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Modernization Theory

The modernization school of thinking was brought about with the intention of finding a solution to the problem of developing Third World countries. With the rise of the United States as a superpower, in the aftermath of World War II and the self-interest of the Marshall Plan to aid European Recovery, really ignoring Third World countries, it became necessary to have a charge in thinking. In his book Development Theory: An Introduction, P.W. Preston outlines the reasons that such a change was required. One of the main reasons was colonization. As nations had expansion meetings, the Third World countries were thought of as savages or ‘less advanced peoples’. (Preston, 137) Also involved was the United States and their interests of capitalist business in maintaining access to the territories of the Third World, the Marshall Plan for recovery in Europe, and a strong nationalist developmentation amongst replacement elites. In Growth Theory the economist John Maynard Keynes states that theory ‘shows that it was possible for economies to go into depression equilibrium where the various factors of the production were not used to achieve optimum economic configurations and the question of theory and policy thereafter concern the precise conditions that will ensure full employment.’ (Preston, 154)

The United States agenda was to ‘order the post-war world in a fashion acceptable to the demands of international business, in particular its United States components.’ (So, 23) The U.S. wanted to secure their crucial concern access to Third World territories to construct a liberal global trading system. Other aspects of United States thinking included the disintegration of prewar social systems and the growth of revolutionary movements and thus, political upheaval all over the world. The U.S. had to contend with the problem of the Soviet Union and the question of Great Britain. Concerning finance,

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