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Word Count: 830
In the eighteenth century the theory of the stages of economic development began to evolve Adam Smith believed that underdeveloped countries went through four stages in order to achieve a high level of economic growth These stages were titled hunting pastoral agricultural and manufacturing Karl Marx also believed that there were four stages he titled them capitalism socialism feudalism and communism It is believed that Rostows theory which contains 5 stages is an extension of these theories In the 1950s countries were suffering from the aftermath of World War Two They became independent thus there became a need for new development policies After the success of the US Marshall plan countries began to see the need for development and thus Rostows theory was developed It was considered a step by step process for an underdeveloped country to become a developed country It was divided into five stages and was considered a linear theory Stage one was referred to as traditional society It is like Smiths hunting and Marxs feudal stage This stage is very similar to the times of Medieval Britain The key idea in this stage is survival Agriculture is the most important industry and the main form of employment In stage one manufacturing is very basic it entails the production of basic tools There is a poor infrastructure in transportation which makes most stay in one area for a lifetime and trading happens in one area The small amount of trade which does occur is done by barter where one good is swapped for another This trade is rare as most output is consumed only by the producers The work is labour intensive and there is a limited quantity of capital Stage two is titled Tran conditional or otherwise known as the pre-conditions to takeoff For this stage to happen the society generally needs to experience a shock such as a civil war or technology leap The people here recognise the need
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