Walt W. Rostow's (1962) dissatisfaction with Karl Marx's explanation of the evolution of society and the cause of change therein, compelled him to try another dimension which integrates the relation of economics to social and political forces in the development of societies.
According to him, growth and development to economic maturity would follow through the following stages:
- The Traditional Society. It is one which structure is developed within limited production functions based on pre-Newtonian science and technology and pre-Newtonian attitudes towards the physical world. Such a society is characterized by a limited level of productivity, pre-occupation with agriculture, a social structure with slow or no mobility and a value system that evolves on fatalism. The dynasties in China, the civilizations of the Middle East, and the world of Medieval Europe are typical examples.
- The Preconditions for Takeoff. This is the traditional era which society prepares itself or is prepared by various forces for sustained growth. Economically, the significant changes are the development of extractive industries, increase in agricultural production, and building of social overhead capital as part of increases in total investments. Socially or politically, a new and more aggressive leadership arises and a strong sense of nationalism develops.
- The Takeoff. This pertains to that decisive interval in the history of a society when growth becomes its normal condition. It is characterized by: a rise in the rate of productive investment; the development of one or more substantial manufacturing sectors with a high rate of growth; and institutional frameworks which exploit the impulses to expansion in the modern sector and the potential external economy effects of the takeoff.
- The Drive to Maturity. This is the time when society has reached the stage of developing a range of modern technology for the harnessment of its resources. It is where the leading sectors of the take off stage are being supplanted by new ones and therefore the industrial process becomes differentiated. Countries that have reached technological maturity are Great Britain (1850), United States (1900), Germany (1910), France (1910), Sweden (1930), Japan (1940), Russia (1950), and Canada (1950).
- The age of High Mass Consumption. At this stage, there will be a shift of attention from supply to demand, from problems of production to problems of mass consumption, and of welfare in the widest sense. In this post-maturity stage, three directions maybe pursued: the national pursuit of external power and influence, that is the allocation of increased resources to military and foreign policy; the use of resources of a mature economy in the attainment of a welfare state; the expansion of mass consumption levels into the range of durable consumers' goods and services. The United States is the first of the world's nations to move from maturity into the age of high mass consumption. Rostow emphasized the significance of technology, and investment in the growth of the economy. This became the basis of the claim that developing countries, lacking both advanced technology, and capital investments have to depend on industrialized countries to support their growth (Rostow, 1962).
The works of Simon Kuznets (1964), and Hollis Chenery (1981) are similar with each other and in a sense with the same directions as Rostow. Kuznets studied the developing countries looking at their growth rate patterns especially in national income. The analysis would look at the transformation of underdeveloped countries structure from agriculture towards industry, and services. The same is true with Chenery's analysis that a country's development lies in the structural change from agriculture to industry and services. In one of Kuznets findings, he mentioned that a country was less developed because of the low initial levels of their per capital product as they entered modern economic era or because of low rates of growth in per capita product during the past century or so -- or both reasons. He also added that the size of a county has a profound effect on the structure of its economy, and particularly the degree to which a country will be involved in foreign trade.In the early stages of growth, the rate of savings and capital formation as a percentage of national income, and product rises, but after reaching a certain level those percentages no longer exhibit any clear trend that diverges significantly from the rise of Gross National Product (GNP) (Kuznets 1973, pp. 247-258).
Both Chenery's and Kuznet's findings are similar in their conclusion that as an economy develops there would be a swing from heavy agriculture to industrialization.
Rostow's theory had been questioned by Andre Gunder Frank basically on the fallacy that the conditions of the development stages of the West such as Great Britain were different as to the situation of Third World countries who were mostly former colonies, Aidan Foster-Carter (1985) and Frank argued that in the first place when the west developed, there were no industrialized countries, Thus, they concluded that the playing field in the world today is not equal due to the emergence of industrialized countries ahead as strong and powerful competitors in the global economy. Why is it that there is widespread poverty in Africa despite government's claim of economic growth patterned after Rostow, Harrod, Domar, Kuznet, and Chenery which Hunt (1989) coined as the Expanding Capital Nucleus Paradigm? Let us consider the “dependency theory” of Andre Gunder Frank (1967) as a framework. Frank's approach to development was different from Rostow in the sense that instead of taking society as a unit of analysis, he saw national economies as structural elements in a global capitalist system. It is this system, not individual societies, which is the necessary unit of analysis. He characterizes it as a whole chain of metropolis-satellite relations. This chain links the entire system: from the ultimate global metropolis which is no one's satellite (e.g. Latin American cities, which Frank sees as both exploited by the United States and themselves exploiting their own hinterlands); right down to the ultimate satellite - e.g. a landless rural laborer, who has nothing and no one to exploit. In the overall, Frank formulated a number of more specific hypotheses. First, the development of satellites is limited simply because they are satellites. Development along metropolitan lines is precisely not possible for satellites, given their subordinate position in the system. What satellites (like African countries) experience is underdevelopment; which crucially he redefines as an active process of distortion, characteristic of the relatively modern fate of the Third World. His second hypothesis states that satellites can only develop when their ties with the Metropolis are relatively weakened. He concluded that if a country avoid satellization, self generating development is possible.
Conclusion
It can be seen that the classical growth theory viewpoints are in contrast with dependency theory which does not agree with its recommendation of technology and investments as cure in order for an economy to take-off. Andre Gunder Frank argued that it is the dependence of developing countries to the highly industrialized countries for capital and technology which makes self-generating development impossible and thus promote satellization.
Whatever is the right solution depends upon one's point of view but in the future the debate on development will center on the issue of classical growth and dependent development.
In the final analysis, the real question should be: Economic Development for Whom?
