Technical Progress and Structural Change in Jean Fourastié’s Theory of Development

Abstract

The social scientist Jean Fourastié introduced his model of economic development in a book published in 1949. He based his analysis on a statistical series he had collected, which established two principles: technical progress is not uniformly distributed across industries (it is higher in manufacturing industry than in services) and human demand for both agricultural and manufactured goods does not grow continuously and may be saturated. These two principles allowed him to propose a model which attempted to predict the high growth observed after World War II (a period that he later called the Glorious Thirty) as well as the following rise of services, leading to a new era of stagnation at the turn of the millennium. His model emphasizes the role of technical progress while growth models focus on capital and labor. Fourastié’s work was initially reviewed by sociological and economic scholars interested in structural changes. As high-level advisor for various French governments and a bestselling author, Fourastié remained at the margin of the economic profession. However, an important legacy is the concept of cost disease developed by William Baumol, which is one implication of Fourastié’s more general model.