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The author or concept searched is found in the following 4 entries.
| Disputed term/author/ism | Author |
Entry |
Reference |
|---|---|---|---|
| Aggregate Production Function | Champernowne | Harcourt I 29 Aggregate production function/equilibrium/CampernowneVsRobinson/Campernowne/Harcourt: Champernowne [1953-4] accepted the logic of Joan Robinson's approach and measure but objected to the possibility that the same physical capital could have a different value as between two situations 'merely' because it was associated with a different set of equilibrium rates of wages and profits. >Aggregate production function/Robinson, >Aggregate production function/Solow. Harcourt I 30 HarcourtVsChampernowne: This objection is valid from the point of view of the theory of production, i.e. the ability to predict the rate of flow of output from a knowledge of factor supplies, but it is neither valid nor relevant for 'capital' viewed as value property, i.e. as reflecting the institutions of capitalist society. There is a real difference between the two situations and value capital ought to reflect it. The economic significance of a given plant may vary from one economic environment to another. Harcourt: Nevertheless Champernowne appears to have been searching for a unit which could do both tricks at the same time. Measure of capital: Thus he further felt it would be convenient - and more in keeping with the orthodox neoclassical tradition - to have a measure of capital such that the rewards to the factors of production could be obtained by partial differentiation of the relationship between output and capital (so measured), on the one hand, and labour, on the other. Comparability: Furthermore, despite the strictures on using comparisons to analyse processes, he was keen to analyse the process of accumulation and deepening, tracing the development of capitalism over time, approaching its 'crisis' as real wages rose and rates of profits fell. Even if, in fact, equilibrium were ruptured repeatedly, Champernowne hoped to make the process slow enough to proceed as if this had not occurred, to measure capital each step on the way and to provide a means of comparing capital stocks over time as well as between different situations of stationary equilibrium. Measurements: Such an all-purpose measure is provided in a chain index whereby the 'normal' concave relationship between output per head of a constant labour force and capital per head would be established, provided that any one technique, having been the most profitable or equi-so at a given rate or range of interest rates, could never reappear again at another rate or range of rates, and that, of two techniques which are equi-profitable at a given rate of interest, it is the one with the higher output per head and higher value of capital per head that is the more profitable at a lower rate of interest. Harcourt I 32 Formalization/indexes: This series of index numbers shows the changes in the 'quantity' of capital after the effects on the value of capital of different rates of wages and profits have been removed. Output/labour: Output may now be expressed as a unique function of labour and chain index capital and the rewards of the factors of production correspond to the partial derivatives of the appropriate branches of the function. In the 'pure' cases, the coefficients of the production function set the upper or lower limits to the factor prices: see Champernowne [1953-4](1), p. 127.) Equilibrium wage rate: The partial derivative of output with respect to labour equals the equilibrium wage rate and the partial derivative of output with respect to capital equals the equilibrium rate of profits multiplied by the 'price' of 'capital'. Price: The price itself is a chain index price since the chain index removes, as it were, the 'quantity' of capital from the coefficient of the capital term. Capital/ChampernowneVsRobinson/Harcourt: In effect Champernowne has removed the 'zigs' - the horizontal stretches - from Joan Robinson's real-factor-ratio curve (…) and changed the slopes of the 'zags' - the upward-sloping stretches - so that they now equal the relevant equilibrium values of the 'price' of 'capital'. >Method/Champernowne. 1. Champernowne, D. G. [1953-4] 'The Production Function and the Theory of Capital: A Comment', Review of Economic Studies, xxi, pp. 112-35. |
Champernowne I David Gawen Champernowne Uncertainty and estimation in economics (Mathematical economics texts) Edinburgh 1969 Harcourt I Geoffrey C. Harcourt Some Cambridge controversies in the theory of capital Cambridge 1972 |
| Capital | Champernowne | Harcourt I 5 Capital/Champernowne/Harcourt: Champernowne (1953-4)(1) accepted the logic of Joan Robinson's measure of capital. >Capital/Robinson. However, he objected to some of its implications for the analysis of distribution and accumulation. He therefore provided, within the same analytical context, a chain index measure of capital. Under certain conditions his measure, when used in the production function, gave neoclassical results in the sense of equalities of equilibrium factor prices with suitably defined marginal products. HarcourtVsChampernowne: Nevertheless, the chain index measure is not independent of distribution and prices; indeed, it may not be constructed unless'either the wage rate or the rate of profits is known. 1. Champernowne, D. G. (1953-4). 'The Production Function and the Theory of Capital: A Comment', Review of Economic Studies, xxi, pp. 112-35. |
Champernowne I David Gawen Champernowne Uncertainty and estimation in economics (Mathematical economics texts) Edinburgh 1969 Harcourt I Geoffrey C. Harcourt Some Cambridge controversies in the theory of capital Cambridge 1972 |
| Economic Growth | Swan | Harcourt I 5 Measurements/Economic growth/factor rewards/marginal products/Swan/Harcourt: In 1956 Swan(1) published one of the first of a spate of neoclassical models of economic growth in which the equality of factor rewards with marginal products plays a crucial role. >Factors of production, >Factor prices, >Capital, >Factor market, >Production theory, >Capital structure. In the appendix to his article he provided a rationale for his procedure. It contained two strands. 1) The first was the device of using a primary unit, namely, a one all-purpose commodity - his famous meccano sets model - so that capital may be measured in terms of its own unit, i.e. itself. The commodity is, moreover, malleable so that both specificity and heterogeneity - two essential characteristics of capital goods - may be abstracted from, and the implications of disappointed expectations in the sense of actual quasirents differing from expected ones may be avoided. In effect it is 'as if perfect foresight always prevailed. 'Capital' as an aid to production and as privately owned property, whether held or invested by its owners, become indistinguishable. A theory of production and of distribution may thus be invoked simultaneously. That is to say, the level of output and its distribution between labour and 'capital' are explained simultaneously by the same set of factors. 2) The second defence was to examine the neoclassical procedure of considering notional changes at equilibrium points in a stationary state. SwanVsChampernowne: Swan argues that the Champernowne chain index measure of capital is peculiarly suited to cope with this procedure in the analysis of a process of accumulation over time. >Capital/Champernowne. RobinsonVsSwan: This viewpoint was (…) vigorously disputed by Joan Robinson, who argues that comparisons of equilibrium positions one with another are not the appropriate tools for the analysis of out-of-equilibrium processes or changes, and that the neoclassical procedure is singularly ill-equipped to cope with the problem of 'time' Cf. >Time/Rothbard. Harcourt I 34 Economic growth/Swan/Harcourt: In Swan's model of economic growth, Swan [1956](1), capital-labour ratios need to change considerably as accumulation occurs over time, in order that both stable equilibrium capital-output and capital-labour ratios may be re-established following a change in a parameter, for example, the saving ratio. Harcourt I 35 In this manner, considerable processes occur, or, rather, are analysed. Moreover, he uses a Cobb-Douglas production function, and assumes that saving determines investment, and that there are constant returns to scale, full employment, static expectations and perfect competition, so that the wage of labour equals its full-employmerit marginal product and the rate of profits on capital equals its marginal product. >Production function, >Cobb-Douglas Production function. RobinsonVsSwan. Capital/SwanVsRobinson: His first line of defence is to suppose that capital consists of meccano sets which can be costlessly and timelessly transformed into any desired form, as given by the latest booklet of instructions (so incorporating technical progress), in order to co-operate with labour in response to the pull of changes in relative factor prices and to technical advances. Relative prices: The relative prices of products (including meccano sets) never change, no matter how rates of wages and profits (and, sometimes, rents, when land, which we ignore, is considered) do. Aggregation: In this way the aggregation of heterogeneous items of capital, both as cross-sections and over time, where they are both 'infinitely durable and instantaneously adaptable', is possible in terms of their own technical unit and 'the basic model of [his] text could be rigorously established in a form which deceived nobody' - an answer which proceeds by abolishing the question. For, with malleability, disappointed expectations and imperfect foresight can be avoided since the capital stock can be made into any form that is wanted and adapted to any labour supply that is forthcoming. Thus it is hoped that the long-run implications of capital-labour substitution may be analysed independently of any troublesome shortrun Keynesian and other puzzles. 1. Swan, T. W. [1956] 'Economic Growth and Capital Accumulation', Economic Record, xxxn, pp. 334-61. |
Swan I Trevor W. Swan Trevor Winchester Swan, Volume I: Life and Contribution to Economic Theory and Policy (Palgrave Studies in the History of Economic Thought) London 1922 Harcourt I Geoffrey C. Harcourt Some Cambridge controversies in the theory of capital Cambridge 1972 |
| Measurements | Swan | Harcourt I 5 Measurements/Economic growth/factor rewards/marginal products/Swan/Harcourt: In 1956 Swan(1) published one of the first of a spate of neoclassical models of economic growth in which the equality of factor rewards with marginal products plays a crucial role. >Factors of production, >Factor price, >Capital, >Factor market, >Production theory, >Capital structure. In the appendix to his article he provided a rationale for his procedure. It contained two strands. 1) The first was the device of using a primary unit, namely, a one all-purpose commodity - his famous meccano sets model - so that capital may be measured in terms of its own unit, i.e. itself. The commodity is, moreover, malleable so that both specificity and heterogeneity - two essential characteristics of capital goods - may be abstracted from, and the implications of disappointed expectations in the sense of actual quasirents differing from expected ones may be avoided. In effect it is 'as if perfect foresight always prevailed. 'Capital' as an aid to production and as privately owned property, whether held or invested by its owners, become indistinguishable. A theory of production and of distribution may thus be invoked simultaneously. That is to say, the level of output and its distribution between labour and 'capital' are explained simultaneously by the same set of factors. 2) The second defence was to examine the neoclassical procedure of considering notional changes at equilibrium points in a stationary state. SwanVsChampernowne: Swan argues that the Champernowne chain index measure of capital is peculiarly suited to cope with this procedure in the analysis of a process of accumulation over time. >Capital/Champernowne. RobinsonVsSwan: This viewpoint was (…) vigorously disputed by Joan Robinson, who argues that comparisons of equilibrium positions one with another are not the appropriate tools for the analysis of out-of-equilibrium processes or changes, and that the neoclassical procedure is singularly ill-equipped to cope with the problem of 'time' Cf. >Time/Rothbard. 1. Swan, T. W. [1956] 'Economic Growth and Capital Accumulation', Economic Record, xxxn, pp. 334-61. |
Swan I Trevor W. Swan Trevor Winchester Swan, Volume I: Life and Contribution to Economic Theory and Policy (Palgrave Studies in the History of Economic Thought) London 1922 Harcourt I Geoffrey C. Harcourt Some Cambridge controversies in the theory of capital Cambridge 1972 |
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