ABSTRACT

Schooled in the traditions of the Malthusian theory, economists, thinking in terms of static economics, have typically placed an optimistic interpretation upon the cessation of population growth. Adam Smith regarded growth of population as at once a consequence and a cause of economic progress. Economic analysis from the earliest development of science has been concerned with the role played by economic progress. The role of economic progress in the maintenance of full employment of the productive resources has come under consideration. The chapter provides discussion on the constituent elements of economic progress: inventions, the discovery and development of new territory and new resources, and the growth of population. Each of these in turn, severally and in combination, has opened investment outlets and caused a rapid growth of capital formation. In the beginning stages of modern capitalism both the deepening and the widening processes of capital formation were developing side by side.