The Transition to New Paradigms
THE SEEDS SOWED by Solow and other neoclassical growth theorists fell onto ground that had been prepared by earlier generations of economists whose work was widely viewed as outside the mainstream of economic thought. Among these, Karl Marx and Joseph A. Schumpeter were the most prominent.
Marx is best known for being a revolutionary communist and for extending, without lasting success, Ricardo's labor theory of value. But Marx, unlike other economists writing during the middle decades of the nineteenth century, perceived that the essential genius of capitalism was its ability to combine the accumulation of capital (hence the title of his magnum opus, Das Kapital) with an incessant stream of technological innovations. Marx wrote in 1848 that capitalists (pejoratively called "the bourgeoisie") "cannot exist without