If one views economic development as the purposeful management of resources through time, an action program must perforce concern itself with utilizing natural resources as fully as possible; with improving the quality and effectiveness of the present and the future supply of human resources; and with changing and perfecting the technological processes whereby natural and human resources are combined. The keys that can open the treasures of economic progress are therefore forged in the schoolroom, the laboratory, the inventor's shop, and the research institute. We take this for granted today because the burgeoning teaching and research apparatus is now much more evident in a physical, financial, and workforce sense than in any previous context. But the difference between our era and earlier experiences with economic development is not absolute; in the past as in the present, whenever economic progress quickened it was a consequence of new insights and a new knowledge, of novelty in thought and action, in short, it was the usufruct of an educational awakening.

Never in history has man successfully invented a device, an instrument, a machine, or a structure without creating a demand for performance far beyond the capacity of the original design. The acceptance of an innovation starts a continuous stream of improvements in the product or in its manufacture that leads to larger, more powerful, or more efficient models; and the widespread diffusion of a product almost automatically implies the evolution of a broad range in the dimensions of serviceability. The increase in the size of the product is an important aspect of industrial growth. At the beginning of the nineteenth century, very few sailing vessels of 300 tons were produced in American shipyards. When the clipper ships were finally outmoded, the largest were at least ten times that size. The first American-made steam engines before 1810 included some that were large for the time, around 100 horsepower. By 1865, engines of 1,000 horsepower were in use, and by 1880 the size had been increased to 4,000 horsepower.

The revolution of 1848, by ending the system of serfdom, had created the basic conditions of Hungary's industrialization; however, since the revolution had remained incomplete and the War of Independence had been lost, the ensuing suppression by Austrian absolutism and the considerable feudal survivals proved a strong barrier to the way of social and economic progress. The Austro-Hungarian monarchy, a product of the Compromise of 1867, offered somewhat more favorable conditions for economic development. Nevertheless, the structure of the dual monarchy kept Hungary's industrialization within rather narrow limits: the absence of independent statehood and the existence of a common customs area with Austria exposed the Hungarian market to devastating competition from Austria's more advanced manufacturing industry; and since these circumstances helped to consolidate the political and economic power of the large landowners, the capital accumulating within the country served above all the capitalist development of agriculture. So towards the end of the nineteenth century, nearly half a century after the bourgeois revolution, Hungary was still a wholly agrarian country whose major exports were foodstuffs and agricultural produce. The rapid development of manufacturing industry began as late as the last decade of the nineteenth century and continued until the beginning of World War I, over a span of some twenty-five years.

In an earlier article, I pleaded for a reappraisal of the Old Poor Law. Despite what all the books say, the evidence that we have does not suggest that the English Poor Law as it operated before its amendment in 1834 reduced the efficiency of agricultural workers, promoted population growth, lowered wages, depressed rents, destroyed yeomanry, and compounded the burden on ratepayers. Beyond this purely negative argument, I tried to show that the Old Poor Law was essentially a device for dealing with the problems of structural unemployment and substandard wages in the lagging rural sector of a rapidly growing but still underdeveloped economy. It constituted, so to speak, “a welfare state in miniature,” combining elements of wage-escalation, family allowances, unemployment compensation, and public works, all of which were administered and financed on a local level. Far from having an inhibitory effect, it probably contributed to economic expansion. At any rate, from the economic point of view, things were much the same after 1834 as before. The Poor Laws Amendment Act of 1834 marked a revolution in British social administration, but it left the structure of relief policy substantially unchanged.