The Nature of Development Economics
Traditional economics is concerned primarily with the efficient, least-cost allocation
of scarce productive resources and with the optimal growth of these
resources over time so as to produce an ever-expanding range of goods and
services. Traditional neoclassical economics deals with an advanced capitalist
world of perfect markets; consumer sovereignty; automatic price adjustments;
decisions made on the basis of marginal, private-profit, and utility calculations;
and equilibrium outcomes in all product and resource markets. It assumes economic
“rationality” and a purely materialistic, individualistic, self-interested
orientation toward economic decision making.