Part 1 which is called
“Growth without history” tells us about neoclassical theory of economic growth.
This theory says that when we try to study the process of economic growth we
make a mistake by paying attention to the economic models, not the real world
we live in. As a result we get such a notion that technology is one and the
same all over the world, and unequal income and growth can be explained by
various levels of savings and types of education. However, if we look deeper we see that these
do not explain why United States had developed much faster than England.
Examining these two countries we can not ignore the technological progress.
Main idea of Part 2 of the
paper is to show that understanding the world as a one independent thing is
difficult. So it is suggested to symbolize the world as a system consisting of
some number of parts which are interdependent between each other. Dawkins called
it “hierarchical system”.
Part 3 introduces the New
Growth Theory the main feature of which is the division of the world on
“nonrival ideas” and “rival things”. Together they clarify how the economic
growth happens. Ideas explain how one matter is being transformed into
something new. Here ideas are perceived as a usual good in a market and the
larger/broader the market is the higher the value of these ideas. Also in this
part we see the comparison of NGT with Neoclassical theory, which in turn,
shows technology and inputs as two absolutely different things.
Part 4 (Why in America) lists
factors thanks to which US’s growth rate
was much higher relatively to other countries. Such factors as natural
resources, or their affluence, to be more precise, and scale effects (can be
understood as large and perspective market) were essential here. Thanks to
these two investment in technologies was so active that later it allowed US to
become the biggest supplier of raw materials for a period of 50 years.