Small and Big Business

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Small and Big Business: Introduction [carbon copy of the 2nd revision]

Author:: Steindl, Josef

Scope:: Typoskript, Durchschlag, 21 Blätter, mit handschriftlichen Korrekturen

Year of publication:: 1978

Source material date:: [04.1978]

Note:: Das Typoskript stellt die zweite Überarbeitung der 1972 neu verfassten Einleitung zu "Small and Big Business" (1945) vermutlich zwecks der spanischen Ausgabe des Buches dar. Die erste Seite enthält mit Bleistift festgehaltenen Seitenangaben, wo Korrekturen vorgenommen wurden.

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.3.10

DOI:: https://doi.org/10.48671/nls.js.AC14446393

5 d This will counteract the cheapening of capital equipment due to scale effects; in other words, the differential profit margin of the large firm will be reduced as the large scale methods spread, and the value of output will fall relatively to a 5) iven capital equipment with given labour cost. The impression is that a race between the cheapening of equipment and the cheapening of output is continuously on and neither is getting too far ahead of the other. So much for the interpretation of data. What about the theoretical discussion of Chapter III ? My analysis there shows under what conditions an increase in capital coefficient will be profitable and this analysis may be applied also outside the context of the problem of economies of scale. The conditions are these: The proportional reduction in cost dévided by the proportionate increase in capital-coefficient must not be smaller than the profit margin from which we start (that is, the profit margin obtained with alternative or usual methods), otherwise the profit rate will be lower than at the outset (that is, with alternative or usual methods). Thus the possibilities of increasing the capital-coefficient without reducing the profit rate depend on the size of the ruling profit margin, in other words, on the distribution of 5) Capital is always measured at cost-value, inflated with a convenient price index to give a measure of reproduction cost.

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