Development Concepts with Shashank Priyadarshi

W. A. Lewis believed that in underdeveloped countries supply of labour is unlimited at a subsistence wage rate. Economic development takes place when this surplus labour is withdrawn from subsistence sectors and placed in the capitalist sector through capital accumulation. In other words, the transfer of labour from the labour surplus agriculture sector to the industry sector will promote the balanced development of both sectors.  Lewis' model divided the economy into two major sectors i.e. the capitalist sector and the subsistence sector. The capitalist sector is defined as " the part of the economy which uses reproducible capital, and pays capitalists for the use thereof." In the capitalist sector, the use of capital is controlled by capitalists, who hire the service of the labour. On the other hand, the subsistence sector doesn't use reproducible capital hence total productivity is lower than the capitalist sector.  However, industries require skilled labour, accor...