Faculty Publications

Title

Veblen and the new growth theory: Community as the source of capital's productivity

Document Type

Article

Keywords

Capital, New Growth Theory, Technological change, Veblen

Journal/Book/Conference Title

Review of Social Economy

Volume

60

Issue

2

First Page

263

Last Page

277

Abstract

A century ago Thorstein Veblen argued that knowledge, which is produced and possessed by the community as a whole, is the foundation on which the productivity of "capital" rests. Orthodox economists chose to ignore Veblen and instead accepted John Bates Clark's definition of capital and the marginal productivity theory that goes with it. Recently, however, mainstream economists working on the "New Growth Theory" have rejected Clark's approach and have redefined capital so as to emphasize the importance of knowledge as well as its social character. Nevertheless, they still have an important lesson to learn from Veblen about growth, namely that technological development is nothing less than a process of cultural transformation.

Original Publication Date

6-1-2002

DOI of published version

10.1080/00346760210146596

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