Rostow, W. W. The Stages of Economic Growth, a Non-Communist Manifesto. Cambridge [Eng.]: University Press, 1960.

Walt Whitman Rostow’s book The Stages of Economic Growth provides a systematic theoretical approach to economic development that is every bit the “non-communist manifesto” that he promises in his subtitle.  Rostow’s work would seem to be foundational to modernization theory and contemporary conservative American views of economics.  Rostow’s primary thesis is that economies grow in developmental stages.  These stages occur in a specific order, and that order operates in only one direction.  The stages begin with “traditional society,” then “preconditions for take-off,” “take-off,” “economic maturity,” and finally “mass consumption.”  For Rostow, this is a linear progressive system, though he claims no Hegelian influence, and rejects the Marxist idea of dialectical progress outright.  This system of economic development is, Rostow claims, a categorization, and so does not claim universal truth, nor does every economy fit perfectly within it.  Still, Rostow’s system is teleological.  It is based on the assumption that, like Francis Fukuyama would later claim for the American system of democratic government, American Capitalism is the highest achievement in human economic history – not perfect, but the most fair, most efficient, and most flexible system for wealth distribution yet devised by human kind.  In this sense, Rostow’s claims are compelling, but logically at times contradictory, at other times circular.  I found Rostow to be a fascinating read, and found more in it that helps me understand current and recent economic thinking among Americans than theory that reflects economic reality.  Rostow, though, despite his disclaimers, seems to see his theory not as theory, but as a series of categories and historical stages that are more real than those proposed by Karl Marx.

Rostow begins his book with an introduction that seems intended both to give his thesis – that economies all operate according to the stages he has proposed – and to make a disclaimer that he is not actually trying to encompass all economic details within his stages, only to propose general categories.  The categories he proposes, though, remind me very much of two traditions of thought in other fields, and I wonder about his relation to those fields.  He clearly had read widely and well.  The first connection that came to my mind was the work of V. Gordon Childe, whose work in the 1930’s formed the foundation for anthropological theories of the stages of development for human society, beginning with hunter-gatherer society and moving through agriculture, civilization, empire, etc…  It seems clear to me that Rostow’s work owes some debt, direct or indirect, to Childe.  But it is also clear that Rostow is an early proponent of Modernization Theory, which as I understand it was an intellectual movement developed in the late 1950’s and 1960’s (during the early Cold War) in opposition to Marxist theories of economic and historical development.  Where Marxists see historical development as happening through a dialectic of class struggle, the end of which is the final competition between the bourgeoisie and the proletariat, the teleology of Modernization Theory is that the ultimate development of human society is democracy and capitalism as embodied in the United States at the end of World War II.  Modernizationists have been as guilty as Marxists of over-theorizing history to make it fit within their teleological position, and I think Rostow certainly goes that route – though, like most Marxists and Modernizationists, not without some value added along the way.

The first stage that Rostow proposes is the so-called “traditional society” in which wealth is based on agricultural production, and in which most wealth ends up in the hands of a non-productive elite, thus, in Rostow’s terminology, providing minimal capital for the compounding of interest (his term for linear progressive development, taken from the lexicon of financial traders’ and economists’ discourse on the way money grows in a capitalist system).  Because in a traditional society most of the people who end up with wealth use it to consume (luxuries, non-productive service labor, etc) rather than invest it in order to produce, traditional society is very inefficient, progresses very slowly, and has a deep gap between wealthy and non-wealthy.

The first real stage of growth toward capitalism, Rostow says, is his stage two – the preconditions for economic take-off.  In an interesting way, this is a progressive concept that is named in a regressive way – that is, the name reveals the essential teleology of the entire system.  Rostow assumes that economies will reach a stage he calls economic take-off, and so looking backward they must go through this stage of creating the preconditions for that take-off.  This stage depends on the existence of the next stage, which is, ironically, dependent upon the existence of this stage.  Circular logic.

In any case, the preconditions for take-off are, according to Rostow, found in economic, social, political, and even religious sectors of traditional societies.  Since, Rostow acknowledges, traditional societies are not immune from change, but are, in fact fluid entities (nonetheless, throughout the book he sets them up as a straw man to be knocked down by the essential fact of change in modern (read ‘capitalist’) societies).  That fluidity leads to natural changes, and contact with societies already in the process of take-off or maturity can accelerate those changes.  The changes he refers to are a kind of gestalt that must include the growth of a “modern” financial system that begins the process of funneling wealth into more productive hands – those who will spend or lend for productive activities, rather than hoard or spend on consumables.  He also sees a need for a society to lose some traditions, and reinforce others such that the accumulation of wealth is considered an acceptable alternative way to gain power and prestige in society, thus making productive economic activity an attractive idea.