Full text: From Stagnation in the 30s to Slow Growth in the 70s.

2) The other question I want to deal with is the role of 
technology. Was not, quite simply, the gradual exhaustion 
of the railway boom the reason for the decline of accumulation 
in the 1890s? The role of the railways in the accumulation 
was no doubt considerable. I cannot of course, uphold the 
view expressed in my book, that technical progress does 
not affect the volume of investment. I recanted loruj ago 
and maintain now, with Kalecki, that technical progress is 
indeed a stimulant to investment. It would be equally wrong, 
however, to explain accumulation entirely by the purely 
exogenous determinant of the rate at which new know how 
becomes available. The economic climate, created by the 
expansion in the recent past, is of decisive importance 
for the transformation of know how into innovation. 
The technological explanation is speciously simple 
and plausible. There had to be saturation in the case of 
railways just as there had to be saturation with motor cars 
more recently, because the high expansion rates of the 
"build up" period cannot be continued indefinitely. 
But the question is why other innovations have not been 
appearing on the scene to take the place of the now saturated 
one? The technological % or "long wave" see Chris^Freeman^ ) 
explanations implicitly assume that the dominant innovation 
( here the railways ) somehow absorbs so much interest and 
resources in capital and management that the alternative 
opportunities for innovation are neglected. Now it has to be 
noted that the dominant innovation railroad implied an 
outstanding development of capital market and organisation, 
; W77 
leading to the megacorporation ( &^e- Chandler,—Xho vis-iblfc^hand ) 
in the 1880s, by far the largest business organisations 
then existing, an oligopolistic organisation designed to 
protect the industry's profit against ruinous competition.

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