RE: [OPE] constant returns to scale

Further, it could be argued that if one uses Kantorovichs method one can
extract marginal returns for each input which are not the same as the average returns his ODVs.
But the underlying model remains linear and tractable.

Paul Cockshott
Dept of Computing Science
University of Glasgow
+44 141 330 1629
www.dcs.gla.ac.uk/~wpc/reports/

-----Original Message-----
From: ope-bounces@lists.csuchico.edu on behalf of GERALD LEVY
Sent: Wed 10/1/2008 4:08 PM
To: Outline on Political Economy mailing list
Subject: RE: [OPE] constant returns to scale
 

> Measuring marginal costs is impractical centrally or in a de-centralized fashion,
> because they vary with level of output. You can assume this away and then
> assume constant returns to scale, so that MC = Average Cost, but this then has
> none of the efficiency advantages of MC pricing. This is quite independent of the
> incentive problems to which you refer.
 
Hi Michael W:
 
Yes, but don't most Marxian models also assume constant returns to scale?
 
I suppose this would be legitimate in a static model, but surely any
truly dynamic model of growth and capital accumulation must not assume
this. This must be the case since technological change in means
of production and the processes of the centralization and concentration
of capital require (and, indeed, express) economies of scale.
 
In solidarity, Jerry
 
 
 
 

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