Abstract
It is often said that the neoclassical economics has been developed on the basis of "equilibrium theory". In such a theory, the market system is supposed to stabilize economic forces, which means even if the disequilibrium exists, it is recognized as being in a temporary state or should be disappeared by the "normal" operation of the market system. Of course, there have been various theories against such a way of thinking. The theory of cumulative causation (CC theory) is also included in them. CC theory has a long history and has rather emphasized the circular and cumulative character in the process of economic change. The main theme of this paper is revaluation of Gunnar Myrdal's CC theory. Although Toner (1999), which is a representative study on the development of CC theory, draws the history of CC theory like one direct line from Young to Kaldor and puts Myrdal middle of them, this paper shows three currents. Young-Kaldor's CC theory might well be one of them. The originality and meaning of Myrdal's CC theory is shown in connection with the three currents. The paper is organized as follows. Section 2 describes three currents of CC theory: Youngian CC theory (CC theory of "economies of scale"), Veblenian CC theory (CC theory of the institutional school), and Wicksellian CC theory (CC theory of monetary theories). Then, Kaldor's CC theory, which consists of three or four Kaldor's Laws, is reexamined. As Toner (1999) insists, his CC theory is positioned in the first current. Section 3 analyzes Myrdal's CC theory. Myrdal experienced three academic stages in his life: a theoretical economist, a politician, and an "institutional economist" as he called himself. It was the last stage that he utilized and emphasized CC theory as his main theoretical tool in analyzing practical socio-economic problems. In addition, this paper insists that his CC theory has a mutual relationship with his methodology of "explicit value premises". Myrdal's CC theory consists of four theses as follows: (1) the basic thesis (the thesis of "backwash effects"), (2) the opposite or exceptional thesis (the thesis of "spread effects"), (3) the thesis relating to the scope of the analysis (the thesis of the importance of institutional factors), (4) the thesis of political implication. Compared with Kaldor's CC theory, Myrdal's CC theory can be characterized in three points. The first is that his CC theory is not a simple logic of polarization process, because it includes not only "backwash effects" but also "spread effects". The second is that his CC theory consists of both "economic" and "non-economic" factors. The third is that his CC theory exists as the theoretical foundation of egalitarian policies following his methodology. Finally, section 4 concludes that Myrdal's CC theory is positioned between the first current and the second one and it might be able to integrate those two currents with its unique theoretical character. It is the theory for "development" including institutional and political factors besides demand and supply. It should be revaluated as a kind of indicator for the further theoretical development of CC theory.
