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higher and higher amount of wages and profits, or, more generally,
an increasing trend in per-capita incomes at the disposal
of consumers. It follows that, in each period of time,
‘echnical progress compels the members of the community to
make new decisions; they must decide on which commodities
‘hey are going to spend the increments of their incomes. It is
nere that their preferences as consumers come to play a central
role.
Consumers’ preferences ultimately depend on the character
of human nature, which represents, in the same way as the
technical conditions of production do, a fundamental datum
for any meaningful economic investigation. No commodity,
whatever ingenious technique it may require, can be sucessfully
produced if its utility for the consumers is not sufficient to
justify its cost: it would remain unsold. The relevance itself of
technical progress depends on demand; an increase in productivity,
however large it may be, loses much or even all of
its meaning, if it takes place in the productive process of a
commodity for which demand is small or negligible. This means
that any investigation into technical progress must necessarily
imply some hypotheses (and if not explicitly, it necessarily does
so implicitly) on the character of the evolution of demand as
Income increases. Not to make such hypotheses and to pretend
to discuss technical progress without considering the evolution
of demand would make it impossible to evaluate the very relevance
of technical progress and would render the investigalion
itself meaningless. Increases in productivity and increases
in real income are two facets of the same phenomenon. Since
the first implies the second, and the composition of the second
letermines the relevance of the first, the one cannot be con
sidered if the other is ignored.
Unfortunately, the economic theory which has so far been
developed is hardly able to give us any help on this problem.
[he consumers’ demand theory that we know today is a highly
sophisticated logical framework, built on static premises. Ti
10] Pasinetti - pag. <9
