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]

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 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.

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.3.10

Access:: Free access

15 Therefore the main arguments of Chapter III retain their place in this book, although the conclusions drawn are not relevant. (this is also true Of my - in any case unfortunate - argument that econoraisslng capital is not important as long as there UAi f is am employment). Indeed, that the profit rate should decline in the highest size classes (taking it as a fact, although tne evidence may not be wholly conclusive) could be explained by reasons more convincing than a supposed tendency for capital-output ratio to rise. The first of these reasons is the safety preferende of the large concerns. Since they are 9) less indebted than smaller firms ' their net profit rate ghrhiegaverage can be expected to be lower. The safety pre ference can also bring about similar effects in other ways. If the integration of sources of rav; materials and power is motivated only by the wish to reduce risks, and yields less than the average profit rate of the firm, then we might inter pret this as a case of "buying safety" which is fully analogous to the reduction in debt. Thus the high apparent capital- output ratios of Table IX (see above) may indeed contribute to the explanation of falling profit rate (unless the raw material investments as happens often in backward countries, are very profitable), but the interpretation of this is quite different from the argument of Chapter III. 9) It is true that large firms issue more bonds than small firms which have no access to the capital market, but the total in debtedness is larger for the smaller firm.

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