Stages of Economic Maturation
Poverty reduction and disease eradication are goals valued by many in the developed and developing countries around the globe. The approaches taken to accomplish those goals remain questionable and daunting as one considers possibilities for modernizing underdeveloped societies. In general, the modernization of developing nations is an endeavor that appears to be loaded with challenge and diversity. Specifically, the extent to which we can unpack modernization perspectives to ensure their relevance to the economic maturation of developing countries remains open for further inquiry. According to the prominent work of W. W. Rostow, all societies fit into one of five stages of economic growth. The linearity of that growth model is certainly one source of its criticism. One way to move beyond those criticisms is to contemplate whether that model is really prescriptive or descriptive in nature and intent. Toward that end, this essay aims to enhance undergraduate student awareness of modernization theory and to explore the applicability of concepts from basic economics and development economics. In addition, it aims to provide those students with valuable insight into the methods for studying, addressing, and resolving the varied needs of developing countries.
Keywords Developing Countries; Development Economics; Economic Maturation; Five Stages of Economic Growth; Modernization Theory; W. W. Rostow
Economics: Stages of Economic MaturationOverview
A variety of perspectives, publications, and college courses relate to the modernization of developing nations whether one refers to them as the Global South, the Third World, or whatever descriptor one can imagine. In reality, a multitude of approaches exist for thinking about and acting upon the goal of expediting social, political, and economic development within their countries. Whether those engagements occur at the conceptual or practical level, those individuals with an interest in the topic can expect to find references to modernization theory, growth theory, liberal development theory, dependency theory, world systems theory, and so on.
Plenty of material is available to support inquires that may run deep and/or wide. In the few pages ahead, this essay acknowledges some of those perspectives while directing attention to an articulate political and historical economist's perspective on economic growth and modernization. Many consider the five stages of economic growth model, which was the work of W. W. Rostow, a foundation for almost anyone who initiates a study on the industrial progress of a developing country. It is important to note that the work has generated a lot of controversy in the decades since its publication, which makes it all the more interesting and fascinating. Similar to what an undergraduate student would find in a course on economic development, this essay contains statements at various points highlighting the model's rationale, assumptions, strengths, and weaknesses.
It seems appropriate to suggest at this early point in the essay that the stages model offers hope to developing countries. In short, the model represents an itinerary for a journey that includes a drive along the winding road of economic maturity heading toward a state of mass consumption; as is the case with most journeys, getting there is half the fun. Nonetheless, many scholars and practitioners criticize the model asserting that it is overly optimistic for Third World realities and/or it is excessively linear for real maturation processes. Perhaps the greatest value of the growth model resides in its capacity for comparing stages between countries and for generating ideas among scholars and policy makers. In the sections ahead, readers will find a brief background on the intellectual history behind various theories of development, a summary of applicable economic concepts, and an application of those concepts to the topic at hand.Applications
The main purposes of this essay include enhancing an awareness of the intellectual history behind the first modern theorists of development, refining an ability to assess the relevance of historical facts and recent debates, and recognizing various motivations for an economic development agenda. Sometimes those components are hidden and other times obvious. Perhaps the original and subsequent publication titles will spark some initial interest, which ties in very well with the apparent theme of sustaining a wide array of interest.Rostow & The Stages of Economic Growth
Publication of the seminal article by W. W. Rostow in 1959 held the title The Stages of Economic Growth. In the following year, that 16-page publication became part of a 179-page book. More importantly, that famous and widely cited book received the subtitle A Non-Communist Manifesto. For reasons that become clear later in this essay, there was a real need to distinguish a superior path to modernization from an inferior one. As a matter of background and context, it is also worthwhile to point out that Rostow was a recipient of funding from the Ford Foundation while authoring those publications. In addition, he was an advisor to the US defense department during the Kennedy and Johnson administrations and later served as an assistant to President Johnson during the Vietnam conflict.
Perhaps those affiliations made the publications all the more controversial. Now in its third edition, total sales of the book reportedly number about 300,000 copies. Nonetheless, interest in the book has waned since the early 1980s. Some scholars suggest that this lull coincides with the onset of a postmodern era, the end of the Cold War, and/or allegations that the growth stages model is irrelevant to the maturation of countries comprising the Third World. Whatever the case may be, the book presents the growth of underdeveloped countries as a direct function of their ability to emulate developed countries in their drive toward economic maturation and as an indirect function of their rates of domestic saving. Certainly, the growth of developed countries corresponds highly with the savings rate given the notable absence of a guide to chart their progressive maturation.
While avoiding the appearance of being ethnocentric, it is important for us to note that economic markets progress at varying degrees through several stages of economic growth. From a basic economic perspective, employments of the factors of production (land, labor and capital) in varied combinations ultimately generate physical outputs and nonphysical consequences. One may think of the progression as a successive movement through economies that depend on agriculture, manufacturing, services, information, or knowledge at some points during history. Though at times there is a significant correspondence between each stage and a dominant perspective, it is far more important to understand the historical context in order to gain a full and comparative meaning.Modernization Theory & Practice
The extent to which modernization theories are relevant to the economic maturation of developing countries remains unsettled and open for further inquiry. Scholars continue to examine the plausibility of those theories and of Rostow's claim as set forth in The Stages of Economic Growth: A Non-Communist Manifesto. In the book, Rostow postulates that economic modernization occurs in five successive stages of varying length. These scholarly pursuits seek a fuller understanding of how changes in political, economic and social environments during the 1940's and 1950's connect with the evolution of modernization theories.
Classifications of society as traditional, modern, or postmodern are evident in the academic realm and literature. In general terms, modernization theory is oriented toward the study of the economic maturation of underdeveloped, developing, or Third World countries. However, the studies are usually conducted through the lens of observers from developed countries. Consequently, it is quite possible for some researchers to overstate the importance of twin pillars, which are the industrial base and the nation-state, to current modernization processes. At issue is whether contemporary growth originates primarily through domestic means and/or whether developed countries exert an inordinate amount of influence on the developing countries.
Many consider modernization as the goal desirable and attainable by all societies. As experience seems acceptable as a major source of learning, it is natural for a been-there, done-that attitude to manifest itself in any model. Being sensitive to a model's set of underlying assumptions and exercising some amount of care are required in order to avoid allegations of being an ethnocentric, which by definition is the act of judging others based on our own experiences and local customs and norms. The ethnocentric appearance of Rostow's work generates some of the criticisms lodged against the stages model. In sum, the experiences of the developed countries may or may not be directly transferable to developing countries especially when circumstances change with the passage of time.Capitalism vs. Socialism
History reveals that two overarching ideologies had bearing on the post-world war path to modernity. In terms of political and economic orientations, there was the United States and its liberal form of capitalism at one end and there was the former Soviet Union and its form of socialism at the other end. Furthermore, the divisive effect of the Cold War influenced resource allocations in ways not yet fully understood. Nevertheless, it is evident that the United States moved into the age of mass consumption just because we...
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