NOBEL LAUREATE George Stigler remarked on more than one occasion that "it's all in Adam Smith." In a sense, he was right. In a few brilliant pages, Smith anticipated the role creative individuals and specialized research and development organizations would play in propelling technological change and economic growth. Following Smith, however, mainstream economic theory went astray for nearly two centuries, putting far too much emphasis on production relationships from which change, and especially technological change, was largely absent. But still more recently, at first slowly and now on an industrial scale, economists have developed a "new" perspective on economic growth in which new technology not only plays a key role, but responds endogenously to the pull of market demand and the lure of profit.
As always, these new contributions have not persuaded all non- believers. Debate continues among other things over how one sorts out what can scarcely be disentangled--the contribution of capital investment per se, as distinguished from the new technology that is