Abstract

Technical Progress as an Instrument of Economic Policy

Technical progress, in the author’s comprehensive view, consists in the adoption or propagation of (1) new ways of satisfying consumer wants, adding to the existing range of consumer’s goods, (2) new production processes, adding to the existing range of capital goods, (3) new ways of satisfying consumer wants, optimizing existing ways, and (4) new production processes, optimizing existing ones. With regard to objectives of economic policy, the author deals with complementary and (or) compensatory effects of the elements of technical progress. The complementary effect allows economic growth per capital a) in the case of full employment, by productivity increasing new production processes and b) in the case of underemployment, by product adding (demand increasing) new ways of satisfying consumer wants, by new production processes, adding to the existing range of capital goods and by new ways of satisfying consumer wants, optimizing existing ways. He finds that compensation may be established between (4), which is always factor-saving and (1) and (2), which are always factor-employing. The author discusses the problem, whether or not technical progress in general and its elements can be deliberately influenced at least within certain limits. The combination of the four elements of technical progress depends on the aims ‘of economic policy and the economic situation. If the effects of the four elements of technical progress do not correspond, resources are wasted