Rostow and Wallerstein Carter Waterkeyn APHG 2016-2017

Rostow’s Model TRADITIONAL SOCIETY American economist and political advisor during 1950s developed model, arguing that each country passes through five stages from traditional society to high mass consumption. TRADITIONAL SOCIETY PRECONDITIONS FOR TAKE-OFF - elite group initiates economic innovations, leads to productivity. TAKE-OFF - rapid growth in a number of specific economic activities, technical advances. DRIVE TO MATURITY - Modern technology diffuses to a wide variety of industries AGE OF MASS CONSUMPTION - economy shifts from heavy industry to consumer goods.

Modernization Theory - Rostow’s Stages Traditional stage - lives centered around families, local communities, & religious beliefs; similar to lives of ancestors; limited wealth; subsistence farmers Take-off stage - people experiment with producing goods for profit; something like an industrial revolution;urbanization increases; technology breakthroughs; greater individualism and risk taking Drive to technological maturity - economic growth widely accepted; attaining higher living standards; economy diversifies as people can afford luxuries; poverty reduced; population growth reduced; international trade expands High mass consumption - living standards raised; mass production encourages consumption of industrial products; high incomes; most workers in service sector

Problem’s with Rostow’s Model and the International Trade Approach Developmentalism: the idea that every country and region will eventually make economic progress toward “high mass consumption” provided that they compete to the best of their ability. This is not likely and is hard on the planet. Increased dependence on MDCs and their markets. Undue influence on many global policies, including those of the U.N. and World Bank. Market Stagnation: the MDCs have very limited population growth. Markets for low-cost manufactured goods grow slowly today. Undervalues the obstacles and competitive disadvantages faced by late starters versus those in the Core.

Modernization Theory Claims MDCs can help LDCs by encouraging them to control population growth, increase food production, & take advantage of industrial technology Criticisms It’s a justification fro capitalist systems to continue to exploit non- capitalist countries Fails to recognize that rich countries often block development in poor countries

Dependency Theory: Wallerstein’s Capitalist World Economy A global economic system that is based in high-income nations with market economies Traced economic inequality among nations to colonial era when Europeans first took advantage of the wealth of world. Divided countries into 3 types according to how they fit into global economy

Dependency Theory 1. Core countries - rich nations that fuel world’s economy by taking raw materials from around world & channeling wealth to North America, Europe, Australia, Japan through multinational corporations that operate worldwide 2. Countries of the periphery - low-income countries drawn into world economy by colonial exploitation, continue to support rich ones today by providing inexpensive labor and large market for industrial goods 3. Countries of the semiperiphery - remaining countries of world somewhere in between

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According to Wallerstein…. World eco benefits rich societies & harms other countries by making them dependent on core countries Perpetuated by narrow, export-oriented products such as oil, coffee, fruit Lack industrial capacity so caught in cycle of selling inexpensive raw materials & buying expensive manufactured goods, spending more than they take in Result high foreign debt

According to Wallerstein, dependency theory Emphasizes that no country develops in isolation because global economy shapes destiny of all nations Is this reality