ABSTRACT

In the early nineteenth century many wondered if their economic system could provide livelihoods and necessary goods in the future as the previous regimes had done in the past. This chapter starts with the discussion on Thomas Malthus who set the ball rolling by claiming that long-run growth was not sustainable. When GDP exceeds that needed for subsistence, population tends to increase. Malthus' formulation was very 'modern' in a number of ways. It is the one of the earliest 'feedback' systems described in the Anglo-Saxon political economy literature. David Ricardo and Malthus' predictions were not based on the nature of industrial capitalism, its relation with workers, or the possible inadequacies of the market mechanism. Karl Marx looked at capitalism as a contradiction-ridden system driven by profit motive. Contemporary growth theory is based on the insight developed by Robert Solow.