Charles Babbage: an inadvertent development economist

Although some of his original contributions to political economy have been acknowledged, Babbage the economist has received considerably less attention than Babbage the inventor, engineer or mathematician. His treatment of the division of labour which reached beyond Adam Smith’s evaluation, the emphasis he put on technological advances, and his focus on economies of scale have been appreciated by historians and economists. However, Babbage’s contributions to economic theory are not confined to industrial organization. This paper suggests that by pointing out the means of becoming a manufacturer rather than merely a maker, Babbage described a process of national development for Britain. In this process he drew attention to cost and skill-minimizing division of labour; the importance of technological development and human capital in terms of knowledge and skill; the relationship between scientific development and economic development; and finally, Britain’s absolute advantage in capital goods production which originates from all of these factors.