Alberto Quadrio Curzio

Historical and theoretical introduction to rent, resources and technologies

It is useful to introduce this theoretical study with some propositions from the history of economic thought. The review will focus on some general categories later recalled in the analytical part of the book. In so doing, we avoid a superficial survey of issues that would by themselves require monographic studies. Since a selection has to be made, it will be based upon the analytical and intellectual framework followed over several years by the authors in their research on this topic.

Production and distribution: data, hypothesis and problems

We represent a disaggregate and interdependent economic system characterized by sectors producing primary commodities and sectors producing non-primary commodities.

Order of efficiency

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.

Conclusions and further lines of research

This volume attempted to achieve several objectives and we believe it did. Its starting point was historical-theoretical. We were convinced that the issues on natural resources, technologies and rent did not receive the attention in the economic thought that they deserve. Indeed, we showed how economic theory swung back and forth around them through time. Recently these themes were considered far less relevant than those —certainly central but not exhaustive—that explained economic growth exclusively in terms of produced means of production.

Technical and technological progress, rent, and income distribution

This Chapter aims to analyze how technological change modifies prices and income distribution, and it also points out further categories of rent related to different types of technical and technological progress.

Rent, distribution, prices

The analysis carried out until now started with the choice of an exogenous distributive variable and determined the order of efficiency (Chapter III), and the level of activity of the economy (Chapter IV).

Technical progress and technological change

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.

Dynamics of profits, rents and their shares

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.

Choice of technologies and dynamic price-distribution order of efficiency

In this Chapter we will analyze the criteria according to which technologies are chosen by the profit earners, that is, by that economic operator who selects technologies and drives accumulation. We shall refer to this category therefore indifferently as profit-maker, technology-maker, or accumulation-maker operator. It is commonly assumed that this operator aims at profit maximization, which, in turn, is a matter also dependent on the dynamics of accumulation.

Choice of technologies and dynamic values efficiency order

In the previous Chapter we established both the potential and the limits of the dynamic physical efficiency order. Even in the simpler case, in which the determination of the order is achieved with the comparison of techniques employing the same Npmp, this Oe cannot be resolved when: a) the technologies have the same uniform rates of net product, but non-orderable residuals (Chapter VII, § 7); b) the technologies have the same uniform rates of net product, but the commodity that can be entirely accumulated by the two technologies is different (Chapter VIII, § 8); c) the technologies have different uniform rates of net product (except for some particular cases discussed in Chapter VII, § 9)