Review of Political Economy,

Volume 15, Number 4, October, 2003

Technical Progress in Joan Robinson’s

View: an attempt at systematisation
and formalisation
CLAUDIA HELLER
Universidade Estadaul Paulista, Departamento de Economia, Campus de
Araraquara–FCLAr/UNESP, Rodovia Araraquara Jau km 1, Araraquara
14800–901, SP–Brasil

This paper deals with Joan Robinson’s contributions to the issue of technical progress
and her attempts at treating this subject in accordance with the Keynesian theory of
employment and income distribution, mainly in the long run. The paper aims to
review this aspect of her work and to establish a systematisation and a formalisation
of her approach. At the same time, the paper exposes the problems she faced—but
did not always solve. Looking through her main contributions, the paper concludes
that she used different criteria for the classification of innovations and that they
depended on the specific situations described by the models in which she used the
classification.

1. Introduction
Joan Robinson was one of the most important economists of the last century. She
contributed to, explained, criticised, expanded and made innovations to the
central ideas of the Keynesian Revolution, which had as its main source
Keynes’s General Theory of Employment, Interest and Money (1936). Robinson
dealt with so many and varied aspects of economic theory that it is easy to
understand why her relatively few papers on technical progress were relatively
neglected. This can also be explained by the relative failure of her attempt to
deal with such a complex subject in terms of a long-period Keynesian theory. In
addition, Robinson seldom treated the subject in a systematic way. This paper
aims at revising, systematising and formalising her approach to technical
progress, and at showing what were the difficulties she faced and was unable to
resolve.
This article uses the following notation: W for salaries, P for profits and Y
for output (or incomes). The letter K represents capital as a factor of production
and L represents labour. Superscripts 1 and 2 indicate the values before and after
the introduction of innovations, while the subscripts I and II indicate, respect-
ively, the investment and consumption sectors. The letters , ,
and  represent
‘alpha’, ‘beta’, ‘gamma’ and ‘delta’ techniques.
ISSN 0953-8259 print/ISSN 1465-3982 online/03/040521-24  2003 Taylor & Francis Ltd
DOI: 10.1080/0953825032000121469
522 Claudia Heller

2. Intuitive Taxonomy and the First Attempt at Formalisation

The first essay in which Joan Robinson deals with technical progress is entitled
‘The long period theory of employment’, first published in 1936. The essay was
‘an attempt to apply the principles of Mr. Keynes’ General Theory of Employ-
ment, Interest and Money to a number of particular problems’ (Robinson, 1937,
p. v). It aimed at developing a long-period theory of employment, taking into
account the double character of investment, that is, as demand and as productive
capacity creation. This is the most important of all the essays in Robinson’s
Essays in the Theory of Employment (1937). It has been described as the ‘pièce
de résistance’ of the volume (cf. Harrod, 1937), and is still an issue of
controversy (see, for instance, Eatwell, 1983; Kregel, 1983; Garegnani, 1996).
Joan Robinson’s central argument can be summarised as follows: in
Keynes’s theory, which is essentially a short-period theory, a fall in the interest
rate tends to increase employment because it tends to increase the marginal
efficiency of capital in relation to the interest rate and because it reduces the cost
of investment at the same time. As it is supposed that the ‘stock of capital’ is
fixed, the fall in the interest rate has the sole consequence of raising output and
employment, reducing, at the same time, the level of idle productive capacity.
However, in the long run, a fall in the interest rate also implies the
possibility of net investment in capital goods, which may replace the labour
force in certain sectors and branches, and therefore the level of employment may
fall. On the other hand, it is possible to have an increase in employment due to
the expansion of the sector that produces capital goods. These contradictory
effects may or may not cancel each other out. This means that it is not possible
to predict the final effect of a fall in the rate of interest on the long-term level
of employment without taking into account both the possibility of replacement
of part of the labour force by capital goods and the effects of the modification
of the level of employment on the distribution of income and on the propensity
to consume.

… an increase in employment is not necessarily a result of a fall in the interest

rate, for … there are three stages at which there may be a slip between the cup
and the lip.
First, a fall in the rate of interest may increase the desire to save, and so
tend to reduce total income. Second, the change in distribution may be
unfavourable to labour, and so tend to reduce total income. Third, even if total
income increases, employment can be reduced, because of the increase in
output per head. (Robinson, 1936, p. 89)

The same analytical reasoning applies to the evaluation of the effects of a

change in the propensity to save, in fiscal policy, in the size and age composition
of the population, in the degree of monopoly and in technical progress. Dealing
specifically with technical progress, Robinson proposes a taxonomy of ‘inven-
tions’ (restricted to new means of production) and classifies them as neutral,
capital-saving and labour-saving, according to a criterion that compares the share
of capital and of labour in output (or income), before and after the introduction
of the ‘inventions’.
 Technical Progress in Joan Robinson’s View 523

The neutral or biased character of the innovations depends on the

modification (or not) of income distribution, on the modification (or not) of the
level of income and the modification (or not) of the level of employment. A
neutral innovation does not alter income distribution, while a capital-saving
(labour-saving) innovation reduces the share of profits (wages) in income and
increases the share of wages (profits) in income.
Although innovations generally tend to increase the level of output, their
long-run effect depends also on their effects on income distribution. This
reasoning is based on the concept of the propensity to consume and on the
hypothesis that lower income classes have a higher marginal propensity to
consume. Consequently, a capital-saving innovation tends to raise output be-
cause it reduces the aggregate propensity to save; by analogy, a labour-saving
innovation tends to reduce output.
Nevertheless, the final effect on the long-period level of employment
depends also on the combination of two additional factors: the possibility of a
technical improvement (the raising of the level of output without any change in
the quantities of factors used) and of capital intensification (the raising of the
capital/labour ratio). Both processes together tend to raise the capital/labour
ratio, reducing relative employment. Therefore, the consequences for the level of
employment are also dependent on the new ‘combination of inputs’ represented
by the innovations. Adding this to the considerations on the effects on income
distribution, Robinson concludes that it is not possible a priori to determine the
impact of innovations on the long-term level of employment.
In the same way as the innovations generally tend to raise the level of
output, investment generally tends to raise the level of employment. Neverthe-
less, excessively ‘labour-saving’ investments tend to reduce employment both
through their direct effects (a reduction of the number of employees) and
through indirect effects (when the wage share in aggregate income decreases).
On the other hand, although not all investment implies innovation, any inno-
vation implies investment. This is why even innovations that increase the profit
share in income and which reduce output through a fall in the community’s
propensity to consume, can be accompanied by positive net investment and may
raise the level of employment. Robinson concludes that as long as the investment
process continues, the initial effect on the level of employment will be positive,
and that this effect can be maintained through a relatively constant flow of
innovations of any kind.

The immediate effect of inventions upon employment depends upon the extent
to which new equipment is the product of net investment and not merely the
result of using the amortisation funds of old plant to set up new plant. In
general, we may suppose that, except when inventions are highly capital-sav-
ing, a period of positive net investment will result from them … for all except
the most capital-saving require an increase in capital per head, while the
reduction in total output which results from increased thriftiness will not be
immediately foreseen. The first effect of inventions, therefore, is likely to be
an increase in employment, even when in the long run they will reduce it, and
a sufficiently rapid succession of inventions, provided they are not extremely
524 Claudia Heller

capital-saving, would prevent the rate of investment from ever falling to zero.
(Robinson, 1936, pp. 97–98)
One of the important conclusions of this essay is that technical progress
does not necessarily imply unemployment. Technical progress can be blamed for
unemployment only if it simply replaces old equipment (zero net investment)
and/or if it is of an extremely ‘labour-saving’ kind. Such a situation, in
Robinson’s opinion, is in fact unusual.
Among the nearly 40 reviews of Essays in the Theory of Employment,
Harrod’s deserves particular mention because it had a great influence on
Robinson and seems to have led her to develop a line of reasoning which she
initially thought would be fruitful, but which then turned out to be very difficult
and unsatisfying. Harrod asked for an explanation of how to measure the
‘volume of capital’ (or ‘stock of capital’) and required a more precise way of
measuring the effects of technical progress on the distribution and level of
income, as well as on the level of employment, which Robinson described
only verbally and intuitively. Robinson’s attempt to respond to Harrod’s criti-
cism led her to reformulate the production function and to discuss the meaning
and the measure of capital—issues in the famous Cambridge capital contro-
versy.1
Harrod also proposed a classification of innovations according to their
direct effect upon the capital/output ratio and established a causal relationship
for their effect on the level of employment, which was different from the one
suggested by Robinson. Robinson classified innovations according to the crite-
rion of income distribution, and this would become the determinant factor of the
changes in output and in long-term employment (through the principle of
effective demand), while for Harrod it was the change in output that determined
income distribution and therefore the level of employment. In his reasoning, if
the innovation raises the capital/output ratio, the share of wages in income
decreases and therefore the level of employment decreases (and vice versa). The
level of employment does not change if there is no change in the capital/output
ratio and, in that case, income distribution remains unchanged.
Table 1 describes Robinson’s classification, which is based on the income
distribution criterion and Harrod’s classification, which is based on the capital/
output ratio criterion (a kind of ‘technical coefficient’). The last line shows that,
leaving aside issues such as the propensity to consume, both classifications seem
to come to the same conclusion concerning the effect of technical progress on
the level of employment.
Robinson replied to Harrod’s criticisms of the measure of capital in her
article ‘The classification of inventions’ (Robinson, 1937–38). She suggested
that capital should be measured by its costs, in such a way that two stocks of
capital should be considered equal if they cost the same amount. She proposed
that the measure should be taken in terms of cost and related to the most efficient
investment goods of each kind, but she clearly recognised that certain ambigui-
ties remained, and signalled that she was aware of the difficulties involved in
‘measuring capital’. In this same essay, Robinson ‘translated’ the classification
1
See Harcourt (1972) for a survey of the Cambridge capital controversy.
Table 1. Technical progress classification by Robinson (1936) and Harrod (1937)

Neutral Capital-saving Labour-saving

Robinson (1936) W2/Y2 ⫽ W1/Y1 W2/Y2 ⬎ W1/Y1 W2/Y2 ⬍ W1/Y1

and P2/Y2 ⫽ P1/Y1 and P2/Y2 ⬍ P1/Y1 and P2/Y2 ⬎ P1/Y1
Harrod (1937) K2/Y2 ⫽ K1/Y1 K2/Y2 ⬍ K1/Y1 K2/Y2 ⬎ K1/Y1
Effect on employment Remains unchanged Increases Decreases
Technical Progress in Joan Robinson’s View
525
526 Claudia Heller

proposed by Harrod in terms of the elasticity of factor substitution and accepted

the classification he had suggested. This attitude can be ascribed to their
common aim, which was to establish the basis of a Keynesian long-period
theory, but it impoverished her approach to the issue. Nevertheless, the debate
continued and an important difference between them remained, revealed in
Robinson’s continued concern with income distribution and employment, which
became less important for Harrod.2

3. Extension of the Classification and Separation between Criteria

Harrod was not the only influence on Robinson. She read Marx for the first time
in 1940, to ‘distract from the news’ (Robinson, 1973, p. x), and she considered
him to be complementary to Keynes, even though they dealt with different
subjects (see Robinson, 1942, 1948, 1955a, 1957). She had several criticisms of
Marxism, but she incorporated its vision of the economy as a historical process,
of capitalism as a class society, and the importance of technical progress in
economic analysis. The debates of the 1940s and 1950s on growth and accumu-
lation and their determinants (the War Circus) were also essential, especially as
Robinson was going to begin to attempt the expansion of The General Theory
into the long period or, to use her own words, ‘to generalise the General Theory’
to the long period—an expression that became the title of one of the essays that
appeared in The Rate of Interest and Other Essays (Robinson, 1952a). In the
introduction prepared for the second revised edition of the book, now entitled
The Generalisation of the General Theory (Robinson, 1979), Robinson wrote: ‘I
was aiming to carry the models of thought and expression of the General Theory
into new fields, in particular, following Harrod, into the analysis of accumulation
and growth’ (Robinson, 1979, p. ix). It is interesting to note that Robinson first
thought that the essay ‘seemed unsatisfactory and [she] allowed the volume in
which it appeared … to run out of print’ (Robinson, 1975, p. iii), but the second
edition of the 1952 book bore the name of this same essay, which means that she
eventually admitted its importance.
Influenced by her readings of Marx and by the debates of the War Circus,
Robinson tried to link the effect of innovations on real wages (and therefore on
consumption) and on investment profitability (and hence on the decision to
invest). At this point, she proposed a classification based on income distribution
and its effects on investment and, consequently, on economic expansion.
She considered that it was important to separate the effect of innovations on
the level of employment from their effect on income distribution. For the
classification of effects on employment, she used the terms ‘capital-using’,
‘capital-saving’ or ‘neutral’ and for the effects on income distribution she

2
According to Besomi (1999a), the debate between Robinson and Harrod includes the issue of the
effects of technical progress on the price level and, according to Sardoni (2001), Keynes made
interesting observations on this debate concerning the effects of technical progress on the prices of
capital goods. On Harrod’s view see also Besomi (1999b) and, for a brief account of the unpublished
exchanged letters between Harrod and Robinson on this issue, see Besomi (2001).
 Technical Progress in Joan Robinson’s View 527

suggested the expressions ‘favourable’ and ‘unfavourable’ to labour (or to

capital).
It is interesting to note that she ceased to describe income distribution in
terms of wages and profits, which she replaced by labour and capital, respect-
ively. This is because the new categories were supposed to make the distinction
between absolute reductions and relative reductions in the use of factors and that
they implicitly assumed that factors are paid proportionally to their respective
marginal productivities.
Hence, according to their effect on the level of employment, innovations are
neutral when the decrease of the capital/output ratio is equal to the decrease of
the labour/output ratio, independently of their effect on income distribution. A
‘capital-saving’ innovation reduces capital in absolute terms and is symmetrical
with a ‘capital-using’ innovation. Robinson stresses that there is a symmetrical
relationship between ‘capital-using’ innovations and ‘capital-saving’ innovations
(and not between capital-using and labour-saving innovations). By analogy, a
‘labour-saving’ innovation decreases employment by a unit of output in absolute
terms and is symmetrical with a ‘labour-using’ innovation.
Innovations which save more capital than labour are classified as ‘unfavour-
able to capital’, and they are symmetrical with ‘favourable to capital’ innova-
tions. Tables 2 and 3 summarise the previous propositions:
This new classification of technical progress is inspired by the concept of
the production function and by the need that Robinson felt to distinguish ‘choice
of technique’ from ‘technical change’. The expression ‘choice of technique’
assumes the previous existence of a set of alternative technologies, among which
every entrepreneur is able to choose one to be used, according to a clear criterion
(usually, the maximum profit it is able to yield). The expression ‘technical
change’ (or ‘technical progress’), on the other hand, reflects a concern with the
determinants of the emergence of these new techniques, of their adoption
by some entrepreneurs, and of their effects. ‘Technical progress’, there-
fore, contrary to ‘choice of technique’, does not assume the previous existence
of a set of already known alternative techniques (the set of ‘blueprints’).
However, it so happens that both the choice of technique and technical change
were always described in terms of production functions (Robinson did this too),
despite the fact that these functions assume a definite ‘state of technical
knowledge’.
In order to understand Robinson’s reasoning it is necessary to explain her
interpretation of the concept of the production function. Such a function relates
different possible combinations of inputs (factors of production), to a given level
of output. The ‘choice of technique’ is a selection of the most profitable
combinations, given factor prices and output. The transition from one technique
to another, for the same volume of output, is described by a movement along the
production function and implies factor substitution. The transition from one
technique to another, for different volumes of output, is described by a move-
ment towards another production function of the same ‘family’: that is, belong-
ing to a set of isoquants that relate to each other proportionally. Both the
movement along the function and the movement of the function itself suppose
that factor substitution is possible (but eliminate, by hypothesis, the appearance
 528

Table 2. Classification of innovations according to their effect on the level of employment (absolute changes: describe
‘modification’) based on Robinson (1952c)

Neutral Capital-saving Capital-using Labour-saving Labour-using

Claudia Heller

K/ Y ⫽ L/ Y K2/Y2 ⬍ K1/Y1 K2/Y2 ⬎ K1/Y1 L2/Y2 ⬍ L1/Y1 L2/Y2 ⬎ L1/Y1

Changes the Absolute Absolute increase Absolute Absolute
capital/output ratio in reduction in in capital per unit reduction in increase in
the same proportion capital per unit of of output labour per unit of labour per unit
as it changes the output output of output of output
labour/output ratio

Table 3. Classification of innovations according to their effect on income distribution (relative changes: describe
‘choice’) based on Robinson (1952c)

Unfavourable to capital or favourable to labour: Favourable to capital or unfavourable to labour:

it is more capital-saving than labour-saving it is more labour-saving than capital-saving

K/ Y ⬍ L/ Y K/ Y ⬎ L/ Y
 Technical Progress in Joan Robinson’s View 529

of new factors). The difference lies in that, in the first case, an increase in the
use of one factor inevitably implies the decrease in the use of the other. The
proportion in which the factors of production are substituted depends on the
specific shape of the production function and on the specific techniques (combi-
nations) that are exchanged. In the case of a movement towards another function
(of the same ‘family’), it is possible to increase output by simultaneously
changing the use of the two factors, in proportions that depend on the shape of
both functions. In such a case, the comparison between technologies becomes
very complicated, because it compels us simultaneously to compare the change
of ratio between factors and the change in scale of the factors (that is, the relative
and absolute quantities).
A ‘change in the state of knowledge’ is embodied by the emergence of a
new ‘family’ of functions that does not need to have a proportional relationship
to the previous one. If one compares two techniques, one can know when a
‘technical improvement’ occurs: it occurs when it is possible to produce the
same level of output with fewer factors, or to produce more output with the same
quantities of factors, not disregarding the possibility of combining these two
alternatives (simultaneously more output with fewer factors).
The possibility of new products has to be excluded, both in the case of the
choice of technique and in the change of technique, and it usually has to be
supposed that even if there is an ‘increase in productivity’, the physical
characteristics of the factors remain unchanged. These simplifying and ‘heroic’
hypotheses are necessary to avoid the comparison between qualitatively different
things. However, the problems of the quantitative measure remains. The above
description of the processes of ‘choice of technique’, ‘change of technique’, and
the comparison between techniques used intentional generic terms. To employ
more precise and rigorous expressions than ‘fewer factors’ or ‘more output’, one
would need to establish a criterion to permit these comparisons, that is, one
would need a measure—and this is precisely the kind of problem that was at the
core of the Cambridge capital controversy.
In the new classification of innovations, which distinguishes absolute
changes from relative changes in the usage of factors, Robinson concentrates on
the differentiation between ‘choice of technique’ and ‘technical change’. She
abandons her previous point of departure, which consisted in classifying the
innovations by different criteria: their effect on the level of employment and on
income distribution. Thus, in ‘Notes on the economics of technical progress’
(Robinson, 1952c), Robinson bases the classification on the proportion in which
an innovation reduces the use of capital and of labour per unit of output, both
in absolute and in relative terms. In other words: she expands the typology of
innovations to differentiate between effects in terms of the absolute share of the
factors in output and in terms of the combination between them. This means that
she did not completely abandon the concept of the production function, but the
idea of relating the change of the absolute share of a factor in output to its effect
on the level of employment and of relating the change of relative shares of a
factor in output to its effect on the income distribution is left behind. Neverthe-
less, Robinson stresses that, although inspired by the production function, her
classification cannot be translated into its terms because the production function
530 Claudia Heller

is incompatible with the fact that ‘the acquisition of technical knowledge is a

one-way process’ (Robinson, 1952c, p. 99), i.e., it is irreversible.3
Joan Robinson looked for a new formulation capable of incorporating the
concepts of neutral (or biased) and favourable (or unfavourable) technical
progress to labour (or to capital). The first step was to classify techniques
according to their degree of mechanisation, which was the subject of ‘The
production function and the theory of capital’ (Robinson, 1953–54).

4. The Capital Controversy and Classification in terms of Degrees of

Mechanisation
The literature on the Cambridge capital controversy almost unanimously at-
tributes to Robinson’s article ‘The production function and the theory of capital’
(1953–54) the responsibility for having launched the debates on the production
function and the theory of the capital. Despite the fact that one can identify the
beginning of these discussions in previous papers, it is important to stress that
the original version of this essay not only consisted of criticisms, but also
incorporated what Robinson called the ‘positive elements’ for an alternative
approach. She removed these parts from all later editions—those in her Collected
Papers and even in other anthologies (for instance, Harcourt & Laing, 1971).
Robinson (1960b, p. 130) justifies these modifications: ‘I have included here
only the negative part of this article as the constructive parts are better done in
my book, The Accumulation of Capital’.
Originally, this essay was an attempt to move towards the construction of
a long-period Keynesian theory, in which investment, in technology too, would
have an important role. Although this essay is certainly one of the most read,
discussed and quoted among Robinson’s many works, one aspect in particular
attracts our attention: the vast majority of interpreters attribute the difficulty of
measuring capital to the fact that the analysis is aggregated. For Robinson, this
difficulty arises not only from the transposition of a concept originating in
microeconomic analysis to macroeconomic analysis; it also stems from several
other reasons, which, in her opinion, should constitute the basis of a long-period
theory of accumulation that necessarily has to incorporate an analysis of the
changes in the techniques of production. In other words: the measure of capital
is a problem that appears not only in aggregated analysis but also in any
long-period theory, in the sense that such a theory must admit the possibility that
there are several kinds of alterations, which may or may not occur separately,
such as quantitative and qualitative changes, modifications in prices, physical
3
Despite being one of the less quoted essays among those that deal with the Cambridge capital
controversy, it is in this essay that Robinson gives a clear explanation of her criticisms of the
production function, and the one in which she presents the main arguments that she would use
throughout her work on this subject. It must be stressed that the irreversible feature mentioned by
her is linked to both the acquisition of knowledge and to the the stock of capital itself, which, once
it has been incorporated and taken a specific shape, cannot be modified without incurring (frequently
high) costs. This concept became the basis for expressions such as capital-jelly, stuff, putty or butter,
which Robinson employed to reveal the neoclassical assumption that capital can assume any shape
at any time. The most famous term is leets, an anagram obtained by reversing the word ‘steel’.
 Technical Progress in Joan Robinson’s View 531

productivity and profitability. We consider it important enough to quote

verbatim:
The capital in existence at any moment may be treated simply as ‘part of the
environment in which labour works.’ We have then a production function in
terms of labour alone. This is the right procedure for the short period within
which the supply of concrete capital goods does not alter, but outside the short
period it is a very weak line to take, for it means the we cannot distinguish a
change in the stock of capital (which can be made over the long run by
accumulation) from a change in the weather (an act of God).
We may look upon a stock of capital as the specific list of all the goods
in existence at any moment (including work-in-progress in the pipe lines of
production). But this again is of no use outside the strict bounds of the short
period, for any change in the ratio of capital to labour involves a re-organis-
ation of methods and requires a change in the shapes, sizes and specifications
of many or all the goods appearing in the original list.
As soon as we leave the short period, however, a host of difficulties
appear. Should capital be valued according to its future earning power or its
past costs? (Robinson, 1953–54, p. 81; all emphases added)
For Robinson, therefore, the ‘traditional’ production function that relates
different numbers of ‘factors’ to a definite volume of output is acceptable only
in short-period theory. In the long run, where it is necessary to consider the
variation of the stock of capital, the production function is totally inadequate. In
order to replace it she constructs a ‘real factor ratio curve’, better known as the
‘pseudo-production function’, which is based on a classification of the process
of production in terms of its degree of mechanisation.4
The point of departure is the idea of a ‘state of technical knowledge’,
represented by all the available techniques at a specific time. The techniques of
each of these sets, which have in common the fact that they produce a definite
product, can be classified hierarchically according to the rate (or volume) of
output that they are capable of producing with a given number of workers. The
criterion of the hierarchy is ‘productivity’, i.e. the output/labour ratio. Robinson
(1953–54, p. 90) stresses that although the description of a given technique is a
‘purely engineering question’, the list also contains a hierarchy of an economical
sort: if ‘from an engineering point of view, it is possible to use a steam hammer
for cracking nuts’ (Robinson, 1953–54, p. 91), from the economic point of view,
on the other hand, a technique using more capital (than another) to produce less
(than this other) should not be part of the list of techniques likely to be used. The
classification in terms of ‘degree of mechanisation’ therefore uses two criteria:
an ‘engineering’ criterion, based on the output/labour ratio, and an economic
criterion, expressed by the capital/output ratio, in which capital is measured in
wage units, these units being themselves a function of the rate of interest.5

4
The main difference between the pseudo production function and the conventional production
function is that the former does not establish a unique and unambiguous relationship between the
output per capita, the capital/labour ratio and the rate of profitability. For a remarkable explanation
of these differences, though written much later, see Robinson (1977).
5
Robinson considered that the measure of capital needed to take into account the past
time–materialised in the interest rate–because, according to her, at any time the existing techniques
532 Claudia Heller

With various techniques, , ,
and , one obtains a differentiated output

per capita (where the term per capita relates to the number of workers used by
each technique), so that the technique  produces a higher output per capita
than that obtained by the technique  when both employ the same number of
workers.
The method of classification by economic criterion is more complicated
(because it depends on the interest rate), but it permits the exclusion of
techniques that represent a higher cost relative to output in comparison with
other techniques. The remaining techniques (after these exclusions) are classified
according to their ‘degrees of mechanisation’ and one can then be sure, owing
to the previous exclusions, that the techniques that have a higher degree
of mechanisation are those that have a higher capital/output ratio, and that
their higher capital/output ratio is not cancelled out by a higher output/labour
ratio.
This criterion implies that the most mechanised technique () is the one that
also produces a higher output using the same number of workers as technique
 (and  produces more than
, etc). It implies, too, that the relative cost of this
production is lower, although the absolute cost of the machines for  might be
greater than that of , which, in turn, can have a higher absolute cost than that
of
, etc.
Table 4 assumes that the four techniques involve the same number of
workers but that they produce different volumes of output and involve different
capital costs. If the ‘engineering’ criterion is used, the best technique is ,
because it has the highest output per capita ratio. Using the economic criterion,
on the other hand, the best technique is
, because its relative cost is the lowest.
The most mechanised technique, , produces more than , with the same number
of workers (and , in turn, produces more than
etc). However, the relative cost
of production using  is lower than it is with  and  but higher than it is with

. The absolute cost of equipment  is higher than that of , which, in its turn,
has an absolute cost higher than that of  and
, although that of
is higher than
that of . The example also shows that technique , which produces the lowest
output per capita and has the highest capital/output ratio, should be eliminated
from the list of feasible alternative techniques.
This example is completely unrealistic, because it envisages very different
techniques and assumes that all of them involve the same number of workers.
Another serious problem is the absence of a criterion for choosing the best

Footnote continued
are the outcome of previous processes which, in turn, incorporate historic and economic elements
and, obviously, the techniques themselves. See also Robinson (1955b). Harcourt (1972, pp. 15–29)
stresses that Robinson’s proposal to measure capital in terms of dated labour time allowed capital
to be related to output but did not allow to obtain distributive prices and shares. He also stresses that
‘even if we assume that clay machines are made from labour alone, we still run into the puzzle of
indentifying both the physical output and the value of output of a period …’ (Harcourt, 1972, p. 234).
Robinson was of course aware of these ‘puzzles’, which is why she proposed the ‘pseudo-production
function’ denomination. See the previous note.
Table 4. Hierarchisation of techniques, based on Robinson (1953–54)

Technique ‘Alpha’ ‘Beta’ ‘Gamma’ ‘Delta’

Employees L L ⫽ 50 L ⫽ 50 L
⫽ 50 L ⫽ 50
Capital K K ⫽ 110 K ⫽ 104 K
⫽ 55 K ⫽ 90
Output Y Y ⫽ 70 Y ⫽ 65 Y
⫽ 60 Y ⫽ 55
Y/L (engineering criterion) Y/L ⫽ 1.40 Y/L ⫽ 1.30 Y
/L
⫽ 1.20 Y/L ⫽ 1.10
K/Y (economic criterion) K/Y ⫽ 1.57 K/Y ⫽ 1.60 K
/Y
⫽ 0.92 K/Y ⫽ 1.65
Technical Progress in Joan Robinson’s View
533
534 Claudia Heller

technique among those that remain. A possible criterion is that of profitability

(highest rate of profit), given by the relation P/K, where P ⫽ Y ⫺ wL, with w
representing the wage rate, the same for all techniques. In the example of Table
4, if one fixes a wage rate w ⫽ 1, the respective rates of profit are 18.18% for
, 14.42% for , 18.18% for
and 5.55% for . The calculation of profitability
is therefore insufficient:  and
yield the same rate of profit and, while  is
better under the engineering criterion because it produces the highest output per
capita,
is the best according to the ‘economic’ criterion because it has the
lowest capital/output ratio.
This first hierarchical classification based on a certain rate of interest or on
a notional wage (that provides a ‘measure’ for capital) must be summarised by
assuming other alternative rates, which are also notional. During this process,
certain techniques disappear from the list.
If, for instance, the wage rate was w ⫽ 1.1, the rate of profit of  would be
13.64% and that of
would be 9.09%. The output per capita of  would remain
higher than that of
, and the capital/output ratio would not change. In that case,
 would be preferable both from the point of view of profitability and from the
point of view of the ‘engineering’ criterion. However, it is possible to see that
the hierarchical organisation of techniques according to the degree of mechani-
sation is an insufficient criterion for the analysis of accumulation. The problem
does not only rely on the definition of the better criterion for the choice of
technique. According to Robinson, the problem also stems from the need to
distinguish the elements that can be attributed to the differences between them
(the issue of ‘choice’) from those that can be attributed to technical changes
themselves, by comparing techniques.
While the ‘choice of technique’ process can be made based on a given rate
of interest in order to compare and to build a hierarchical criterion, ‘technical
change’ cannot be based on such a hypothesis because none of these rates
can be considered to be given if there is change. For Robinson, the adoption
of this hypothesis represents an insoluble problem and a contradiction, because
it invalidates what was taken as one of the main motivations to adopt
innovations—the variation of relative prices of factors or the perspective
to realise ‘above-normal profits’. Furthermore, the adoption of new tech-
niques affects costs and therefore affects the profitability of investment, and
consequently the notional rates on which the comparison between techniques is
based.
In order to explain these difficulties, Robinson mentions the need to be able
to differentiate the analysis that compares the various relationships between
factors from the one that assumes a variation of this relationship: ‘The compari-
son between equilibrium positions with different factor ratios cannot be used to
analyse changes in the factor ratio taking place through time, and it is impossible
to discuss changes (as opposed to differences) in neo-classical terms’ (Robinson,
1953–54, p. 100).
Robinson’s recognition of the insufficiencies of the classification of tech-
niques according to their degree of mechanisation led her to summarise it, along
with her previous classifications, in her book The Accumulation of Capital
(1956).
 Technical Progress in Joan Robinson’s View 535

5. Technical Progress and Accumulation: Interaction and Unification

of Criteria
In The Accumulation of Capital, Robinson tried to take up the challenge of
elaborating an analysis of technical progress within a theory of accumulation
framework. She started from the questions and problems she had already
identified and studied in her previous works. In ‘Notes on the economics of
technical progress’ she warns:
Technical progress is difficult to discuss in precise language. We have no
definite unit on which to reckon the quantities concerned. Commodities alter
their character, capital equipment its form, labour its productivity and money
its purchasing power. Yet the problem is not metaphysical. Actual businessmen
make actual innovations to save actual costs, and actual effects follow
therefrom. A craven scruple of thinking too precisely on the definitions must
not prevent us from trying to analyse them. It seems better to hack a way
through the problem by making drastic simplifications, and then to adapt the
argument to complicated cases as best we may. (Robinson, 1952c, p. 82)
The Accumulation of Capital is undoubtedly one of Joan Robinson’s most
important works. It is also the most difficult to understand. Especially with
regard to the issue of technical progress, this book summarises certain concepts,
such as ‘degree of mechanisation’, modifies the notion of ‘(un)favourable
techniques’, adds the idea of ‘neutral and biased’ technical progress and
incorporates new definitions such as ‘superior and lower techniques’,
‘(de)mechanisation’ and ‘capital enlargement’. Although this attempt tries to
reconcile all these concepts within a unique theoretical schema, these concepts
are not always comparable to each other, because they were elaborated based on
different variations of the basic model, the hypotheses of which are not always
compatible.6
At the same time, although the term ‘technical progress’ is referred to in
almost all the arguments in The Accumulation of Capital the book does not aim
at the elaboration of a theory of technical progress, nor does it intend to build
a classification of innovations. In some sense, this justifies the muddled treat-
ment of the different concepts but it also makes it very difficult to get an
accurate understanding of the main purpose of the book, which was to establish
‘the relations between wages and profits … conducted in terms of (1) the
relations of the stock of capital to the available labour force; (2) the influence
of competition; and (3) the technique of production’ (Robinson, 1956, p. 70).
Robinson recognised that she was not very skilful in her statements, and
wrote in the introduction of her Essays in the Theory of Economic Growth
(1962) that the book should ‘be regarded as an introduction rather than as a
supplement to my The Accumulation of Capital [which] was found excessively
difficult’. She apologises ‘to readers whose heads ached over the earlier one’
(Robinson, 1962a, p. v). Thus, many of the papers that she wrote after The
Accumulation of Capital were attempts to clarify the central ideas of that book
and, according to her, some of the papers were written to clarify her own ideas.
6
For a more detailed evaluation of these difficulties and of the incompatibilities between the different
concepts of technical progress, see Heller (2000).
536 Claudia Heller

For Robinson, the main difficulty was her ‘failure to mark sufficiently sharply
the departure from the confused but weighty corpus of traditional teaching that
we required to make when we adopt a Keynesian approach to long-period
problems’ (Robinson, 1962a, p. v).
Some of the interpreters of Robinson, such as Meacci, add that the central
problem was the lack of a sufficient differentiation between the analysis of the
‘choice of technique’ and the study of ‘technical change’. For Meacci (1996,
p. 249), the choice of technique is connected to a list of feasible techniques
available for businessmen ‘that act like a sieve through which potential tech-
niques collapse into reality.’ In this sense, it represents an analysis within the
businessmen’s choice framework at a ‘microeconomic level’ and an ex-ante one,
driven by future prospects. As for technical change, it is connected to a list of
techniques that were already chosen from a list of techniques ‘[that] essentially
consist of input–output relations and feature all the complementarities character-
istic of actual production’ (Meacci, 1996, p. 249). Unlike ‘choice’, it represents
a dynamic phenomenon, which has implications for the rate of accumulation. In
this sense, although permeated by businessmen’s decisions, it applies to the
domain of ‘macroeconomics’ and it reflects the aggregated ex-post consequences
of these decisions. The main problem, according to Meacci, is that the division
between ‘choice’ and ‘change’, while present in The Accumulation of Capital, is
in fact only implicitly and indirectly presented.
It is necessary to stress, however, that the absence of a neat separation
between the ‘choice of technique’ and the ‘change of technique’ in The
Accumulation of Capital arises precisely because Robinson conceived that it was
necessary to consider both these elements in a long-period theory. In several of
her self-critical works from the 1950s, she arrived at the conclusion ‘[that] there
is no such thing as accumulation without change’ (Robinson, 1980, p. 110) and
furthermore, that ‘the spectrum of ready-blueprinted techniques was a mislead-
ing formulation; the process of accumulation itself brings techniques into being
as they are required’ (Robinson, 1980, p. 111). She also declared:
I was always hankering after the story of accumulation without new inventions,
which used to be told in terms of deepening the structure of capital, lengthen-
ing the average period of production, or increasing the roundaboutness of
inputs of labour …
[But] investment does not involve merely picking the profit-maximising
spot on a well-mapped technological frontier. It involves searching for an
appropriate technique, which will be blueprinted only after it has been chosen,
and the very process of search is a process of technical change. The growth of
output itself creates opportunities for specialisation and ‘increasing returns’,
… and new inventions and discoveries are continually being adapted to
industrial processes. There is no such thing as accumulation without change.
(Robinson, 1980, p. 109–110)

6. New Exercises: the broadening of classification and the restoration

of the differentiation between criteria
In fact, Robinson was not able to overcome the difficulties she observed.
 Technical Progress in Joan Robinson’s View 537

Table 5. Classification according to the change of output per capita and period of
production, based on Robinson (1960a)

Changes in output per capita

Change in the Reduction No change Elevation

period of production Y2/L2 ⬍ Y1/L1 Y2/L2 ⫽ Y1/L1 Y2/L2 ⬎ Y1/L1

Reduction Partial improvement Superior More than superior

No change Inferior Neutral Superior
Elevation Less than inferior Inferior Partial improvement

Towards the end of the 1950s, she proclaimed herself totally dissatisfied with the
different models of accumulation that had appeared, essentially because they
were supposed to explain what actually took place. Her own book, The
Accumulation of Capital, did not escape from her criticisms. Nevertheless, at the
same time she recognised that all the models, including hers, were inevitably
unrealistic and, for this reason, should be seen as simple exercises. It is as an
exercise that she continued to pursue her work on growth, and she published
numerous other essays on the subject. Among these, it is worth mentioning her
‘Capital, technique and relative shares’ (1960a; see also Robinson, 1959a,
1959b, 1961, 1962c).
Here, Robinson elaborates four types of models and develops her arguments
around them. The first model is characterised by the existence of a unique sector
and a single technique, in which the only necessary investment serves for the
payment of wages, so that capital is simply a wage fund. In this model, she
defined the categories of ‘superior techniques’ (and ‘inferior techniques’) and
‘partial improvements’. ‘Superior’ techniques are a product of innovations that
reduce the period of production without changing output per capita, or of those
that increase output per capita without changing the period of production.
‘Partial improvements’ are a product of innovations that reduce the period of
production at the cost of productivity, and vice versa. Table 5 allows the
identification of other combinations not mentioned by her, such as ‘more than
superior’ techniques (which raise output per capita while decreasing the period
of production) and, conversely, ‘less than inferior’ techniques.
In the second model, Robinson assumes a single sector with a variable
technique, so that it becomes possible to choose among different ‘combinations
of factors’. She then defines ‘neutral innovations’ and ‘biased innovations’,
through movements of the production function and changes (or no changes) in
its shape. If the movement takes place without changing the shape of the
function, it represents a neutral innovation, which allows the level of output to
be raised without changing the use of factors. Capital-using innovations increase
output and use a higher proportion of capital than that of labour, irrespective of
the change in labour utilisation, and vice versa. Table 6 represents these
definitions schematically.
The third model works with two sectors and a variable technique and
538 Claudia Heller

Table 6. Classification according to the relative change of factors, based on Robinson

(1960a)

Criterion Neutral Capital using Labour using

Change in output Y2 ⬎ Y1 Y2 ⬎ Y1 Y2 ⬎ Y1
Change in capital K2 ⫽ K1 K2 ⬎ K1 Indifferent
Change in labour L2 ⫽ L1 Indifferent L2 ⬎ L 1
Relative change in factors K2/L2 ⫽ K1/L1 K2/L2 ⬎ K1/L1 K2/L2 ⬍ K1/L1

proposes a new category, ‘capital creation innovation’. This kind of innovation

is capable of producing more output without changing the endowment of factors
and, furthermore, it is less expensive, i.e. ‘it increases wealth without any net
saving being required’ (1960a, p. 175) or, otherwise expressed, it is more
expensive but has a longer useful life. It represents an innovation which, in
addition to increasing output (in the consumption sector), creates wealth (in the
investment sector). Robinson indicates that this type of innovation does not fit
into the traditional classification and suggests keeping it in ‘its own pigeonhole’.
The fourth model is constructed with three sectors and a variable technique.
The model supplies the categories of ‘neutral innovations’, ‘indirect biased
innovations’ and ‘strictly direct biased innovations’. The only simple definition
is that of neutrality, which occurs when output per capita increases in all sectors
in the same proportion and is neutral from the point of view of the whole
economy. As for the non-neutrality of technical progress, it can assume three
different features.
The first one is an innovation that has a bias in the sector in which it occurs.
It can be classified in terms of income distribution (as in Table 1), in terms of
absolute change in factors (as in Table 2) or in terms of the relative change in
factors (as in Table 3).
The second type of non-neutrality relates to an innovation that raises output
per capita in the same proportion in all sectors but reduces the period of
production in one of them, and therefore has a final indirect effect (on the other
sectors), by saving capital. Alternatively, the innovation may extend the durabil-
ity of capital goods and has a final and indirect effect similar to the ‘capital
creation’ innovation.
The third kind of non-neutrality is an innovation that has a capital-saving
bias for the economy as a whole, because it increases output per capita in the
capital-goods sector in a higher proportion than it does in the consumer sector.
This type of innovation could be considered to be strictly capital-saving and
corresponds, inversely, to a strictly capital-using innovation (when output per
capita increases less in the investment sector than it does in the consumption
sector). There are therefore neutral innovations, innovations that are indirectly
capital-saving because they permit a reduction in the period of production, or are
indirectly capital-using innovations because they create capital and consequently
save labour, and labour-saving innovations that are strictly capital-using innova-
tions.
 Technical Progress in Joan Robinson’s View 539

Table 7. Classification according to the sectoral relative change of labour productivity,

based on Robinson (1960a)

Category Description

Neutral YI/ LI ⫽ YII/ LII

Non Neutral Type 1 Cf. Previous classifications:
Biased in the sector it Table 1 (income distribution: W2/Y2 ⫽ W1/Y1)
comes up Table 2 (absolute changes: L2/Y2 ⫽ L1/Y1)
Table 3 (relative changes: K/ Y ⫽ L/ Y)
Non Neutral Type 2 YI/ LI ⫽ YII/ LII
Capital-saving bias Associated to a reduction of the period of production
Capital creation Associated to an elevation of the durability of capital goods
Non Neutral Type 3 YI/ LI ⫽ ⫽ YII/ LII
Strictly capital saving YI/ LI ⬎ YII/ LII
Strictly capital using YI/ LI ⬍ iII/ iII

Table 7 summarises this classification and shows that the analysis of the
effects of these different categories of innovations on income distribution and on
the level of employment is extremely complicated, but it is also a very rich one.
Asimakopulos & Weldon (1963) recognise that extending the one-sector model
to a two-sector one allows one to describe the various ways in which a specific
type of technical change may occur, but they argue that for analytical (not
descriptive or historical) concerns the classification in the one-sector model is
exhaustive. They also maintain that ‘the two-sector nature of Robinson models
is an unnecessary elaboration, and that the essential features of these models can
be quite satisfactorily represented in a single sector’ (Asimakopulos & Weldon,
1963, p. 372). I disagree: both in the figure and in the table they present
(Asimakopulos & Weldon, 1963, p. 373 and p. 383 respectively) many of the
most interesting features of Robinson’s various classifications do not appear.
For instance: following Robinson’s suggestions, an innovation that raises
output per capita in the investment sector permits us to produce the same
‘productive capacity’ with a lower level of employment and therefore releases
labour which will then depend on being hired through investment made in the
other sectors. When such investment is not enough, or if there are labour-saving
innovations (which, in turn, do not re-employ labour in the production of these
innovations), there will be unemployment. If, in addition, the new machines used
in the consumption sector have a higher productivity, real wages may rise if
prices follow (declining) the increase in productivity—this depends on the
‘degree of competition’. The result may be a decrease in employment and a rise
in real wages for those employed.
This example also shows that the specific feature of the innovation is not
the single determining factor of the final outcome, and illustrates the fact that the
macroeconomic outcome from a single innovation depends on several other
factors, particularly the degree of competition. It is even more important to
emphasise that the outcome may be determined by a multiplicity of factors. It
also depends on the specific hypotheses adopted. There are so many possible
540 Claudia Heller

solutions that Robinson was obliged to limit them through restrictive assump-
tions. Thus, she was able to describe alternative possibilities that characterise the
basic situations from which it is possible to develop the other variants. These
alternative basic situations were called ‘Robinson’s metallurgy’ (on this subject,
see Nevile, 1963, and Lachmann, 1963).
Undoubtedly, the essay ‘Capital, technique and relative shares’ is an
improvement on the previous papers on technical progress, at least in the
organisation of the arguments, even if Robinson did not always succeed in
eliminating the compartmentalisation of the various criteria of classification of
technical progress, or manage to make an orderly examination of their effects on
income distribution and/or on the level of employment (or on consumption and
investment). Nevertheless, she did not give up on this subject—but she did
refrain from trying to deal with all the issues of accumulation and technical
progress together. Two years later, in ‘A model of technical progress’ (Robinson,
1962c, p. 88), she admitted that:
The analysis of an economy in which technical progress is going on cannot be
made both neat and lifelike. There is nothing in reality which remains constant
through time to provide us with neat units in which to calculate. Workers are
acquiring new skills and losing old ones. Products are changing in physical
character, in saleability and in capacity to satisfy wants. The wants themselves
are changing with the products. The purchasing power of money over com-
modities, or over labour-time, or over both, is changing not only in general
level but also in pattern. Above all, capital goods are changing, so that the
means of production required for a later technique have little or nothing in
common with those of earlier designs.

However, she continued: ‘On the other hand, analysis which does not take
account of technical change can be very neat but it is of no interest’ (Robinson,
1962c, p. 88)

7. Conclusions
At the very beginning of her career (in the 1930s), Robinson wrote two different
essays on the subject of accumulation and technical progress: ‘The long period
theory of employment’ (1936) and ‘The classification of inventions’ (1937–38).
During the 1950s she wrote ‘The generalisation of the General Theory’ (1952b)
and ‘Notes on the economics of technical progress’ (1952c), which she repub-
lished in one book (The Rate of Interest and Other Essays). The only work in
which she tried to deal with both subjects in a coordinated way—The Accumu-
lation of Capital (1956)—was not a satisfactory one, as she recognised. She
made several new attempts during the 1960s, among which ‘A model of
accumulation’ (1962b) and ‘A model of technical progress’ (1962c) were also
republished (in Essays in the Theory of Economic Growth). Taking into account
that she reconsidered the importance of her 1952 essays and that they were
republished in 1979 (as The Generalisation of The General Theory), it is
possible to conclude that Robinson never gave up on these subjects, even though
she abdicated from dealing with both simultaneously.
 Technical Progress in Joan Robinson’s View 541

In the essay ‘A model of accumulation’ (1962b), despite mentioning

technical conditions, she examines them only through the prism of the quantity
and the quality of the workforce (and its propensity to grow over time), of the
state-of-the-art of the industry (and its propensity to improve) and of the
availability of natural resources (by assuming, to simplify, that there were no
scarce natural resources). She left the analysis of technical progress as such for
her other essay ‘A model of technical progress’ (1962c), because the objective
of the first one was to examine the different possible relationships between the
‘desired’ growth rate (by firms) and the ‘feasible’ growth rate (defined by the
growth of the population and the technical knowledge which was hypothetically
considered neutral).
While ‘A model of accumulation’ received a significant number of com-
ments, because it was the only one of the Essays in the Theory of Economic
Growth that had not been previously published, ‘A model of technical progress’
did not receive much attention. Nevertheless, the latter essay proposed a
systematisation of the various categories of technical progress with a two-sector
model as a starting point in which the innovations occur in the investment sector
and are embodied by ‘improving the design of equipment for use in the
consumption-good sector’ (Robinson, 1962c, p. 89), without changing the physi-
cal features of the investment sector or even the labour needed to produce this
new equipment. The new equipment of the consumption sector, which incorpo-
rates the new technique, can be evaluated in terms of production capacity, in
terms of the volume of employment supplied and in terms of its real costs—that
is, ‘its price when new in terms of labour-time, at the ruling rate of profit’
(Robinson, 1962c, p. 89)
When a new machine produces a larger quantity of goods and when it has
the same durability and the same nominal cost (capital per capita) as the
previous one, it represents a neutral innovation. According to Robinson, the
advantage of such a criterion is that there are two ways to express the neutrality
of the innovation. One compares the changes in output per capita in both
sectors: when the change is the same, the innovation is neutral. The other way
of expressing neutrality compares the factor ratio of the two techniques: when
it does not change, the innovation is neutral. Note that the first expression also
appears in Table 7 and that the second one is illustrated by the numerical
example in Table 4.
By analogy, an innovation has a capital-saving bias when the cost of each
factor is lower. In that case, the increase in output per capita in the investment
sector is proportionally higher than in the consumption sector, and vice versa.
An example of this is also given in Table 7.
The superior techniques increase both output per capita and output per unit
of real cost at the factory. All neutral innovations are superior, but not all biased
innovations are necessarily superior. The biased ‘non-superior’ innovations are
partial improvements. Furthermore, not all partial improvements are eligible, i.e.
likely to be chosen.
Thus, an excessively capital-saving innovation that increases output per
capita in the investment sector and reduces it in the consumption sector is a
partial improvement, because it lowers one of the cost elements of the final
542 Claudia Heller

output and increases the other. This also applies to an excessively capital-using
innovation, which reduces output per unit of capital. Obviously, partial improve-
ments are adopted only if the reduction in a cost element is proportionally higher
than the increase in the other element of cost. This is the criterion of eligibility
(or preference) used for the ‘degree of mechanisation’.
It is evident that this general classification of the different types of
innovations proposed by Robinson in her latest work on technical progress is not
rigorously new in itself. In ‘A model of technical progress’, Robinson refers to
the variants of the ‘golden age’—or the ‘vicissitudes’ to which a capitalist
economy is subjected—that arise when technical progress is biased and/or is
unstable. Despite this analysis, developed in ‘A model of accumulation’, she
limits the ‘vicissitudes’ to the possibility that the ‘feasible growth rate’ may be
different from the ‘desired growth rate’. Again, this means that innovations are
relegated to the background, despite their being considered to play a wide-
ranging role in changing the feasible rate of growth. At the same time, if
adopted, innovations become responsible for changing the real growth rate as
well.
The truth is that Robinson’s criterion of classification depends very much
on the hypotheses of the models in which the classification is employed.
Furthermore, the generalisation proposed in ‘A model of technical progress’ is
based on assumptions such as a closed system, non-existence of scarce factors
or of economies of scale, and the postulate that technical progress is incapable
of qualitatively modifying the final goods and that it is limited to the creation of
new equipment for the consumption-goods sector, using the same factories in the
investment-goods sector.7 Robinson concludes this essay by reminding the
reader that ‘in our analysis technical progress was assumed to have no effect
upon either the nature of commodities or the character of workers and con-
sumers’ (1962c, p. 111), and finally gives up her attempt to estimate its effects
on income distribution and on employment, restricting her study to seeking only
the kind of innovation that would be best suited to each specific situation, in
order to allow the continuity of the accumulation process.

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7
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