Rediscovering the Burchardt-Lowe Post-Classical Model and Its Implications for Structural Modeling and Structural Economic Dynamics
The task here is to extract Fritz Burchardt’s (1931-32) and Adolph Lowe’s (1987; 1976) somewhat neglected, but albeit insightful contributions toward the development of a non-neoclassical theory of production. Fritz Burchardt and Adolph Lowe developed the Post-Classical production model which synthesized the Classical and Austrian models developed in the 19th century; most notably conjoining the two-department model formulated by Karl Marx in Capital, with the linear production models of Bohm-Bawerk and the Austrians. Given this back-drop, the essay re-introduces Burchardt’s critique of the inadequacy of reducing production to models featuring only circular or linear components. By using Burchardt’s critique of Bohm-Bawerk and Marx as a launchpad, the essay puts into question the continued separation of the methods of production into two research agendas. Along the way the essay decomposes the behavioral assumptions required for modeling production in a circular/Classical fashion, and emphasizes the definition of time, which is implicit in all models of a productive economy. Lastly, the final section of the essay re-introduces the Post-Classical model for today’s theorists and describes situations in which modeling production in this manner is preferable. To this point, the essay argues that choosing among Classical, Austrian, or Post-Classical methods becomes dependent upon the level of economic investigation being conducted; yet, as we shall see the Post-Classical model is more robust then either Austrian or Classical models because it is able to handle circular methods of production, the sequential nature of production, and importantly, structural bottlenecks that are basic or localized.
Area: Eshet Conference
Keywords: Production Modeling, Classical Political Economy, Austrian Economics
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