It seems highly probable that a long period of experimentation and struggle toward a viable political framework compatible with adequate economic growth lies ahead for most less developed countries of today; and this process will become more intensive and acute as the perceived gap widens between what has been attained and what is attainable with modern economic growth. exploitable by more developed nations, that yields a large and increasing rent. Thus, not only are high aggregate growth rates associated with rapid changes in economic structure, but the latter are also associated with rapid changes in other aspects of society – in family formation, in urbanization, in man’s views on his role and the measure of his achievement in society. How to organize research into long-term trends of economic growth? Main Modern Economic Growth. He characterized the modern industrial system as one in which entrepreneurs applied the empirical findings of science to the solution of problems and the organization of production. Simon Kuznets - Prize Lecture: Modern Economic Growth: Findings and Reflections, The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1971. Listed: Kuznets, Simon; Registered: Simon Kuznets † Abstract. Thus, modern technology with its emphasis on labor-saving inventions may not be suited to countries with a plethora of labor but a scarcity of other factors, such as land and water; and modern institutions, with their emphasis on personal responsibility and pursuit of economic interest, may not be suited to the more traditional life patterns of the agricultural communities that predominate in many less developed countries. And, to mention a closely related service, it can refer, select, or discard, legal and institutional innovations that are proposed in the attempt to organize and channel effectively the new production potentialities. This shortcoming of the theory in confrontation with the new findings, has led to a lively discussion in the field in recent years, and to attempts to expand the national accounting framework to encompass the so far hidden but clearly important costs, for example, in education as capital investment, in the shift to urban life, or in the pollution and other negative results of mass production. This research agenda guided Kuznets as he produced ten monographs that were published as supplements to the journal Economic Development and Cultural Change under the general title "Quantitative Aspects of the Economic Growth of Nations." For 1938 and 1947, Dudley Seers, The Levelling of Income Since 1938. One issue was the unit of observation. These will, in turn, change the conditions under which the innovation exercises its effect on human welfare, and raise further problems of adjustment. Tasked with a mission to manage Alfred Nobel's fortune and has ultimate responsibility for fulfilling the intentions of Nobel's will. To the extent that this is true, and that the conditions of production in the developed countries differed greatly from those in the populous less developed countries today, the material technology evolved in the developed countries may not supply the needed innovations. 314-54), which deals with various interrelations between aggregate change and structural shifts in economic and other aspects of social structure. in the character of participation in economic activity, in the social values, and in the new pressures on deviant members of society. Many Schumpeterian entrepreneurs failed to grasp, by a wide margin, the full scope and significance of the innovations that they were promoting and that eventually brought them fame and fortune. The less developed areas that account for the largest part of the world population today are at much lower per capita product levels than were the developed countries just before their industrialization; and the latter at that time were economically in advance of the rest of the world, not at the low end of the per capita product range. Whatever the weight of the several factors in explaining the failure of the less developed countries to take advantage of the potential of modern economic growth, a topic that, in its range from imperialist exploitation to backwardness of the native economic and social framework, lends itself to passionate and biased polemic, the factual findings are clear. While an economist can argue that some aspects of growth must be present because they are indispensable components (i.e. The rapidity of structural shifts in modern times can be easily illustrated by the changes in the distribution of the labor force between agriculture (and related industries) and the non-agricultural production sectors. Look for popular awards and laureates in different fields, and discover the history of the Nobel Prize. Modem Economie Growth, Rate, Structure and Spread, Simon Kuznets, New Haven and London Yale University Press, 1966, 529 pages. Many of these effects are of particular interest, because they are not reflected in the current measures of economic growth; and the increasing realization of this shortcoming of the measures has stimulated lively discussion of the limits and limitations of economic measurement of economic growth. He makes c detailled comparative enalysis of industrial The rather violent changes in these structures that occurred in those countries that have forged ahead with highly forced industrialization under Communist auspices, the pioneer entry going back over forty years (beginning with the first Five-year Plan in the U.S.S.R.), are conspicuous illustrations of the kind of social invention and innovation that may be involved. And the variants even of Communist organization, let alone those of democracy and of non-Communist authoritarianism, are familiar. This continuity is important particularly when we find that, except for Japan and possibly Russia, all presently developed countries were well in advance of the rest of the world before their modern growth and industrialization began, enjoying a comparative advantage produced by pre-modern trends. Thus, modern economic growth reflects an interrelation that sustains the high rate of advance through the feedback from mass applications to further knowledge. 9. "How Simon Kuznets codified modern economic growth" by Robert Fogel, 2013, ChicagoBooth [ article] Political Arithmetic: Simon But the rate of succession of such innovations was clearly more rapid in modern economic growth, and provided the base for a higher rate of aggregate growth. 3. Definitions A country’s economic growth may be defined as a long-term rise in capacity to supply increasingly diverse economic goods to its population, this growing capacity based on advancing technology and the institutional and ideological adjustments that it demands. That fear was not cast out of professional and public discourse during the 1950s. Thu. Even if we disregard the threatening exhaustion of natural resources, a problem that so concerned Classical (and implicitly even Marxian) economics, and consider only early urbanization, one major negative effect was the significant rise in death rates as population moved from the more salubrious countryside to the infection-prone denser conditions of unsanitary cities. Kuznets was able to describe long-term changes in the industrial structure of twenty-eight countries, going back a whole century in two of the countries and between half and three-quarters of a century in most of the others. Netherlands Antilles, Puerto Rico, Kuwait, and Qatar). Two important groups of effects of this rapid transformation of economic structure deserve explicit reference. Or, finally, is it merely a reflection of the temporarily favourable climate of the U.S. international policies? By Simon Kuznets. Of course, this is not the only economic function of the state: it can also stimulate growth and structural change. The significant aspect here is that the surprises cannot be viewed as accidents: they are inherent in the process of technological (and social) innovation in that it contains an element of the unknown. Kuznets rejected all these options in favor of the nation-state because the available data were organized and maintained by sovereign states. Categories: economics. Several outreach organisations and activities have been developed to inspire generations and disseminate knowledge about the Nobel Prize. And one may argue that this source is the emergence of modern science as the basis of advancing technology – a breakthrough in the evolution of science that produced a potential for technology far greater than existed previously. Please read our short guide how to send a book to Kindle. However, some of them are listed, because they contribute to our understanding of the distinctive problems of economic life in the world today. Yet modern growth continues many older trends, if in greatly accelerated form. Modern Economic Growth 4. Mitchell's unwillingness to have the bureau sponsor his project, which Burns later rejected out of hand, led Kuznets to seek other auspices. Robert W. Fogel | While the list is selective and is open to charges of omission, it includes those observed and empirically testable characteristics that lead back to some basic factors and conditions, which can only be glimpsed and conjectured, and forward to some implications that have so far eluded measurement. Examples of both positive and negative surprises abound. Other examples, in the early periods of industrialization among the currently developed countries, or, for that matter, more recently within some less developed countries, are not lacking. At the same time, the difficulty of making the institutional and ideological transformations needed to convert the new large potential of modern technology into economic growth in the relatively short period since the late eighteenth century limited the spread of the system. 3 Dec 2020. To cite examples from modern economic growth: steam and electric power and the large-scale plants needed to exploit them are not compatible with family enterprise, illiteracy, or slavery – all of which prevailed in earlier times over much of even the developed world, and had to be replaced by more appropriate institutions and social views. And the changing course of economic history can perhaps be subdivided into economic epochs, each identified by the epochal innovation with the distinctive characteristics of growth that it generated.1 Without considering the feasibility of identifying and dating such economic epochs, we may proceed on the working assumption that modern economic growth represents such a distinct epoch – growth dating back to the late eighteenth century and limited (except in significant partial effects) to economically developed countries. Modern Economic Growth Simon Kuznets. Vaccines, penicillin, and other powerful medicines were widely available to deal with once-fatal diseases. 5. Mar 05, 2014. With the rather stable ratio of labor force to total population, a high rate of increase in per capita product means a high rate of increase in product per worker; and, with average hours of work declining, it means still higher growth rates in product per manhour. Indeed, to push this speculative line further, one can argue that all economic growth brings some unexpected results in its wake, positive as well as negative, with the latter taking on greater importance as the mass effects of major innovations are felt and the needs that they are meant to satisfy are met. Nor is modern technology compatible with the rural mode of life, the large and extended family pattern, and veneration of undisturbed nature. Other readers will always be interested in your opinion of the books you've read. Find books 10-27). Obviously, this aspect of modern economic growth deserves our greatest attention, and the fact that the quantitative data and our knowledge of the institutional structures of the less developed countries are, at the moment, far more limited than our knowledge of the developed areas, is not reason enough for us to ignore it. Concluding Comments The aim of the discussion was to sketch the major characteristics of modern economic growth, and to note some of the implications that the empirical study of economic growth of nations suggests. A similar theme was struck by the commissioner of the 1900 census, who reviewed the progress of the preceding half century, which included the laying of the Atlantic cable, electric lights, shortwave radio, automobiles based on internal-combustion engines, the completion of the national railroad network, elevators, typewriters, photographic film, diesel engines, fountain pens, the gramophone, escalators, and motion pictures. Two points are relevant here. Religious denominations? Generalizations about less developed countries must be carefully and critically scrutinized in the light of this wide variety of conditions and institutions. In that modern economic growth has to contend with the resolution of incipient conflicts continuously generated by rapid changes in economic and social structure, it may be described as a process of controlled revolution. One may hope, but with limited expectations, that the task of refining analysis and measurement in the developed countries will not be pursued to the exclusion or neglect of badly needed studies of the less developed countries, studies that would deal with the quantitative bases and institutional conditions of their performance, in addition to those concentrating on what appear to be their major bottlenecks and the seemingly optimal policy prescriptions. In this work Kuznets identified a new economic era—which he called “modern economic growth”—that began in northwestern Europe in the last half of the eighteenth century. Fifth, the economically developed countries, by means of the increased power of technology, particularly in transport and communication (both peaceful and warlike), have the propensity to reach out to the rest of the world – thus making for one world in the sense in which this was not true in any pre-modern epoch.6 Sixth, the spread of modern economic growth, despite its worldwide partial effects, is limited in that the economic performance in countries accounting for three-quarters of world population still falls far short of the minimum levels feasible with the potential of modern technology.7. Simon Kuznets 3. Even with adjustments to allow for hidden costs and inputs, growth in productivity accounts for over half of the growth in product per capita (see Simon Kuznets, Economic Growth of Nations: Total Output and Production Structure, Harvard University Press, Cambridge, Mass., 1971, pp. This portion of the monograph series relied on data collected by the United Nations. The sketch above draws upon the results of many and widely varied studies in many countries, most of them economically developed; and the discussion reflects a wide collective effort, however individual some of my interpretations may be.
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