Development Ideas in Economics: from Plato to Modern Age

Topics: Economics, Keynesian economics, Adam Smith Pages: 38 (13833 words) Published: March 29, 2013
Development Ideas in Economics


Lexicographically, development means a progression from a simpler or lower to a more advanced, mature, or complex form or stage. It is also defined as the gradual advancement or growth through a series of progressive changes. Development is a process, not a level. It is a path to achieve certain goals. Development is a normative concept referring to a multidimensional process. Some people argue that development must be relative to time, place, and circumstance, and dismiss any universal formula.

In modern development thinking and economics, the core meaning of development was economic growth, as in growth theory and Big Push theory. In the course of time mechanization and industrialization became part of this, as in Rostow’s Stages of Economic Growth (1960). When development thinking broadened to encompass modernization, economic growth was combined with political modernization, that is, nation building, and social modernization such as fostering entrepreneurship and ‘achievement orientation’. In dependency theory, the core meaning of development likewise was economic growth or capital accumulation. Its distorted form was dependent accumulation which led to the ‘development of underdevelopment’, and an intermediate form was ‘associated dependent development’. The positive goal was national accumulation or auto-centric development. Alternative development thinking introduced new understandings of development focused on social and community development and ‘human flourishing.’

The propounding of development ideas in the economics can be dated back to the time of ancient Greek and Indian scholars. However, the meaning of development in economics has evolved over time during last three centuries as follows:

Period Perspectives Meanings of development
1800s Classical political economy Remedy for progress; catching up 1870 > Latecomers Industrialization, catching-up
1850 > Colonial economics Resource management, trusteeship 1940 > Development economics Economic growth – industrialization 1950 > Modernization theory Growth, political and social modernization 1960 > Dependency theory Accumulation – national, autocentric 1970 > Alternative development Human flourishing

1980 > Human development Capacitation, enlargement of people’s choices 1980 > Neoliberalism Economic growth – structural reform, deregulation, liberalization, privatization
1990 >Post-development Authoritarian engineering, disaster 2000 Millennium Development Goals Structural reforms
In the immediate post-war period, development economics, a branch of economics, arose out of previous studies in colonial economics. By the 1960s, an increasing number of development economists felt that economics alone could not fully address issues such as political effectiveness and educational provision. Development studies arose as a result of this, initially aiming to integrate ideas of politics and economics. Since then, it has become an increasingly inter- and multi-disciplinary subject, encompassing a variety of social scientific fields.

In this study, we shall focus on the development ideas propounded by the economic thinkers and the dominant development theories in economics. We shall first introduce the economic thoughts and ideas on development in perspective of the thinker chronologically dated back from ancient age. Then we shall also discuss about the dominant development theories in economics sorted on the basis of chronology of publishing of the ideas.

Early Economic Thoughts
The earliest discussions of economics date back to ancient times (e.g. Chanakya's Arthashastra or Xenophon's Oeconomicus). Back then, and until the industrial revolution, economics was not a separate discipline but part of philosophy. In Ancient Athens, a slave based society but also one developing an embryonic model of democracy, Plato's book The Republic contained...
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