Theorists of Economic Growth from David Hume to the Present With a Perspective on the Next Century

by Rostow, W. W.

• ISBN13: 9780195058376
• ISBN10: 0195058372
• Format: Hardcover
• Copyright: 1990-07-26
• Publisher: Oxford University Press

Summary

This history of theories and theorists of economic growth elucidates the economic theory, economic history, and public policy observations of the renowned scholar W. W. Rostow. Looking at the economic growth theories of the classic economists up to 1870, Rostow compares Hume and Adam Smith, Malthus and Ricardo, and J.S. Mill and Karl Marx. He then examines the period 1870-1939 and its economic theorists, including Schumpeter, Colin Clark, Kuznets, and Harrod, and surveys the three forms of growth analysis in the postwar era: formal models, statistical morphology, and development theories. This authoritative overview also includes an agenda of unresolved problems in growth analysis and a description of the five major tasks statesmen will confront over the next several generations.

Author Biography

W. W. Rostow is Rex G. Baker, Jr. Professor Emeritus of Political Economy, University of Texas at Austin. He has written over thirty books in economic theory, history, and public policy.

Table of Contents

Figures	p. xvii
Tables	p. xix
Introduction	p. 3
Purpose	p. 3
The Structure of the Book	p. 3
The Analytic Perspective	p. 4
The Link to Economic History	p. 7
Personalities: Do They Matter?	p. 9
Six Classical Economists: David Hume to Karl Marx
David Hume and Adam Smith	p. 13
The Setting	p. 13
David Hume (1711-1776)	p. 18
The Basic Growth Equation	p. 21
Population and the Working Force	p. 24
Investment and Technology	p. 24
Business Cycles	p. 25
Relative Prices	p. 25
The Stages of and Limits to Growth	p. 26
Noneconomic Factors	p. 31
Adam Smith (1723-1790)	p. 33
Basic Growth Equation	p. 35
Population and the Working Force	p. 36
Investment and Technology	p. 39
Business Cycles	p. 41
Relative Prices	p. 42
The Stages of and Limits to Growth	p. 44
Noneconomic Factors	p. 47
T. R. Malthus and David Ricardo	p. 51
T. R. Malthus (1766-1834)	p. 51
The Basic Growth Equation	p. 55
Population and the Working Force	p. 56
Investment and Technology	p. 58
Business Cycles	p. 63
Relative Prices	p. 65
The Stages of and Limits to Growth	p. 69
Noneconomic Factors	p. 71
David Ricardo (1772-1823)	p. 73
The Basic Growth Equation	p. 77
Population and the Working Force	p. 79
Investment and Technology	p. 80
Business Cycles	p. 84
Relative Prices	p. 86
The Stages of and Limits to Growth	p. 87
Non-economic Factors	p. 90
J. S. Mill and Karl Marx	p. 91
John Stuart Mill (1806-1873)	p. 91
The Basic Growth Equation	p. 98
Population and the Working Force	p. 100
Investment and Technology	p. 103
Business Cycles	p. 108
Relative Prices	p. 112
Stages of and Limits to Growth	p. 113
Noneconomic Factors	p. 117
Karl Marx (1818-1883)	p. 121
The Basic Growth Equation	p. 125
Population and the Working Force	p. 128
Investment and Technology	p. 134
Business Cycles	p. 138
Relative Prices	p. 141
Stages of and Limits to Growth	p. 142
Noneconomic Factors	p. 146
Growth Theory Moves to the Periphery, 1870-1939
The Setting	p. 153
Alfred Marshall (1842-1924)	p. 160
The Basic Growth Equation	p. 164
Population and the Working Force	p. 168
Capital and Technology	p. 170
Business Cycles	p. 173
Relative Prices	p. 181
Stages of and Limits to Growth	p. 184
Noneconomic Factors	p. 189
Population and the Working Force	p. 194
The Statistical Analysis of Population	p. 194
Population and Growth Theory: Advanced Industrial Countries	p. 196
A. Marshall	p. 203
J. B. Clark	p. 203
G. Cassel	p. 204
Population and Development	p. 205
An Interim Conclusion	p. 208
Investment and Technology, Part One: The Emergence of National Income Accounting	p. 209
The Statisticians Blow Their Trumpets--Again	p. 209
The British Story: From William Petty to Richard Stone	p. 210
C. K. Hobson and Paul Douglas	p. 215
The American Story: From George Tucker to Simon Kuznets	p. 216
Investment and Technology, Part Two: Growth Theory	p. 223
Defending the Legitimacy of Interest: E. Bohm-Bawerk	p. 224
The Interest Rate and Price Trends: Fisher and Wicksell	p. 225
The Transfer Problem: Williams and Cairncross	p. 229
Technology and Growth: J. A. Schumpeter and the early Simon Kuznets	p. 233
Two Unorthodox Views: Henry Adams and Thorstein Veblen	p. 246
Formal Growth Models: Bickerdike (1876-1961) and Harrod (1900-1978)	p. 248
Business Cycles and Growth: From Juglar to Keynes	p. 258
Juglar and Some Other Continentals	p. 259
Three Cambridge Giants	p. 263
D. H. Robertson (1890-1963)	p. 263
A. C. Pigou (1877-1959)	p. 269
Business Cycles and Growth: Keynes and After	p. 272
J. M. Keynes	p. 272
W. C. Mitchell	p. 282
Some of Mitchell's Progeny	p. 288
Alvin Hansen and the Young Paul Samuelson	p. 296
The Emergence of Econometrics: Frisch and Tinbergen	p. 299
Relative Prices	p. 302
British Anxiety about Unfavorable Terms of Trade: 1903-1919	p. 302
Keynes and Robertson on the Interwar Terms of Trade: Un Embarras de Richesse	p. 304
Three Longer Perspectives: N. D. Kondratieff, Colin Clark and F. Hilgerdt	p. 306
A Conclusion	p. 311
Stages of and Limits to Growth	p. 312
Colin Clark's The Conditions of Economic Progress	p. 313
Anstey, Tawney, and Knowles	p. 315
Walther Hoffmann	p. 318
Folke Hilgerdt	p. 319
Reflections on the Limits to Growth: Hansen vs Schumpeter	p. 321
Two Perspectives on 1870-1939: A Coda for Part Two	p. 325
Growth Analysis Post-1945: A Three-Ring Circus
Introduction	p. 329
Formal Models of Economic Growth: Rise and Subsidence	p. 332
A Half-Serious Statistical Note	p. 332
Growth Models in Three Phases of the World Economy	p. 333
Growth Models: Variations on a Theme by Harrod-Domar	p. 334
Harrod-Domar on the Edge of the Abyss	p. 334
Neo-Classical Growth: Stability via Factor Substitution	p. 335
A Cambridge (England) Response to Neo-Classical Growth Models: Stability via Changes in Income Distribution and the Saving/Consumption Ratio	p. 335
Invention, Innovation, Technology in Growth Modeling	p. 336
N. Kaldor	p. 337
Joan Robinson	p. 339
Solow Incorporates the Demographic Transition	p. 341
Investment and Technology: The Charles Kennedy-Paul Samuelson Debate and Some Uneasy Asides	p. 342
Growth and Business Cycles: Five Efforts to Go Beyond the Mainstream Consensus	p. 343
J. R. Hicks	p. 343
Alvin Hansen	p. 346
James Duesenberry	p. 346
R. C. O. Matthews	p. 347
Burns and Mitchell	p. 349
A Conclusion	p. 350
Statistical Analyses of the Structure of Growth: From Morphology to Policy--Almost	p. 352
The Great Enterprise of Simon Kuznets	p. 352
Chenery et al.	p. 355
The Sectoral Planners	p. 359
A Conclusion	p. 362
Basic Growth Equation	p. 362
Population and the Working Force	p. 362
Investment and Technology	p. 363
Business Cycles and Relative Prices	p. 365
The Stages of and Limits to Growth	p. 365
Noneconomic Factors	p. 368
Growth Accounting: Edward Denison	p. 369
A Reflection	p. 371
Development Economics	p. 373
Six Phases in Development and Development Policy	p. 374
(A. Wartime planning for the postwar	p. 374
The hinge period, 1948-1949	p. 375
The great debate, 1950-1961	p. 377
The 1960s: activism, progress, and disappointment	p. 378
The 1970s: intellectual and political revolt	p. 378
The 1980s: a time of troubles	p. 380
Development Pioneers	p. 381
P. T. Bauer	p. 385
Colin Clark	p. 387
Albert Hirschman	p. 390
W. Arthur Lewis	p. 392
Gunnar Myrdal	p. 399
Raul Prebisch	p. 403
Paul N. Rosenstein-Rodan	p. 408
H. W. Singer	p. 411
Jan Tinbergen	p. 414
Two Conclusions about Development Policy: Time and Politics	p. 418
Rostow's Theory of Economic Growth	p. 428
Presuppositions	p. 428
People, Complexity, and Process	p. 428
A Dynamic Disaggregated Theory of Production	p. 429
The Emergence of The Stages of Economic Growth	p. 431
Stages Beyond Take-off	p. 432
The Stages of Economic Growth as seen by the Author	p. 433
The Debate	p. 434
Applications in the 1950s: Development Policy	p. 436
Applications in the 1950s: War and Peace	p. 438
Five Applications for the 1980s and Beyond	p. 440
Problems and Prospects
Two Concluding Questions	p. 445
What Don't We Know About Economic Growth?	p. 450
Population and the Working Force	p. 450
Technology and Investment	p. 451
Relative Prices: Have Kondratieff Cycles Passed into History?	p. 470
Growth and Business Cycles	p. 477
The Stages of Economic Growth	p. 479
Noneconomic Factors	p. 480
The Appropriate Role of Public Policy	p. 483
The Individual and Society	p. 484
Where Are We? An Agenda in Mid-Passage	p. 486
The First Take Off: The Entrance into Modern Economic Growth	p. 486
The Fourth Graduating Class: The Central Phenomenon in the Time Ahead	p. 487
How Far Through the Transformation Are We?	p. 490
Five Great Issues of Policy	p. 495
The Short Run and Long Run	p. 501
"All on a Razor's Edge It Stands, Either Woeful Ruin or Life"	p. 504
Models of Economic Growth	p. 507
Prefatory Note (WWR)	p. 507
Introduction	p. 507
A One-Sector Adam Smith Model of Growth	p. 508
A Verbal Account	p. 508
Formal Exposition	p. 511
Three Models of Economic Growth Compared	p. 526
Introduction	p. 526
Economic Framework of the Models	p. 528
The Neoclassical Model	p. 532
Assumptions	p. 532
The Rostow Model	p. 541
Special Characteristics	p. 541
Investment as a Function of Profit	p. 543
Resource Cost of Technical Advance	p. 546
The Role of Industrial (or Technological) Revolutions	p. 548
The Demographic Transition	p. 550
The Rostow Model Integrated	p. 552
The Kondratieff Cycle Added	p. 552
The A. Smith Model Revisited	p. 552
The Multisector Framework	p. 552
Method	p. 554
Labor	p. 554
Capital Stock	p. 554
Land	p. 555
Technological Progress	p. 555
Manipulation of the Model	p. 556
Three Necessary Conditions for Sustained Growth	p. 561
A Rich Country-Poor Country Model	p. 562
The Framework	p. 564
A Static Solution	p. 566
Three Dynamic Solutions	p. 568
Notes	p. 571
Author Index	p. 683
Subject Index	p. 689
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