Industrialization Essay Research Paper Industrialization in economics

Industrialization Essay, Research Paper

Industrialization, in economics, condition marked by an increase in the importance of industry to an economy. The process of industrialization describes the transition from an agricultural society to one based on industry. During the process of industrialization, per capita income (level of income per person) rises and productivity levels increase.

Modern industrialization is often dated as having its origins in the Industrial Revolution, which began in Great Britain in the 18th century and spread to other parts of Europe and North America in the early 19th century. Industrialization had occurred by the end of the 19th century in some southern European countries and in Japan, and during the 20th century, particularly after World War II (1939-1945), in eastern Asia. Today, Japan, the United States, and Great Britain are among the world’s major industrialized countries.

The process of industrialization usually includes a movement from rural to urban living and a shift from home to factory production. Increased mechanization in agriculture generally leads to increased agricultural productivity and enough food for large urban populations. Agricultural productivity growth is necessary for modern industrial growth to become self-sustaining. Other conditions are also necessary for industrialization to occur, and the next section describes three differing theories on this process that were developed during the 20th century.

Rostow’s Theory

American economist Walt Whitman Rostow argued that for countries to industrialize successfully, they need to meet certain prerequisites such as a highly productive agricultural sector, functioning markets, and a stable government. Once these preconditions are met, industrialization could enter the take-off phase a brief period of 20 to 30 years in which the process of industrialization is completed. In Rostow’s framework, the industrialized countries of today all went through similar stages of development. According to his theory, Great Britain was the first country to manifest a take-off into industrialization between 1780 to 1800, followed by France, Germany, and the United States in the 19th century.

Although Rostow’s explanation of the stages of industrialization is accepted as a general theory, recent works on the British industrial revolution suggest that the British economy did not take off, but rather experienced a steady pace of industrialization throughout the 18th and early 19th centuries. The experience of other European economies also contradicts the idea of a take-off because the process of industrialization is now believed to have occurred over an extended period of time throughout the 19th century.

Gerschenkron’s Theory

Russian-born economist Alexander Gerschenkron introduced the concept of relative backwardness, in which the development path of a late industrializing country will, by the virtue of its backwardness, differ fundamentally from that of the leading industrial country. He theorized that the late industrializer displays the following characteristics: a rapid and intense growth of industrial output; an emphasis on producer goods (goods used to make other products) rather than consumer goods (products sold directly to consumers); a stress on large-scale plant and enterprise; a reliance on technological borrowing, and probably on financial assistance from abroad; importance of the government as the promoter of industrial development; spread of ideologies supportive of industrialization; and a passive role for agriculture. Although historical case studies of many European economies have failed to verify many of these descriptive features, Gerschenkron’s perspective has had significant influence on the study of the industrialization process. Most economists accept Gerschenkron’s theory that historical events influence the path of industrialization.

Catching-Up Models of Industrialization

In recent years economists have attempted to explain the process of industrialization within a framework of catch-up growth. These theories set forth the premise that late industrializers can imitate technologies already in existence in the leading industrial countries, allowing them to undertake economic development and catch up to the per capita productivity levels of the leaders.

The catch-up theory predicts that per capita income levels in poor and rich countries should converge. This hypothesis has had numerous tests. There is a strong tendency toward convergence among the major industrial countries. However, when the very poor countries of the world are included, the hypothesis breaks down. A large number of poor countries have failed to industrialize and grow rapidly relative to rich countries; therefore, catching up is not an inevitable historical process.

In order to understand why the forces of catching up are only powerful in the developed world, American economist Moses Abramovitz introduced the idea of social capability, which means that relatively backward economies must reach certain social conditions to be able to adopt the technology of major industrial countries. These conditions include a large, capable workforce and a stable political system.