Rostow’s Model of Stages of Growth

• Rostow’s model of stages of growth holds that every society moves through five stages, from traditional society to the age of high mass consumption. It is the classic linear model of modernisation.
• It was set out by Walt Whitman Rostow (1916–2003), an American economic historian. The take-off came first, in “The Take-Off into Self-Sustained Growth” (The Economic Journal, 1956). The full scheme followed in The Economic History Review (1959) and the book The Stages of Economic Growth: A Non-Communist Manifesto (1960).
• Its core claim: growth is a matter of leading sectors and investment, and one short interval, the take-off, turns a stagnant economy into one where growth is normal.
• It is a non-spatial model. Its place in geography comes from how it shaped the language of development and its measurement, and from the critique it provoked.

Background

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The Post-War Setting

• After the Second World War (1939–45), Europe faced ruin and joblessness. The Marshall Plan (1948), launched under President Harry S. Truman and named after Secretary of State George C. Marshall, seemed to show that outside capital could restart growth.
• At the same moment, decolonisation raised a new question. Geographers and economists divided the world into developed and developing, first and third world, core and periphery. They wanted to know why some countries had developed and others had not.
• A family of growth theories appeared, most of them favouring industrialisation, urbanisation and capital formation:

• Before Rostow, modernisation was widely assumed to mean becoming like the West. Countries should copy its capitalism and liberal democracy.

The Man and the Message

• Rostow was fiercely anti-communist. He served in the Kennedy administration and became President Johnson’s National Security Adviser (1966–69), promoting his model as part of American foreign policy.
• The subtitle was deliberate. He offered an alternative to Karl Marx’s stages of history, and an argument that aid could lead poor nations to capitalism before communism reached them.
• The model has two faces, then: an account of economic history, and a Cold War policy prescription.

Assumptions

• Societies can be classified by economic dimensions into a single sequence.
• Growth is linear and unidirectional, though not automatic.
• Capitalism is the setting, and the Western experience is the general pattern.
• Capital formation is the key variable, and growth is sectoral: a few fast-growing leading sectors pull the rest.
• Change in values and politics accompanies economic change, and it needs a new elite and a working national state.

The Five Stages

1. Traditional Society

• Output is limited by pre-Newtonian technology. There is much invention and change, but no systematic understanding of nature that would make invention regular. A ceiling on output per head results.
• 75 per cent or more of the workforce goes into food production.
• Income above subsistence goes to monuments, wars and landlords’ living.
• Society is hierarchical, and power rests with regional landowners rather than a central state.

2. Preconditions for Take-off

• In Western Europe the preconditions came from two forces within: modern science, and the discovery of new lands, which widened markets. Britain moved first, helped by its political settlement of 1688, its nonconformists, its naval strength and its resources.
• Elsewhere they mostly came from outside. An advanced power’s intrusion brought both a positive and a negative demonstration, and reactive nationalism then drove modernisation. Japan responded quickly, China slowly.
• Three non-industrial sectors must change:
  • Social overhead capital, above all in transport, to make a national market and let the state rule.
  • A technological revolution in agriculture, which supplies food for the growing population and the towns, income that creates demand for industry, and savings for investment.
  • Expansion of imports, paid for by more efficient sale of natural resources and by capital inflow.
• Society changes too: farmers accept new techniques, a new class of entrepreneurs appears, and an effective centralised national state emerges.
• The stage may last a century or more. India’s First Five Year Plan (1951–56) worked on many of these conditions.
• “Born free” societies such as the United States, Canada and Australia, which grew out of a society already far advanced, skipped the traditional stage.

3. The Take-off

• This is the great watershed, an interval of two or three decades when the economy transforms itself so that growth becomes more or less automatic.
• Three necessary conditions:
  1. A rise in the rate of productive investment from about 5% or less to over 10% of national income, outstripping population growth.
  2. Development of one or more substantial manufacturing sectors with a high rate of growth.
  3. The existence or quick emergence of a political, social and institutional framework that exploits these impulses and keeps growth going, including the ability to mobilise domestic capital.
• Rostow’s three kinds of growth sector:

• Agriculture changes along with industry, urban workers multiply, and a new elite takes control. Growth now dominates society and politics.

Rostow’s Own Take-off Dates

• He labelled these figures “tentative, approximate”. The table first appeared in 1956 and was carried forward.

• For the last four he gave only a start. He wrote that it was too soon to judge the Indian and Chinese efforts, for quite different reasons. He also held the Japanese timing to be uncertain for want of data.

4. Drive to Maturity

• Maturity is the point when a society has effectively applied the range of then-modern technology to the bulk of its resources.
• New leading sectors replace the old. After the railway take-offs, steel, new ships, chemicals, electricity and machine tools took over. Sweden moved from timber to pulp and paper, and from ore to fine steel. Resources and policy shape the sequence.
• About 10–20% of national income is steadily invested, and output outpaces population.
• Society changes in three ways: workers become more skilled, urban and organised, with rising real wages; professional managers replace rugged founders; and the public, a little bored with the miracles of industry, starts to look for something new.
• Rostow noted an oddity: maturity comes about sixty years after take-off begins. He admitted that he had no argument to explain this.

5. The Age of High Mass Consumption

• Once a mature society stops treating technology as its overriding goal, it has three directions to choose from:
  • public welfare: security, welfare and leisure;
  • private mass consumption: family homes, cars and durable goods;
  • national power on the world stage.
• Leading sectors shift to durable goods and services: housing, automobiles, petroleum, rubber, electrical appliances. These in turn demand new roads and commercial centres.
• The balance of attention moves from supply to demand, and from production to consumption and welfare. The share of skilled, office and service work rises.
• Sequence: the United States led in the 1920s, moving to suburbs and cars. Britain and Western Europe leaned to public social security before 1914, and Western Europe and Japan entered the phase fully in the 1950s.
• Beyond consumption: in Politics and the Stages of Growth (1971), Rostow added a search for quality, for what happens when more income loses its appeal.

Evaluation

Criticism

• Linear and teleological: the end is known from the start, and every society is on the same road. The stages admit no reversal, and countries do fall back.
• Ethnocentric: the sequence is drawn from a few Western cases, and it treats Western capitalism as the destination.
• Ahistorical: it ignores colonialism, the slave trade and the unequal world in which later countries must grow. The first developers had no earlier rich countries to contend with.
  • Andre Gunder Frank (1966, 1967) argued that underdevelopment is not an original state but something produced by contact with capitalist metropolises. Stage 1 therefore misdescribes today’s poor countries. Dependency and core–periphery views follow from this.
• The take-off is not in the data: at the 1960 conference of the International Economic Association, Simon Kuznets (“Notes on the Take-Off”, 1963) found that investment and output rates rise slowly over longer periods, with no sharp break at Rostow’s dates.
  • Historians of Britain and France found much the same. Phyllis Deane and H. J. Habakkuk (1963) could not find investment doubling within his British take-off.
  • The 10% test therefore looks arbitrary. Rostow himself conceded in 1963 that the investment rate alone was not a crucial test of take-off.
• Leading sectors are overstated: Robert Fogel (1964) calculated that railways added little to American growth that alternatives could not have provided. Yet the railway is Rostow’s central example.
• No single route: Alexander Gerschenkron (1962) showed that later developers use substitutes for missing prerequisites. Banks in Germany and the state in Russia did what slow accumulation had done in Britain. The more backward the country, the faster and more state-led its spurt.
• Stages blur:
  • The preconditions need not come first. Countries such as Denmark and New Zealand grew through farming, and “born free” countries had no traditional stage.
  • Some features of take-off, such as high investment, also define the drive to maturity, so the line between them is unclear.
  • Canada and Australia entered high mass consumption before technological maturity.
  • The third take-off condition, mobilising domestic capital, partly repeats the first.
• Weak on causes: the stages describe rather than explain, and the motor of change between them is not specified.
• Ignored dimensions: income distribution, regional inequality, gender, and the environment. Mass consumption for all may be ecologically impossible if all countries reach it.
• Silent on space: the model takes the nation as its unit, while growth is uneven within it. The American South and Quebec lagged long after national take-off, as Rostow himself conceded.

Rostow on India and East Asia

• Rostow’s 1952 date for India rested on the investment promised by the First Plan. The real record is more complicated:

• East Asia fits best, on the surface. Korea moved from gross investment of about 11% in 1960 to 29% by 1975. Manufacturing rose from 11% to about 27% of GDP, leading in the way Rostow expected.
  • But the drivers were an activist state, export discipline and land reform, closer to Gerschenkron than to Rostow.
• India breaks the sequence. Gross investment was already about 18% of GDP in 1960, and net investment reached about 10% of income by the mid-1960s. Yet income per head grew only 1.2% a year up to 1980, so the 10% line alone predicts very little.
  • Growth then came mainly through services: their share rose from 39% to 49% of GDP between 1960 and 2025, while manufacturing has stayed between about 13% and 18%. India’s limited manufacturing path skips the leading manufacturing sector that Rostow thought necessary.
  • India’s income per head in 2025 is about where Korea’s was in 1973, so the “mass consumption” label fits only a small urban share of its people.
• China began its fastest growth around 1980, long after his 1952 date, and under a Communist Party, in direct challenge to the manifesto’s political claim.
• Vietnam since the 1980s and Bangladesh in garments show that manufacturing for export remains a possible route. Premature deindustrialisation elsewhere suggests that this ladder may be getting shorter.

Where India Might Sit

• Rostow’s stages can be read against India’s record, with the caution that the fit is loose:

• A single country can be at several stages at once. Parts of metropolitan India show mass consumption, while poorer rural districts remain close to subsistence. This is the spatial weakness of a national model.

Rostow and His Critics Compared

• Paul Baran and Eric Hobsbawm (1961) attacked the model from the left as a set of labels and not an explanation of how one stage leads to the next. Rostow’s own defence lies in his dynamic theory of production, in which sectors rise and slow.

What Survives

• A useful vocabulary. “Take-off” and “mass consumption” remain part of ordinary economic language, for all the objections.
• Attention to structure. Rostow insisted on looking at sectors and institutions, not just aggregates. This put growth back in its historical and social setting, and it was an advance on abstract models of the time.
• Foundation for later work. Debates with Rostow helped produce dependency theory, Gerschenkron’s model of relative backwardness and today’s theories of regional imbalance.
• A partial truth. Investment, infrastructure, agricultural productivity and effective states do matter for growth. What fails is the claim to a single universal sequence.

Summary