The Stages of Economic Growth: A Non-Communist Manifesto

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The Stages of Economic Growth: A Non-Communist Manifesto is the most important work of the American economist and economic historian Walt Whitman Rostow (1916–2003). It was published by Cambridge University Press in Cambridge in 1960 . The model set up therein for the economic development of states gained worldwide attention as an explicitly non- communist modernization model . In the literature, the Rostov model is also known as the Rostov model or take-off model .

description

Rostov describes in his book a systematic sequence of five stages in economic development. This development is followed by each individual state and, despite possible deviations, differences or delays, basically always shows the same course. Rostov's model is based on data from historical economic developments, particularly in Europe and the USA .

The five stages

Diagram of the development of different states
  • Take off
  • Maturity
  • High mass consumption

    • 1. The traditional society

    A first-phase society has a natural upper limit on productivity because modern science and technology were either not yet available or used to a limited extent. In addition, the society is shaped by agriculture and has a hierarchical social structure and limited mobility.

    2. The preconditions of the take-off ("preconditions")

    This phase describes societies that are in transition, such as the states of Western Europe in the 17th and 18th centuries. New production methods are emerging in the agricultural and industrial sectors. A world market is developing.

    3. The take-off

    The take-off is the most important phase. In it, the share of investments increases from around 5% to over 10%. This is due to the rapid expansion of new industries that generate high profits, which in turn are invested in new factories. There is a rapidly growing demand for new workers and services as well as for industrial finished goods. Cities begin to grow and more new industries emerge. At the same time, agriculture is becoming more commercialized as new technologies are being introduced here too. The take-off itself is a relatively short phase of 2-3 decades (in England the two decades after 1783; in France and the USA the decades before 1860; in Germany the 25 years after 1850; in Japan the last quarter of the 19th Century; in Russia / Canada the three decades before 1914; in India and China since 1950).

    4. The development to maturity ("The drive to maturity")

    This phase spans around 40 years, which are characterized by a consistently high investment rate of 10–20%. Industrialization affects the whole of society and overall productivity allows further population growth.

    5. The age of high-mass-consumption

    The central needs for food, clothing and housing are satisfied in this phase. The demand for superior goods increases, while at the same time striving for and developing welfare states. One characteristic of this phase is, for example, the widespread use of cars in a society.

    effect

    Rostov's modernization model was discussed worldwide and to a certain extent also influenced the development policy of the industrialized countries towards the countries of the Third World, especially in the sixties and seventies.

    literature