Abstract
In this chapter, the model as developed in the last section, is now used to analyse the special problem of capital accumulation is this agriculture. It is found that given an unequal distribution of income and wealth, and related imperfection of credit market, such agriculture can show a tendency to approach a state of zero rate of capital accumulation under certain plausible conditions, and this can be accompanied by a process of immiseration of family farms.
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Notes
- 1.
This case will come to be very relevant for our discussion in Chapter 5.
- 2.
See discussion of the case where the elasticity of M with respect to i is less than 1, pp. 41–43.
- 3.
It should be noted that as a result of any increase in T2 and fall in T1, there is an increase in the marginal product of labour in the capitalist farm and a fall of it in the family farm, implying a reallocation of L1 and L2. Similarly, there is also an increase in the marginal product of capital in the capitalist farm and a fall of it in the family farm, again implying a reallocation of K1 and K2. But although there is change in the composition of the demand, the behaviour of the total amount of the demand for capital, \( n{\overline{P}}_k{K}_1+{\overline{P}}_k{K}_2 \) relative to the demand for \( \overline{P}{C}_1^l \) does not change, following the usual decrease in y1.
References
Bagchi, A. K. (2015). Perilous Passage. Lanham, MD: Rowman & Littlefield.
Bhaduri, A. (1983). The Economic Structure of Backward Agriculture. London: Academic Press.
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Dasgupta, A.K. (2018). Behaviour of the System over Time. In: Income Distribution, Market Imperfections and Capital Accumulation in a Developing Economy. Palgrave Pivot, Singapore. https://doi.org/10.1007/978-981-13-1633-3_4
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DOI: https://doi.org/10.1007/978-981-13-1633-3_4
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