ABSTRACT
This chapter contains a small share of anecdotal history, but the argument depends ultimately upon the timing of income growth. In Schumpeterian terms, especially as extended by the work of the Swedish historian Erik Dahmen, the otherwise surprisingly low rate of per capita income growth would be typical of a period of industrial preparation. The structural change may be institutional or organizational; it may be a series of corporate mergers or a major shift in the pattern of population movements to the frontier. The changes in textile methods increased the demand for steam engines and other producers' hardware, thereby increasing pressures upon the iron and steel and metal fabricating sectors and making more likely the achievement of further economies of scale in those primary sectors. Increases in the production of goods and services can be achieved only with appropriate increases in the stock of capital equipment, given "the" capital-output ratio. Therefore, income changes will determine the required level of investment.
