In this lecture I propose to deal with capital accumulation and its role in the history of the theory of economic development. At first sight this might seem to be a banal theme to occupy the greater part of a lecture. In the present phase of affairs we are so used to regarding accumulation as a good thing and ample capital provision as an almost indispensable prerequisite of development, that it might be thought that, so far as history is concerned, the only thing to do is to discover the man who first said so and then to take note of non-stop applause from that date to the present day.


Political Economy Capital Stock Fixed Capital Effective Demand General Glut 
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  1. 1.
    Bernard de Mandeville, The Fable of the Bees, ed. Kaye (1924) pp. 25, 28, 32.Google Scholar
  2. 1.
    A great deal of heavy criticism has been brought to bear on Smith’s unwise statement that before a man takes to weaving, a stock of food etc. must be available to keep him until the product is completed (see, e.g., Cannan, Theories of Production and Distribution, 3rd ed. (1922) p. 81 seq.).But this does not touch the point that if weaving takes time, it has to be sustained in cash or kind by advances against the final product.Google Scholar
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    William Ellis, The Effects of the Employment of Machinery, Westminster Review V, Jan. 1826,201–30. Mill’s allusion is in his Principles, P. 736.Google Scholar
  4. 1.
    Cf. the opening sentence of Irving Fisher, The Theory of Interest (New York, 1930),‘Income is a series of events’, and the overt reference to Rae.Google Scholar
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    John Rae, New Principles of Political Economy (Boston, 1834) pp. 80–94.Google Scholar
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    J. B. Say, A Treatise on Political Economy, trs. Prinsep (1821) vol. i, p. 180.Google Scholar
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    James Mill, Commerce Defended, in Selected Economic Writings,ed. Winch (1966) p. 129.Google Scholar
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    James Mill, Elements of Political Economy, in Selected Economic Writings, ed. Winch (1966). See especially ch. iv, section iii: ‘That Consumption is co-extensive with Production’, pp. 326–37.Google Scholar
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    Malthus, Principles of Political Economy (1820) p. 352 n.Google Scholar
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    Malthus, Principles of Political Economy (1820) p. 32.Google Scholar
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    See B. A. Corry’s account of this very interesting writer in his Money Saving and Investment in English Economics 1800–1850 (1962) pp. 106–7, 145–51. This work is a mine of information, splendidly mustered, on many of the topics discussed in this lecture.Google Scholar
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    R. Torrens, op. cit. pp. 421–2. See Robbins, Robert Torrens and the Evolution of Classical Economy (1958) p. 176 seq.Google Scholar
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    Op. cit. See especially p. 540 seq. companies would be started, old businesses would be extended; and soon there would be a good demand even for the work of those who make Fixed capital.’ Alfred and Mary Paley Marshall, The Economics of Industry 1879 pp. 154–5.Google Scholar
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    An exception should be made for N. Johannsen whose A Neglected Point in Connection with Crises (New York, 1908) seems to have got very near what is now held to be the truth of the matter.Google Scholar
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    See Robbins, Robert Torrens and the Evolution of Classical Economics (1958) pp. 153–81.Google Scholar
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    Keynes, The General Theory of Employment, Interest, and Money (1936) p. 308.Google Scholar

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© Lord Robbins 1968

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  • Lord Robbins

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