Layers of Techniques: Implications of the Co-Existence of Different Technologies for General Economies and Industrial Firms

This is professor P.N. Mathur's last book, practically written on hisdeath bed. At the time of his retirement from University of Wales at Aberystwyth, UK, he had developed many other interests outside economics, principally ancient Indian astronomy. However, after a few years he became fascinated with price structures in economics and as these are affected by the technology in use, he later became interested in the mechanics of how older technologies are gradually replaced by newer ones. Technological progress not only leads to the early obsolescence of the fixed capital equipment before its mechanically useful life, but also leads to progressive decrease in its profitability over its working life. As this is an almost continuous process, a firm in competitive industry would experience a continuously decreasing mark up on its current cost during its productive life. At one stage this mark up may become almost equivalent to zero and may tern negative. At that point of time the particular capital equipment of the firm becomes obsolete, and have to be taken out of production. Not taking this naturally decreasing profitability into account tend to make a project look much more profitable than it actually is. This book explores and elucidates these themes providing a solid theoretical background for understanding the effects of multiple layers of technology extant in an economy on the price and profitability of enterprises employing them.