From the Review of Economic Studies, vol. 33 (1966), pp. 61-78. A revised version subsequently appeared as a note to Chapter XIII of Meade's The Growing Economy (Principles of Political Economy, Vol. 2) (London: Allen & Unwin, 1968), pp. 243-261. The correspondence with D. G. Champernowne in August 1944, referred to in footnote 9 on p. 442 below, concerned a paper by Meade on *Increasing returns, monopoly and population ’ (Meade Papers 3/3).