COG

Ownership Discussion


[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

A question for those with fingers on figures



I have a question I've been wanting to examine for a while.  One of Kelso's 
primary faux pas (in my mind, at least) was that he frequently asserted without 
formal empirical support that capital accounts for 90% of economic output (to 
my horror this was propogated in Ashford & Shakespeare's "Binary Economics" 
with no additional support).  The statement was informally justified by 
statistics that show that a similar percentage of economic growth in the 20th 
century has been attributable to technological progress (I believe this was 
Solow?).  While the logic is appealing, this has always given me pause for two 
reasons:

1)  Obviously, no formal analysis has been done to support or destroy the 
assertion.
2)  More importantly, my memory of statements made in my labor economics course 
a few years ago was that labor receives roughly 75% of aggregate income and 
only 25% is paid out to owners of capital.

So, my main questions are a) what are the current figures accepted in 
mainstream economics for the relative proportion of economic output paid to 
labor as opposed to capital (sources would be greatly appreciated), and b) 
assuming they are similar to the 75%/25% figures above (which I am hoping I 
have not reversed in the haze of passing semesters), how would one square that 
with the apparently disproportionate impact of technological progress on 
economic growth, which would presumably result in increased payments to capital?


Of course, if the current figures support Kelso's assertions, that would be 
just dandy...