Saturday, November 30, 2013

The Economic Development of Society

Production and economic structure have a level of association when attempting to develop stronger economic growth. According to a paper by Tvaronaviciene & Lankauskiene (2013), a review of economic history finds that many of the main theories associated with economic growth are about platform growth. They propose in their literary study that economic growth often puts pressure to change the economic structure of society. 

Most researchers measure economic growth through GDP. As a benchmark, a large percentage of countries use natural resources to create wealth. Yet this approach is not sustainable in the end. The development of knowledge based societies and innovative sectors are more likely to maintain growth into the future. This growth improves upon the livelihoods of those within the workforce. 

Adam Smith produced the famous book An Inquiry into the Nature and Causes of Wealth of Nations (1776). Market forces are seen as the invisible hand and are generally better regulators than government (Willis, 2005). Societies that seek to gain wealth begin to improve upon their production and then export that production to other areas of the world. 

 John Maynard Keynes published the General Theory of Employment, Interest and Money (1936).  In Keynes argument, the free market could be a positive or a negative force and that investment was the real key to overall growth (Willis, 2005). Continually investing in newer infrastructure projects helps adjust the structure and maintain higher levels of growth. 

One method of increasing development was the mobilization of domestic and foreign savings in order to generate sufficient investment to accelerate economic growth (Todaro & Smith, 2011). Economies move from subsistence agriculture, to modern urbanized centers and into more industrial diverse manufacturing and services.  In order for an economy to develop, it must move transit from one economic structure to a higher structural platform. 

The paper discusses the movement from a primarily agricultural society to one an urban society with products and services. It does not really move beyond this point but does hint how social structure can advance through advancements in technology. If we look at the pace of technology development as seen in portable computers, social media, micro manufacturing, etc. the next level of development is not yet clearly defined. True sustainability is based in the high capacity development generated from the advanced technologies of modern times. These technologies create a higher platform where various entities can help form profound new products and services through the contribution of interconnected societal elements. 

Willis, (2005). Theories and practices of development. Routledge, Taylor & Fracis group: London and New York. 

Todaro, M. & Smith (2011). Economic development (Eleventh edition). Pearson Education limited: England.

Tvaronaviciene, M. & Lankauskiene, T. (2013). The impact of production factors and economic structures on economic development. Business Theory and Practice, 14 (1).

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