Increasing Returns and Economic Progress

Abstract

AbstractMy subject may appear alarmingly formidable, but I did not intend it to be so. The words economic progress, taken by themselves, would suggest the pursuit of some philosophy of history, of some way of appraising the results of past and possible future changes in forms of economic organisation and modes of economic activities. But as I have used them, joined to the other half of my title, they are meant merely to dispel apprehensions, by suggesting that I do not propose to discuss any of those alluring but highly technical questions relating to the precise way in which some sort of equilibrium of supply and demand is achieved in the market for the products of industries which can increase their output without increasing their costs proportionately, or to the possible advantages of fostering the development of such industries while putting a handicap upon industries whose output can be increased only at the expense of a more than proportionate increase of costs. I suspect, indeed, that the apparatus which economists have built up for dealing effectively with the range of questions to which I have just referred may stand in the way of a clear view of the more general or elementary aspects of the phenomena of increasing returns, such as I wish to comment upon in this paper…