Beyond the Accumulation of Capital

The Author presents in this chapter of: JOAN ROBINSON’S ECONOIMCS. A CENTENIAL CELEBRATION, a deeper and more developed elaboration of his 1983 article “The Accumulation of Capital” (CJE, 7:3/4, pp.405-411). The 1983 article raises the question: is there any relevant difference between the accumulation of individuals’ wealth through the ownership of precious metals and durable consumption goods, and the accumulation of individuals’ wealth through the ownership of means of production? The analysis undertaken by the author shows quite clearly that the economic systems in which production is carried out with the use of capital goods (as opposed to more primitive economic systems in which the use of the means of production is negligible) have acquired new features of social relevance. The Author concludes that the attitude of the community as a whole towards the ownership of capital goods cannot be the same as its attitude towards the ownership of durable consumption goods. The process of the accumulation of capital goods is essential to the working of the whole production process and no industrial society can avoid facing the social implications of the process of capital accumulation. In “BEYOND THE ACCUMULATION OF CAPITAL” the Author goes beyond growth of physical capital and focuses attention on technical progress (that is, the growth of knowledge), which falls into a special category of its own. Knowledge being immaterial constitutes the vital difference as compared with the material status of traditional goods – both physical capital and consumption goods. The unique nature of knowledge bears crucial implications for economic theory, and for institutional analysis, especially in respect to some key institutions, such as property rights and the efficiency (or inefficiency) of the free market mechanism, which is based on property rights. The knowledge factor, as in the case of capital goods plays a social function, in fact a crucial social function for the economic system as a whole. Without knowledge, no true economic DYNAMICS can take place. Owing to its properties of a quasi-public good, technical knowledge may play its social function as a necessary input of production. But unlike capital goods, it does not entail the usual costs of reproduction required by material goods.