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This paper considers epistemology in economics, looking at the ways in which theory, observation and measurement are combined. Agricultural economics is a policy science and so scientific research programmes operate simultaneously with political action programmes. Taking policy positions and advising government makes scientific detachment impossible. With this as background progress in production economics is considered, especially regarding technology, productivity and the returns to R&D. The position taken is that progress has been considerable and we can by now measure technological progress and show how it is generated by agricultural R&D. Almost all the studies show that this is an investment with a high rate of return. The main point of the study is that almost all the agricultural economics research that has made this possible was conducted in the USA, where the theory and data were in place when needed to convince the politicians that public funding should be maintained at adequate levels. The payoff is that agricultural productivity has grown monotonically in the USA. The UK case shows the costs of our profession failing to mount an effective political action programme in the area at time of Mrs Thatcher's cuts in the early 1980s. The result was about sixteen years of negative productivity growth. This should act as a warning for South Africa, which is pretty clearly cutting R&D and following the UK productivity path. These failures are so costly, it is odd that only USA seems to have the knowledge and funding required for steady productivity growth. [ABSTRACT FROM PUBLISHER]