78x Filetype PDF File size 2.71 MB Source: gesd.free.fr
Joan Robinson The Production Function and the Theory of Capital 1 Joan Robinson “The Production Function and the Theory of Capital” The Review of Economic Studies, Vol. 21, No. 2 (1953 - 1954), pp. 81-106 2 D. G. Champernowne “The Production Function and the Theory of Capital: A Comment” The Review of Economic Studies, Vol. 21, No. 2 (1953 - 1954), pp. 112-135 3 Robert M. Solow “The Production Function and the Theory of Capital” The Review of Economic Studies, Vol. 23, No. 2 (1955 - 1956), pp. 101-108 4 Joan Robinson “The Production Function and the Theory of Capital--A Reply” The Review of Economic Studies, Vol. 23, No. 3 (1955 - 1956), p. 247 The Production Function and the Theory of Capital INTRODUCTION The dominance in neo-classical economic teaching of the concept of a production function, in which the relative prices of the factors of production are exhibited as a know- function of the ratio in which they are employed in a given state of technical ledge, has had an enervating effect upon the development of the subject, for by con- attention of factors it has distracted centrating upon the question of the proportions the but more rewarding questions of the influences governing from the more difficult supplies of the factors and of the causes and consequences of changes in technical knowledge. the function has been a powerful instrument of mis- Moreover, production 0 f where L is education. The student of economic theory is taught to write f (L, C) a of C a quantity of capital and 0 a rate of output of commodities.' quantity labour, in of is to man-hours He instructed assume all alike, to measure L workers and labour; a unit of involved in choosing he is told about the index-number problem something he will forget and then in the hope that output ; he is hurried on to the next question, a to in does he has become professor, is measured. Before ever he ask what units C ask, to the next. so habits of on one generation and sloppy thought are handed from The in existence at The is not an answer. capital question certainly easy one to " of the environment in which labour any moment may be treated simply as part This is the a alone. works."2 We then have production function in terms of labour goods the the supply of concrete capital right procedure for short period within which for it not line to means does but the a very weak take, alter, outside short period it is of capital (which can be made over a change in the stock that we cannot distinguish the weather (an act of God). the from a change in long run by accumulation) in the existence look a of of all We stock as the specific list goods may upon capital of But at moment work-in-progress in the pipe lines production). any (including any change in of the short period, for this again is of no use outside the strict bounds of and of methods production the ratio of capital to labour involves a re-organisation all the a in the sizes of many or goods requires change shapes, and specifications in the 3 list. appearing original Should As soon as leave host of a difficulties appear. we the short period, however, costs ? be to or its power past capital valued according its future earning with a certain When we know the future expected rate of output associated of if a rate interest, then, we are given and future prices and costs, capital good, expected which will we can value the capital good as a discounted stream of future profit it earn. But to do so, we have to begin by taking the rate of interest as given, whereas the main purpose of the production function is to show how wages and the rate of and conditions as the by technical interest (regarded wages of capital) are determined the factor ratio. i Throughout this essay we shall be abstracting from land as a factor of production, so we will not bother the student with it. 2 . General Theory, p. 2 4 Keynes, I tenth man joins nine who are digging a hole, nine more 8 In Professor Robertson's example, when a and a bucket to fetch beer. (Economic Fragments, expensive spades are turned into nine cheaper spades P. 47-) 8I OF STUDIES THE REVIEW ECONOMIC 82 money Are we then to value capital goods by their cost of production ? Clearly power the purchasing we can specify nor unless is here there cost of production neither to effect, that is, in units, of wage terms cost in goods we the capital but may of money, of a of labour. their cost in terms unit standard measure to in the past is congenial as time expended To treat capital a quantity of labour nature of for to the essential point of it corresponds the production-function view, employ- in in essence, of Investment consists, as a factor production. regarded capital is making saving while which will its fruits in the future in a yield now way labour ing products available for the workers to consume in the meantime; and the current that was expended in the fact that a unit of labour of capital consists productiveness in the is more valuable to-day than a unit expended to-day, at a certain time past are its fruits already ripe. because of whole lies at the root the a which we encounter fundamental But here difficulty is in a form. All work is pure of capital. A unit of labour never expended problem of goods of some kind or another. When Adam delved and done with the assistance in existence. The cost were evidently a spade and a spindle already there Eve span before be constructed and they must the cost of goods, since of includes capital capital between the of time over period is interest of the cost of capital be used, part they can work was done in capital goods and the time when the moment when constructing a of capitalism, are a stream of output. This is not just consequence they producing will yield a to-day, which of expended a society a unit labour, for in socialist equally the same as a unit which will yield a product in time, is not thing product five years' to-morrow. even if it were possible to measure capital simply in terms of labour Finally, of units is ? what composed the C not have answered time, we still should question: of as in is to we are it natural think capital measured accumulation, When discussing in from consuming of consists refraining of The process accumulation terms product. we consider what to the of But when addi- to stock wealth. order in add output current a we must measure of makes, to resources given amount accumulation tion productive the stock of made to by the addition in labour for equipment capital units, productive in how much is done constructing an of work increment upon adding capital depends of an labour. as we move of hour's not the in terms final Thus, it, upon cost, product, in terms of one on a function to another, measuring capital from point production to see the effect we have to know the rate in order upon pro- product, product-wage in labour duction of the ratio of capital to labour. Or if we measure units, changing would be to see how much accumulation have to know the in order we product-wage with the a of But the rate alters to produce given increment capital. wage required both for a of and one stand quantity product the factors : cannot of symbol, C, ratio of labour time. a quantity the which the function to analyse, All the same, problem production professes although it has been too much puffed up by the attention paid to it, is a genuine is cleared a few problem. To-day, in country Alpha, a length of roadway being is by made in Beta a road the same being with bulldozers near-enough quality) men ; (of of men of men with and ox-carts. In Gamma thousands are hundreds by some picks the all shovels and little baskets to remove soil. When possible with wooden working made for in national character and and for have been differences climate, allowances for in the state of it seems pretty clear that the main reason differences knowledge, in than in is that in some sense is more plentiful Alpha this state of affairs capital of of it Gamma. Looked at from the point view an individual capitalist, would not were at finance the in if unlimited available) to use methods Gamma pay Alpha (even at the of view of it rate of interest which is ruling, and looked from point society, PRODUCTION FUNCTION AND THE THEORY OF CAPITAL 83 THE to raise all the labour available in effort of accumulation would need a prodigious is a real one. We cannot even to the Beta level of technique. The problem Gamma the element of common- to rescue without an effort function the production abandon in it. been entangled sense that has THE QUANTITY OF CAPITAL is called. The capital is it is what its name "Capital" is not what capital called, in existence at that moment. all the goods of time are in existence at a moment goods Blanc. Mont nor heap a rubbish neither in existence. It includes It is not all the things " " are is that they have value, that is The characteristic by which goods specified tin is not a an empty petrol Alpha in country other. Thus, over each power purchasing " where old tins are a source of valuable industrial raw good," whereas in Gamma it is. material, It is so actual objects, called The list of goods is quite specific. many particular from the same name differ under grouped blast furnaces, etc., etc. Goods overcoats, and these must not be over- each other in the details of their physical specifications twenty years in their ages are also important. A blast furnace looked. Differences in other respects, old is not equivalent to a brand new one of the same specification is relevant one. There another new to a brand old equivalent is twenty days egg nor an to an one wear and egg one it, An requires body characteristic of the goods. overcoat or one are and two bodies eat one or mouth, they useless, mouth to it. Without body, in them. But a blast furnace share using of time) cannot mouths (at a given moment iron. iron into Therefore to ore of turn a of numbers bodies be used range can by certain a of its rate of as function an account output of blast furnace includes the description a not discuss shall problems, we short-period it. (Since the number of bodies operating of in with each of equipment, the situations working piece actually of bodies the number most to it.) is appropriate we is the number which technically which shall be concerned, the which is quite different. Of two overcoats, is aspect of goods There another is on the of Mrs. who is one body Jones, completely similar in all the above respects, is on the of Mrs. delight at her fine appearance. Another body with inward purring income what it she is obliged who is her husband's being is, because, Snooks, grizzling In what follows we shall not discuss this aspect of clothes. to buy mass-produced is an overcoat IV), and that an overcoat IV) (Mark goods at all. We take it (Mark no nonsense. who of individual is not a thing what we can this who's goods Now, enormous to the items a of we have evaluate all To it as quaantity goods handle at easily. express the in terms of the real cost of pro- of it is composed. We can evaluate goods which the to make the work and existing goods required ducing them-that is, formerly or in some unit of power, we can of their purchasing them, or in terms value expressed is, what the stock of goods will to their productivity-that evaluate them according is in it. the future if work done with in conjunction become three evaluations equivalent results ; there In a of all yield position equilibrium to another the is a quantity which can be translated from one number by changing the of It entails that there have been no events unit. This is definition equilibrium. between the the relation over the relevant of past time which have disturbed period that the human in the situation a stock of and beings of goods, valuations given various the future to be just like the past-entirely devoid of such disturbing are expecting the rate of to-day is the rate which was expected to rule ruling events. Then profit the now extant was and the decision to invest in good made, to-day when any capital of are to the expected future receipts, capitalised at the current rate profit, equal are to them. cost of the which expected produce capital goods
no reviews yet
Please Login to review.