In this article, the author discusses the Baran hypothesis that there cannot be a spontaneous diffusion of industrial development from the developed world to the countries of the third world under capitalism: a hypothesis apparently contradicted by the current pattern of development visible at least in Asia. His analysis resolves this contradiction by using an inherent but less talked about 'contradictions to capitalism' which is the role of a stable medium of wealth or in the present context, a leading currency. He explains why the current pattern of growth and technology diffusion in the newly industrialising countries cannot be sustained given the necessary pattern of their interaction with the leading capitalist country.

February 17, 2006.