Book contents
- Frontmatter
- Contents
- PREFACE
- 1 INTRODUCTION
- PART I THE MICROECONOMIC THEORY OF PRODUCTION
- PART II MACROECONOMIC THEORIES OF DISTRIBUTION AND TECHNOLOGICAL PROGRESS
- 11 TECHNOLOGICAL PROGRESS AND THE NEOCLASSICAL THEORY OF PRODUCTION
- 12 TECHNOLOGICAL PROGRESS AND THE NEOCLASSICAL THEORY OF DISTRIBUTION
- 13 VINTAGE MODELS AND FIXED PROPORTIONS IN NEOCLASSICAL THEORY
- 14 LEARNING BY DOING
- 15 MONOPOLY AND AGGREGATE DEMAND AS DETERMINANTS OF RELATIVE FACTOR SHARES
- 16 INDUCED BIAS OF INVENTION AND THE THEORY OF DISTRIBUTIVE SHARES
- REFERENCES
- AUTHOR INDEX
- SUBJECT INDEX
16 - INDUCED BIAS OF INVENTION AND THE THEORY OF DISTRIBUTIVE SHARES
Published online by Cambridge University Press: 07 October 2011
- Frontmatter
- Contents
- PREFACE
- 1 INTRODUCTION
- PART I THE MICROECONOMIC THEORY OF PRODUCTION
- PART II MACROECONOMIC THEORIES OF DISTRIBUTION AND TECHNOLOGICAL PROGRESS
- 11 TECHNOLOGICAL PROGRESS AND THE NEOCLASSICAL THEORY OF PRODUCTION
- 12 TECHNOLOGICAL PROGRESS AND THE NEOCLASSICAL THEORY OF DISTRIBUTION
- 13 VINTAGE MODELS AND FIXED PROPORTIONS IN NEOCLASSICAL THEORY
- 14 LEARNING BY DOING
- 15 MONOPOLY AND AGGREGATE DEMAND AS DETERMINANTS OF RELATIVE FACTOR SHARES
- 16 INDUCED BIAS OF INVENTION AND THE THEORY OF DISTRIBUTIVE SHARES
- REFERENCES
- AUTHOR INDEX
- SUBJECT INDEX
Summary
Introduction
The classification of inventions is straightforward. Further, determining the capital-using or labor-using character of any particular invention would also be straightforward if one could accurately observe the proper variables, i.e. the change in the marginal rate of technical substitution at a given capital–labor ratio or the change in the capital–output ratio at a given rate of interest. But, unfortunately, these changes cannot be accurately observed. At best, one can only determine, within statistical probability limits, the biased or neutral character of a stream of inventions over time.
Yet one can observe particular inventions and draw non-statistical inferences concerning their factor-saving effects. This, I would suggest, has been the cause of great mischief. The inventions typically observed are those that cause smaller machines and human labor to be replaced by larger machines: locomotives replaced wagon trains, and digital computers have more recently replaced desk calculators and file clerks. Even Pigou was presumably misled, for he wrote: ‘Probably, however, the majority of inventions in the narrower sense would have to be reckoned as “labour-saving”, because as Cassel has observed, “almost all the efforts of inventors are directed toward finding durable instruments to do work which has hitherto been done by hand.”’
Hicks agreed: ‘…there is no reason to question his [Pigou's] view that inventions have a decided bias in the labour-saving direction. It is indeed difficult to find cases of important capital-saving inventions—wireless is, of course, the standard case, but beyond that, although there can be little doubt that capital-saving inventions occur, they are not easily identified…’
Despite the weight of authority supporting these inferences, they are totally without foundation.
- Type
- Chapter
- Information
- The Neoclassical Theory of Production and Distribution , pp. 336 - 364Publisher: Cambridge University PressPrint publication year: 1969