The Misperceived Economy
IN this chapter we will reflect upon the sources of growth and upon a peculiar condition wherein these and other basic facts of economic structure have been ignored and misinterpreted in the development of what passes for economic policy. The focus for our discussion is the dualism condition, a fundamental split in the economy which amounts to its disjunction into two nearly distinct subeconomies. According to a view which we will examine in considerable detail in subsequent chapters, the operating core of the system is an active, "progressive" sector characterized by large firms, technological change, skilled educated work forces, and an atmosphere of growth. This is juxtaposed against a stagnant sector of unsophisticated technology, underdeveloped human resources, declining employment, marginal career opportunities, and hard-core poverty. The dynamics and forces for change in the society as a whole emanate from business decisions taken within the progressive sector. Yet these forces have not been effectively directed at reducing the drag of the stagnant component, improving the material well-being of those tens of millions left behind within it, or otherwise assimilating them by expanding the industrial core. The outcome is dramatic inequality and desperate poverty within the world's largest economy, and within a society that takes pride in its myths of equality, equity, and opportunities for social mobility.
The prospect of the permanent encapsulation of an impoverished, underdeveloped society within the body of the economy is disquieting at the very least. For those condemned to an unrelieved perspective of poverty the sentence represents the abrogation of an implied social contract which promised equitable participation in the functioning of the