YOU NEED MONEY TO MAKE MONEY^275
mobilization of capital. He distinguished three levels: (1) a country
with lots of private wealth and well-funded merchant banks, able to
finance enterprise with family resources, small loans, and
reinvestment of profits; (2) a poorer country with fewer and smaller
private fortunes, but enough to finance industry if (investment)
banks could be created to mobilize these dispersed funds; and (3) a
country poorer still, where private wealth was insufficient and only
the state could do the job, whether by financing investment banks or
by direct subvention. Britain was clearly in the first category;
Germany, Austria, and Italy in the second. The United States,
Belgium, Switzerland, France came in between. Russia fell in the
third group.
Gerschenkron's work in this area has been criticized because of his
heavy reliance on the scholarship of an earlier generation and the
refusal of complex historical arrangements to fit neat schémas. Every
new series of numerical estimates calls for adjustments in perspective.
Even so, Gerschenkron has continued to influence students of
development, in large part because of his central points: that
latecomers need to make special arrangements to compensate for
their backwardness and for changes elsewhere; and that with
intelligence and will, they can find ways to do so.^13