Need We Stand Economic Theory on Its Head

Need We Stand Economic Theory on Its Head ?
Phiroze B Medhora IN his article entitled "Let Us Stand Economic Theory on Its Head" (Insight, January 1972), Mahbub ul Haq has called for rethinking on the accepted theory of economic development. According to him, the accepted theory stands for maximising the rate of growth (of income or production) leaving the benefits of growth to percolate through to all classes of the population. Mahbub ul Haq argues that such a system creates its own vested interests which prevent the percolation of the benefits to all classes of the population. He also argues that given the specificity of factors, factors devoted to the production of (or transformed into) high- income consumption goods, cannot be used to produce mass-consumption goods and do not lead to the economic welfare of the poorer classes.