Introduction

Steindl, Josef

Bibliographic data

Works

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

Description:: Twenty five years after the first publication of this little book I do not find myself in full agreement with everything it contains... My chief amendment concerns an error in interpreting the statistics of U.S. corporations which show that fixed capital in relation to turnover increases with the size of the firm (chapter III, Table IX, p.24). (Auszug S. 1)

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.

Related work:: Steindl, Josef (Hrsg.): Economic Papers 1941-88. London: Macmillan, 1990 Steindl, Josef: Small and Big Business. Economic Problems of the Size of Firms. Oxford: Blackwell, 1945

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

Access:: Free access

8. be ascertained with confidence. It appears likely, however, that the economist’s conviction about the importance of diminishing returns rests on prejudice, and that we hardly ever enter the range of diminishing returns, or of increasing capital- output ratios. It is conceivable that the relation of profit margin and profit rate expounded in Chapter III at least partly explains why this should be so: If the capital-output ratio is increased, the profit margin must increase, also the method would be rejected because of the implied decline in profit rate. As the profit margin increases, a further increase in capital-output ratio is less likely to yield a constant profit rate. Thus the increase in capital-coefficient would tend to set limits for itself sooner or later. Whether this is in fact the explana tion of the apparent constancy of capital-output ratios in history, or their decline with size and advancedness of technique (in a cross section), and the limited range of capital-output ratios in manufacturing, cannot be decided with confidence. As a special case in which some of these complex relations might be studied the problem of servicing machines may be mentioned. When a number of automatic looms are tended in common by a number of workers, the management wants to know which combination of numbers of men and of machines is most advantageous. This problem is solved by the methods of stochastic processes ^; it appears that an increase in scale of operations up to a certain point yields better utilisation of both men and machines. This is a special example of the "principle of massed reserves" (Sargent Florence) which has very wide applications in the field of inventories, cash holding, etc. It is essentially a probabilistic problem and has to be dealt with by these methods. Evidence of the capital-coefficient is still much too imcomplete to clarify all the details. It is safe to state, however, that capital per man and scale of output increase jointly in the course of technical progress, and the inter-relation of the three elements is of great importance. ^ Cf. C. Palm, The Distribution of Repairmen in Servicing Automatic Machines, (in Swedish) Industritidningen Norden, Vol. 75(1947). W. Feller, Probability Theory and its Application, Vol. 1, XVII.7 D. R. Cos and W. L. Smith; Queues, London 1961, Chapter IV: Machine Inter ference.

Works

Cite and reuse

Works

Image

Image fragment

Citation links

Citation recommendation