TheRostovian take-off model (also called "Rostow's Stages of Growth") is one of the major historical models ofeconomic growth. It was developed byW. W. Rostow. The model postulates that economicmodernization occurs in five basic stages, of varying length.[1]
Rostow asserts that countries go through each of these stages fairly linearly, and set out a number of conditions that were likely to occur ininvestment,consumption andsocial trends at each state. Not all of the conditions were certain to occur at each stage, however, and the stages and transition periods may occur at varying lengths from country to country, and even from region to region.[2]
Rostow's model is one of the morestructuralist models of economic growth, particularly in comparison with the 'backwardness' model developed byAlexander Gerschenkron. The two models are not necessarily mutually exclusive, however, and many countries seem to follow both models rather adequately.
Beyond the structured picture of growth itself, another important part of the model is that economic take-off must initially be led by a few individualsectors. This belief echoesDavid Ricardo’scomparative advantage thesis and criticizesMarxist revolutionaries push for economic self-reliance in that it pushes for the 'initial' development of only one or two sectors over the development of all sectors equally. This became one of the important concepts in thetheory of modernization in thesocial evolutionism.
Rostow's model is descendent from theliberal school of economics, emphasizing the efficacy of modern concepts offree trade and the ideas ofAdam Smith. It also deniesFriedrich List’s argument that countries reliant on exporting raw materials may get “locked in”, and be unable to diversify, in that Rostow's model states that countries may need to depend on a few raw material exports to finance the development of manufacturing sectors which are not yet of superior competitiveness in the early stages of take-off. In that way, Rostow's model does not denyJohn Maynard Keynes in that it allows for a degree of government control over domestic development not generally accepted by some ardent free trade advocates. Althoughempirical at times, Rostow is hardly free ofnormative discourse. As a basic assumption, Rostow believes that countries want to modernize as he describes modernization, and that society will assent to thematerialistic norms of economic growth.
Traditional societies are marked by their pre-Newtonian understanding and use oftechnology. These are societies which have pre-scientific understandings of gadgets, agriculture is predominant and society has a hierarchical structure. The norms of economic growth are completely absent from these societies.The society has a low ceiling on per capita output because of the backwardness of the technology. Agriculture is the main source of income.
The preconditions to take-off according to Rostow, refers to that thesociety begins committing itself to seculareducation, that it enables a degree ofcapital mobilization, especially through the establishment ofbanks andcurrency, that anentrepreneurial class forms, and that the secular concept ofmanufacturing develops, with only a few sectors developing at this point. This leads to a take-off in ten to fifty years. At this stage, there is a limited production function, and therefore a limited output.
Take-off then occurs whensector led growth becomes common and society is driven more by economic processes than traditions. At this point, the norms of economic growth are well established. In discussing the take-off, Rostow is a noted early adopter of the term “transition”, which is to describe the passage of a traditional to a modern economy. After take-off, a country will take as long as fifty to one hundred years to reach maturity. Globally, this stage occurred during the Industrial Revolution in economic development.
The requirements of take-off are the following two related but necessary conditions:
After take-off, there follows a long interval of sustained, if fluctuating, progress, as the now regularly growing economy drives to extend modern technology over the whole front of its economic activity. Some 10-20% of the national income is steadily invested, permitting output regularly to outstrip the increase in population. The makeup of the economy changes unceasingly as technique improves, new industries accelerate, and older industries level off. The economy finds its place in the international economy: goods formerly imported are produced at home; new import requirements develop, and new export commodities match them. Society makes such terms as it will with the requirements of modern efficient production, balancing off the new against the older values and institutions, or revising the latter in such ways as to support rather than to retard the growth process.[1]The drive to maturity refers to the need for the economy to diversify. The sectors of the economy which lead initially begin to level off, while other sectors begin to take off. This diversity leads to greatly reduced rates ofpoverty and risingstandards of living, as a society no longer needs to sacrifice its comfort in order to strengthen certain sectors.
The age of high mass consumption refers to the period of contemporary comfort afforded many western nations, wherein consumers concentrate ondurable goods, and hardly remember the subsistence concerns of previous stages. Rostow uses the Buddenbrooks dynamics metaphor to describe this change in attitude. InThomas Mann’s novelBuddenbrooks, a family is chronicled for three generations. The first generation is interested in economic development, the second in its position in society. The third, already having money and prestige, concerns itself with the arts and music, worrying little about those previous, earthly concerns. So too, in the age of high mass consumption, a society is able to choose between concentrating onmilitary andsecurity issues, onequality andwelfare issues, or on developing greatluxuries for its upper class. Each country in this position chooses its own balance between these three goals.
Of particular note is the fact that Rostow's "Age of High Mass Consumption" dovetails with (occurring before)Daniel Bell's hypothesized "Post-Industrial Society." The Bell and Rostovian models collectively suggest that economic maturation inevitably brings on job-growth which can be followed by wage escalation in the secondary economic sector (manufacturing), which is then followed by dramatic growth in the tertiary economic sector (commerce and services). In the Bell model, the tertiary economic sector rises to predominance, encompassing perhaps 65 to 75 percent of the employment in a given economy. Maturation can then bring-on deindustrialization as manufacturers reorient to cheaper labor markets, and deindustrialization can, in turn, destabilize the tertiary sector. The suggestion is that mature economies may implicitly destabilize and cycle back-and-forth between the final stages of the Rostovian-Bell developmental phases as they rebalance themselves, over time, and re-evolve their economic base.
1: Rostow ishistorical in the sense that the result is known at the outset and is derived from the historical geography of a developed, bureaucratic society.
2: Rostow ismechanical in the sense that the underlying motor of change is not disclosed and therefore the stages become little more than a classificatory system based on data from developed countries.
3: His model is based on American and European history and defines the American norm of high mass consumption as integral to the economic development process of all industrialized societies.
4: His model assumes the inevitable adoption ofNeoliberal trade policies which allow the manufacturing base of a given advanced polity to be relocated to lower-wage regions.
Rostow's thesis is biased towards a western model of modernization, but at the time of Rostow the world's only mature economies were in the west, and no controlled economies were in the "era of high mass consumption." The model de-emphasizes differences between sectors in capitalistic vs. communistic societies, but seems to innately recognize that modernization can be achieved in different ways in different types of economies.
The most disabling assumption that Rostow is accused of is trying to fit economic progress into a linear system. This charge is correct in that many countries make false starts, reach a degree of transition and then slip back, or as is the case in contemporaryRussia, slip back from high mass consumption (or almost) to a country intransition. On the other hand, Rostow's analysis seems to emphasize success because it is trying to explain success. To Rostow, if a country can be a disciplined,uncorrupt investor in itself, can establish certain norms into its society and polity, and can identify sectors where it has some sort of advantage, it can enter into transition and eventually reach modernity. Rostow would point to a failure in one of these conditions as a cause for non-linearity.
Another problem that Rostow's work has is that it considers mostly large countries: countries with a large population (Japan), with natural resources available at just the right time in its history (Coal inNorthern European countries), or with a large land mass (Argentina). He has little to say and indeed offers little hope for small countries, such asRwanda, which do not have such advantages.Neo-liberal economic theory to Rostow, and many others, does offer hope to much of the world that economic maturity is coming and the age of high mass consumption is nigh. But that does leave a sort of 'grim meathook future' for theoutliers, which do not have the resources,political will, or external backing to becomecompetitive.[3] (SeeDependency theory)
