574
PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28
increments of wealth, it is bound to subside. Industry, on
the other hand, is bound to remain a permanent cause of
increase of wealth and to become pre-eminent as time goes on,
owing to the very nature of its cumulative process.
These two aspects of the modern world seem to me very
helpful in indicating the directions in which the emergence of
the modern era has stimulated economic analysis.
The concept of trade is, so to speak, a static concept. It is
associated with a situation in which a plurality of economic
systems (or of individuals) are endowed with particular resour-
ces or products and try to gain advantages by exchange. The
interest that such a situation arouses in an economist concerns
the problem of how to reach the best allocation of given resour-
ces, namely of how to make the best use of what one has
already. We may imagine a stationary situation in which a
plurality of economic systems have reached equilibrium in-
ternally, but do not trade among themselves; and then another
stationary situation in which the same economic systems, be-
sides having reached an internal equilibrium, also trade with
one another. Is is easy to show that the passage from the first
to the second situation — i.e. a once-for-all change from no
trade to a new situation of trade, to be maintained thereafter —
normally brings about a gain for all. The problem involved
is a problem of rationality, which may be expressed by a
mathematical function to be maximised under certain cons-
traints.
The concept of, and the problems entailed by, industry
are quite different. Industry is, so to speak, a dynamic con-
cept. It means production, i.e. the engagement and the appli-
cation of man’s ingenuity to make and shape the products he
wants. But since by doing and experiencing man learns, it
is implied in the very nature of carrying on a production
activity that new and better methods of production will be
discovered. Of course, to find new methods takes time, and
takes time in a persistent way. The economist is faced here
‘10] Pasinetti - pag. 4
