Who Is Sir Arthur Lewis?
- Sir Arthur Lewis was an economist famous for his work in development economics.
- He was awarded the Nobel Memorial Prize in Economics in 1979.
- His best-known work is the dual-sector model of developmental economics, which is also known as the "Lewis model."
Understanding Sir Arthur Lewis
Lewis's career featured many important milestones. In addition to being the first Black person to win a Nobel Prize in a scientific discipline, Lewis was also the first Black student at the London School of Economics (LSE), the first Black teacher at the LSE, the first Black faculty member at the University of Manchester, and the first Black person to become a full professor at Princeton University, where he taught for 20 years.
Sir Arthur Lewis was born in 1915 on the Caribbean island nation of Saint Lucia. He showed remarkable intellectual abilities from a young age, skipping two full grades and graduating from his school at the age of 14. Shortly thereafter, he won a scholarship that allowed him to study as an undergraduate at the London School of Economics.
Lewis was the only Black student at the LSE at the time, and despite the prejudices that no doubt greeted him there, he soon earned a reputation for academic excellence. In fact, Lewis’s undergraduate adviser described Lewis as the brightest student he had ever supervised. After gaining his undergraduate degree in 1937, Lewis enrolled in the PhD program, which he completed in 1940. Following his graduation, he was hired as a faculty member at the LSE, where he worked until 1948.
In 1948, Lewis accepted a position as lecturer at the University of Manchester, where he remained until 1957. It was during this time that he developed the ideas in development economics for which he would later win the Nobel Prize. The most famous of these ideas was his dual sector model, otherwise known as the "Lewis model."
The Lewis Model
Lewis set out the dual sector model in his 1954 publication, "Economic Development with Unlimited Supplies of Labor."
Lewis' model seeks to provide a framework for understanding how relatively poor countries can develop economically. It begins by assuming that one of the characteristics shared by poor countries is that their economies tend to consist largely of "subsistence sectors" in which the supply of labor is very large and the amount of capital invested per worker is very low.
Many economists have used the Lewis model as a framework for explaining the extraordinary economic development that China has achieved in recent decades.
The Lewis model describes a path whereby a developing economy can foster the growth of a new "capitalist sector," which will employ a growing share of the excess labor available from the subsistence sector. Over time, this capitalist sector can come to eclipse the subsistence sector, causing the overall economy to grow.
Like all economic theories, the Lewis model relies on simple assumptions to make its argument clear. Therefore, this model will never be perfectly applicable to reality. Nevertheless, it has been widely praised and used by economists interested in how developing economies can escape from poverty and produce wealth.