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This article examines the neoclassical theory of economic growth through a comparative historical analysis of social development in Costa Rica and Chile in the post-1930 period. The neoclassical model underestimates the social and political sources of social development. Markets may create a dynamic and expanding economy, but growth will not automatically result in social infrastructure that will advance the social conditions of the majority. It is in this context that working-class mobilization is decisive for social development. As the Costa Rican and Chilean experience shows, a mobilized working-class can advance social development by forcing government actors to implement social policies in the attempt to either weaken the strength of labor or to buy labor's support. In either case, labor fulfills a critical role in establishing the statutory and bureaucratic precedents for advances in social development.

Based on N. Georgescu-Roegen's bioeconomic paradigm, this paper reconsiders the neoclassical economic paradigm which endorses continuous global economic growth through stimulated trade. We suggest that, in view of sustainability, it is fundamental to acknowledge: (1) the importance of preserving the identity and integrity of economic systems in different regions of the world through enlarging as much as possible self-sufficiency and equity assessed at national and regional levels; and (2) the importance of including respect for biospheric equilibria as one criterion to be used to regulate world economic activity and trade. We examine differences and similarities of the past and present patterns of ecological degradation. We also present two types of efficiency to assess technological changes and the drive toward unsustainability. Then we discuss an entropy-based theory of North-South trade issues and three points for promotion of sustainability. Finally, we show that the true origin of current ecological crisis lies in a deep change in the perception of the relation between humans and nature that affects the mode of technological development of modern society. [ABSTRACT FROM AUTHOR]