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

6 income. (It should immediately be noted that this ruling profit margin will be different for different size classes of firms.) We now turn to the relation of capital Intensity and productivity. It can be shov/n that the growth rate of the capital-output ratio equals the growth rate of capital per man minus the growth rate of output per man. On p. 33 I used somewhat different concepts; Instead of capital per man I tided the capital-cost ratio, and instead of output per man the sales-cost ratio. If we take the wage as constant, the analysis of p. 33 will come to the same as the present analysis, but it should be noted that in fact real wages can differ between firms (e.g. of different sizes), and especially over time. In the light of the engineering date it seems that the growth in productivity will outweigh the growth of capital intensity over a wide range of output: In consequence the capital-output ratio will decline over this range. This is indeed apparently the course of much of the technical progress. It might be that beyond a point the relation will be reversed, the capital growth will outweigh the productivity growth, so that the capital-output ratio will increase; there will be diminishing marginal returns to capital which on p. 33 I still regarded as plausible. Today I doubt whether the range of diminishing returns of capital-intensification is actually entered in the ordinary course of events; such techniques are perhaps not

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