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The authors give evidence of having read Aristotle and parts of Adam Smith and Karl Marx. Neither seems familiar with economics as it has been developed since, although some naive misunderstandings of Lord Keynes are displayed. This shared innocence has enabled Mr. Kelso to discover all for himself (and Mr. Adler solemnly to hail as a revelation) that “What appears to be the increasing productiveness of labor is not the increasing productiveness of labor but the. increasing productiveness of capital.” Yet any economics textbook could have told them this. Surely no one ever seriously maintained that increases in the production of hourly passenger miles per pilot are due to greater efforts by pilots (labor); everyone knows that they are due to faster and bigger planes (capital). It takes stupendous gall to write a book presuming that no one had figured out as much.

Although increases in productivity have quite largely come about with more investment of technologically improved capital goods, contrary to Messrs. Kelso and Adler neither capital nor labor “produces” the increased output, which cannot be imputed to any specific input element. The output is a joint product of all input factors. To be. sure, it cannot be produced without capital, but neither can it without labor or, for that matter, without land. The economic premise of the authors is wrong. Interestingly, the “logic” employed is pretty much the. same as that of Marx and, before him, of the physiocrats: define one input element as the most (or only) productive one (land for the physiocrats; labor for Marx; capital for Kelso and Adler) and conclude that it ought to get most, or all, of the product.

EH

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Ernest van den Haag

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The authors give evidence of having read Aristotle and parts of Adam Smith and Karl Marx. Neither seems familiar with economics as it has been developed since, although some naive misunderstandings of Lord Keynes are displayed. This shared innocence has enabled Mr. Kelso to discover all for himself (and Mr. Adler solemnly to hail as a revelation) that “What appears to be the increasing productiveness of labor is not the increasing productiveness of labor but the. increasing productiveness of capital.” Yet any economics textbook could have told them this. Surely no one ever seriously maintained that increases in the production of hourly passenger miles per pilot are due to greater efforts by pilots (labor); everyone knows that they are due to faster and bigger planes (capital). It takes stupendous gall to write a book presuming that no one had figured out as much.

Although increases in productivity have quite largely come about with more investment of technologically improved capital goods, contrary to Messrs. Kelso and Adler neither capital nor labor “produces” the increased output, which cannot be imputed to any specific input element. The output is a joint product of all input factors. To be. sure, it cannot be produced without capital, but neither can it without labor or, for that matter, without land. The economic premise of the authors is wrong. Interestingly, the “logic” employed is pretty much the. same as that of Marx and, before him, of the physiocrats: define one input element as the most (or only) productive one (land for the physiocrats; labor for Marx; capital for Kelso and Adler) and conclude that it ought to get most, or all, of the product.