The Idea of Stages

History – it has been said – was created to prevent everything from happening simultaneously. History obviously implies that events happen in a sequence, and stage theories are attempts, based on different criteria, to organize the historical process in sequential stages. In their most general form, stage theories postulate that a key factor in the process of socioeconomic development is the mode of subsistence, i.e., what, how and with which tools a society produces. Stage theories are tools that can be used to study both the qualitative changes in the division of labour over time, and the processes of institutional design and change that accompany these changes. Stage theories point towards areas where the focus of human learning is concentrated at any point in time, and as such, they serve as a basis for a qualitative understanding of processes of techno-economic change and of income inequality. It is to this ancient tradition of organizing history that Carlota Perez has made the most original and path-breaking contribution of the last 100 years. As I see it, understanding the qualitative differences between economic stages – the relationship between technology, social organization, and wealth – is a prerequisite for understanding, designing and implementing appropriate institutions and mechanisms both for the technology policy and for income distribution in a society.