7.3 Accelerators in the Productive Process

 

7.3      Accelerators in the Productive Process

In 1730, Joseph Foljambe in Rotherham, England, used new shapes as the basis for the Rotherham plough, which also covered the moldboard with iron. By the 1760s Foljambe was making large numbers of these ploughs in a factory outside of Rotherham, England, using standard patterns with interchangeable parts. The plough was easy for a blacksmith to make, but by the end of the 18th century it was being made in rural foundries.1Wikipedia contributors, “British Agricultural Revolution,” Wikipedia, https://en.wikipedia.org/w/index.php?title=British_Agricultural_Revolution&oldid=892242592. Accessed April 14, 2019.

In section 7.1, we talked about how production rates of heavy ploughs resulted in accelerations in yield rates for crops in Europe (and, in fact, beyond). In a similar way, even if only modest, a sustained average rate of equipping foundries so that they could produce Rotherham ploughs resulted in accelerations in plough production rates. Accelerating plough production rates not only accelerated crop yield rates, but accelerated acceleration of crop yield rates. Not only did crop yield rates increase but, for a time, they increased by increasingly large increments.2Just as with plough production and harvesting, there were lags. An initial lag was time needed for the idea to spread. But, for each foundry, time was needed to equip the foundry so that it could make the Rotherham ploughs. That included time needed for mining ores and obtaining building materials, making new casts and, finally, having casts in place and ready to use to make ploughs.

You may already see where this is going. Ploughs are used to produce crops. Factories are used to produce ploughs. Tools are used to make factories. How far back we go depends on each case.

The general result can be expressed by improving our notation. Instead of using a subscript b for bushels of grain and p for ploughs, call basic production level 1 ; level 2 is production at a first surplus level; level 3 is surplus production serving level 2 production; and so on. Equation (16) of section 7.1 is then replaced by a system of equations3CWL21, 244, Economics for Everyone, 45.:

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The equations help bring out various possibilities. For instance, if we write a1(t) = k2[v2(t l2) – B2 (tl2)] + A1(t),  total acceleration at the basic level is seen to be a combination of short-term and long-term accelerations. An increase in basic production rates might be possible by adjustments that only lead to short term accelerations5For instance, there could be picking up the slack. In medieval times, crop rotation increased yield rates.. But, a sustained surge in second level surplus production rates can have longer-term impact on basic production and consequently the standard of living.6More recent innovations include the steam locomotive, the automobile, the airplane, the jet engine, and digital technologies. Remember that our results here are about structure, not the wisdom or benevolence of how things work out in particular cases. Metals can be used to make ploughs. Metals can also be used to make weapons.

As instances reveal, there are different levels of production; and linkages between production rates and accelerations at lower levels. “We are not model-building: we are trying to home in on what actually happens, however sloppily it happens.”7Economics for Everyone, 3rd edition, 43.  See also Economics for Everyone, 47, note 24.

The meaning of the equations is not that there is some single series of production rates and accelerations. Multiple surges and slow-downs can be occurring simultaneously, be in different phases, be happening in different levels, sectors, towns, cities, and regions. The state of the process will be determined by trends at all levels8Statistical results will require up-to-date statistical methods.. Statistical analyses for levels i ≥ 2 will reveal the state of surplus production grounding aggregate basic production at level i = 1.

As history reveals, innovation in the surplus level can lead to surges on a massive scale that yield surges in basic production that consequently shift the standard of living. In such cases, individual lags result in “average lags” across levels and for broad sections of basic and surplus production.

A well-known example, of course, is what happened during the Industrial Revolution. Then, patterns in figures 7.4 and 7.5 represent an across-the-board surge in aggregate surplus production soon followed by an across-the-board surge in aggregate basic production. It “is a matter, simply, of the surplus stage accelerating more rapidly than the basic, then the basic stage accelerating more rapidly than the surplus.”9CWL21, 245. It was “simply” for Lonergan, after having worked on the problem through the 1930’s and up to 1944 (Pierrot Lambert and Philip McShane, Bernard Lonergan, His Life and Leading Ideas (Vancouver: Axial Publishing, 2010), 194). Lonergan called this pattern a “pure cycle.” As already discussed, it is an ideal. See also note 32.

Gathering results, and allowing for normal turnover periods, main phases of the process can be described in the following terms: A static phase is when aggregate basic production and aggregate surplus production rates are more or less constant. A capital expansion phase is when there is a capital build up above and beyond maintenance and replacement. An ordinary basic expansion phase is when surplus production rates may be constant but exceed maintenance and replacement, and there is an acceleration in production of ordinary basic goods and services (e.g., food, clothing, shelter, utilities, …). A cultural expansion phase is when surplus expansion rates may be constant but exceed maintenance and replacement, and there is an acceleration of the cultural superstructure of society (books, schools, hospitals, …).10CWL21, ch. 2, 11- 27.

These phases are “pure types.” As already mentioned, they may be occurring simultaneously, in different parts of an economy, for different reasons and be at different stages.

[Surplus production rates] may increase and at the same time increase both ordinary and [cultural rates]. But, as is clear, this division of effort will yield less notable results in each of the three fields than would concentration on one alone. In any case, economic theory has to study the three separately, for their laws are distinct, and any real composition of the three is explained by a combination of the three sets of laws.11CWL21, 25.

The double-surge structure also hints of future developments in the science of economics. In fluid dynamics, relatively simple motions can be approximated by sums of trigonometric functions. In applied fluid dynamics, a regular supply of large data sets are needed for estimating flow patterns in bodies of waters. In the new economics, economists will work with combinations of surges and flows.12In economics, it will not be simply a matter of mathematical sums. For “adding” flows includes all mutual relations at all levels. However, mathematical sums will be part of analyses and it may prove useful that pulse functions for accelerations are closed under addition.

In sections 5, 6, and 7 we discussed elements of the productive process. Today, most of these function as part of (international) exchange economies. In sections 8 – 10, we go back to including financial structures. Section 9 focuses on international trade.

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