Rent, Resources, Technologies

We have already noticed (Chapter II, § 12) that the determination of the OE is of primary concern. It rises from the fact that there are more processes that employ the Npmp to produce the same basic primary commodity. The choice of the order to activate these processes has fundamental effects on both the price-distribution system and the physical system.

From the analysis of the foregoing Chapter, we came up with some key variables in studying the dynamic process; namely, the techniques A(h), the derived compound technologies, the internal growth rate of each technique, and the residuals that could emerge from the increasing technological dimension.

Profits and rents are two distributive variables that depend on quite different production factors and economic operators. Profits depend on capital, a producible factor, and entrepreneurship. Rents depend on a scarce factor, either nonproducible, non-reproducible or non-reproduced, and ownership. It could therefore appear advisable to deal with rents and profits separately. In particular, considering rent alone would seem the natural corollary of having in our analysis Npmp as scarce factor of production. However, there are also reasons for dealing jointly with these two categories of income because, given the unit wage, we notice that in the long run the real antagonism is between profits and rents. Moreover, because technology and accumulation, which are decided by the technology-maker operator, affect the distributive weights of profit and rent, it is useful to analyze these two variables together. A different choice would have been required if we assumed given the rate of profit instead of the unit wage. An exogenous rate of profit rises conflicting interests between rents and wages, and in this situation the two latter categories should be studied together.

The aim of this Chapter is to clarify some aspects of our theoretical framework of production based on compound technologies; namely, the meaning of technical and technological progress, the differences between these two concepts, and the implications of the choice of technology for the price-distribution system and the growth process. Such a theoretical setting has profound implications for the analysis of technological change. The models put forward in the previous Chapters in which non-produced means of production (Npmp) play a key role, imply an autonomous and partially new taxonomy of technological and technical progress. This novelty may rise some doubts among those used to the traditional technological classifications.