Introduction

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Introduction: A revised introduction to "Small and Big Business"

Author:: Steindl, Josef

Scope:: Typoskript, 20 Blätter

Year of publication:: 1972

Source material date:: [04.1972]

Language:: English

Note:: Beim Typoskript handelt es sich um eine neu verfasste Einleitung zum Buch "Small and Big Business" (1945) vermutlich zwecks der italienischen, spanischen oder portugiesischen Ausgabe des Buches.

Topic:: Firm and market structure

JEL Classification:: D24 [Production, Cost, Capital, Capital, Total Factor, and Multifactor Productivity, Capacity] D43 [Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection] L11 [Production, Pricing, and Market Structure, Size Distribution of Firms]

Shelfmark:: S/M.3.7

DOI:: https://doi.org/10.48671/nls.js.AC14446127

10. diversified hierarchical structures designed to save communication lines and to loss in efficiency. The computer is a great help in improving communication, and, therefore, it is a boon to the very big firms. To return for a moment to the discussion of capital-intensity: It is also connected with the question of the "correct 11 measure of size of an estab lishment or firm. I have shown in another place ^ that the pattern of relation of size and output per man is quite different according to whether size is measured by output or employment. (In the first case a monotonous increasing relation obtains, whereas in the second case the output per head first increases, then falls with size). I also showed that the difference between the two patterns is due to the stochastic character of the data - the dispersions of the individual values of output per head round the average. What the "correct 11 measure of size is cannot be decided by statistical arguments. We are free to choose our definitions on grounds of convenience of language, and simplicity of description. On these grounds 1 choose the criterion of output capacity; the relations of technical progress, capital-intensity and scale which were pictured earlier on could not in principle be changed by a different terminology but they would become unnecessary complicated because the size of plant in terms of manpower historically first increases, and then in the age of automation decreases. If one chose men per plant as the criterion of size, (2) as Mr. Johnstone proposed, the automated plants would count as small (or lower medium) sized, and output per man would accordingly have a maximum at this level. I cannot find anything enlightening in this use of language, but it does in itself, of course, not contradict my picture of the relations of technical progress and scale, which requires in any case a description of the plant in terms of several variables (man, output, capital). 1 turn now to a point on which I would like to correct myself again: Just as I was wrong to play down diseconomies I was too unfavourable on the chances of the small firms, although my remarks on their shrinking degree of Maturity and Stagnation in American Capitalism, Chapter IV, Oxford 1952. (2) J. Johnstone, Statistical Cost Analysis, London 1960.

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