On the Causes of Economic Growth: The Lessons of History

On the Causes of Economic Growth: The Lessons of History

On the Causes of Economic Growth: The Lessons of History

On the Causes of Economic Growth: The Lessons of History

Excerpt

The following pages will analyze the period running from the birth of the first civilizations up to the mid-20th century and will attempt to extract from the empirical data an alternative to orthodox explanations of the causes of economic growth. The book will concentrate on the nations in Europe, East Asia, and North America that attained the fastest rates of growth and had the most influence on world affairs.

It will be argued that there is a missing factor, one which has been largely overlooked by economists and social scientists, that is fundamentally responsible for the generation of economic growth. It will be held that this factor is intimately linked to the manufacturing sector.

Manufacturing shall be understood as every economic activity that does not fall in the category of primary sector activities, construction, and services. The traditional division of economic sectors is not compatible with the purposes of this essay. Traditionally, the economy has been divided into three sectors and the secondary sector has been identified with industry. Orthodox definitions of industry include a mixture of several components. The most important is manufacturing, but it is accompanied by construction, mining, and in some cases even by transportation and telecommunications. Under the orthodox division of sectors, manufacturing does not have a place of its own because prevailing economic theories do not assign manufacturing a predominant role in the generation of economic growth.

For the purposes of this book, manufacturing will be classified separately, mining shall be included in the primary sector, construction will be placed in a separate category, and services will continue to remain independent. The term “manufacturing” will therefore not be utilized as synonymous to industry. The word “industry” will be avoided as much as possible. The term “factory,” however, will be utilized as a synonym of manufacturing.

Throughout most of history, manufacturing took place mostly at the household level and in workshops. It was only in the 19th century that a few nations began to produce a large share of their manufacturing output in factories. The term “factory” will nonetheless be utilized to refer to all of manufacturing production, even when this type of production . . .

Author Advanced search

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.