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Hasan Gürak Peter Lang, Frankfurt, Germany, 2015, 258pp., EUR59.95, Hardcover, ISBN:
978-3631660720
, (hardback)
As the subtitle indicates, the purpose of the book is twofold: the author wants to evaluate critically the (neo-classical) mainstream theories of economic growth and to put forward a different (heterodox) model of growth and development. He dismisses neo-classical growth models as 'utopian', 'unrealistic' and 'fictional'. According to Gürak, even the less sophisticated theories by classical economists like Adam Smith or Karl Marx are more useful than neo-classical theories at explaining the mechanism of economic development. For Gürak, the source of long-run growth is technological progress, which depends on the creative mental capabilities of the labour force. A good model should capture this relationship. So let us have a look at his arguments in detail.
After introducing the reader to the concept of economic growth and development, the author analyses several historical growth theories of economists such as Adam Smith, David Ricardo, Karl Marx, Alfred Marshall, John Maynard Keynes and Joseph Schumpeter. According to Gürak, these economists were on the right track as they rightly stressed the importance of technology and education for economic development. Especially Schumpeter's theory of technological change and creative destruction, inspired by Marx, seems to be a good starting point to analyse the process of economic growth. For Schumpeter, new technologies are not 'manna from heaven' as in the neo-classical theory of growth, but emerge endogenously as a result of the capitalist system.
The path-breaking growth model of Solow (1956), probably the most famous growth model to date, only rediscovered the central role of technological progress for long-term economic growth. But in contrast to the theories of Marx and Schumpeter, in Solow's model technological progress is exogenous: it is not explained in the model. One only knows that technological change is...