Abstract

This dissertation addresses issues arising out of the problems of capital accumulation, productivity growth and 'putty-clay' technology. The concept of economic modernity occupies a central place in the subject-matter studied here in that it expresses both the incessant drive for newness that characterizes economic reality and the persistence of dated techniques that successfully resist replacement. This study examines the way in which an expansive development-theoretic 'putty-clay' framework may be employed to explain the historical processes behind both the avalanche of newness and the conservatism of technology in the U.S. economy. The guiding link is the fixity of investments in physical capital equipment over time and space. The dilemma of fixed capital is studied in the context of the constant entrepreneurial search for flexibility and liquidity. The thesis advanced is that a development -theoretic 'putty-clay' conceptualization of the economic system adequately addresses the recurring problems of fixity, flexibility, and liquidity, and thereby permits important insights into the enigma surrounding the persistent productivity growth slowdown and 'stagflation' of the late sixties and seventies and the related phenomena of physical 'capital obsolescence' and the financial or 'speculative explosions' of our times. ;The notion of 'putty-clay' used here is an innovative one in that it departs from the growth-theoretic literature to re-appear as a Schumpeterian theory of modernity modified by a Veblenite view of an economic system directed by the exigencies of the 'machine-process'. The empirical aptitude of a macroeconomic 'putty-clay' model to explain capital obsolescence mediated by the energy 'crises' of the seventies and eighties is examined in a separate chapter with results that differ markedly from the standard conclusions for the U.S. economy. The final chapter in the dissertation reverts to the modernity problematic but relates it to the philosophical discussion on causation and causality. In doing so this dissertation advances a 'distanced nearness' between the disciplines of economics and philosophy