The Cobb-Douglas Production Function and Political Economy

17 Pages Posted: 8 Feb 2010 Last revised: 1 Apr 2013

Date Written: March 30, 2013

Abstract

In classical and Marxian political economy economic advancement takes place in stages of development. These stages are characterized by different functional distributions of income. In this paper we show that the Cobb-Douglas Production Function is the only production function which has the property of a constant functional distribution of income of the factors of production. Furthermore it is argued that an aggregate production function is not appropriate to analysing macro-economic processes of a capitalist economy. But it is a very useful tool in the hands of a socialist planning authority.

Keywords: political economy, classical economics, Marxian economics, socialist economics, aggregate production function, functional distribution of income, Cobb -Douglas Production function, stages of economic development, Historical Materialism

JEL Classification: B12, B14, B51, E25, O11, O20, P16, P21

Suggested Citation

Hagendorf, Klaus, The Cobb-Douglas Production Function and Political Economy (March 30, 2013). Available at SSRN: https://ssrn.com/abstract=1541468 or http://dx.doi.org/10.2139/ssrn.1541468

Klaus Hagendorf (Contact Author)

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