Why, indeed, in America? Theory, history, and the origins of modern economic growth.

Neoclassical growth theory explains growth in terms of interactions between two basic types of factors such as technology and conventional inputs. At the next level, conventional inputs are subdivided into physical capital, labor, and human capital. The initial split into technology and conventional inputs is promising, because technology does differ from all other inputs. However, for technical reasons, neoclassical theory mapped this split onto the theoretical dichotomy between public and private goods. This means that the theory leads to a dead end when one tries to understand the details about technology in a second-stage analysis analogous to economist Richard Dawkins's investigation of the steam governor. Technology in the model does not correspond to anything in the world. It is possible to understand capital in terms of things like machine tools that can be observed, but for a description of technology, neoclassical theory only relates to things that live in models-shifting production possibility frontiers and the like. The obvious real-world candidates for technology simply are not public goods. For example, a promising line of work in the 1960's studied embodied technological change. Implicitly, it modeled technology as designs for machines. This line of work lost its momentum, perhaps because of the difficulty people had in reconciling what is known about machine design with an initial cut that makes technology a public good.