. A REPRISE OF THEORETICAL ASPECTS
The early writers, for example Rosestein-Rodan (1943), Lewis (1954), Scitovosky
(1954), Hirchman (1958), Jorgeson (1961), Fei and Ranis (1961) and others
emphasized the role of agriculture only as a primary supplier of wage goods
and raw materials and abundant labour supply to industry (Johnston and
Mellor, 1961 and Vogel, 1994). The role of agriculture in the transformation of a
developing economy was seen as ancillary to the central strategy of accelerating
the pace of industrialization (Vogel, 1994).
7
The Lewisian “two-sector” growth model emphasized the crucial role of capitalist
surplus in the development process. Assuming unlimited supply of labour in the
subsistence sector, the model predicted that cheap surplus labour from traditional
rural subsistence sector would speed the accumulation of capital and development
of high productivity modern sector.12 Hirschman (1958) pointed out agriculture
for its failure to exhibit strong forward and backward inter-industry linkages
needed for development. 13 In contrast, Fei and Ranis (1961) advocated
„balanced-agricultural-industrial growth‟ path as the strategy of development.
Kuznets (1968) also observed that for a successful development strategy
technological
advancement
must
support
both
industrialization
and
improvements in agricultural productivity.14 Recognizing that economic growth
is (not) just a matter of easy transfer of labor from subsistence agriculture to
progressive industry, Kuznets emphasized the increase in agricultural
productivity as an indispensable base of modern economic growth.
Kalecki (1976) also pointed out the importance of investment and
technological advances in agriculture for the rapid development of industry.
Emphasizing agricultural development as essential for a successful
industrialization, Kalecki remarked that „balanced investment in the
production of wage goods and capital goods forms the basis of the sustainable
long-run growth path‟. However, unlike Lewis, Kalecki assumes the existence
of excess capacity in the industrial sector, and thus, cost-determined industrial