Economic Philosophy

Economic Philosophy

Economic Philosophy

Economic Philosophy

Excerpt

After the war, when the problem of deficient effective demand seemed to have faded into the background, a fresh question came to the fore -- long-run development.

The change arose partly from the internal evolution of economics as an academic subject. The solution of one problem opens up the next; once Keynes' short-period theory had been established, in which investment plays the key role, it was evidently necessary to discuss the consequences of the accumulation of capital that investment brings about.

Still more, the change in the centre of interest was due to urgent problems thrown up by the actual situation. The nations of the world appeared to be divided into three groups (with some exceptional cases in each). One comprised advanced industrial economies, whose inhabitants enjoy a relatively high level of per capita consumption (in terms of goods and services purchased), competing amongst themselves with varying fortunes, with overall average output growing at a moderate rate. Another comprised still largely agricultural economies industrializing at a rapid rate under socialist institutions. And the last, a various group of colonial, neo-colonial and excolonial regimes, many experiencing a violent population explosion as a result of importing a modernized death-rate into regions where a primitive birth-rate still obtains, clamouring to escape from the status of hewers of wood and drawers of water for the prosperous West and to set up as prosperous nations themselves.

In this situation both static neo-classical analysis of the . . .

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