060 FONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA -

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is 0.2 instead of 1 as'is implicitly assumed in equation 2 of LEon-IIEF’s
 paper. In no case it is possible to conclude that there is
some proportionality between R and C which would mean B equal
to unity.
Now, in the Leontief calculations the hypothesis that real national
mcome tends to be proportional to real national capital plays a fundamental
 role. If this hypothesis were abandoned, the results would
be completely different.
My argument is absolutely the same as yesterday. A given property
 can appear to be reasonable without being right. I repeat
again. From an economic point of view, my model may be right
or wrong, this is as may be, but it is mathematically coherent. And
while it shows an approximate proportionality between income and
capital, nevertheless there is at the same time a maximum for real
national income whatever the value of real capital.
The political impact of the LEONTIEF paper, were its results
correct, would be of very great importance. The conclusion would be
that the West should very substantially increase its aid in capital.
My convinction is that this increase would have a much lesser effect
than that predicted by the LEONTIEF paper because the more important
 factor is not capital but, in my opinion, technological
education.
Certainly, if we accepted a production function such as the Douglas
 production function, which it seems very reasonable to accept,
at least as a first approximation, the result would be that the paper
would predict a much lesser effect. Thank vou.

LEONTIEF

I think I fully understand Prof. ALLAIS’ objection. To meet it
let me restate my position in respect to the point raised bv him in
the following way:
The stock of capital employed in productive process represents a
necessary but not a sufficient condition for attaining the level of

13] Leontief - pag.. 22