Hobsbawm's question on peasantry

Why do peasant economies persist in the Third World but disappeared in the First World? In spite of its significance, the peasant economy could be considered a reality without theory, for no explanation exists about its role in a capitalist society. This essay intends to contribute to such theory by constructing peasantry models of the unified theory of capitalism. Peasant economies operate under different geographical settings, which constitute essential elements in their behavior. The particular reality under study here is the Andean Highlands peasantry. Empirical predictions have been derived from the models, which tend to be consistent with facts. The models suggest that the peasant economy is a subsistence economy, part of the excess labor supply, and is the residual of the capitalist sector behavior in the Third World. The economic growth process has not led to the great transformation of the peasantry into wage labor, as it did in the First World. The great transformation is, however, taking a different path.