David Gomes
Dr. Maran
ECO 1326
May 9, 2006
According to Rostow, there are five stages to economic growth. These stages are
the traditional society, the preconditions for take-off, and the take-off itself, the drive to
maturity, and finally the age of high mass-consumption. Atack and Passell’s A New
Economic View of American History, reiterates Rostow’s theory in explaining the growth
of the American economy from a post-colonial standpoint to the superpower it is
considered today.
The first stage of economic growth is the traditional society. The traditional
society is one whose structure is developed within limited production functions, based on
pre-Newtonian science and technology. In this first stage, population and level of life
fluctuated due to varying different reasons, including political and social turbulence, the
upkeep of roads, and the efficiency of central rule. This society productivity was limited
mainly to agriculture.
The second stage is the pre-conditions for take-off. It takes time to transform
traditional society in ways to be able to exploit the new innovations in science and
technology. As technologies were introduced and improved, the society moved towards
the pre-conditions to a take-off. However, the transitional stage was also affected by
political structure, building a centralized national state. According to Atack and Passell,
after the Revolutionary war, the government grew. Under the development of Alexander
Hamilton, a system of banking and bimetallic money arose as the economy was growing
due to higher output from new innovations in technology and an increased labor force.
