Concluding Remarks

In judging theories economists lean heavily on the side of logic rather than empirical content, and if the standard is internal rigour and elegance of construction, the neo-classical version of vent for surplus undoubtedly has much to offer. With key assumptions of utility maximisation, independent household decision-making and perfect knowledge, it is possible to formulate a model of household behaviour in which a shift in the marginal rate of transformation of labour inputs to imported consumer goods results in an increased supply of labour inputs to produce exportable commodities. ‘Everything’ is resolved by working out initial equilibrium conditions and movements between equilibrium points. There is no need to investigate the decision-making process more closely. Utility maximisation provides the requisite behavioural response. There is a logical quality to the neo-classical version which goes a long way towards explaining its appeal. But if the yardstick of internal logic and consistency is replaced by one of an empirical nature, then the question is thrown wide open. It was claimed in the introductory chapter that ‘good’ economic theory should first and foremost be able to clarify the important issues involved in real world experiences, the real world instance being the growth of peasants’ exports. Having decided on this criterion, the important question of how the real world relevance of a theory is to be judged still remains.