671. Joan Robinson to Harrod , 30 May [1937] [a]

[Replies to a letter not found; follows on from 668 , continues at 672 ]

3, Trumpington St, Cambridge

30 May [1937]

My dear Roy

E.J. is due in a day or two so we can safely start again. I think I can best take up the tale by posing once more my original question.

Your neutral invention, with given rate of interest, leaves period of production unchanged (and leaves stock of capital in my sense unchanged) \ it leaves income going to capital per unit of employment unchanged (same capital per man & same r. of i.). [b] But the invention has improved technique \ output per unit of employment with unchanged p. of prod. has increased \ real wage raised \ relative share of capital reduced.

This is consistent with my system, as your neutral invention lies within the range I follow Hicks in calling capital saving (see map below), & since it required no change in stock of capital (my sense) e[lasticity] of sub[stitution]. does not affect the result. But according to you relative share of capital is constant. [fig. 1]

Yours

Joan

  1. a. ALS, three pages on two leaves, in HP IV-1089-1107. Reproduced by kind permission of the Provost and Scholars, King's College, Cambridge.

    b. Punctuation missing in Ms.


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