Since the 18th Century, people have had the idea that they can develop and change their societies for the better. Arguably, the topics of growth, development and modernization are inseparable in the modern world. Three key aspects of development exist, namely the economic, sociological and psychological perspectives.
It is the aim of each and every country to achieve a higher state of development, since this represents better living standards and welfare of its citizens. This paper explores the topic of modernization, critically analyzing its basic argument, its features and characteristics, and discussing the contribution of Walt Rostow in the form of his five stages of economic development.
The modernization theory explains the process through which modernization occurs in societies. Its origin can be traced back to the 18th century, to the development of the basic principles of the Idea of Progress. This period came to be referred to as the “Age of Enlightenment”, signifying the period when people brought up with the idea that they could change their societies.
The fundamental line of reasoning of the modernization theory is that societies change from traditional to a modern form. A number of factors are associated with this change, including technology, economic growth and development, education, religion and culture. According to Marquis de Condorcet, economic development and advancement in technology can lead to change in cultural value, consequently leading to social progress (Perry et al. 194).
This became evident since as societies adopted the idea of modernization, further radical changes in the social structure came into existence, bringing about the social evolution. This was characterized by division of labor in the society, industrialization, globalization and capitalism. According to this theory, development is the process through which societies achieve modernization.
According to the modernization theory, traditional societies can achieve the same status as the developed societies using the same criteria as the latter, provided the former gets the necessary assistance. The modern society refers to the U.S.A and Western Europe countries. All other countries aiming to achieve the status of a modern society must imitate these developed countries.
Modernization theory exhibits several characteristics. Top on this list is the proposition that development leads to modernization. This theory suggests that a country can only achieve modernization if it experiences significant levels of development in three key areas: economically, sociologically and psychologically. The psychological aspect is a significant element of development, since psychological intentions form the driving force of economic growth (McClelland et al. 5).
Focusing on the economic aspect, one of the most significant contributors to this theory is Walt W. Rostow. For instance, he put forward a non-communist manifesto identifying five stages of economic development (Stages of Economic Growth 4). According to Rostow, development can only be achieved through capitalism and industrialization (Process of Economic Growth 6). This theory is discussed in details later in this paper.
Another significant proposition by the modernization theory is that development is a linear and irreversible process. The process of transformation of a society from the traditional to the modern state through the Rostow’s stages of economic development is as a result of influence of both internal dynamics and external forces.
This theory also takes economic growth both as a means to achieving economic development and a result of economic development. According to Todaro, there can be economic growth without development, yet there cannot be economic development without economic growth (22).
Apart from economic growth, economic development also encompasses elements such as increase in national income, betterment of living standards of the citizens, higher life expectancy, lower child mortality rates, better health care and improved education systems.
Several methods of measuring economic development exist, including determination of increase in Gross National Product (GNP) and GNP per capita; improvement in welfare of citizens of a country and through the use of social indicators. However, the most accurate and commonly used method is through measurement of increase in GNP per capita (World Economy 8).
Traditional and modern societies exhibit totally contrasting characteristics, according to the modernization theory (Torado and Smith 203). Traditional societies are based on socialism while the modern societies exhibit capitalism. While the economies of traditional societies depend on agriculture as the main source of income, modern societies’ economies are based on industrialization.
Production at the level of traditional societies is for subsistence only while modern societies exhibit surplus production. Modern societies extract their labor from formal labor markets. Such markets are non-existent in traditional societies, and the source of labor is families and clans. While modern societies apply advanced levels of technology in production processes, traditional societies apply primitive technology, which raises the production cost and often results in low productivity.
Other characteristics include an underdeveloped, rural, religion based society exhibiting collective social relations and a culture based on traditions for the traditional societies; as opposed to a developed, urban, rational, secular society exhibiting individuality and which is based on rules and laws; as in the case of modern societies.
The economic aspect of modernization follows the Rostow’s stages of economic growth. Walt Rostow identified five stages of economic development, namely the Traditional Society, Preconditions for Take Off, Take Off, Drive to Maturity and High Mass Consumption.
During the stage of the Traditional Society, the economy is dominated by subsistence production. All the output is consumed by the producers, implying that no surplus is left for sale. Such societies exercise barter trade, where there is direct exchange of goods for other goods.
This form of trade depends on a double coincidence of wants between the seller and the buyer. Production in traditional societies is labor intensive and utilizes only limited amount of capital. Further, such societies utilize traditional methods of production, since modern production methods and technology are either inaccessible or unavailable. The political organization of the traditional societies is not centralized, while the social organization is hierarchical and based on inheritance.
The Preconditions for Take-off can be referred to as a transitional stage, in which an economy exits from the traditional society. During this stage, there is the rise of new ideas that are favorable to economic progress. These include better education systems and entrepreneurship.
There is the emergence of new and better capital mobilization institutions. There is a dramatic increase production; resulting from investment in infrastructure and specialization in production. This leads to surplus production, which can be used for trading.
Improvement in the infrastructure also facilitates trade and administration in the society. Take note that although there is the emergence of a new industrial sector, traditional social structures remain in place. This results in what is known as a “dual society”. Another significant change that takes place during this stage is the change in the political structure. This involves change to nationalism, characterized by the formation of a centralized national government and administrative power.
The Take-off is the most essential and the hardest stage to achieve, according to Rostow (Stages of Economic Growth 299). It involves sustainable growth of industries and a significant rise in investment.
Technically, this stage requires a revolutionary advancement in agricultural production. In order to achieve take-off, three conditions must be met: First, the rate of investment must increase to between 10% and 12.5% of the national income. Secondly, there must be emergence and high growth rate of at least one (preferably more than one) leading manufacturing sector(s).
Such a sector employs the latest advancements in technology and stimulates supplementary growth sectors and derived growth sectors. This leads to an overall growth in the economy (299). The third condition requires the existence of a social, political and institutional framework that can adequately support the leading sector and allow the benefits of the economic expansion to spread throughout the economy.
Drive to Maturity is the stage occurring about two decades since the beginning of the take-off stage. The former is characterized by slowing down of growth of leading sector(s), hence other sectors become more prominent.
At this level, modern production techniques are not limited to the leading sectors as in the case of take-off – they now exist in most sectors in the economy (World Economy 2). Production at this level aims at maintaining competitiveness in the international market, not just for social necessity. The factor facilitating the development at this stage is the emergence of mass education.
Age of high mass consumption refers to the stage when per capita income exceeds the cost of basic needs. There is the accumulation of significant economic surplus. Consequently, consumers have sufficient disposable income.
Economies at this level may choose to extend their social overhead capital and social-welfare policies, strive for world power by building up military power and colonization; investing overseas, including exportation of capital and expertise; or gear the economy towards given consumption patterns.
This stage is characterized by a shift of the leading sectors towards housing and durable consumer goods; in addition to education, health and recreation services in the economy. Note that the first three stages seek to prolong the drive to maturity while the last option will result into the entrance into the age of high mass consumption.
Through his theory of economic development, Rostow brought out the point that development requires substantive investment in capital. This concept can be applied in enforcing development in less developed countries (LCDs) as follows: Foreign direct investment and aid can only be of help in inducing development if it is given to the LCD in its take-off stage, meaning that the economy has already reached the preconditions for take-off stage.
His theory also proposes injections in the form of capital, foreign investment and aid as the means to fill the financing gap facing LCDs, hence attain development.
A number of weaknesses have been identified with the Rostow’s theory of economic development. For instance, this theory is based on observations of American and European societies. Assuming that third world countries have to follow the same path towards modernization may be incorrect, since they face different environments.
They may, therefore, have to follow different paths towards their economic development In addition, Rostow’s theory assumes that growth occurs automatically by the time an economy reaches its maturity stage. This was disputed by Kuznets, who denoted that all levels of growth require external forces (Todaro 431). There is also an overlap between the preconditions for take-off and the take-off stages of the Rostow’s Model (431).
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