Oct 01, 2008
Ed Bradford

Last week, I finished a book entitled


  The Stages of Economic Growth
by
  W.W. Rostow.
  Cambridge University Press, 1964

Inside the cover is a price written in pencil of 25 cents. This book
had been a used book for a long time. Rostow puts forth his ideas about
how economic growth proceeds in five stages:

1. Traditional society
2. The preconditions for take-off
3. The take-off
4. The drive to maturity
5. The age of high mass consumption

The book is subtitled, "A Non-Communist Manifesto". Rostow discusses
various societies and their paths to modernization. He speaks of how
societies transformed themselves from tribal agricultural societies to
modern industrial societies. No value judgements of whether this
movement is good or bad are presented. The book focuses on the
mechanisms and impulses motivating transitions from stage to
stage and discusses how to identify each stage. The last chapter
of the book compares the stages of growth model with Marx and
Engle's views of economic growth.



COMMENTS:

I found the book fascinating and useful for understanding one view
of economic growth. Rostow included the Russian Communist economy in
his analysis and looks at China and India and how they are
approaching the take-off for mondernization [book was written
in 1959]. Noted are the requirements for take-off
which include a growing infrastructure which is included in "social
overhead capital". Another observation is that until the
reinvestment of profit exceeds the population growth by a
certain amount, take-off will not happen. This explains somewhat
the lack of modernization in the antebellum south where all
the profit was plowed into luxuries rather than captital
investments. (Luxury spending benefits the owner; capital
spending can benefit both the owner and labor and can yield
further profits).

Although the book is only about 160 pages long, the level of
detail and exmamples was sufficient for me to understand his
views on how countries modernize. It helped me
understand how some countries can avoid modernization for
generations and how other countries can get on the bandwagon
within one generation.

Excellent book if you are interested in economic models of
growth.

Ed