Editing Economies of scale (section)

===Economies of scale in Marx and distributional consequences ===
In {{lang|de|[[Das Kapital]]}} (1867), [[Karl Marx]], referring to [[Charles Babbage]], extensively analyzed economies of scale and concludes that they are one of the factors underlying the ever-increasing concentration of capital. Marx observes that in the capitalist system the technical conditions of the work process are continuously revolutionized in order to increase the surplus by improving the productive force of work. According to Marx, with the cooperation of many workers brings about an economy in the use of the means of production and an increase in productivity due to the increase in the division of labour. Furthermore, the increase in the size of the machinery allows significant savings in construction, installation and operation costs. The tendency to exploit economies of scale entails a continuous increase in the volume of production which, in turn, requires a constant expansion of the size of the market.{{sfnp|Marx|1867|pp=432–442, 469}} However, if the market does not expand at the same rate as production increases, overproduction crises can occur. According to Marx the capitalist system is therefore characterized by two tendencies, connected to economies of scale: towards a growing concentration and towards economic crises due to overproduction.{{sfnp|Marx|1894|pp=172, 288, 360–365}}

In his 1844 ''[[Economic and Philosophic Manuscripts of 1844|Economic and Philosophic Manuscripts]]'', [[Karl Marx]] observes that economies of scale have historically been associated with an increasing concentration of private wealth and have been used to justify such concentration. Marx points out that concentrated private ownership of large-scale economic enterprises is a historically contingent fact, and not essential to the nature of such enterprises. In the case of agriculture, for example, Marx calls attention to the [[wikt:sophistry|sophistical]] nature of the arguments used to justify the system of concentrated ownership of land:

: As for large landed property, its defenders have always sophistically identified the economic advantages offered by large-scale agriculture with large-scale landed property, as if it were not precisely as a result of the abolition of property that this advantage, for one thing, received its greatest possible extension, and, for another, only then would be of social benefit.<ref name=marx1844>Karl Marx, ''[[Economic and Philosophic Manuscripts of 1844]]'', M. Milligan, trans. (1988), p. 65–66</ref>

Instead of concentrated private ownership of land, Marx recommends that economies of scale should instead be realized by [[Cooperative|associations]]:

:Association, applied to land, shares the economic advantage of large-scale landed property, and first brings to realization the original tendency inherent in land-division, namely, equality. In the same way association re-establishes, now on a rational basis, no longer mediated by serfdom, overlordship and the silly mysticism of property, the intimate ties of man with the earth, for the earth ceases to be an object of huckstering, and through free labor and free enjoyment becomes once more a true personal property of man.<ref name=marx1844/>