The Journal of Economic Abstracts December 1968 [antikvár]

Abstract and Article Listing by Subject General Economics; Methodology Ricossa, S. A Criticism of Some Economic Laws (Critica di alcune credenze economiche). Empirical economic laws should be revised as soon as required by the fast growth of statistical material. Some laws, still accepted by present "conventional wisdom," are completely or partly wrong, and may lead to serious errors if applied to solve practical problems. Pareto's law of constancy of income distributions does not hold, since economic development usually brings about a spontaneous reduction of inequality. Land and natural resources generally are not becoming insufficient or overvalued, thanks to the discovery of new sources, substitution with artificial raw materials, and increased productivity of basic goods. Stability of the average capital coefficient is mostly a casual fact and cannot be taken for granted in long term planning, while in the short run the marginal capital coefficient fluctuates widely. Propensity to save and to invest does not increase, as envisaged by "mature economy" prophets. Net investments in the U.S. are indeed decreasing, as a percentage of national income, because of more public consumption, and more private consumption of durable goods, etc. Ricardo's theorem even in its modern version, e.g. the Hecksch-er-Ohlin theorem, has a very modest utility in explaining international trade, which is a topic where paradoxes abound (see the Leontief paradox). Mechanization of production has not yet increased the value of machines much over 15 per cent of total capital or 10 per cent of total productive properties. Quality of machines seems more important than quantity. Other examples can easily be found to support the argument stated above: economic beliefs get old quite rapidly and must be fre- 801