strategic factors in economic development, nicholas kaldor (1967)

(vii): economic constraints are critical (labour supply being central) -- not efficiency of management, what have you

(6): the major explanation for industrial take-off is going to be an economic one (response of supply to demand, response of demand to supply)

(7): fast rates of growth are centrally dependent on fast rate of growth of manufacturing (this characterizes the transition from 'immaturity' to 'maturity')

(12): it's not productivity or rate of technological change that explains why the secondary sector is central

(15): the fundamental reason is a dynamic relationship between changing rates of productivity and output (not static)

(21): mining and agriculture, on the other hand, are 'diminishing returns' industries -- growth of productivity outpaces growth of output

(22): services sector will also be insufficient [though reason given here is a bit hurried]

(23): sum

(29): three sources of demand, driving growth

1. real income/consumer demand -- the more consumers make, the more they'll spend on manufactured goods
2. capital investment -- growth of manufacturing sector generates own demand
3. changing structure of foreign trade -- here story of Phase I (where country substitutes home production in light industries, ISI) --> Phase II (where country starts exporting consumer goods) --> Phase III (where country starts to do ISI in capital goods) --> Phase IV (where country starts to export capital goods)

(33): two constraints on supply, inhibiting growth

1. domestically--when industrial sector grows, it needs to absorb goods and services; externally--will need increased imports, which can threaten balance of trade
2. manpower -- a country will need 'employment' growth, which in the early stages will come from the 'disguised unemployment' on the land.

(39): the labour-intensiveness in services means that productivity growth causes it to 'mop up' a significant proportion of the w-force

(41, 45): this can be a problem, if it prevents people from working for industry (because of decent wages in services), given manufacturing's centrality to growth (Kaldor using example of the UK)

(46): advanced vs. mature -- an advanced country is one in which the supply of labour to industry is elastic, whereas a mature country experiences a shortage of labour to industry when demand calls (all countries headed towards maturity)

(54): agriculture, even if highly productive, cannot drive growth (when highly productive it can only absorb a fraction of the working population)

(55): key--one general cause explaining underdevelopment is 'backwardness of agriculture' -- you can't grow secondary and tertiary sectors without an 'agricultural surplus'

(56): key--agricultural growth does not take 'external stimuli', but presupposed endogenous changes in the social framework of agriculture

(57): low productivity (despite low wages) make industrial development for many countries in age of 'free trade'

(59): key--the growth of domestic industry is dependent on the growth of internal purchasing power, which will demand robust growth in agriculture (suggestion that ISI was done in by the failure of the agricultural sector to respond to the stimulus adequately)

(61, 62): key-- it is important to keep developing unless one raises export potential by improving the growth of domestic output to be competitive--but this presupposes a robust internal market, which will help productivity rise to the point at which one can be competitive

(62-63): you cannot devalue/tweak exchange rates and become competitive. there is no substitute for productivity/lower costs

(65): advanced countries protect their industries, thus posing obstacles for underdeveloped countries

(66): protectionism as 'luddism'

(67): the existence of advanced countries has not been a 'bad' thing for underdeveloped countries, all things considered [hmm]