UNIT-3 QUESTION; DEFINE DIFFERENT STAGES OF STAGE THEORY? OR DEFINE ROSTOW S THEORY OF ECONOMIC GROWTH?

OR EXPLAIN THE TERM THE TAKE OFF? MENTION THE CONDITIONS AND IMPORTANCE OF THIS STAGE? OR ROSTOW S THE STAGES OF ECONOMIC GROWTH IS MOST WIDELY CIRCULATED AND HIGHLY COMMENTED PIECE OF ECONOMIC LITERATURE IN RECENT YEARS? COMMENT THIS STATEMENT. ANS; INTRODUCTION; Economic development is a multi-dimensional phenomenon; the E.D is influenced by both economic and non-economic factors. W.W.Rostow has laid much emphasis on social institutional factor as vital agents of economic development. In fact the non-economic factors plays a major role in the drama of E.D.There are some economist who had described the various stages of E.G in a historical perspective. They believe that in the process of E.D. each and every country must and should be possess through this stages. Name of the 1st stage 2nd stage 3rd stage 4th stage 5th stage economist Adamsmith Hunting Pastoral Agricultural Commercial Manufacturing Friedrich list Slavery Pastoral Agricultural Agricultural & Commercial manufacturing Hildevard Barter Money Credit ----------------------------economy economy economy Karl Marx Feudalism Capitalism Socialism Communalism ------------------W.W.Rostow Traditional PreTake off Drive to High mass society condition maturity consumption for takeoff W.W Rostow propounded an alternative theory of the stages of growth in his famous book The stages of economic growth which was published in 1960.He says that each and every country must and should be passes through all these stages in the process E.D. Let us discuss the various stages of Rostow in brief;

TRADITIONAL SOCIETY; In the process of E.D first or the initial stage refers to a traditional society. It is a primitive society where no window is open for the utilization for modern science and technology. According to W.W.Rostow- T.S is one whose structure is developed within the limited production functions based on pre-Newtonian science and technology and pre-Newtonian attitude towards physical world. It means the structure of T.S was based on primitive technology and orthodox ideas of people. The preNewtonian era is called Traditional society. The dynasty of china, the civilization of Middle east and the

Mediterrean etc are possessed the characteristics of Traditional society. Following are some of the characteristics are as follows;          Dominance of Agriculture. Dominance of family and caste system. Political power. Techniques. Law of diminishing returns. Unproductive expenditure. Application of Malthusian theory. Ignorance about development avenues. Economic activities are totally traditional. PRE-CONDITION FOR TAKE-OFF; The second stage of E.D is one in which the pre-conditions are created for sustained E.G in an economy. It is also called a transitional area, responsible for creating the pre-conditions for take-off stage. This type of stage was created, the end of medieval period age in the beginning of the modern age. India passed this through stage during the first five year plan.W.W Rostow defines it in following manner, The second stage of growth embraces the society in the process of transition, this is the period when the pre-condition for takeoff are developed. This stage has duration of around 100 yrs.If we explain Rostow s definition following are the important features of pre-condition for take-off. Those are as follows. Importance of non-agricultural sector. Expansion of social overhead capital. New ideology Exports and Imports. Technological advancements. Rate of saving and investment. Stress on development of transports. Economic and social cost. Decline in birth rate. Change in views. End of conservation.

          

TAKE-OFF ;=> Take off is a crucial and decisive stage. In this stage the economy transform itself more or less into a selfsustaining economy. It is the 3rd significance stage of growth, the period of this stage is 20 to 30 years, during which the economy development process is automatic and the economy becomes self-reliant. It is the great watershed in the human life. During this stage human life changes in a dramatic way. He compared human life and watershed with take off stage. How the watershed is essential for human life in the same manner take-off is essential for E.D. W.W.Rostow defines take-off in the following manner- Takeoff is an industrial revolution, tried directive to radical changes in the method of production having their decisive consequences over a relatively short period of time. COUNTRY United kingdom United State of America TAKE-OFF 1783-1802 1843-1860

Germany Japan India

1850-1873 1878-1900 1952 till today

Following are the important conditions have suggested by Rostow or process of self-sustaining economy;  The growth rate of GDP is between 5 to 10%.  There must be a one or more leading sector.  There is a change in social, political and institutional frame work. CHARACTERSTICS OF TAKE-OFF;           Profit motive. Use of saving for investment. Development of finance institutions. To rise demand for domestic purpose. External resources. Technological advancement. Foreign trade. Govt. policy Period is short. Economic revolution.

DRIVE TO MATURITY; Take-off stage reaches in an economy in a phase of self-sustain and self-generating growth that is technically known as the stage of drive to maturity. It is a period of long sustained growth extending over 4 decades. In this stage new production technique takes place again in this stage of saving and investment which such a magnitude that E.D becomes automatic. In this stage new leading sectors are created. Again in this stage dependency on agriculture declines and there is a radical changes in occupation pattern, during this stage real wage of the workers rises and they all are organized in nature Rostow define the stage of drive to maturity in following manner- It as the period when a society has effectively applied the range of modern technology to the bulk of its resources. Prof.Rostow has given the following symbolized data s for technical maturity for some countries. COUNTRY Great Britain United State of America Germany India is not reached the stage till now. FEATURES;  Rate of investment goes up to 10 to 20% and rate of national income is greater than the of population growth.  In this stage the conditions of laborers were in better conditions.  The standard of living is very high.  New political and social conditions set up.  Production is managed by able entrepreneurship. YEAR 1850 1900 1910

   

New technology is introduced in all sectors of the economy. During this period there is a rapid increase in export. This stage is comes after 40 to 60 yrs of take-off. New leading sectors are created.

HIGH MASS CONSUMPTION; The stage high mass consumption comprises the tendency of the migration of villages in the cities, the extensive use of automobiles, the durable consumer goods and household instruments. In this stage more attention being paid to the consumption goods. It is a kind of very progressive and prosperous society in which hungry is something that one reads about and poverty a memory. Rostow defines it in a following manner- The balance of attention of the society shifted from supply to demand, from the problems of production to the problems of consumption It is a stage of durable consumer goods. Some of the important characteristics of this stage which are as follows;       Rapid increase in per capita income and national income. The standard of living is very high. The rate of investments in this stage goes up to 20% and high or more than 20%. Improvement in the employment opportunities. In this stage welfare activities are more. Consumption of comforts and luxuries good rises. In the process of E.D the stage of high mass consumption is the last stage representing the attention of the goal to produce more and to consume more. CRITICISMS OF STAGE THEORY; Rostow s work, the stage of E.G is in fact a remarkable contribution to the subject of economy. This theory of E.D is based on the facts of history which gives us realistic and liquid analysis of E.G. But modern economist criticized Rostow s theory in t6he following grounds; Traditional society not necessary for development. Pre-condition may not necessary for take-off. Overlapping in the stages. The stage of take-off is not clear. The stage of drive to maturity is puzzling and misleading. The stage of high mass consumption not chronological.

     

CONCLUSION; On the basis of the views expressed above one should not conclude that Rostow s approach to the problem of growth is theoretically unsound or practically useless. This analysis is as it highlights the importance of social and institutional factors in theory of E.D.On this back ground Prof.Carin Cross says that the stage theory is the light of economic development.