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| This article is largely about the latter. The author's five stages theory goes as follows: 1. Traditional society * Low production, mostly devoted to agriculture * Low socioeconomic mobility with power concentrated in the landed * pre-Newtonian philosophy/science * "Newton is here used as a symbol for that watershed in history when men came widely to believe that the external world was subject to a few knowable laws, and was systematically capable of productive manipulation." (p.4) 2. Preconditions for take-off * Western Europe experienced a gradual take-off, rest of the world experienced a sudden (sometimes literal) invasion * Capital has to become held by those who will invest into infrastructure and education, rather than ornamentation * Justifiable by either capitalism and nationalism * Communication, transportation, and trade all widen * Financial institutions emerge 3. Take-off * Early investments into manufacturing yield high returns, which are largely re-invested * High investment rate should be visible indicator of stage * Agriculture becomes more efficient * Trickle down economics lifts everyone's quality of life 4. Drive to maturity * Economy outgrows population * Extractive export industries replaced by 'mature' industries * Society reorganizes to fit around new economy 5. Age of high mass-consumption * Industries arrive to durable consumer goods and services * Substantial population living above subsistence level * Urbanism * Investment into welfare and security rather than growth 6. Beyond consumption * Author believed the U.S. was building into a sixth stage contemporaneously * Baby boom * Disinterest in growth The author interprets the differential experiences of European powers through a lens of old landed elite vs. new economic elite. More generally, the author looks for 'sharp stimuli' that rearrange society and trigger self-reinforcing growth; usually a political revolution. The author classifies industries as: 1. Primary growth sectors, which involve necessities with inherent value. 2. Supplementary growth sectors, which involve inputs to industrialization. Effectively extractive industries which have no inherent value for a traditional society but do for a country in take-off. 3. Derived growth sectors, which grow in proportion to real incomes. |
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The Stages of Economic Growth
There are a pair of works known by this name: an article and a book expanding on the article.
The Stages of Economic Growth (DOI: https://doi.org/10.2307/2591077) was written by Walt W. Rostow. It was published in the Economic History Review volume 12 (1959).
The Stages of Economic Growth, a Non-Communist Manifesto was written by Walt Whitman Rostow in 1960.
This article is largely about the latter.
The author's five stages theory goes as follows:
- Traditional society
- Low production, mostly devoted to agriculture
- Low socioeconomic mobility with power concentrated in the landed
- pre-Newtonian philosophy/science
- "Newton is here used as a symbol for that watershed in history when men came widely to believe that the external world was subject to a few knowable laws, and was systematically capable of productive manipulation." (p.4)
- Preconditions for take-off
- Western Europe experienced a gradual take-off, rest of the world experienced a sudden (sometimes literal) invasion
- Capital has to become held by those who will invest into infrastructure and education, rather than ornamentation
- Justifiable by either capitalism and nationalism
- Communication, transportation, and trade all widen
- Financial institutions emerge
- Take-off
- Early investments into manufacturing yield high returns, which are largely re-invested
- High investment rate should be visible indicator of stage
- Agriculture becomes more efficient
- Trickle down economics lifts everyone's quality of life
- Early investments into manufacturing yield high returns, which are largely re-invested
- Drive to maturity
- Economy outgrows population
- Extractive export industries replaced by 'mature' industries
- Society reorganizes to fit around new economy
- Age of high mass-consumption
- Industries arrive to durable consumer goods and services
- Substantial population living above subsistence level
- Urbanism
- Investment into welfare and security rather than growth
- Beyond consumption
- Author believed the U.S. was building into a sixth stage contemporaneously
- Baby boom
- Disinterest in growth
The author interprets the differential experiences of European powers through a lens of old landed elite vs. new economic elite.
More generally, the author looks for 'sharp stimuli' that rearrange society and trigger self-reinforcing growth; usually a political revolution.
The author classifies industries as:
- Primary growth sectors, which involve necessities with inherent value.
- Supplementary growth sectors, which involve inputs to industrialization. Effectively extractive industries which have no inherent value for a traditional society but do for a country in take-off.
- Derived growth sectors, which grow in proportion to real incomes.