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

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.

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

DOI:: https://doi.org/10.48671/nls.js.AC14446394

7 developed at all, and diminishing returns to capital-intensifi cation exist only theoretically beyond the point at which actually developed methods end. This point is, however, shifted further on in the course of technical progress. This avoidance of the range of increasing capital-output ratios may result from the above stated influence of high profit margins. What can be the relevance of this analysis to the question of scale ? In Chapter III I used it to explain why the highest size groups of corporations show signs of diminishing profit rate, for which I could find no technical reasons (dis economies or scale I assumed to be unimportant). But if the capital coefficient does not rise with increasing scale, the whole argument falls to the ground. There is an even more direct objection against it: Why, one might ask, do the big concerns apply such methods of production, if they yield them a smaller profit rate than less capital-using methods would ? In fact, the analysis of Chapter III is much more suitable for explaining why the large firms do not increase the capital coefficient! I thought for some time that Chapter III is altogether out of place in this book. But this is not true. Infect the analysis is relevant for the whole relation of capital intensity, technical progress, economies of scale and the distribution of income.

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