ABSTRACT
This chapter revisits some old problems of economic theory, discussed in the work of Smith (1776), Marshall (especially 1890) and Allyn Young (especially 1928), in a manner not congenial to contemporary high theory. They touch on what Marshall (1890: 461) called the ‘high theme of economic progress’ and the role therein of increasing returns and the division of labour, topics equally linked in the earlier work of Adam Smith and subsequently by Allyn Young. Others have seen increasing returns and the division of labour as ‘wretched’ because they play havoc with conventional notions of competition and equilibrium (see, for example, Hicks 1939: 82-5; Samuelson 1947: ch. IV; 1967: 39; Hahn 1973: 12-13, 32). The issues raised by this have featured frequently in Brian Loasby’s work (especially Loasby 1989: ch. 4; 1990; 1995). I myself have touched on them on previous occasions (Groenewegen 1977: esp. 173-4; 1982) while they are also raised by Negishi (1985: esp. chs 2, 5) in his study of nonWalrasian economics.
