Economic essays

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Monograph

Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Elasticity of supply as a determinant of distribution / Paul H. Douglas

Collection:: Economics Books

96 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK It is in other words to the advantage of a factor that it should not expand but rather contract under prosperity and that its rival should increase in quantity as much as possible. 3. Although the compass of this article is altogether too short to develop this point, it can be said that such mathematical computations as have been made seem to indicate that these two conclusions apply also as regards the relative shares of the total product as well as the return per unit. This is true for certain plausible assumed productivity surfaces but not for others. There is indeed grim irony in the fact that the principles of distribution run so counter to the heart of the Christian ethic with its faith that “whoever shall lose his life shall find it,” and with its injunction to go the second mile. Within the world of purely economic values and motives however, that factor which gives of itself most sparingly reaps the greatest reward, and reaps the more, the more the other factors expand and give of themselves. 4. Where one factor has a negative elasticity of supply which is greater than the positive elasticity of the other, there is a cumulative process tending to enhance the return to the negatively elastic factor. The same may also be true when both factors have negative supply curves but of differing magnitudes. 6. Elasticity of Supply in Relation to Decreases in the Net Effectiveness of Industry Precisely the reverse set of results would occur were the efficiency or exchange powers of a society to decrease without any prior change in the quantities of the factors themselves. If the supplies of both were completely inelastic, then for a symmetrical productivity surface each would suffer an equal proportionate loss without, of course, causing any diminution in the quantity of either. Were they both of infinite elasticity, then there would be a great contraction in the supply which would only be checked by (1) the lessened strain put upon some third factor such as land, and hence the higher joint product credited to the two factors in question, (2) the probability that some of the supply of the factors would be offered for a somewhat lower price rather than not be offered at all. If both of the elasticities were positive but equal, then the initial decrease in

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