Theory of Economic Growth

457 Pages·2007·38.799 MB·English

by  W. Arthur Lewis

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ROlttledge Library Editions
THE THEORY OF
ECONOMIC GROWTH
ECONOMICS
Routledge Library Editions - Economics
DEVElOPMENT ECONOMICS
In 7 Volumes
Western Enterprise in Far Eastern Economic Development
A/lm
II \X'estern Enterprise in Indonesia and Malaya
A/lm
III Economic Analysis and Policy in Underdeveloped Countries
Baller
IV The Condicions of Agricultural Growth BQserllp
V Development Planning Lewis
VI Overhead Costs Lewis
VII The Theory of Economic Growth Lewis
THE THEORY OF ECONOMIC
GROWTH
W ARTHUR LEWIS
i~ ~~~~r~~~~~p
LONDON AND NEW YORK
First published in 1955
Reprimed in 2003 by
Routledge
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Transferred to Digital Printing 2006
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Britisb Librn,.y Cnta/ogllhlg ill Publimtio/l Data
A CIP catalogue record for rhis book
is available from the British Library
The Theory of Economic Growth
ISBN 10: 0415407087
ISBN 13: 9780415407083
Miniset: Development Economics
Series: Routledge Library Editions - Economics
Printed 3nd bound by CI'I Amony Rowe. Eastbourne
THE THEORY OF
ECONOMIC GROWTH
by W. Arthur Lewis
Stanley Jevans Professor of Political Economy
in the University of Manchester
George Allen & Unwin LId
RUSKIN HOUSE MUSEUM STREET LONDON
FIRST PUBLISHED 1955
SECOND u.tPRESSiDN 1956
THIRD IMPRESSION 1957
FOURTH IMPRESSION 1960
This book is copyright uflder Ihe Beme COflvefll;o/l,
Apart Irom OflY lair dealiflgs lor Ihe purpose 01
pr/f'ate study. reUQrch, crilil'i1m or review, /U
permitted under the Copyright Act 1956, no /XIrliofl
m4Y be reproduced by any process wiThouT writ/en
permission. Enquiry should be made TO the publisher
PREFACE
The purpose of this book is not to present original ideas on its
subject, but to try to provide au appropriate framework for studying
economic development. The place for original ideas is articles in the
technical journals, and my articles on this subject are listed in the
bibliographical notes. A book of this kind seemed to be necessary
because the theory of economic growth once more engages world
wide interest, and because no comprehensive treatise on the subject
has been published for about a century, The last great book covering
this wide range was John Stuart Mill's Principles ofP olitical Economy,
published in 1848. After this economists grew wiser; they were too
sensible to try to cover such an enormous field in a single volume,
and they even abandoned parts of the subject altogether, as being
beyond their competence. It is partly irrepressible curiosity and
partly the practical needs of contemporary policy·makers that have
driven me to range over this enormous area; but I suppose it is also
mainly an excess of courage that has permitted me to offer to a critical
public a book whose subject matter is so vast that most of it must
inevitably be treated superficially.
My title is misleading ifit suggests that there can be a single theory
of economic growth. The factors which determine growth are very
numerous, and each has its own set of theories. There is not much in
common between the theories which one uses in studying land tenure,
or the diffusion of new ideas, or the trade cycle, the growth of po pula·
tion, or the government's budgets. 'Theories' of economic growth
might have been a more appropriate title, but it would have been
just as misleading in suggesting that the book set out to review the
literature of economic growth. What I have done is to make not a
theory, but a map. So many factors are relevant in studying economic
growth that it is easy to be lost unless one has a general perspective
of the subject. This also is my excuse for superficiality. Maps are
published in many different scales. for many different purposes. The
articles in the technical journal correspond to a scale of an inch to
the mile. This book is on a scale more like an inch to a hundred
miles; this too should have its uses.
The same combination of curiosity and of practical need which
drove me to this subject has also determined the shape of the book.
Curiosity den:ands a philosophical enquiry into the processes of
human history, w~ile practical need demands a handbook of things
to do. Since I am equally interested in both. what I have written will
suit neither those who care only for philosophy, nor those who want
to know precisely what to do next. It seems inevitable that a book
6 PREFACE
should rcfie<.:t the personality of its author, with its diversity of
traits.
A book must also relIeet its author's craft. Economists and socio
logists deal in generalizations, where anthropologists and historians
deal in particular cases. I would much have liked to strengthen the
book by including in it two or three case studies of economic growth
or economic stagnation. I set out with this intention, and have bad
much pleasure reading of Ancient Egypt and Greece and Rome and
Islam, not to speak of China, and Japan and the end of the Middle
Ages. But in truth I derived more pleasure than knowledge,
especially of periods before 1500 A.D., partly because so little is
known with certainty about early economic history. To write up a
single case adequately, covering all the matters dealt with in this
book, requires immense researches, and a separate treatise. I have
collaborated very closely with Mrs. Gisela Eisner, who is writing up
the economic development of Jamaica from 1830 to 1930, as a
member of the research staff of the University of Manchester. In a
sense that volume, when it is publisbed in 1956, will be a case study
corresponding to this.
I have had generous treatment from many friends and acquaint
anCes. Those who have taken time off, in South East Asia, or Africa.
or the Caribbean, to show me what they were doing, to exchange
ideas, and to entertain me hospitably, are so numerous that I cannot
even begin to recite their names. Then there is also the debt one owes
to the academic fraternity for innumerable conversations in many
countries, as well as the ceaseless Bow of articles in journals. Mr.
Peter Bauer, Professor Max Gluckman, Mr. J. M. Low, Dr. J. Mars.
Dr. K. Martin, the Rev. R. H. Preston, Dr. P. Rosenstein-Rodan
and Professor M. N. Srinivas have been kind enough to read the book
in typescript, and to offer detailed criticisms. I have benefited im
mensely from their comments, whilst obstinately adhering, here and
there, to formulations whkh they still consider false or misleading.
An immense labour has fallen upon my secretary, Miss Dora Walkden,
who has typed the manuscript with patience and with care, and whose
forbearance I gratefully acknowledge.
My wife and children have paid a heavy price for the writing of
this book, in absences and silences; but I cannot begin to speak of
what [ owe to their affection.
W.A.L.
Manchester
July, 1954
CONTENTS
PREFACB page 5
I. INTRODUCTION 9
1. PEFINITIONS
2. METHODOLOGY
3. LAYOUT
Bibliographical Note
II. THE WILL TO ECONOMIZE 23
I. THE DESIRE FOR GOODS
(a) Asceticism
(b) Wealth and Social Status
(e) Limited Horizons
2. THE COST OF EffORT
(a) The Attitude to Work
(b) The Spirit of Adventure
3. RESOURCES AND RESPONSE
Bibliographical Note
III. ECONOMIC INSTITUTIONS 57
I. THE RIGHT TO REWARD
(a) Non-Material Rewards
(b) The Management of Property
(e) The Reward for Work
2. TRADE AND SPECIALIZATION
(a) Advantages
(b) The Extent of the Market
(e) Organization
3. ECONOMIC FREEDOM
(a) Individualism and Collective Action
(b) Vertical Mobility
(e) Freedom of Markets
4. SOME CASES
(a) Religion
(b) Slavery
(e) The Family
(d) The Organization of Agriculture
(e) Cottage Industry
5. INSTITUTIONAL CHANGE
(a) The Process or Change
(b) The Cycle or Change
Bibliographical Note
IV. KNOWLEDGE 164
I. THE GROWTH OF KNOWLEDGE
(a) Pre-scientific Societies
(b) Invention and Research