The Missing Component in Long-term Growth Theory, CML

The central idea behind long-term and sustained growth, coupled with a “non-declining rate of profit,” revolves around “new products,” encompassing production methods, and it implies increased demand and a profit rate surpassing the sectoral average rate until competitors catch up. The source of all “new products” is “technological progress.” The first vital and related question that comes to mind is: What is the source or origin of technological progress, which continuously introduces new products as well as new methods of production? The answer is clear: “Creative Mental Labor,” or interchangeably “creative abilities of the human brain,” which is the “missing component” in all economic theories regarding value–price formation and growth.