There is a second issue with Okishio's theorem. Basically, for it to hold, the competitors have to wait for equilibrium before introducing the method too, if they don't, then the math doesn't work anymore. Additionally, they assume that the innovation doesn't change either of the prices.
Indeed. The justification is that a theoretically perfect equilibrium is achieved that palliates the issue in the input of prices and that volume is unchanged, all of this before the technique is spread, which is of course not a realistic expectation. A remark has been made that for this to hold true generally capitalists would have to plan the economy, lol
There is a second issue with Okishio's theorem. Basically, for it to hold, the competitors have to wait for equilibrium before introducing the method too, if they don't, then the math doesn't work anymore. Additionally, they assume that the innovation doesn't change either of the prices.
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Indeed. The justification is that a theoretically perfect equilibrium is achieved that palliates the issue in the input of prices and that volume is unchanged, all of this before the technique is spread, which is of course not a realistic expectation. A remark has been made that for this to hold true generally capitalists would have to plan the economy, lol