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Apr 15, 2010 · Capitalism’s superiority for economic growth and development deserves the unqualified support of everyone who believe that wealth is better than poverty, life is better than death, and liberty is better than oppression.
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Jul 22, 2017 · It argues that economic growth in capitalism is inevitable, since this economic system is oriented towards unlimited and short-term valorisation, quantitative and geographic expansion, circularity and reversibility.
- Milena Büchs, Max Koch
- 2017
- Introduction
- The Historical Evidence
- An Institutional Explanation of Capitalist Dynamism
- Generalisability
- Conclusion
The tendency for capitalist economies to grow is one of their most characteristic properties. The successful capitalist countries have experienced sustained per capita growth for many decades, to an extent unparalleled in previous human history. Take-off has occurred successively in country after country over the past 200 years. Such take-off was n...
2.1 Spatial and temporal distribution of growth take-off
In England, per capita growth shows a structural break at around the time of the Industrial Revolution. The economy started expanding rapidly around 1800, if judged by the hourly wage of building workers (Clark, 2005), or 1820 (Maddison, 2007). This tendency to grow has been sustained ever since in England, albeit with fluctuations. Growth diffused throughout the economy, creating and then continuously transforming mass markets in basic necessities such as food and clothing. Subsequently, lin...
2.2 Historical changes in productivity and prices
Such descriptive spatial and temporal data do not give much indication of the underlying processes, and for this more detailed historical evidence needs to be examined. One example is a study of the American Northeast in the period 1820–1860 (Sokoloff, 1986). This looked at changes in productivity and prices in the following sectors: boots/shoes, coaches/harnesses, cotton textiles, furniture/woodwork, glass, hats, iron, liquors, flour/grist mills, paper, tanning, tobacco and wool textiles. Wi...
Why has the emergence of the firm as an institutional form led to the observed continual reduction of real resource inputs to produce a given unit of output? Why has it also led to an unprecedented profusion of new products? And how are these two processes related? The answer to the first of these questions at least is to be found in the nature of ...
4.1 Other strategies and their consequences
The introduction of new products has similar properties to cost reduction, in that the results differ at the level of the individual firm and in the aggregate. When a firm successfully introduces a new product, a new pharmaceutical for example, it has a temporary monopoly and consequently earns a good level of profit (Schumpeter, 1942). This lasts until other firms manage either to imitate the product, which depends on the institutional and legal context such as patent law, or to produce some...
4.2 Staging
Of the two major sources of growth, cost reduction can be regarded as primary because it does not require any other process to make it possible. In contrast, new products would be difficult to introduce were it not for the release of capital and labour, and especially of buying power, that cost reduction makes possible. This may be a major reason why product innovation becomes so vibrant as capitalism takes hold. The relationship between the two types of process is analogous to the way that n...
4.3 Generalisability outside manufacturing
The above description is based on manufacturing, but may well be more general, inviting the question, ‘what other sectors have similar properties?’. The historical record shows that agriculture has followed a path similar to industry, at least in rich societies. The development of retailing makes it clear that a similar dynamic must be operating in this sector too. The example of Wal-Mart has already been referred to, and in earlier times similar processes led to the rise of chain stores and...
This paper has attempted to provide a causal explanation of the main components of growth under capitalism—abundance plus product diversity and quality—in terms of the institutional properties of the firm. It is argued that the sustained dynamism characteristic of capitalist economies, or at least the successful ones, derives from the properties of...
- Michael Joffe
- 2011
Drawing on historical and other empirical evidence, this paper provides a causal explanation of a central question: why sustained per capita growth occurs in capitalist economies—i.e. in what way capitalism differs from ‘the market’ that gives it this property.
So, in the capitalism-capable society, the role of growth is to provide the means (resources) for social policy to function and the role of the latter is to ensure economic growth takes place, as well as creating the right framework for individuals ‘to exercise their reasoned agency’.
Jun 5, 2019 · Right now, there are three big challenges to the capitalist promise of a better tomorrow: slower income growth for many across their own working lives and into retirement; diminishing odds that...
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May 9, 2021 · For the first time in human history, capitalism in its various forms has established itself worldwide as the superior form to organize economic activities. The central question for social science research is to find an explanation for why, of all possible forms of...