ABSTRACT
This chapter considers what it is which determines whether the standard of living will be rising or falling at any point of time. It also considers the case of a Propdem, in which property and earning power are equally distributed among the citizens. The distribution of income between wages and property incomes is of no importance, since each citizen possesses the same share of both types of income. In a Plantcap the problem is a little more complicated. The chapter distinguishes between two standards of living—that of the workers who own no property and that of the owners of property who do no work. It argues that the elasticity of substitution between any one factor and any other factor is constant and is unaffected not only by technical progress, but also by changes in factor proportions. The chapter shows that the elasticity of substitution between any one pair of factors is the same as between any other pair of factors.
