Economic Development and Social Change

Topics: Economics, Capitalism, Economy Pages: 16 (5548 words) Published: September 16, 2013
Section 1

1) What is the primary goal of modernization theory in contrast to theories of capital formation? Compare and contrast Hoselitz’ formulation of modernization theory with Lewis’ theory of capital formation

In the 18th century, during the Age of Enlightenment, an idea named the Idea of Progress emerged whereby its believers were thought of being capable of developing and changing their societies. This philosophy initially appeared through Marquis de Condorcet, who was involved in the origins of the theoretical approach whereby he claimed that technological advancements and economical changes can enable changes in moral and cultural values. He encouraged technological processes to help give people further control over their environments, arguing that technological progress would eventually spur social progress. In addition, Émile Durkheim developed the concept of functionalism in the sociological field, which emphasizes on the importance of interdependence between the different institutions of a society and their interaction in maintaining cultural and social unity. His most well known work, The Division of Labour in Society, which outlines how order in society could be controlled and managed and how primitive societies could make the transition to more economically advanced industrial societies.

Another reason for the emergence of the modernization theory derived from Adam Smith’s Wealth of Nations, which represented the widespread practical interest on economic development during a time when there was a constant relation between economic theory and economic policy that was considered necessary and obvious. It was by analysing, critiquing, and hence moving away from these assumptions and theories that the modernization theory began to establish itself. At the time the United States entered its era of globalism and a ‘can do’ attitude characterized its approach, as in the functionalist modernization advanced by B. Hoselitz: “You subtract the ideal typical features or indices of underdevelopment from those of development, and the remainder is your development program”. As he also presents in Social Structure and Economic Growth , this body of economic theory “abstracted from the immediate policy implications to which it was subject” and also “assumed human motivations and the social and cultural environment of economic activity as relatively rigid and unchanging givens”(23-24). He claims that the difference lies in the extra examination of what is beyond simply economics terms and adjustments, by “restructuring a social relations in general, or at least those social relations which are relevant to the performance of the productive and distributive tasks of the society”(26). Most forms of evolutionism conceived of development as being natural and endogenous, whereas modernization theory makes room for exogenous influences. Its main aim is to attain some understanding of the functional interrelationship of economic and general social variables describing the transition from an economically “underdeveloped” to an “advanced” society. Modernization theory is usually referred to as a paradigm, but upon closer consideration turns out to be host to a wide variety of projects, some presumably along the lines of ‘endogenous change’ namely social differentiation, rationalization, the spread of universalism, achievement and specificity; while it has also been associated with projects of ‘exogenous change’: the spread of capitalism, industrialization through technological diffusion, westernization, nation building, state formation (as in postcolonial inheritor states). If occasionally this diversity within modernization is recognized, still the importance of exogenous influences is considered minor and secondary. I do not view ‘modernization’ as a single, unified, integrated theory in any strict sense of ‘theory’. It was an overarching perspective concerned with comparative issues of national development, which treated...
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