Organized nations succeed where others fail

By Lester C. Thorow

Returning from a recent visit to Cambodia and Laos (the Laotians never cease to remind you that it should be called Lao since their French colonial masters mistakenly used the plural form, thinking there were three Laos), it is hard not to think about how once wealthy nations become poor.

The almost unbelievable tyranny inflicted on Cambodia by Pol Pot, who died last week, was only the final step in a process of destruction over a period of decades.

If you visit the remains of the Khmer civilization, Angkor Wat and the many magnificent complexes around it, you understand that it was one of the world's most advanced civilizations for several hundred years at the beginning of the second millennium. But by the end of this millennium, Cambodia is not just a poor country. It is an economic wreck.

Advanced civilizations need the ability to generate an agricultural surplus so that many of their citizens can devote their time to the activities that create a civilization - education, culture, art, religion, engineering, building. If everyone has to be a farmer to hold off starvation, subsistence agriculture is all that can exist, and progress is impossible. And because of high transportation costs, until very recently it was impossible to produce other goods and then trade for the food that every society needs.

Laos is, and essentially always has been, a country of subsistence agriculture. It never has had the spare time to develop a civilization. It is almost entirely mountainous. Its mountains are not particularly high, but they are extremely rugged, especially in the north, and when combined with an often impenetrable jungle, it is virtually impossible to produce an agricultural surplus that can feed a substantial urban population. "Slash and burn" agriculture is still a way of life. Trees are cut and burned wherever the hillsides are not too steep, the poor soil under the trees is farmed for a few years until it is completely exhausted, and then the farmers move on to another round of "slash and burn."

But if one looks at what remains of the Khmer civilization, it is clear that inhabitants had a lot of time to devote to activities other than feeding themselves. The quality and extent of their stone carvings show a civilization that had millions of hours to devote to building stone edifices and training the sculptors who carved the millions of images on them - there are said to have been more than a million images of Buddha alone in Angkor.

Ancient Cambodia's secret was that inhabitants had the necessary terrain (much of the country is flat with good soil that has washed down from China and Laos in the Mekong River's annual floods), but more importantly the social organization to trap the water available during the rainy season so they could irrigate during the dry season and get three crops of rice per year.

Today, much of Cambodia gets only one crop of rice per year and some of it gets two, but almost none of it gets three. The terrain, of course, has not changed. What has changed is their ability to get organized and tap the resources they have. Disrupted by a Thai invasion, they essentially lost their ability to get organized, and they started on a long downward path.

The negative effects of social disorganization are even more dramatically evident in more recent wars. Both Laos and Cambodia were hammered during the Vietnam War. More bombs fell on Laos than were dropped in all of World War II, but Laos has pulled itself together and today is clearly, if slowly, moving toward a higher standard of living. The bombs dropped from the B-52s blew up 25 years ago - they weren't land mines that sit there forever. The jungle and the people have had more than a decade to recover. But most importantly, Laos has had governmental stability. Civil wars have not raged back and forth.

Cambodia, conversely, is an example of what happens when Pandora's box is opened, all of the furies emerge, and the social system falls apart. The Vietnam War destabilized a traditional monarchy that was tottering anyway. Like Algeria today, Cambodians turned in upon themselves and in an almost incomprehensible way destroyed themselves - Pol Pot and the killing fields. The Vietnamese then invaded but could not eliminate the Khmer Rouge, and
eventually retreated back to Vietnam. Although Pol Pot died last week, civil
war still periodically breaks out.

Everywhere in Cambodia there are land mines - in the temples, in the rice fields, in the jungle. The economics of the land-mine problem are simple but unsolvable. It costs $50 to put a mine in the ground but $300 to get it out. We know who was willing to pay to put them in the ground, but who is willing to pay to get them out of the ground? Until they are out, economic activity cannot really recommence. Piracy and kidnapping become the most profitable lines of business.

Outside efforts to re-establish ongoing political and social organizations fail. Governments are overthrown - most recently in July 1997. In the ensuing chaos the police don't get paid and start collecting their own "taxes." Social disorganization rules. Talking about economic development in the midst of such social disorganization is much like proposing that we flap our arms
and fly to the moon.

In the end, there is a simple moral to the tale. The ability to get organized is any society's greatest asset. Laos has it; Cambodia doesn't.

Lester C. Thurow is a professor of economics and former dean of MIT's Sloan School of Management. He is also a member of USA TODAY's board of contributors.

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