Let us make an in-depth study of the meaning, characteristics, policy implication and critical appraisal of social dualism.

Meaning of Social Dualism:

According to Prof. Boeke, “Social Dualism is the clashing of an imported social system with an indigenous social system of another style. Most frequently the imported social system is high capitalism. But it may be socialism or communism just as well, or blending of them.”

Prof. Boeke uses ‘East’ and ‘West’ as different expressions for the underdeveloped or dual economies and developed capitalist economies, respectively.

Underdeveloped economies, that is economies of the East are generally underdeveloped economies. Co- existence of two diverse social orders is the principal property of such economies. Social dualism thus is kind of social disintegration caused by the rise of capitalism in less developed economies.


This integration highlights the conflict between the imported social order and the indigenous social order of the underdeveloped economies. In the opinion of Prof. Boeke,

“Without doubt the most frequent form of a social dualism is to be found there where an imported Western Capitalism has penetrated into a pre-capitalistic agrarian community and where the original social system, be it not undamaged, has been able to hold its own or, expressed in opposite terms, has not been able to adopt the capitalistic principles and put them into full practice.”

Characteristics of Social Dualism:

According to Boeke, following are the main features of social dualism:

1. Limited Needs:

The foremost characteristic of eastern or the pre-capitalist indigenous sector of dualistic economies is marked by limited needs in sharp contrast with the western society. In western society, wants are unlimited. The reason of limited needs of the dualistic economy is simple habits and simple way of thinking. People are therefore contented with their limited means or money incomes.


As soon as people earn sufficient money income to fulfil their limited needs, people start preferring leisure to work. The supply curve of labour is thus generally backward- sloping in these economies. This implies that in response to rise in wages beyond a particular point the supply of labour starts diminishing, rather than increasing.

2. More Importance of Social Needs:

Boeke’s theory lays more emphasis to social needs. Social perspective is of greater importance than the national perspective. In other words, social value of the goods is of more important than their economic value.

In the words of Prof. Boeke “It is not their economic usefulness or the individual services they render their possessor which determine the value of goods. It is what the community thinks of the commodities that give them value.”

In fact the lower the development of individual, the greater his dependence on social tradition and the fewer his economic needs, the more place is given to social needs. In this way, he gives more importance to social needs of eastern sector as compared to western sector.

3. Importance to Self Sufficiency:


The eastern society considers ‘family’ as unit and every individual is self sufficient in his needs. People cannot easily induce to organise production or to collect investment.

According to Boeke “Not only do they feel strangers to basic forms of exchange like business and profession but in so far as these are business they are always one man affairs that can hardly compete with western capitalism and are not lasting.” Thus, the purpose of production is not merely profit-making but also satisfying personal needs.

4. Unorganized Labour:

According to Boeke, the labour is totally unorganised, passive, silent and casual in dualistic economy. Moreover, the labour is unskilled and immobile too. People hesitate to leave their homes as they have attachment for petty things.

Due to immobility, the labour remains unorganised and as such his bargaining power remains weak. The people are orthodox in outlook. In contrast, the people in western, economy are progressive, dynamic and forward looking. They display their interest in every type of adventure. Wages in the eastern sector are low due to lower marginal productivity.

5. Idea of Income is not Suitable:

The idea of income does not fit in eastern society. Income is a thing that a man gets more or less regularly as a result of acts of exchange. If income is not received in the shape of money, it can never be evaluated in terms of money.

In fact, eastern society has barter terms of trade. Thus, maintenance of household cannot be termed ‘income’ in strict sense because there is no absolute price basis nor any basis to determine the costs.

6. Lack of Profit Motive:

Production is not done for the profit motive in the economies of East. Thus the modern theories of business enterprise do not hold good in these economies. Windfall profits and losses are attached greater significance in these economies than the continuous and consistent flow of income. Further there is general lack of entrepreneurship in these economies.

Policy Implications of Social Dualism:

Boeke’s theory of social dualism has the following implications:

1. Agriculture:

Boeke feels that western economic theory can hardly bring about any improvement in agriculture in eastern areas. Instead, it may cause retrogression because the mental attitudes of farmers is not changeable. They stick to old and unscientific methods of cultivation. Boeke is of the opinion that the culture of villagers is totally based on traditionalism and the farmers cannot afford to accept new change.

2. Industry:


In the field of industry, the eastern countries have different approaches to its counterpart i.e. western countries in producing the same commodity. However, technological progress along western lives is impossible because, there is no question of the eastern producer adapting himself to the western example technologically, economically or socially.

If the eastern producer initiates a western producer he will merely loose his competitive qualities. In support of his view, Boeke holds the example of Indonesian economy who adopted western technology to achieve the goal of industrialization and self-sustained growth but ruined its small industry.

3. Unemployment:

Prof. Boeke’s pessimistic approach also held the similar views to the problems of unemployment.

Thus, he distinguishes five type of unemployment:


(i) Seasonal

(ii) Casual

(iii) Unemployment for regular labour

(iv) Unemployment of white collared in urban areas


(v) Disguised employment.

The problem of unemployment in underdeveloped areas is so acute that its solution is beyond the reach of government. The solution to these five kinds of unemployment would need large financial investment and government has limited resources and, thus, government remains in dilemma.

4. Economic Development:

Prof. Boeke says that economic development is hampered by the limited wants of the eastern society. The increase in the supply of food stuff and industrial goods results in glut in commodities in the market which does not help in improving economic development of the area. The leads to depression and fall in investment.

In short, Boeke’s idea was that any industrialization or agricultural improvement should be gradual so as to suit in the frame work of dualistic economy. Otherwise, any radical changes in the structure of the dualistic economy might prove harmful. Therefore, Boeke advices that development process must be slow, and the urge for development must be the soul of the people.

5. International Relations:

Prof. Boeke has stressed the need for ‘village restoration’. The term village restoration implies that basic character of village should be kept intact and it should not be disturbed through the influence of international trade.

The restoration of the village can take place through the revival and adoption of democratic means among the rural peasantry class. This will provide an opportunity for new leaders to come forward and take up the local and social responsibilities with a sense of determination and devotion. They should work for the goal of economic development with faith, confidence and patience.

6. Organization:


In organisation too, there is a lot of difference in eastern and western countries. The highly capitalistic forms of organization specially in mining, transportation in western society cannot be adopted in eastern society.

7. Absence of Profit Motive:

Another feature of dualistic economy in the eastern society is almost the absence of profit motive. The profit from speculative activities, however, holds attraction for them.

8. No Technical Advancement:

Technological progress of western sector has yet to touch the eastern society of dualistic economies. In the words Boeke, “in fact, there is no question of the eastern producer adapting himself to the western example technologically, economically or socially.”

9. Lack of Industrialization:

The Industrialization in the eastern sector lacks initiative, drive, discipline and organizational capabilities. In contrast, in western sector, industry passes all these business qualities.

10. Aversion of Capital:

According to Boeke, industry in the eastern sector is not investment minded. He further claims, “aversion to capital owing to some sort of conscious dislike of investing capital and risks attending this.”

11. Lack of Professional Trading:

The Professional Trading is conspicuous by its absence in the eastern sector. Indeed, there is exchange of goods at personal level. By and large, trading profession is almost unknown to the people as they are totally ignorant of the new market.

12. Urban Development at Behest of Rural Economy:


Prof. Boeke holds the view that in a dual economy, urban development flourishes at the cost of rural economy. In the wake of urbanisation, there occurs a progressive fall in the rural population and income. In other words, hardships of rural life compel the villagers to pull to the cities.

13. Absence of Free Competition:

Another dominant characteristic of eastern sector is that there is absence of full competition of land and rent and it depend on the land owner’s need for money. Moreover, factors of production lack homogeneity and mobility. As a result distribution of income is not in accordance with marginal productivity theory.

14. Export is Main Objective:

Boeke also makes distinction on the ground that export is the great objective of foreign trade in the eastern sector. It means that it only makes import possible in the western sector.

15. Fatalism:

Above all, another outstanding feature is that eastern society is guided by fatalism and resignation while western industry is moulded by common sense and reason.

Critical Appraisal:

Boeke’s theory of social dualism points a gloomy picture for under-developed countries. This is due to peculiar circumstances in which it was formulated. In fact, under the name of’ Ethical Policy’, in Indonesia a genuine effort was made to raise the standard of living during 1900 to 1930.

But this policy was a great flop which gave the feeling of gloom, sorrow and defeatism. Prof. Bennjamin Higgins makes a scathing attack on Boeke’s theory of social dualism development.


However, following are the main grounds of Higgins criticism:

1. Wants Limited—Not True:

It is wrong to universalise that people in underdeveloped countries have limited wants and supply curves of effort and risk taking are backward sloping. Truly speaking, the marginal propensity to consume and to import are high which result into larger demand for domestic and foreign semi luxuries.

Therefore, it is a problem for those governments to control the fast expanding wants of the people. The wants of the villagers are numerous and varied. Thus, Boeke’s contention that wants in under developed countries are limited, is not borne out by the actual facts and not consistent with human nature.

2. Trade Unions not Visualised:

Boeke’s dualistic theory ignores the role of trade union. The workers are unorganised, passive, silent and casual in underdeveloped countries. This is inconsistent with the growing strength of organised labour even in Indonesia.

In fact, trade union activities are becoming more and more streamlined all over the world. Workers are more organised, vocal and active. These trade unions fight for their rights and actively participate in various activities.

3. Labour not Immobile:

It is not possible to accept that people in eastern economies are inherently immobile and do not move from villages to towns. Rapid urbanisation in these economies is a specific proof of the migration of village people to cities.


In fact, the attraction of the urban life such like cinemas, cafes, shops, libraries and sport events, has proved to be attractive to the villagers who get a taste of it which has resulted in congestion, inadequate community facilities and unemployment in big cities.

4. Not Peculiar to Underdeveloped Economies:

Prof. Boeke takes one eyed view by saying that the phenomenon of dualism is only confined to the eastern economies. He himself admits that social dualism also exists in underdeveloped economies of Africa and Latin America. But this fact is not peculiar in underdeveloped economies. To some degree, it exists in almost all economies.

To quote Prof. Higgins, “even in the most advanced countries such as Italy, Canada and United States, more are areas in which techniques lag behind those of the advanced sectors, and in which standards of economic and social welfare are correspondingly low.” In this sense, even the most developed countries can be categorised as dual.

5. Applicable to Western Societies:

This theory has also been criticized on Boeke’s view that western economic theory is not applicable to the problems of eastern economies. But Prof. Higgins holds the view that the tools of western economic theory pertaining to monetary and fiscal policies can be applied with certain modifications to solve the crucial problem of balance of payments, disequilibrium and unemployment etc. of UDCs.

6. Not a Theory but Description:

Prof. Boeke fails to provide a distinctive economic and social theory for underdeveloped economies. The dualistic theory undoubtedly explains the various traits of eastern economies but fails to furnish an integral approach to the social and economic theory of such countries. On this ground, dualistic theory failed bitterly.

7. No Solution to the Problem of Unemployment:

Prof. Boeke has talked about five types of unemployment in his dualistic theory. But he has not provided any satisfactory solution to meet with the problem of unemployment. In fact, he regards unemployment of various categories as ‘beyond the reach of government help’. Modern government really plays a pioneer role in mitigating the unemployment problems through the device of development planning.

8. Technological Possibilities are not Limited:

Prof. Boeke’s view regarding limited technological possibilities in both agriculture and industry is also not sustainable. A number of underdeveloped countries have introduced new techniques in the agricultural sector and have recorded substantial improvement in agricultural productivity. Similarly, in industrial sector one finds a growing number of enterprises efficiently organised and managed by eastern people.

9. Characteristics Net Specific to Eastern Society:

Boeke’s theory gives no specific characteristics to Eastern Society. A number of these characteristics are found in western society as well. The preference for speculative profit over term investment in productive enterprises which Boeke thought was specific to eastern society but it was also found in western society.

In the same manner, the conscious dislike of investing capital and the risk attending is very common everywhere. Therefore, the differences between underdeveloped and advanced economies, according to Bauer and Yamey, “are of degree rather than of kind.”

10. Wrong Impression Depicted:

Boeke has wrong impression about the business community of eastern societies. The business community lacks initiative and fails to make the best use of the opportunity which comes its way. Lewis does not agree to the assumption that wants are limited in eastern societies and compulsion would be necessary to obtain adequate supply of labour.

He says, “These compulsions (except slavery) are still to be found in one or the other of African colonies of all European powers but they are not necessary now as they were formally thought to be. The Africans have acquired new wants and are willing to work to satisfy them without compulsion.”

Again Bauer and Yenren disagree that wants of agriculturists are static. But in reality, the entrepreneurial acumen and other business qualities are very much there in the underdeveloped countries.


On the basis of above criticism, it can be concluded that this theory does not provide answer to problems of underdevelopment. The main problem of underdeveloped country is unemployment and scarcity of capital.

In the end, “there are no special economic theories or methods of analysis fashioned uniquely for the study of underdeveloped world. But while the tools of analysis are of wide relevance in a study of underdeveloped countries, the situations to which they must be applied vary greatly.”

In fact, there is no question about the phenomenon of dualism as a distinguishing feature of underdeveloped countries, yet the solution has to be sought not in a sociological sense but to be in technological terms. This is a realistic dualism. Boeke provides the basic insight into the effects of a dualistic society on the pattern of development.