Fixed Capital

Abstract

In section 8.1, I suggested that the appropriate way to generalise the analysis of circulating capital to the fixed capital case was within a joint production framework — indeed, the provision of such an analysis is the main purpose of this chapter. However, it should be recognised that the treatment of fixed capital within a joint production framework is not the only possible generalisation. In section 9.2, I present an alternative to the joint production approach, suggesting its properties and indicating its weaknesses. The study of this alternative — in itself a useful exercise in the application of concepts discussed in Chapters 4 and 6 — is a preliminary to the proper treatment of fixed capital in sections 9.3–9.11.