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It had however considerable consequences for Marx's theory
and his anticipations with regard to the further
development of capitalism. His well known expectation that
the share of wages in the product would inevitably
and continuously decline depends entirely on the assumption
of an increasing capital-output ratio. Indeed if the
capital-output ratio remained constant wages per man
could increase in step with productivity without
diminishing the ratio of surplus to capital and therefor
the growth of capital. Since surplus would be a constant
share of product which would be in constant proportion
to capital, it would be possible to increase capital
by a constant percentage year by year, provided
a constant proportion of the surplus would he "capitalised".
It is only when the capital-output ratio rises that
an increasing share of surplus ( and a decreasing share of
wages ) is required in order to keep the rate of proft
and the rate of growth of capital constant.
Now to the other feature of technical progress:
Concentration ♦ This was the most successful prediction
Marx has made. Concentration of control over private
business capital has increased tremendously since the time
of Marx and it has continued to increase also recently.
We are not so optimistic, it is true, about the ultimate
happy outcome of this concentration process. But
whatever our hopes, fears or frustrations, on a purely
analytical plane there are signs which make us doubtful
whether we are justified in extrapolating the trend of
concentration into the future.