Small and Big Business

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Small and Big Business: Introduction [2nd revision]

Author:: Steindl, Josef

Scope:: Typoskript, 21 Blätter, mit Hilfe von Tipp-Ex korrigierte Version

Year of publication:: 1978

Source material date:: [04.1978]

Language:: English

Description:: Several decades after the first publication of this little book I do not find myself in full agreement with everything it contains. Since I have no time to re-write it completely I better leave it as it stands and try to explainin the following what amendemnts I should have liked to make. (Auszug, S. 1)

Note:: Das Typoskript stellt die 2. revidierte bzw. korrigierte Fassung der 1972 neu verfassten Einleitung zu "Small and Big Business" (1945) dar. Vermutlich zwecks der spanischen Ausgabe des Buches verfasst.

Related work:: Steindl, Josef: 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.3.11

Access:: Free access

Many economists for a long time apparently held views about the capital-coefficient which have no sufficient basis in facts. The reason may be the enormous role of tradition which often takes the place of information in economic thinking. The economist's prejudice stems from the following ideas: (1) a belief in capital accumulation as the only vehicle of economic progress (strong virtues of saving) (2) the idea that economics is a matter of substitution (where the product is regarded as fixed. This could be justified only if we are everywhere far in excess of the "optimum scale of production".) (3) the idea that producers always operate in the range of diminishing returns. In analogy to Ricardo's picture of a fixed amount of land to which successive doses of input of labour and capital are applied, we have to picture a given amount of labour to which successive doses of capital are applied. This picture, however, would not be adequate to represent the conditions of an individual plant under modern industrial conditions, because technical progress may very well involve a reduction of the labour employed per plant. We plot there fore capital per man as a function of output per man. The gradient of a straight line joining the coordinate centre to a point of this function - the capital coefficient - will decline over a certain range; later on we can assume for general

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