Main trends of research in the social and human ... - unesdoc - Unesco

324 Economics
taneously ensures the full employment of a growing labour force and allows for
technological progress. Once this aspect of the problem has been satisfactorily
dealt with, Joan Robinson’s conclusion becomes fully valid: ‘In this situation,
both static neo-classical analysis of the allocation of given resources between
various uses, and Keynesian short-period analysis of how given resources are
employed, appear quite inadequate. A dynamic long-run analysis of how re-
sources can be increased is now what we require’ (EconomicPhilosophy, p. 94).
However, the question of increasing resources becomes really significant only
if productive capacity is fully utilized already, i.e. when the availability or other-
wise of the factors of production is the determining item, and not fluctuations
in aggregate effective demand. The ability to create effective demand on a scale
that ensures the full utilization of productive capacity is usually considered to
be typical of a centrally planned socialist economy; the same assumption cannot
be made without qualification in respect of a capitalist economy. Hence, it is
quite natural to consider growth under socialism as synonymous with augment-
ing the available productive resources but, speaking objectively, an analogous
approach to growth under capitalism may have laudatory overtones.
To say that questions of growth are not an obsession of the backward coun-
tries but also dominate in the highly advanced Western countries does not imply
that the problem is the same in both. It has been pointed out quite rightly (cf.
Galbraith) that, in contemporary affluent societies, not only the level of needs,
but their structure have special features deriving e.g. from the specific way in
which these needs have developed, and the sources and forms of accumulation;
in other words, although the general problem persists, the conditions and struc-
ture of growth, and hence the limitations, are different from those in the devel-
oping countries.
Problems of long-term dynamics have a growing r61e in economic policy, a
r61e reflected in the new status of growth theory as a separate branch of econ-
omics.77 There is no precedent for this in the economics textbooks published
just before the Second World War, but growth theory today is universally recog-
nized as a separate branch of economics, and given ever-increasing attention in
publications and teaching.
An interesting comparison can be made in this respect between two surveys of
growth theory published at an interval of twelve years : Abramovits’ ‘Economics
of Growth’ (the 1952 Survey of Contemporary Economics), and ‘Theories of
Growth’ published by Hahn and Matthews in the Economic Journal in 1964.
The progress is notable, especially in the presentation of the argument and in
the refinement of methods which now permit the construction of complicated
multi-factor models. But the comparison also reveals the danger, already men-
tioned, inherent in the trend which the theory of growth is following today: the
danger of excessive formalization through taking the production functions, not
only in isolation from socio-economic processes in the widest sense, but also
from what has been designated in economic literature by the much less general
and more technical term of ‘institutional conditions’.
Particularly to be avoided are the frequent cases of direct transposition of the
argument from socialist to capitalist conditions and vice versa or - what finally