INDUSTRIALISATION OR AGRICULTURE

Industrialisation or Agriculture

Industrialisation or Agriculture

Introduction

People now understand that economic growth in already developed countries is mostly a function of their ability to increase worker productivity and that economic growth in developing countries is often hampered by the lack of social, political, financial, legal, and economic institutions that are pre-requisite to economic growth. You understand the magnitude of the gap between developed and developing countries and that the countries that have moved from developing to developed did not follow a single path. Economic development refers to attempts to transform a basic, low-income economy into a more complex and productive one. Economic development requires investment in a country's basic infrastructure, which includes the construction of roads and airports. This paper discusses if a developing country should prioritise industrialisation or agriculture, or it should seek to combine the two of them in pursuit of economic development.

Discussion

Economic development refers to the transformation of a simple, low-income national economy into a more sophisticated one in which citizens' incomes rise. The term “economic development” is often used, in everyday conversation, as a synonym for “economic growth,” but economists draw a clear distinction between the two. Whereas economic growth refers to a simple increase in the quantity of goods and services produced in an economy, economic development describes a wide range of interconnected, qualitative changes at the structural level of the economy. The process of economic development involves changes in economic inputs (the resources, such as land, raw materials, equipment, and labor, that are used to produce goods and services), in the technologies used to combine these inputs in the production process, and in economic outputs (the final products produced by the economy). (Rosenstein-Rodan 2005, 202-211)

Undeveloped economies tend to be predominantly agricultural, consisting of workers who act directly on the natural world with only minimal help from tools and technology. Development usually proceeds as businesses accumulate capital (equipment and machines that aid in production, as well as the skills that workers acquire through education and training). New equipment allows workers to increase their efficiency and to produce larger quantities of goods, and new labor skills develop in combination with the use of the new equipment, changing the nature of the labor force. Incomes rise, and people who have more money to spend begin demanding more and different products. The economy adapts to these new tastes, spurring the growth of new industries. Over time, as these structural changes occur, the economy shifts away from agriculture and into industrial production, and it begins to be considered a developed, rather than a developing, economy. (Harris 2008, 126-142)

Agriculture

The historical geography of agriculture has been critical to the survival and success of the human species. Throughout the vast bulk of our existence (98% or more), we were hunters and gatherers, not agriculturalists; people were food collectors, not producers. The Neolithic Revolution, roughly 10,000 years ago, which saw the invention or discovery of agriculture, made possible a nonnomadic existence; it paved the way for a social surplus and the ...