ABSTRACT
Interpreters from Adolph Lowe (1954) to Walter Eltis (1984) have stressed that economic growth and socio-economic development in the classical authors from Adam Smith to David Ricardo and Karl Marx were considered endogenous phenomena. In their writings, the behaviour of agents, their creativity and need for achievement and distinction, and social rules and institutions defined the confines within which the process of the production, distribution and use of social wealth unfolded. The concept of exogenous growth, as it was introduced by Gustav Cassel and then made central in Robert Solow’s growth model (Solow 1956), was totally extraneous to the way the classical economists thought. In their view the main problem the social sciences were confronted with consisted of the fact, in the words of Smith’s teacher Adam Ferguson, that history is ‘the result of human action, but not of human design’. What was needed was to come to grips, as best as one could, with the consequence of purposeful human actions, both intended and unintended.
