Abstract
In a capitalistic economy the main production decisions are made by private capitalists. The choice of technique is one of the decisions in their hands, and the criterion for that choice is to maximize the expected profit rate. In order to calculate that rate they must have expectations of the prices of various commodities, and of the wage rate.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Marx, K. 1867–94. Capital. Translated from the third German edition by Samuel Moore and Edward Aveling, ed. Frederick Engels. Reprinted. New York: International Publishers, 1967.
Nakatani, T. 1984. Technical change and the rate of profit: Considering fixed capital. Kobe University Economic Review 30: 65–78.
Okishio, N. 1961. Technical changes and the rate of profit. Kobe University Economic Review 7: 85–99.
Ricardo, D. 1821. On the principles of political economy and taxation. Vol. 1, of The works and correspondence of David Ricardo, ed. P. Sraffa. Cambridge: Cambridge University Press, 1951.
Salvadori, N. 1981. Falling rate of profit with a constant real wage: An example. Cambridge Journal of Economics 5(1): 59–66.
Simon, H.A., and D. Hawkins. 1949. Some conditions of macro-economic stability. Econometrica 17: 245–248.
Sraffa, P. 1960. Production of commodities by means of commodities: Prelude to a critique of economic theory. Cambridge: Cambridge University Press.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Okishio, N. (2018). Choice of Technique and the Rate of Profit. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_511
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_511
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences