The disguised-unemployment hypothesis ranks among the most interesting and the most controversial doctrines of development economics. Proponents of the hypothesis claim that there is in much of Asia, the West Indies, Eastern Europe and the Middle East. These areas are inhabited by more than half the world's population. As much as 40 per cent. of the population of the Middle East and between one-fourth and one-third of the agricultural population of pre-war Eastern Europe was said at one time or another to constitute a or to be in a fashion. And the disguised-unemployment analysis has been extended to other underdeveloped areas of the world as well, including Latin America. The hypothesis claims that in poor, densely populated countries, more people are employed than needed to produce the prevailing output with the existing techniques and the existing supply of non-labour inputs. The labour constitutes hidden or disguised unemployment. Many of the proponents of the hypothesis make the further claim that agricultural output will not decrease, and industrial output will increase, if measures are taken to re-allocate labour from subsistence agriculture (where the surplus is supposed to exist) to industry (where there is no surplus labour). Since labour can be removed from agriculture at no social cost, its supply to industry is, in a sense, as long as unemployment prevails. The hypothesis of unemployment or of the unlimited supply of labour has been praised as being intellectually and for having considerable explanatory power in economic history and in the growth of developed countries.' It has been used to justify the Great Leap Forward type of development strategy: in countries such as China there are untold millions unemployed in a fashion; these untold millions can be employed without any modern capital equipment in the creation of highly capital intensive works yielding in most part phenomenal returns.2 On the theoretical front the hypothesis has served in the construction of an ingenious and elegant growth theory corresponding to the Rostovian stages.3