Economic essays

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

Collection:: Economics Books

ELASTICITY OF SUPPLY AS A DETERMINANT OF DISTRIBUTION * Paul H. Douglas p=» ae The Positwe Contributions of the Marginal Theory of Distribution THE marginal theory of distribution as developed by Professor Clark has made a great contribution to economic theory by extending to labor and capital the classical doctrine of diminish- ing returns on land. As applied by Ricardo and James Mill,* a combined “dose” of fixed proportions of labor and capital was applied to land with the result that while the total output increased, it did not increase in proportion with the rate of increase of “doses.” The return specifically attributable to the combined dose was in consequence less than before and the difference between (1) the yield of the combined dose multiplied by the number of doses, and (2) the total product, became rent. But the quantity of capital was not varied independenfly in relation to either land or labor, nor was the quantity of labor. The relationship between capital and labor was one of fixed technical coefficients and the only variation consisted of the quantity of labor and capital on one side and the quantity of land on the other. Yet out of this simple relationship, the classi- cal law of rent was deduced. Von Thiinen * made an approach to a more malleable theory by breaking up the fixed “dose” of James Mill and by varying the quantity of labor which was applied to land. He hinted that the quantity of labor as compared with capital could also be varied but did not work out his own suggestion. This failure to * This paper was received by the Publication Committee on March 23, 1927 —EDITOR. The author wishes to acknowledge the invaluable assistance which has been given him by his colleague, Mr. S. W. Wilcox. * Cf. James Mill, Elements of Political Economy (1824), p. 24; pp. 30-34. 3 Der lsolierte Staat.

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