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Economics

Arthur Lewis

(23 January, 1915 – 15 June, 1991)

William Arthur Lewis was the Stanley Jevons Professor of Political Economy at the Victoria University of Manchester, in the Faculty of Economic and Social Studies, from 1948 until 1957.

During this time, he published his seminal work in Development and Growth Economics for which he was awarded the Nobel Memorial Prize in Economics in 1979, jointly with Theodore Schultz.

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Childhood and upbringing

Lewis was born in Castries, Saint Lucia, the fourth of five children, and his parents were both school teachers. His father died when Arthur was just seven, and his mother raised the five children alone.

He was always a gifted student and, following tuition from his father, was promoted two classes ahead of his age completing his primary schooling at the age of 14.

Early studies

He then went to work as a clerk in the civil service until was old enough to apply for a Government Scholarship to attend a British University. This he successfully achieved and in 1932 went to the London School of Economics to read for the Bachelor of Commerce degree.

As Lewis, himself, later noted the undergraduate training was very helpful in the various administrative jobs he later undertook, but its weakness from the standpoint of his subsequent academic career was that it lacked mathematics!

After he graduated in 1937, with a first class honours degree, LSE awarded him a scholarship to undertake a PhD in Industrial Economics, which he completed in 1940. Following this he worked as a member of the academic staff at the LSE until 1948. 

Time at Manchester

At the young age of 33, he was appointed to the Chair at Manchester – and, in so doing, he became Britain’s first black Professor. He stayed at Manchester until 1957.

During this period, he developed some of his most important concepts about the patterns of capital and wages in developing countries. He particularly became known for his contributions to development economics, and in 1954 published what was to be his most influential development economics article, "Economic Development with Unlimited Supplies of Labour" (Manchester School, Volume 22(2), pp. 115–227).

His ‘Turning Point’

In this seminal “essay”, Lewis introduced what became known as the Dual Sector model, or simply the "Lewis Model."

The model combined an analysis of the historical experience of developed countries with the central ideas of classical economics to produce a broad picture of the development process.

In his theory, a "capitalist" sector develops by taking labour from a non-capitalist backward "subsistence" sector.

At an early stage of development, the "unlimited" supply of labour from the subsistence economy means that the capitalist sector can expand for some time without the need to raise wages. This results in higher returns to capital, which are then reinvested in capital accumulation.

In turn, the ensuing increased capital stock leads the "capitalists" to expand employment by drawing further labour from the subsistence sector.

Given the assumptions of the model (for example, that the profits are reinvested and that capital accumulation does not substitute for skilled labour in production), the process becomes self-sustaining and leads to modernization and economic development.

The point at which the excess labour in the subsistence sector is fully absorbed into the modern sector (so that further capital accumulation begins to increase wages) is sometimes called the "Lewisian turning point". It has recently been widely debated in the context of economic development in China.

Wider work

What is, perhaps, less well-known of his time in Manchester is work on behalf the wider community.

Seeing further education as the key to development, and with his colleague Max Gluckman (Professor of Social Anthropology), he established two innovative social and educational centres in Moss Side and Hulme (south-central Manchester) to help improve the socio-economic status of the large Afro-Caribbean population who now lived there.

One of these centres survives to this today as the “West Indies Sports and Social Centre”.

Key dates

  • 1947 married Gladys Jacobs, and they had two daughters
  • January 1948 Arrived in Manchester
  • 1957 Left Manchester to become economic adviser to the new government of Ghana and help to draft its first Five-Year Development Plan
  • 1959 Appointed Vice Chancellor of the University of the West Indies
  • 1963 Knighted for his contributions to economics and moved to Princeton University
  • 1970 Became the founding president of the Caribbean Development Bank
  • 1973 Returned to Princeton, as the James Madison Professor of Political Economy
  • 1979 Awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel
  • 1983 Retired
  • 1991 Died in Bridgetown, Barbados and buried in the grounds of the St Lucian community college named in his honour
  • 2014 The Arthur Lewis Centenary Lecture given by Prof Jim O'Neill at The University of Manchester (right)

Further reading