Wednesday, November 20, 2019

Andrew Batson — Capacity to transform

Important. Andrew Batson summarizes Charles Kindleberger's insight into development in terms of ability to transform the economy — what promotes it and what hinders it.

Neoclassical economics assumes flexibility among the factors of production and also flexibility within them, resulting in immediate response to economic "laws," e.g., based on natural market forces that automatically generate spontaneous order (general equilibrium).

However, economic forces are not independent of social and political factors in society. Neoclassical assumptions generate an idealistic model that doesn't necessarily correspond to actual conditions. As a result there are market failures and idle resources.

There are different rates of transformational capacity and reasons for them. Charles Kindleberger considered them.

Andrew Batson's Blog
Capacity to transform
Andrew Batson

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