In the 1960's, American economist W.W. Rostow developed a model
of economic growth He suggested that a country goes through five
stages as it economically develops
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Stages of Economic Development Stage One - Traditional Society
Land is the basis of wealth Economy is dominated by subsistance
agriculture Severly limited potential for both economic and
population growth Social and economic progress are limited by
natural controls like droughts and outbreaks of disease Governments
are usually absolute monarchies or dictatorships Inflexible
society, used to operating in conditions that change very little
over centuries Examples include Britain until about 1750, Canada
before the 1880's and todays 5th world countries
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Stages of Economic Development Stage One - Traditional
Society
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Stages of Economic Development Stage Two - Establishing the
Pre-conditions for Takeoff Transitional period to a more complex,
advanced economy Happened first in Britain at the beginning of the
Industrial Revolution in 1750 In Britain, conditions that prepared
the country for economic takeoff had to be developed within the
country For other countries it is triggered by an externally
originating shock Rostow believed that the takeoff stage could only
be reached if a society was able to achieve a surplus of wealth
that could be invested in economic sectors like transportation,
communications and natural resource exploitation E.g. Increased
agricultural production meant labour and capital was available for
other uses
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Stages of Economic Development Stage Two - Establishing the
Pre-conditions for Takeoff Development of more effective,
responsive central governments For western European nations this
was in the late 1700's and early 1800's For Canada, it occured in
the mid 1800's Some fifth world and many fourth world countries are
now in this stage
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Stages of Economic Development Stage Two - Establishing the
Pre-conditions for Takeoff
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Stages of Economic Development Stage Three - Economic Takeoff
This is a period of intense growth in the economy due to the
introduction of important technological innovations Agriculture
changes from primarily subsistance to primarily commercial
Manufacturing becomes an important part of the economy The tertiary
or service sector of the economy begins to expand Britain - very
late 1700's, France and the U.S. - by 1860, Canada - by 1900 Many
fourth and third world nations are in this stage now
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Stages of Economic Development Stage Three - Economic
Takeoff
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Stages of Economic Development Stage Four - The Drive to
Maturity After a countrys economic takeoff, there is an extended
period of sustained growth Economic growth outpaces population
growth so per capita wealth increases Economy becomes more
diversified Continued expansion of manufacturing (secondary) and
tertiary industries Modern, efficient production methods come into
use
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Stages of Economic Development Stage Four - The Drive to
Maturity Increasing % of a nations wealth is invested in developing
the economy Historically, a countrys economy would reach maturity
50- 60 years after takeoff Britain reached maturity in the 1850's
France and the U.S., around 1910 Canada reached economic maturity
by the 1950's More recently, economies like those of hong Kong,
Singapore and South Korea were able to reach maturity more
quickly
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Stages of Economic Development Stage Four - The Drive to
Maturity
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Stages of Economic Development Stage Five - High Mass
Consumption Many people have incomes that are greater than
necessary for buying essentials like shelter, food and clothing
Growing demand for additional consumer goods and services Society
can invest in social programs like improved health care and
educational opportunities U.S. - about the 1920's, Canada, about
the 1960's
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Stages of Economic Development Stage Five - High Mass
Consumption
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Stages of Economic Development Rostows model presents only one
explanation for variations in economic development and quality of
life in different countries His model describes development as he
saw it in Europe and North America Elsewhere, economic development
may not have occured this way
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Stages of Economic Development Historical Colonialism - Past
and Present Colonialism dominated the worlds economic system for
more than four centuries, until the second half of the 20th century
The impact was so profound that even today it affects the economic,
social and political systems of much of the world To understand the
economic progress and problems of most of the developing world
today, we have to go back and look at the beginnings of the
colonial period This period is tied to the early need to establish
and secure reliable trade routes between Europe and east Asia
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Historical Colonialism - Past and Present
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Colonialism really begins during the late 1400s Spain and
Portugal are allowed to divide the world in half according to the
Pope Other European countries challenge this ruling but it
underlines the point that the colonies only existed to meet the
needs of the colonizers. (Clark, Wallace 173) European colonization
reaches its peak with the empires of France and Britain The world
wars were caused partly by countries trying to develop colonial
empires by taking colonies from others
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Historical Colonialism - Past and Present 1530 1600 1650 1700
Spain, Portugal and early Ottoman Empire Spain, Ottoman Empire,
Indian Empire Russia, France, Britian, China
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Historical Colonialism - Past and Present 1812 1770 Britain,
Spain, China, India Britain, Spain, China, India, U.S.A. 1800
Britain, Spain, China, India, U.S.A., Russia 1850 Britain, U.S.A.,
Spain, Portugal
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Historical Colonialism - Past and Present 1861 1901 1914 1925
Britain, U.S.A., Russia, France Britain, U.S.A., Russia, France,
Others Britain, Russia, France, Others Britain, Russia, China,
Japan, Others
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Historical Colonialism - Past and Present Colonies were
developed for the economic benefit of the mother country This was
called the Mercantile System Colonies were a source of raw
materials and were consumers of finished products
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Historical Colonialism - Past and Present The companies not
only expanded trade but also acted as agents for the colonial
government in remote places Most of the companies faded into
obscurity over the years but two stand out The first is the East
India Company. This British company was given a monopoly on the tea
trade. To promote and protect it they built their own armed navy,
traded in opium to get cheap tea and promoted the interests of the
British Empire One way to expand colonies and develop commercial
activity was through Concession Companies Concession companies were
monopoly traders set up by the mother country to exploit a resource
or area of the colony The second is the Hudson Bay Company.
Originally formed to hold a monopoly on the fur trade, the Hudson
Bay Company grew, expanded and still thrives to this day
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Historical Colonialism Impacts of Colonialism 1. Destruction of
Traditional land tenure practices In many parts of the world the
land was shared equally amongst all collectively rather than being
privately owned Private ownership brought inequality and hunger as
land could no longer be used by all 2. The Plantation System saw
large tracts of good land given to individuals or concession
companies Local tenants werepushed off the land and forbidden to
farm in a traditional way Plantations specialized in single crops,
usually for export These plantations still exist in many areas
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Historical Colonialism Impacts of Colonialism 3. The rise of
colonial cash crops altered the agricultural balance Farmers grew
crops for export to the mother country, rather than growing core
food crops In many places this so damaged the colonys ability to
feed itself that they began importing food 4. Local manufacturing
was delayed or refocused The distortion of manufacturing priorities
to accommodate the mother country left many colonies at a severe
disadvantage once they became free
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Historical Colonialism Impacts of Colonialism 5. There was
little or no colonial protection for the environment Mining,
forestry, agricultural and manufacturing all went unregulated and
damage was ignored Many former colonies are still struggling with
the environmental damage that was left behind 6. Colonizers
introduced their own government forms to the colonies, regardless
of what had previously existed Little recognition or respect was
given to traditional systems
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Historical Colonialism Impacts of Colonialism 7. Colonial
powers were not able to fully staff their colonies so they had to
train locals These locals became an elite, educated and priviledged
This group was often not representative of the general population
In many cases these people became the rulers after independence was
achieved 8. Countries were created from land that did not match
tribal, cultural or religious boundaries The colonial powers
created boundaries for their convenience, not for the subject
colony
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Historical Colonialism Impacts of Colonialism 9. Colonial
powers imposed their culture and language on the colonies This
meant that the native culture as often submersed and seen as
inferior, even by those whose culture it was While a common
language did help unite certain colonies, it was divisive in far
more 10. Colonial infrastructure was built to serve the needs of
the colonizers This meant that many roads, railways and portswere
built to service the export trade but few hospitals or universities
were created Infrastructure often did not service the areas with
the densest population