History of Economic Thought II - Development Economics. How do societies lift themselves out of poverty and begin to grow? A perennial question dating back at least to Adam Smith, this becomes a field of economics after World War II. Economists such as Walt Rostow and Sir Arthur Lewis argued that capital investment was the key to modernization and growth. In this lecture, economist Charles N. Steele discusses their theories and describes how the World Bank and other agencies and organizations have tried to implement them, typically with poor results. Why has standard development economics failed? The ideas of Lord Peter Bauer provide an explanation.