Traditional Views of Economic Growth
HOW DID GROWTH achieve its prominent place on the agenda of economic discourse? This question must be answered in order to understand the new perspectives on economic growth and the role technological innovation plays.
Serious consideration of how economic growth occurs began with the so-called mercantilist economists such as England's William Petty and John Locke and France's Jean-Baptiste Colbert. They saw money, and especially hard specie such as gold and silver, as a source of national wealth, to be accumulated assiduously. To build gold and silver reserves, they argued, it was desirable to achieve a positive balance of trade through aggressive export promotion and tariff or quota restrictions on imports. The specie obtained in this way would reduce interest rates and spur investment in the home market, leading to an increase in domestic employment (implicitly assumed otherwise to be deficient) and hence enhanced prosperity. A positive trade balance was also