(^274) THE WEALTH AND POVERTY OF NATIONS
backward economy from the advanced. Gerschenkron made no
effort to ask why anyone should want to leap the gap. The
advantages were obvious. Rather, he saw the gap as an incentive in
itself, an invitation to effort—like a gap in potential that, when
sufficiendy great, is crossed by electrical energy in the form of a
spark. (That is my metaphor, but it is not unjustified. Gerschenkron
speaks explicitiy of "tension" between "potential" and actual.)
In Gerschenkron's model, then, it pays to be late. Not before the
leap, but after. (He makes no effort to estimate the cost of relative
poverty before industrialization, but he doesn't have to. It's high.)
The greater the gap, the greater the gain for those who leap it. Why?
Because there's so much more to learn—including mistakes to be
avoided. As a result, follower countries grow faster than their
predecessors. Their growth is characterized by what Gerschenkron
calls a spurt (or spurts), a period (or periods) of exceptional rates of
increase.
Late growth, says Gerschenkron, also tends to be based on "the
most modern and efficient techniques," because they pay the most
and nothing less can compete with more advanced nations. These
techniques are typically capital-intensive, which would seem to be
irrational for countries that abound in cheap labor. * Gerschenkron
recognizes the paradox, but explains it by the quality of the
workforce. Good, well-disciplined labor is in fact scarce, he says,
scarcer than in richer, more advanced countries. So it pays to
substitute capital for labor.
That, for Gerschenkron, is half the story. The second half concerns
the how: How did backward countries, poor in capital and good
labor, manage to create modern, capital-intensive industry? And
(although Gerschenkron does little with this part of the story) how
did they manage to acquire the knowledge and know-how? Finally,
how did they overcome social, cultural, and institutional barriers to
industrial enterprise? How did they create appropriate arrangements
and institutions? How did they cope with the strains of change?
In his exploration of the conditions and constraints of
backwardness, Gerschenkron laid particular stress on the
- This was partly because that was the direction of technological advance—the sub
stitution of capital for labor; but also because Gerschenkron thought the way to rapid
growth and catch-up was via heavy industry. This was what he saw in Germany and
Russia, and he turned it into a paradigm. Ironically (for Gerschenkron was anything
but a Marxist), Marxist economic thinking had followed similar lines.