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Pratibha.B.S. MAD11030.
The stages of economic growth: A Non-communist manifesto -----W.W.Rostow W.W.Rostow, an economic historian essentially believed that economic growth could be achieved through five stages of economic growth. The first stage (traditional society)
Response paper 1
Pratibha.B.S. MAD11030.
This society is essentially marked by limited output in production, where agriculture is the main industry, with limited access to modern science and technology. Society, family form an important part of the social order. The second stage (pre-conditions for take-off) This stage is a stage of transition. Industrialisation does not take place overnight. First, growth in certain sectors propels the investment through building institutions which mobilise capital like banks, and investment grows in transport, education. But, the traditional social sectors remain the same. This phase may take place in 10 to 50 years of time. The third stage (take-off) In this stage, the old traditions are overcome and economic progress becomes the norm of the society. Agriculture sees growth and the economy grows as a result of processes to meet the demands of the new economic groups. The fourth stage (drive to maturity) In this stage, there is a tendency to extend modern technology to all the economic activities. About 10% to 20% of GDP is invested and economy becomes of international order. The focus shifts from producing for them to making profits in a competitive market. The fifth stage (the age of high mass consumption) This stage marks the production of durable consumer goods and services. This stage not only ensures basic needs, but also the excess resources are used for social welfare and security. Thus th e concept of welfare State .
The entire argument of W.W.Rostow is more suitable for a capitalist form of economy and whether this is applicable to other economies is questionable. The welfare state concept is a mere manifestation of use of modern technology. The stages of economic growth culminate in mass production, which promotes high levels of consumerism. There is also an innate danger of developing or under developed countries heavily becoming dependent on the modern technology of these modern developed countries. Even the concept of welfare state is a policy, seen as a result of development and not vice-versa. This type of modernisation creates a capitalist class and a working class. This theory is essentially a function of microeconomics.
Response paper 1
Pratibha.B.S. MAD11030.