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individuals can broadly estimate the risks that lead to such needs, they can guard themselves against those risks
by personal savings and insurance policies, Or provide for the needs by borrowing. From the individual point of view, all this amounts to an optimal utilisation of personal resources over time, shifting a portion of the present income to the future (savings and insurance premiums) cr shifting a portion of the future income to the present (borrowing). Surely, and efficient market system can generate an optimal extent of private entreneurship to provide banks, credit facilities, saving institutions and insurance companies in order to help individuals optimise their resource management.
It is clear that micro-economics at least indicates some broad tendencies of what thinking individuals would do for themselves. Economic security is recognised as a positive good. It is not a bad idea that actual individuals should try to emulate the ideal micro-economic man by paying attention to the best possible way of using their resources. The danger is in the attitude and outlook of the users cf micro-economics. Micro-economic reasoning is useful if the user is mature enough to temper the analysis with an adequate assessment of how the real system deviates from the ideal type of a self-regulating market system. It is of course unfortunate that micro-economics does not offer guidance for the acquisition of the much-needed skill that enables one to distinguish the real from the ideal and to measure the differences between the two worlds appropriately so that recommendations based on analysis may become relevant to the real situation. Inherently lacking in micro- economics is an evolutionary viewpoint, an awareness of different stages of socic- economic development at which the scope and efficiency of the market mechanism and people's attitudes toward participation in the market system are different. The market mechanism itself improves in the course of economic evolution. The basic day-to-day skills of individuals in coping with the increasingly complex economic realities also change for the better in the course of economic development. There is therefore an acute need for the type of economics that takes into account the problems of structural change and that is capable of pointing up the risks and uncertainties that social security schemes or other equivalent arrangements purport to counter. Development economics is this type of economics.
III. Development economics and social security
a
Development economics is in flux, and, by its very nature, cannot offer rigidly structured set of theorems and conclusions of the kind found in conventional economics. The strength of development economics is its emphasis on the evolution of economic institutions. W. Arthur Lewis, doyen of development economics, takes stock of the achievements of this branch of economics in his recent article. "A unifying idea in development economics", Lewis says,
is that "development is initiated by a few people in a few places ('leading sectors') and [that] the rest of the economy may or may not follow." He therefore declares: "The various aspects of this process constitute the major interest of development economics.' Не then offers а sort of checklist of questions that one should bear in mind when considering the process of development involving the interaction between "leading sectors" and the rest of the economy:
(a) Where are the leading sectors?
(b)
How does the rest of the economy treat them?
(C)
(a)
How does the rest of the economy change in response to them?
What is the effect of growth of leading sectors on the distribution of income?
In his earlier semina r work оп development economics, Lewis called the "leading sectors" by a more expressive collective name, "capitalist sector" and analysed the interaction between this sector and the "subsistence" or "traditional" sector.2 The dichotomy of the "capitalist" and "traditional" sectors is more appropriate as an image of the basic developmental process. With a slight
1 W. Arthur Lewis, "Development economics: An outline", University Programs
Modular Studies
(Morristown, N.J.: General Learning Press, 1974). Quotations and references that follow are from p. 3.
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2 W. Arthur Lewis, "Development with unlimited supplies of labour" Manchester School, Vol. 22 (1954), pp. 139-191.
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