TheGreat Leap Forward
TheGreat Leap Forward
Adetailed review of Drucker Alchian-Hayek model reveals that aneconomy driven by price signals and competition is likely not toprosper. It is evident through the argument whereby despite theenvironment that was created decades ago aimed at promoting economicdevelopment, there has been little progress in lowering the gapbetween the different societal classes. The establishment of thevarious institutions was witnessed after the Second World War. It isduring this period that there was the creation of governmental andnon-governmental entities such as the World Bank, the United Nations,and the International Monetary Fund (Lewis, 2012). This paper aims atadopting the viewpoint of a macroeconomic analyst in a bid to clarifythe failure of TheGreat Leap Forward,as illustrated in the documentary film clips.
Inspite of the time and resources that have been put into thedevelopment of the said firms, the theory behind their founding hasbeen proved wrong. It has further been made evident through thelittle growth that has been witnessed irrespective of the measuresthat had been established to embrace a micro economy. The developmentof a micro-economy was seen to be at its pick following the changesthat were made in different sectors of the economy that saw to theprivatization of industries, price decontrol, market regulation, andgood corporate governance. In order to ensure that the changes tookplace efficiently, market reform was witnessed in numerous countriesacross the world including New Zealand, Russia, India, Poland,Brazil and Argentina (Lewis, 2012). In spite of these efforts, themarket did not stabilize as expected given that the differentgovernments expected rapid growth resulting in the undermining ofsignificant factors that could have positively impacted the reformsleading to the desired output.
Throughthe Great Leap Forward, it becomes evident that economic developmentis a slow and gradual process this is apparent through thedisappointing results that were experienced. Further economic reformsthat were incorporated into the diverse economies highlighted revealthat the micro economy reforms were a failure. It can be establishedthrough results that were recorded at the early 90s where asubstantial number of the countries that had engaged in economicreforms had returned to lower ranking economic levels (Lewis, 2012).
Itis estimated that an average of 80% of the countries in the worldrecords a quarter less of the mean income in the West this is a dropin their average earnings five decades ago (Lewis, 2012). It iscorrect to state that there is need to worry given that mostdeveloping countries continue to engage in unrealistic economic goalsand reforms that could see to their collapse two decades from now. Itis because they continue to be consumer-focused rather that producerfocused. A good example as to why economies need to be producerfocused is evident in the instance of The Great Leap (Lewis, 2012).It is because they had intended on joining the world`s richestcountries in being economic giants by producing more agricultureproducts and steel. As such, this was done at the expense of beingproducer focused.
Evidently,no focus was put into guaranteeing that the quality of the productsand produces was produced was up to standards. It is because theleaders at the time had no realistic goals and failed to assess whatfundamentally influenced the success of the Western countries theywished to compete with. The failure of the economies of the times canalso be attributed to the fact that there was little consideration ofthe GDP. For there to be equitable and efficient development, thereis need to evaluate the GDP (Lewis, 2012). The GDP has beenestablished to be the most useful and recommendable measure ofeconomic development.
Itis due to the technique it uses is evaluating workforce productivity.The GDP is multiplied by the percentage of the population that works.However, it is important to note that the proportion of the workforcevaries though by record by a high rate. Another aspect that themastermind behind failed to consider is thatthe income level of a country is influenced by its output in itslargest industry.
InTheGreat Leap Forward,its success would have been inevitable had they focused on thecountry`s strongholds. Such a step is unlike the move that they tookwhere little thought was made to establish the country`s high pointsrather than engaging in activities that they had little knowledge onthis is evident in their move to dig huge pit where they would dropfertilizers and large portions of grains to achieve high productions.Their steel production was also conducted in an unprofessional mannersince none of them had the expertise required to engage in successfulproduction (Lewis,2012).
Inconclusion, based on these two instances, it becomes evident thatthere is no way that economic development can be hastened. It isessential that countries establish what they are good at and hold itas their primary industry. Through this, they will be able to attainstable development as they will acquire the expertise needed toproduce the quality of products that meet the consumer standards.
Lewis,W. (2012). The Power of Productivity. Cambridge, Massachusetts. MITPress.