Full text: Small and Big Business

That technical progress and scale are closely related is 
prima facie plausible. Technical progress proceeds by 
1) division of labour (leading ultimately to the conveyor belt) 
2) replacement of human energy by energy from other sources 
(which involves machinery for energy transformation and 
application) 3) continuous processes 4) selfregulation 
(automation, computers). These technical changes all tend to 
increase scale, while at the same time they also Increase 
capital per man. 
Some time ago economists used to think that economic progress 
involves a substitution of capital for labour, more capital 
being used per unit of output. Empirical studies (Kuznets, 
Goldsmith etc.) have shown that there is no consistent long 
term trend in this direction. 6 * Technical progress has proceeded 
by making things cheaper in terms of labour and in terms of 
capital at the saune time. 
There are also considerable doubts about the concept of a 
"given technique", consisting of "alternative methods" of 
production of a final godd. Production methods do not fall 
from the sky. What in fact really "exists" are only those 
techniques which have been developed, which have been tried 
out (i.o. where there are proto-types, or experimental 
production runs), In a given country or region there will be 
6) S. Kuznetsx Capital in the American Economy. Princeton 
1961, p. 199, 209, 214.

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