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Economics 33 I
regularities which result from this kind of inter-dependence. It defines these reg-
ularities in such a way as to relate changes in the production function to the
evolution both of productive forces and the relations of production, as well as to
the political and ideological superstructure, which is in turn affected by econom-
ic development. Whether or not we approve this particular approach, partly
or fully, the investigation of the factors which determine the production func-
tion as contained in the econometric model (and constitute the components of
historical development) would seem to be the crucial theoretical problem in con-
temporary economics; it is rendered all the more important by the fact that
growth theory has so far over-concentrated on perfecting formal instruments
for studying the relations between various factors of growth and the volume of
production while, as a rule, arbitrarily defining the character of the function
itself and neglecting the study of constants which underly secular variations in
the factors.
C. Problems of distributioiz
A significant shift of emphasis has occurred in the theory of distribution under
the influence of growth problems which are not necessarily entirely new - per-
haps merely well-known issues stated in a different form.
In classical economics, questions of distribution loomed large precisely be-
cause the conditions and factors of economic growth were treated as crucial
issues by men like Smith and Ricardo, who regarded the theory of distribution
as a broadly-conceived social theory which dealt extensively with the conditions
under which the different classes participated in the national income. This view
of the theory of distribution enabled them to explore the sources of accumula-
tion, and hence to forecast future developments.
It is hardly necessary here to stress the importance of the r6le accorded to the
theory of distribution in past and present Marxist thinking, or its close associa-
tion with the theory of economic development.
The classical attitude to distribution problems has never vanished entirely,
although long supplanted by a tendency to eliminate the social aspect of the
problem almost entirely (except of course in Marxist thinking). This technical
and formalized treatment results quite evidently from the dominant r61e ac-
corded to static analysis. Under the theory of static equilibrium, the idea of the
various social classes participating in the national income was replaced by the
idea of the factors of production being remunerated according to their marginal
productivity. As elsewhere, price relations provided the criteria of optimization,
the factors of production being remunerated in accordance with their marginal
productivity. This was based on the assumption that self-operating market
mechanisms were capable of cancelling out all departures from the position of
equilibrium. Not only did this strike out the criteria of social equity as a separate
issue (since the closer market mechanisms get to satisfying the principles of
perfect competition, the better do they satisfy the criteria of optimization by
adjusting the remuneration of the factors to their productivity), but it likewise