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Average and Marginal Labour Values are: On Log (n)—A Reply to Hagendorf
Abstract
The article discusses Hagendorf's contribution to the debate on average versus marginal labour costs as a metric of economic efficiency. It criticises his assumption of rising marginal costs and compares his position to that of other authorities. It provides arguments as to why marginal labour costs tend to fall in industrial economies. It then goes on to look at the practical viability of performing such calculations, using empirical data. These indicate that the non-null elements of the technology matrix tend to grow as n log n, making the calculations tractable.
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Ball (2010) has argued that a shift in Soviet Account practice occurred from the 1960s when development costs ceased to be met out of grants and had instead to be met out of sales revenues. He argues that this led to a decline in the rate at which innovative technologies were applied in the USSR.