ABSTRACT
Among the fundamental points on which the post-Keynesian tradition was founded was the rejection of the neoclassical dichotomy between "shifts in" and "movements along" a given production function (Robinson, 1973, pp. 34-35). While this rejection spurred the development of a rich, alternative view of growth and income distribution, it also lead post-Keynesian economists to seek an alternative to the neoclassical theory of technological change. Most post-Keynesian economists chose to follow the lead of Kaldor and Robinson, who modeled aggregate technical change as a function of output growth and accumulation as well as exogenous forces. But a new framework for the analysis of technical change—based on the notion of vertical integration—presents a distinctly post-Keynesian alternative to the aggregate approach and represents an improvement on many counts. In this paper we explore the vertically integrated approach and argue that it provides new insights to the understanding of the process and impact of technological change. We present estimates of productivity and technical progress for vertically integrated sectors in nine OECD countries. The vertically integrated measures capture sector-specific phenomena that are lost in aggregate approaches, but they are still able to capture dynamic external economies, which are lost in simple direct productivity calculations. To date, uses of the vertically integrated approach to technical change have inadequately integrated endogenous forces into a model of growth. We explore this potential extension in a discussion of Eichner's eclectic approach to technical change in the "corporate economy," in which accumulation, growth, and institutional factors such as the state of scientific knowledge, social norms, and megacorp power are the driving forces.
