Professor John Hall
Journal of Economic Literature Classification Codes
O14, O15, O33, O52
Economic development, Human capital, Machine process, State intervention, Technology transfer, Thorstein Veblen
This inquiry summarizes and analyzes Thorstein Veblen’s explanations for Imperial Germany’s rapid industrialization. In his book Imperial Germany and the Industrial Revolution, Thorstein Veblen introduces a comprehensive understanding of processes affecting economic development. Technology transfer, human capital and state intervention are the variables that transformed an agrarian feudal Germany into industrialized Imperial Germany. Instead of developing technology over time by trial and error, Germany just transferred already established technology to their country. Since Germany had no established institution they could set up the most modern technologies. The machine process of the industrial system renders it easy to train workers with new skills that have application in a widespread of industries. State intervention compelled the industrialization process since the social and political culture of Germany allowed for a strong invasive state to force rapid development. Even though these variables explain Germany’s rapid industrialization they can also be applied to the economic development of any country.
Maldonado, Cesar. "Towards a Veblenian Theory of Economic Development: Drawing from Imperial Germany, Working Paper No. 6", Portland State University Economics Working Papers. 6. (15 March 2015) i + 14 pages.