chapter  4
41 Pages

Classical and Neoclassical Theories

As we learned in the previous chapter, the pursuit of economic growth and development as a socially desirable goal is of relatively recent origin, being more-or-less contemporaneous with the rise of capitalism as an economic system. The Industrial Revolution in England in the mid-eighteenth century provides a convenient date for the emergence of systematic and intellectual interest in understanding how and why economic development occurs. It also marks the emergence of economics-or political economy, as it was called at that time-as a separate sphere of scholarly inquiry. Not at all coincidentally some of the most distinguished and most enduring thinking about the process of economic development was produced in

Great Britain during and following the transition from feudalism to capitalism, where long-term economic expansion and rising income per capita first materialized on an extended scale (Maddison 1982).