ABSTRACT
Economics is concerned with the phenomena of production and distribution. Market and non-market economies alike have to meet the same problems: goods have to be produced and distributed among the population. It is on the former that economists have concentrated their attention. At the same time they have tended to neglect the interactions and conflicts between the market and other social institutions. However, in the study of societies which are changing over from non-market to market economies such factors cannot be so easily ignored. Since the majority of the world's population lives in societies where this transition is now occurring, the development of underdeveloped areas has become a central problem in world affairs, and a central concern of economists and others. Ways and means have to be devised to increase output so as to allow for a surplus to be sold, by which the economy is incorporated in the market system. Economic development involves here not only the use of new and more productive methods, it also depends on the presence of appropriate incentives which will induce the population to adopt the new techniques. In these circumstances, therefore, the recognition of the interplay of all social institutions becomes particularly important. This probably explains why economists have developed so few models to show the working of traditional non-market economies. They have concentrated their attention rather on the emerging and growing capitalist sector (Lewis, 1954, pp. 139–191, and 1958; pp. 1–32). Yet in order to establish the conditions for the emergence and growth of a capitalist sector in underdeveloped countries an understanding of the principles underlying the customary non-market economies is essential. Apart from its purely theoretical interest, this is necessary to explain why some development schemes are successful and others fail; why the indigenous population of underdeveloped areas is prepared to react positively to some new economic opportunities and not to others.
