6
/ysw*
Thus the possibilities of increasing the capital-coefficient
without reducing the profit rate depend on the size of the
ruling profit margin, in other words, on the distribution
of income. (It should immediately be noted that this ruling
profit margin will be different for different size classes
of firms.)
\ We -Jttrtteer turn to the relation of capital intensity and
productivity. It can be shown 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
, I
different concepts: Instead of capital per man^the capital-
cost ratio, and instead of output per man the sales-cost
ratio. If we «asr take the wage as constant, the analysis
of p. 53 will come to the same as the present analysis, but
it should be noted that in fact real wages can differ
, N (&vui
between firms (e.g. of different sizes), Jwat especially over
time.
/& fit /d&tk-
it seems^arttfriba that 1 the growth in productivity will ^ ^
outM/£»i^ the growth of capital intensity over a wide range,:
In consequence the capital-output ratic 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 oui.wtt'tyi
the productivity growth, so that.capital-output ratio^in-
crease^; ttirt will be diminishing^returns to capital which
on p. 35 I atill took for plausible. Today I doubt whether