ABSTRACT
This chapter shows the term excess capacity as a striking but not as the sole example of how technical progress might seem to waste and squander economic vitality rather than lead to a betterment of our situation. Technical inventions, which by their very nature constitute spontaneous advances in our technical knowledge that are not predictable in detail, are the first and most striking example of technical progress. Replacing old machines with new ones and scrapping the old ones is not necessarily profitable for every invention that lowers production costs. Running costs, on the other hand, refer to all those current expenditures that are necessary to keep a given fixed investment in operation. Only when the total costs of production of the new invention fall below the running costs of the old process, will the old facilities have to be closed down and the entire production taken over by new facilities.
