ABSTRACT
Circular and cumulative causation (CCC) has been a critical principle of political economy for over a hundred years. While the roots of the concept go back further (see Humphrey 1990; O’Hara 2000), Thorstein Veblen (1857-1929) used the concept in his examination of the evolution of institutions. Gunnar Myrdal (1898-1987) scrutinized the conditions of African Americans and Asian underdevelopment through the lens of CCC; influenced as he was by Knut Wicksell (1851-1926) (Myrdal 1939). Nicholas Kaldor (1908-86) applied CCC to the role of manufacturing in capitalist growth; he was influenced by Adam Smith (1723-90) and Allyn Young (1876-1929). Numerous other scholars have used the notion of CCC, often in different ways. There are linkages between Veblen, Myrdal and Kaldor. For instance, Veblen influenced Allyn Young who in turn taught Kaldor; Myrdal got the concept from Knut Wicksell and worked with Kaldor at the United Nations (Economic Commission for Europe); and Kaldor (1970: 142) got the term from Myrdal. The first main section studies the similarities and differences between the Myrdalian and Kaldorian CCC frameworks. The second section develops a general system model of integration between the two traditions. There is a large measure of continuity between the two CCC approaches; they complement each other. Myrdalian CCC concentrates on the social provisioning aspect of development, while Kaldorian CCC centres on demand-supply relationships linked to the manufacturing sector. Linking both CCC approaches in an integrative model enhances our understanding of development and growth dynamics, and contributes to the development of institutional-evolutionary political economy. The third section illustrates a contemporary application of CCC through an investigation of the dynamic forces expanding the scope, network interaction and conceptual-empirical edifice of heterodox political economy.
