ECONOMIC-GROWTH AND THE CHEMICAL-INDUSTRY

Developments in economics since the later 1950s have increased our knowledge of what makes for the growth of industrial societies. The paper traces this evolution. It has become evident that competition among nations, industries, and firms is increasingly on a global basis. As opposed to the days of Adam Smith's The Wealth of Nations, and David Ricardo's work, comparative advantage has become a dynamic affair and is no longer primarily based on resource advantages. As a result, such comparative advantage shifts from place to place and from time to time. This process is illustrated by the history of the chemical industry since the 1850s. The lessons learned from this first science-based industry may be generalized to other industries and finally to policies that the government can follow to sustain and improve the growth rate and standard of living of this country.