certain employment opportunities that compete with the manufacturing sector for both labor and capital. However, the imitative consumption of food products creates opportunities for investment in the food processing industries. In underdeveloped countries those industries are usually among the simplest to establish. Urbanization, the extension of the marketing sector, and imitative consumption all encourage such industrialization. Clothing Imitative consumption generally operates to alter the demand for clothing very early in a period of "culture contact." Industrialization and urbanization seem merely to accelerate this change in consumption.21 But changes in style of dress would seem to have only limited effects on industry and agriculture. The greater effect lies in the shift in demand toward the synthetic fibers that have been developed in the high income countries. So far, only rayon seems to have been of any sig18 Economic Bulletin for Latin America, 2:18 (February 1957). 19 Ibid., p. 28. 20 See Henry G. Aubrey, “Investment Decisions in Underdeveloped Countries,” in National Bureau of Economic Research, Universities - National Bureau Committee for Economic Research, Capital Formation and Economic Growth (Princeton: Princeton University Press, 1955), p. 409. 21 Pandharinath Prabhu, "Social Effects of Urbanization on Industrial Workers in Bombay," Sociological Bulletin, 6:14-33 (March 1957); and Audrey I. Richards, Land, Labor and Diet in Northern Rhodesia (London: Oxford University Press, 1939), p. 216. nificance in this regard. The fact that rayon looks like silk and lends itself to bright colors recommends its use in several low income societies. The results of this diffusion of consumers' taste from the developed to the developing countries are to depress the demand for the natural fibers, to insert greater processing charges between the producer of raw material and the consumer, and to encourage imports. This change in demand presents an opportunity for investment since the cellulose base for rayon can be derived from ubiquitous materials, but it must be remembered that consumers' preferences for rayon can cross international boundaries with far greater ease than can the techniques for producing rayon. The demand for shoes, which is commonly identified with urbanization, has a happier result than does the demand for rayon. Shoe manufacturing is relatively simple to establish and the raw materials involved are seldom a problem. In this instance urbanization because of its effect on demand is an unmistakable catalyst in the industrialization process. The Westernization of clothing apparently leads to a related demand for services, e.g., shoe repairing and tailoring, and thus provides some additional employment opportunities.22 These may facilitate industrialization by expanding the supply of experienced craftsmen. Durable Goods It is particularly intriguing to trace the consequences of urbanization and imitative consumption as they operate on the demand for durable goods. One can exaggerate the difficulties that these demands may cause, since so few people are likely to have incomes large enough to afford durables. Yet to the extent that economic development succeeds in raising incomes, a demand for durables is likely to arise. Even in the early stages of cultural contact with higher income societies, imported kitchen utensils, for example, are substituted for those formerly made in the home.23 Consumers' durables were developed in the high income countries in part to permit the substitution of capital for labor. The automobile reduced the time and effort involved in personal travel; the washing machine reduced the drudgery in laundering; and the modern stove required less tending. These were not, of course, the only reasons for 22 Richards, ibid. 23 See Margaret Mead, "Native Standards of Living and African Culture Change," Africa, 11(Supplement):21-24 (1938). |
