The Foundations of Growth Theory

  • Jerzy Osiatyński


The doctrine of the faster rate of growth of Department I (producing means of production) than of Department II (producing means of consumption), had its origins at the end of the nineteenth century in the debates around the Marxian schemes of reproduction, and the conditions derived from them for balanced expanded reproduction. In these discussions an important role was played by Rosa Luxemburg, with her critique of Bulgakov, Tugan-Baranovski and Lenin, who thought that the faster growth of Department I was a feature only of capitalism, and of Kautsky, who considered that in the long run it was impossible. Rosa Luxemburg argued that the faster growth rate of Department I was a general economic law, operating in all expanding socio-economic formations. Furthermore, she stated that in the socialist economy, the gap between the growth rate of Department I and that of Department II must be even greater than under capitalism. For many years after this assertion provided an unquestioned theoretical justification of the policy of forced industrialisation in the Soviet Union.


Economic Growth Labour Productivity National Income Technical Progress Socialist Economy 
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© Jerzy Osiatyński 1988

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  • Jerzy Osiatyński

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