ABSTRACT
In prior discussion [in earlier chapters of Outline of Anti-Classical Political Economy] we showed that a tendency toward dynamic increasing returns (i.e., decreasing costs)2 has been the rule rather than the exception in the process of industrialization. When we look back at the long history of industrialization, this tendency is clear ex post. Indeed, the concept of dynamic increasing returns is hardly distinguishable from the idea of economic growth, which is commonly defined as rising productivity per head.3 However, ex ante, increasing returns were not always pursued deliberately by decision makers responsible for enterprise management or policy formulation. One important reason for this is that technological breakthroughs were thought to be sporadic and accidental; they were not believed to come with predictable certainty. The further we go back in history, the more this idea appears to accord with reality.
