development cannot be adequately grasped unless the role of 'non-economic factors' is taken into account. This recognition, however, has generated a controversy over the precise role assigned to 'non-economic factors' in development. There was a time when under the influence of Schumpetcr's ideas on entrepreneurship, 'non-economic factors' were considered more important than 'economic factors'. Schumpeter argued that the entrepreneur almost defied the laws of economics to give the critical push necessary for the economy to attain higher levels of efficiency1. Instead of working within the confines of the market the entrepreneur, according to Schumpeter, created new markets by discovering and introducing new products and processes. This theory brought the role of innovative individuals to the centre of stage, but for a short period. The very logic of development seemed to undermine the role of the entrepreneur. Schumpeter himself recognised subsequently that the growth of giant modern corporations routinised the creative role of the entrepreneur2. The modern corporation, it appeared, had reduced 'production' to precisely the process that economists had in mind when they defined the term, viz, a combining of 'factors of production' according to certain predetermined technical norms and criteria. True, some industrial sociologists did even then point out that production involves the coming together of human beings in an organisation and that 'human relations' affected productivity.3 But this argument tacitly acknowledged that 'human relations' can at best only enable a corporation in attaining the optimal level of production that was set independently using the laws of engineering and economics. That is, the 'non-economic factors' now came to be regarded as mere constraining factors and hence secondary.
