Knowledge that Transforms

T HE whole problem of capital requirements in economic growth has received increasing attention in recent years under double impetus of post-Keynesian preoccupation with full employment in more highly developed countries and new interest in theory and strategy of economic development for underdeveloped areas. Growth models such as those of Harrod, Domar, and Fellner explicitly focus on productivity of investment, i.e., productivity of incremental additions to capital stock, as a determinant conditioning full-employment rate of growth.' At same time, most of projections for underdeveloped areas are based on models in which capital-output ratio figures as one of principal growth variables.2 In this context, there have been two schools of thought as to comparative levels of marginal capital-output ratios in developed versus underdeveloped economies. The first school, following good classical doctrine, maintains that on an a priori basis one would expect a comparatively low marginal ratio in underdeveloped countries, where capital is relatively much scarcer than labor. On other hand, second school argues that in early stages of development a large share of investment resources will need to be allocated to social overhead capital, productivity of which is low. Therefore on this account, as well as owing to shifts in industrial structure, while initial marginal capital-output ratio tends to be high, it will decline at more advanced stages of economic growth. For instance, Colin Clark maintains that the figure of capital requirements per unit of output rises . . . in early stages of industrialization, but that later effect of modern technology is to bring this figure down. I With this background in mind, it seemed to us that an investigation of incremental capital-output ratio in Soviet Union might throw some additional light on factors impinging upon problem of capital requirements during periods of rapid growth in early stages of development. The Soviet process of economic growth with its marked emphasis upon development of producers' goods and defense industries has been generally considered a highly capital-intensive one. However, as we will attempt to show, this conclusion seems to be belied by realities of Soviet development experience for economy as a whole, although it does have some validity for industrial sector alone. Specificially, in this paper we propose (i) to develop measurements of aggregate and industrial incremental capital-output ratios in Soviet Union, (2) to indicate some of factors which may account for comparatively low ratios observed, and (3) to point to some of implications of our results for measurements in general.

YOU are familiar with those huge ant-heaps that one finds occasionally in the woods: myriads of tiny particles collected and put together with patience and perseverance by a legion of methodic small creatures. Whenever I think of the statistical aspects of the gross product in a detached fashion this image comes to my mind, and the analogy brings out the difficulties which I face in this talk: While the complete ant-heap is truly imposing, it is not easy to say anything of a general nature about the individual particles. Nor do the techniques employed by the builders appear to lend themselves to significant summarization. However, to talk in detail about the particles and the work by which they are put together would not only be an endless affair; it would also be endlessly boring. I shall deal as well as I can with these difficulties, and hope that I shall be able to further your understanding of gross product statistics.

S. E. Harris, S. H. Slichter, P. A. Samuelson, W. Fellner, E. S. Shaw, H. M. Groves, H. C. Wallich, A. C. Harberger, N. Goldfinger, The Economics of Eisenhower: A Symposium, The Review of Economics and Statistics, Vol. 38, No. 4 (Nov., 1956), pp. 357-385

THIS study attempts to evaluate the importance of some influences on inter-industry changes in average hourly earnings for the period I939 to I947 in manufacturing. We consider the relationships between earnings changes and the original earnings level, changes in production, employment, productivity, the importance of wages in total costs, and the extent of unionization. Our statistical investigation covers 57 manufacturing industries, including all those industries for which Census Bureau output indexes, or combinations of them, comparable to B. L. S. data on hours and earnings were available.'

R ECENT discussion of future farm output requirements ' have stressed heavily the important role which technological progress is expected to play in meeting the projected output requirements. This is as true of the studies which have emphasized the transitory nature of present food surpluses 2 as of the studies which point to continuation of the present pressure of food supplies on population. I In spite of this emphasis on the importance of technological change, these studies have generally failed to make explicit the relationship between technological progress and changes in factor input requirements other than labor inputs. This failure seems to stem from use of an analytical scheme which fails to distinguish between technological change and change in labor productivity, thus confusing the contributions to farm output made by technological change and increased nonlabor inputs.4 In this paper, I shall attempt (a) to outline an analytical scheme which distinguishes between the contributions of technological change and increased nonlabor inputs, (b) to present a set of alternative technological change and factor input models for American agriculture which will illustrate the possible consequences of alternative rates of technological change on certain aggregate input categories during the next quarter century, and (c) to discuss some questions of agricultural policy stemming from the close relationship between technological change and input requirements.

THIS paper summarizes the results of an exploratory study of wage levels in relation to the foreign trade of the United States.' Attention is concentrated on manufacturing industries, although mining and agriculture are also included. The broad conclusion is that export industries tend to pay higher wages than importcompeting industries (i.e., the industrial classifications within which the largest volume of competitive imports fall). Within the manufacturing sector, the difference is associated with the higher wages paid by durable goods industries as compared with nondurable goods industries; that is, a large part of the difference is connected with the fact that the proportion of durable goods industries is higher among the leading export industries than among the leading import-competing industries. Even greater wage differences are found when the leading export industries are compared with industries producing commodities most vulnerable to further import competition or with industries producing goods that are competitive with highly protected imports. Relatively higher wages have characterized exported manufactures for over half a century. The same tendency for average wages in the export group to exceed those of the import-competing group is found in the mining and agricultural sectors, but for agriculture the analysis of wages in relation to foreign trade is much more tentative. The reconciliation of foreign trade statistics with data on wages, employment, and production for the years I947 and I952 had been accomplished by the Bureau of Labor Statistics in connection with its input-output studies.2 Average hourly earnings, which are used as the measure of wages,3 are either calculated from Census data or taken from B.L.S. estimates. For agriculture, however, there was no source of hourly earnings data, and, as is explained in the section on agriculture, the author has employed a makeshift method based on data of the Bureau of Agricultural Economics.