ABSTRACT
We will work with an aggregative (one-good) model of the utmost simplicity and generality.6 Production is carried on by homogeneous labor, using a stock of capital to produce output; in obvious notation,
The capital good-the same stuff as output, of course-does not depreciate; there is therefore no material input flow in production, and no distinction between net and gross output. We define, conventionally, two ratios that completely describe the technology in use: k = K/L, the capital-labor ratio (Marx's "technical composition of capital"), andx = X/L, labor productivity.
