Nicholae Georgescu-Roegen, 4 feb. 1906 – 30 oct. 1994

There is…one recipe that development economists have used with appreciable success. It was presented in a volume from the late 1920s by Mihail Manoilescu, a former compatriot of mine. In an engineering manner, the engineer Manoilescu proved that labor is far more productive of value in industry than in agriculture. As one would now guess, Jacob Viner blew his top about that attack on the old classical faith every time he had occasion. Yet today we generally stand by the principle of economic development by industrialization, even if we have forgotten the name of Manoilescu (as we ordinarily do for most old path breakers). To my knowledge, the most powerful verification of that recipe was achieved by the research program conducted at the Vanderbilt Economics Department by William H. Nicholls and Anthony M. Tang. They were fortunate to have as their object the development of the Mid-South United States triggered by the industrial organizations attracted there by the Tennessee Valley Authority. Of course, the famous recipe worked quickly and efficiently there because massive investments were forthcoming from a sector of the same national economy.

So, you see that you will still have to use aggregates. But they must be used sparingly and with the same care as Simon Kuznets taught us. Exclusive regard for national income as the most reliable indicator, something of a Dow Jones of well-being, may blind the planner to an abominable situation. [We can see therefore that] while we brag about the increase in national income, the mass of people “is still as poverty-stricken as ever—a passive gloomy onlooker at the increasing well-being of the exclusive circle that delights in the Square Dance of effective Demand, which alone moves faster and faster each day.” (NGR, Analytical Economics, 1966) Although I know that many insuperable difficulties stand in the way of a general betterment of mankind’s well-being, my fervent hope is that at least this square dance will be brought to acceptable proportions.

(“Closing Remarks: About Economic Growth – a Variation on a Theme by David Hilbert”, Economic Development and Cultural Change, Vol. 36, No. 3, Supplement: Why Does Overcrowded, Resource-Poor East Asia Succeed: Lessons for the LDCs? (Apr., 1988), pp. S291-S307, University of Chicago Press, 1988)


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