Accounting for entrepreneurship in late Victorian Britain
M easurement of total factor productivity (T.F.P.) growth has played a central part in revisions of pOst-I870 British economic performance and in the rehabilitation of the late-Victorian entrepreneur. However in a timely discussion in this journal, Nicholas has drawn attention to the unreliability of the T.F.P. index as a measure of aggregate economic performance.' The -model of the British economy implicit in the derivation of the T.F.P. index is one in which output is determined by the supply of inputs. With no demand side problems growth in the economy occurs because of the growth over time of mutually independent factor inputs and T.F.P. Output is related to inputs by means of an aggregate Cobb-Douglas production function constrained to exhibit constant returns to scale: