Standard economic theory, which assumes that economic agents behave x-efficiently, precludes human agency as an important variable in determining the level of material welfare. But when the quantity and quality of effort involved in the production process is a choice variable, human agency and its particular determinants must play critical roles in affecting the economy. Human agency affects material welfare by affecting not only the efficiency of production but also the extent and the rate of technical change. Human agency, in turn, is motivated by pressure, be it individual, cultural, or market-driven. The model presented here helps to explain both the existence of upward sloping long run supply curves even in the absence of external diseconomies as well as the timing of and the adoption of new technology.