Early theoretical models of development associated development with economic growth and industrialization, and theorists saw countries that had not yet achieved these as being at an earlier or lower stage of development relative to Europe and North America. The most influential proponent of this view was the American economic historian Walt W. Rostow. According to the Rostow doctrine, the transition from underdevelopment to development can be described in terms of a series of steps or stages through which all countries must proceed. Rostow listed the five stages in his book The Stages of Economic Growth: A Non-Communist Manifesto: the traditional society, the pre-conditions ...
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... external monopoly resulted in the foreign expropriation, and thus local unavailability, of a significant part of the actual economic surplus produced in Latin America. Therefore, the region was actively underdeveloped by not generating at its potential and losing its surplus to Europe and North America. Peripheral countries were kept from accomplishing development because they sold their products at prices below their value, while rich countries sold products at prices above their value (Peet and Hartwick pp. 188 -199). Thus, in contrast to modernization theory, which emphasized the benefits of free trade, foreign investment, and foreign aid, these theorists argued that free trade and international market relations occur in a framework of uneven relations between developed and underdeveloped countries and work to reinforce and reproduce these relations.
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