Introducing technical progress

As soon as we abandon the artificial hypotheses of proportional dynamics and try to move nearer the phenomena that characterize the reality of industrial economic systems, we have no choice but to find a way to introduce into economic analysis, explicitly and without artificial restrictions, that widespread phenomenon of individual and social learning which constitutes the primum movens of industrial societies. Without making too many distinctions, which would carry prejudicial concepts with them, we shall simply label it with the all-embracing term of ‘technical progress’.

Obviously we do not intend to go into an investigation of the deep sources of technical progress; a complex social phenomenon, which cannot but be accepted here as a given external datum. However, to assume technical progress as a datum does not mean assuming technology as constant. What is here taken as a datum is its dynamics. That is to say, we are going to introduce explicitly into our analysis a few very general but essential dynamic features of technical progress. As will be seen in the following pages, this very simple but crucial analytical step – with respect to the traditional procedure of assuming technical coefficients as constant – has truly upsetting effects.

Technical change and the evolution of consumption patterns

Technical progress reveals immediately, in the economic sphere, two separate and distinct, though obviously connected, aspects.

The first and most apparent aspect is strictly technological.