| |
Contributions from
the Column
Tribune
Development theory: Who's Who? Part 43: Walt Whitman Rostow
From the rent-seeking society to the knowledge society
12/2003
|
|
page 2
Whether it is at all a theory and not merely a taxonomy of economic stages is already one of the fundamental criticisms levelled at Rostow. It is also said that in contrast to his own claim he took too little account of the social and political factors. However, this objection is wrong if one looks at other works by Rostow in which he emphasises the decisive role of new societal forces, whereby nationalist sentiment vis-à-vis more advanced countries is recognised as a motivating force for modernisation. Rostow is also criticised for his fixation on the Anglo-Saxon path, which ignores the top-down modernisation implemented in countries such as Germany, Japan and the Soviet Union. In empirical terms, much does not tally; for instance, no take-off can be verified in France or Austria-Hungary. Even Rostow's description of the USA as a model case is only partly right because despite its mass consumption it is not a welfare state. The relative decline of countries such as Britain can certainly not be explained at all, and countries such as Turkey, Argentina and India have never emerged from their alleged take-off stage. In that respect, Rostow suffers the fate of many global theorists because there is always a great number of objections in detail. Like other representatives of the Historical School, the neo-classical authors deny his work has the character of theory per se because the theoretical stringency of deductively-obtained models can never be achieved in an inductive way.
The highpoint of criticism was reached at the Constance Conference of 1960, which Rostow edited in 1963 under the title The Economics of Take-Off into Sustained Growth. The main critics were Kuznets and Solow, whereby the former found fault with the lack of an empirical basis and the latter questioned whether Rostow's work had the character of theory at all. The empirically pursued controversy turned on the issue of whether a take-off stage for individual countries could be verified. Here the economic historians tended to stand on Rostow's side, while the economists were among the critics. It was not until 1978, in The World Economy, that he provided the empirical proof for his stages theory. He originally intended his How It All Began (1975) to be the introduction to that. In this work he himself established the connection to the Historical School. Basically, his final stage in life and its enormous research programme was nothing other than an attempt to put straight his earlier critics.
The controversy over take-off marked the core of the problem. Only if the existence of take-off could be proved did it make sense to research the preconditions, and only then was the theory right that the automatism of self-sustaining growth followed take-off. Also only then did the normative conclusion make sense that one could orchestrate this connection and promote it from outside.
That brings us to the less noticed but much more important political consequences of Rostow's stages theory, which he published in two texts with Max Millikan in 1957/58. The first was the book A Proposal: Key to Effective Foreign Policy, and a short while later in Foreign Affairs the essay Foreign Aid: Next Phase. Both texts contain the demand to arrive at a reformulation of American foreign policy, which against the background of the Korean War was fixated on the military dimension of the East-West conflict. The USA should assume the leadership "in a new international partnership program for world economic growth". That gave Foreign Aid a status similar to that of the famous article The Sources of Soviet Conduct signed with an 'X' by George Kennan and published in Foreign Affairs in 1947, in which he justified the US policy of containment towards the Soviet Union.
Millikan and Rostow aimed to broaden the understanding of containment and make clear that the East-West conflict must also be conducted at other locations, namely in the countries of Asia, the Middle East, Africa and Latin America. These were in the second stage of the Rostowian model, where the preconditions for take-off are laid. If this stage is gone through successfully, it comes to take-off and self-sustaining growth. If the preconditions are not in place, it comes to crisis. The Communists then have the chance to take over power, as has already happened in China and is in the offing in Vietnam and elsewhere. Therefore the process must be supported from outside – by development assistance. That is meant by Next Phase, after the first phase in which American policy was focused too strongly on creating military alliances and providing military assistance on the periphery of the Communist bloc. Rostow made calculations on how much capital would be required to bring the investment rates of the countries involved up to the critical mark. He estimated that given a targeted per capita growth of 2 per cent per year, about US$ 2.5-3.5 billion would need to be mobilised for the following decade (the later first development decade), which was to be raised by state development assistance and private sector direct investment.
Three criteria had to be fulfilled: the existence of a national development plan, the necessary potential to implement it, and a country being able to mobilise its own resources. Besides the US government, the western allies, international organisations and private investors should be prompted to act as donors. The partners of the assistance would be the new elites in the countries mentioned, whose nationalistic strivings are expressed in the wish for economic and social modernisation. At least in the initial phase, a strong state component would be essential, whereby in case of doubt the military could certainly be a suitable partner. As everyone knows, that is similar to how things were actually handled from the 1960s, with support being given to every autocratic regime if only it were robustly anti-Communist and promised development. The Alliance for Progress was to contribute to "political maturity".
Beforehand, Rostow believed it was necessary to convince the US foreign policy elite that development policy was definitely in their national security interest. In The View from the Seventh Floor, he developed once again in 1964 the five dimensions of global US strategy: (1) alliance with western Europe, Canada and Japan; (2) support of the modernisation process in the Third World by development assistance; (3) alliance with the new elites of the South; (4) giving them military support in the fight against Communist subversive movements; and (5) a tougher line in dealing with Communist states. In cases where the Communists had already taken power, they must be suppressed by force of arms so that his second stage of the preconditions for take-off could be gone through in peace and quiet.
The Republican side criticised Rostow vehemently for his programme, and in fact he had to justify himself to Congress in the face of charges that he was seeking to water down American security policy and placed too much emphasis on a planned economy. Conservative economists such as P. T. Bauer and Milton Friedman even said they suspected him of socialism because of his budgetary approach.
However, Rostow and his fellow combatants were able to assert their views and convince Kennedy. To be sure, they were helped by Kruschev's political offensive from the Sputnik shock in 1957 to the Cuba crisis of 1962, which signalled a substantial growth in Soviet power. The establishment of development policy at the beginning of the 1960s, the announcement of the first development decade, the founding of the AID, the Alliance for Progress, the Peace Corps, and the OECD's Development Assistance Committee, and the reorientation of the World Bank from postwar reconstruction aid to financing development – all that, which meant the putting the new foreign policy strategy on an operational basis, goes back to Rostow's influence. But a small flaw was overlooked amid the hubris of power: despite all efforts, reality could not be shaped in the way it was planned in the Rostowian stages theory. That again links him with Marx. Vietnam, the chosen model, became a trauma. Because the Vietcong prevented the creation of the preconditions for take-off in South Vietnam, the war was driven ahead ever more, due not least to Rostow's advisory position under Johnson. It was not until the change to the Nixon administration that conservative realist Kissinger was able to stop the bustling activity of the liberal missionary Rostow by accepting the American defeat in Vietnam.
III. Impact
What is left of Rostow? In the 1970s he became a classic figure of controversy – not only because of his role in the Vietnam war, but also because he had dared to provide a counter concept to Marx. He never mentioned the subjects of dependency, the world market, Terms of Trade or colonialism. He liked assistance from outside, the World Bank, direct foreign investment, multinationals and military advisers. But for Vietnam, he could have taken his place among the honoured school of the development pioneers, could have returned to the MIT and there continued to write much-noted books without his reputation having the taint of warmonger and fanatical anti-Communist.
What has remained are his concepts: take-off, preconditions of growth, self-sustained growth, the age of mass consumption. From today's viewpoint, against the background of the major disaster of failed and rogue states, we must recognise that his demand for the political preconditions for take-off are more topical than ever. What is lastingly due to him, even if in his technocratic perception and boundless optimism about what was feasible he was wide of the mark, is that he was one of the decisive theorists who was able not only to dream up development policy and justify its necessity, but also use his position at the levers of power to ensure its practical introduction. Whether thereby US security policy interests and combating Communism were the crucial motive, or whether he knew how to cleverly package his developmental engagement in political terms, as realistic critics ascribe to him, is an open question. Whatever, the countless Vietnamese and the counted American victims of the Vietnam war are also part of his appraisal. The title of his last book, published after his death, is Concept and Controversy: Sixty Years of Taking Ideas to Market.
Publications by Walt W. Rostow
1955: Marx Was a City Boy, or Why Communism May Fail, in: Harper's Magazine 210.1955, No. 1257, pp. 25-30
1957: With Max F. Millikan: A Proposal: Key to an Effective Foreign Policy. New York, Harper. Reprint Westport CO, Greenwood Press 1976
1957: With Max F. Millikan: Foreign Aid: Next Phase, in: Foreign Affairs 36.1957/58, 3, pp. 418-436.
1960: The Stages of Economic Growth: A Non-communist Manifesto. Cambridge MA, Cambridge University Press; 2nd edition 1971, containing: Appendix B, pp. 172-241 (reply to criticism).
1964: View from the Seventh Floor. New York, Harper & Row
1971: Politics and the Stages of Growth. Cambridge, Cambridge University Press
1975: How It All Began. Origins of the Modern Economy. London, Methuen
1978: The World Economy. History & Prospect. London, Macmillan
1985: Eisenhower, Kennedy and Foreign Aid. Austin, University of Texas Press
1990: Theorists of Economic Growth from David Hume to the Present, with a Perspective to the Next Century. New York, Oxford University Press
2003: Concept and Controversy: Sixty Years of Taking Ideas to Market. Austin, University of Texas Press
Publications on Walt W. Rostow
– Charles P. Kindleberger/Guido di Tella (eds.): Economics in the Long View: Essays in Honour of Walt Whitman Rostow. 3 vols., London, Macmillan 1982
– Bruno Knall: Wirtschaftserschließung und Entwicklungsstufen. Rostows Wirtschaftsstufentheorie und die Typologie von Entwicklungsländern. In: Weltwirtschaftliches Archiv 88.1962,I, pp.184-258
– Kimber Charles Pearce: Rostow, Kennedy, and the Rhetoric of Foreign Aid. East Lansing, Michigan State University Press 2001
Further reading
– Yvonne Baumann: John F. Kennedy und "Foreign Aid”. Die Auslandshilfepolitik der Administration Kennedy unter besonderer Berücksichtigung des entwicklungspolitischen Anspruchs. Stuttgart, Franz Steiner 1990
– Gerald M. Meier/Dudley Seers (Eds.):
Pioneers in Development. New York, Oxford University Press 1984
– Gerald M. Meier (Ed.): Pioneers in Development, Second Series. New York, Oxford University Press 1987
Prof. Dr. Ulrich Menzel teaches international relations at the Technical University of Brunswick.
ulrich.menzel@tu-bs.de
page 1
|
