Page 1 : David Ricardo feared eventual stagnation from slow capital accumulation,, and diminishing returns from population growth on fixed natural resources., However, he failed to see the possibility of sustained, rapid, economic growth, because his theory understated scientific discoveries and technological, progress., , Marx saw history dialectically as progressing from feudalism to capitalism to, socialism on the basis of class conflict. The oppressed classes overthrow the, classes controlling the prevailing means of production., , Rostow's economic model has five stages; its central historical stage is the, takeoff, a decisive period of increased investment, rapid growth in leading, sectors, and institutional change during which the major blocks to steady, growth are finally overcome, , The vicious circle theory contends that a country is poor because its income, is too low to encourage potential investors and generate adequate saving., Balanced growth advocates argue that a big push is needed to begin, economic development because of indivisibilities in demand and, infrastructure., , Critics indicate that most LDCs do not have the resources essential for, launching such a big push., , Hirschman supports a deliberate unbalancing of the economy to facilitate, economic decision making and investment. However he fails to stress the, importance of agricultural investment., , Kremer’s O-ring theory of development emphasizes that production consists, of many tasks, all of which must be successfully completed for the product to, have full value and to prevent coordination failure., , In the Lewis model, an unlimited supply of surplus farm labor migrates to, urban areas for wages in excess of rural, subsistence wages. This supply of, cheap labor to the industrial sector is the basis for profits, and capital, accumulation., , Fei and Ranis, too, believe that the capitalist wage will increase before surplus, labor is absorbed, unless agriculture and industry can achieve balanced, growth., , For Baran, the coalition of the bourgeoisie and landed classes, helped by, foreign capitalist governments, is incapable of undertaking the capital, , formation and political reform required for rapid economic growth and, alleviation of mass poverty., , Furtado's dependency theory contends that increased productivity and new, consumption patterns resulting from capitalism in the peripheral countries of, Asia, Africa, and Latin America benefit a small ruling class and its allies., Frank's dependency approach maintains that countries become, underdeveloped through integration into, not isolation from, the international, capitalist system., , The neoclassical counterrevolution to Marxian and dependency theory, emphasized reliance on the market, private initiative, and deregulation in, LDCs. Neoclassical growth theory emphasizes the importance of increased, saving for economic growth., , The new endogenous growth theory arose from concerns that neoclassical, economics neglected the explanations of technological change.