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•Conception of development as a uni-linear path from a traditional to a modern society•Rostow represented a wider intellectual climate of the 1950s and 1960s focusing on the need for massive investment, the mobilisationof savings and seeing capital as the missing link in development.Modernization Theory
•Five Stages:•The Traditional Society•Fatalistic patterns of thought•Static production•The Preconditions for Take-off•Challenge to traditional society’s stability by external challenges•Emergence of the idea of improvement of life by own effort•Modern science into technology•Increase in non-industrial sector (agriculture and mining etc)•Surplus above subsistence investment and labor freed for industrial prod.•The Take-off•Rapid change of economy in short period of time•Requirement for very high levels of investment (especially in the leading industrial sector)•High supply of entrepreneurship and loanable funds•The Drive to Maturity•New production techniques spread from the leading sectors to the rest of the economy•The Age of High Mass-Consumption•Looks surprisingly like Rostow’s North American society!•whole population benefits from the increased opportunities for consumptionRostow’s Stages of Economic Growth (1960)
Traditional Society• Subsistence farming• Fatalistic• Non-Centralized Power (small governing elite)Preconditions for Take-Off• Start of commercialization• New ideas • Increase in investment• Traditional social structures remainTake Off• Modern technologies• Stable flow of capital investment• Industrialization• Growth of manufacturingDrive to Maturity• Diversification• specialization• innovation• investmentAge of Mass Consumption• Highly sophisticated societyTimeLevel of Economic Development
StageTime PeriodCharacteristicsTraditionalPre-nineteenth century Native American subsistence and hunter–gatherer societies; European settlers focus on trade of agricultural goods Preconditions for Take-Off1815–40s Focus on economic activities after independence gained in 1776; higher productivity in agriculture, e.g. cotton production; large-scale infrastructure projects with